Thank you very much, Mr. Chair.
On behalf of Viterra, I would like to thank the standing committee for this opportunity to present our views on the Trans-Pacific Partnership agreement.
By way of a quick background, Viterra is Canada's grain industry leader and marketer of grains, oilseeds, and pulses. We are headquartered in Regina, Saskatchewan, and our commitment to agriculture goes back over 100 years, partnering with farmers to market and move the crops to areas of need around the world. Our assets in Canada, from Quebec to British Columbia, include 67 elevators, nine special-crop facilities, six port terminals, and two oilseed processing plants. As a company, we export to every significant market when it comes to our grains, oilseeds, and pulses.
We're also a member of Cereals Canada, the Canola Council of Canada, the Western Grain Elevator Association, and the Canadian Special Crops Association. We support the views put forward by our commodity organizations.
From the very outset, Viterra strongly supports Canada's ratification of the Trans-Pacific Partnership. The TPP is of direct and vital importance to Canada as a major exporter of grains and oilseeds, as well as processed products. Over 90% of Canada's farmers depend on world markets for their livelihoods.
The countries in the TPP represent a significant opportunity for export growth. Together these countries represent about 40% of the world's domestic product, and the region is the destination for 65% of Canada's agricultural and food exports. Many of the countries in the TPP, for example, Vietnam, are growing rapidly in income and population. Expanding market access will pay long-term dividends for our exports of grains, oilseeds, and pulses, and Canada's overall economy.
To touch on a few of the benefits, on the major ones for wheat, there's a potential to grow Canada's exports to TPP countries by 20%. In canola, improved access to Japan will mean up to $780 million in increased exports. When we look at barley and processed barley, this could result in an increase of an additional 400,000 to 500,000 tonnes annually.
The consequences of failing to ratify this agreement and not being a participant, we are convinced, would result in Canada being forced to cede some of its Asian markets to our big competitors like the U.S., and Australia, and into that region. The TPP, without Canada, would mean a loss of preferential access to Japan, as well as emerging markets, such as Singapore, Malaysia, and Vietnam. For example, Japan currently imports about 1.5 million tonnes of high-quality wheat per year. For wheat and durum, estimates show a difference between the potential gain of participating in the TPP, and the cost of being left out of the agreement, at about 4.3 million tonnes.
In addition to the reduction of tariffs, another critical element of the TPP is the commitment to reduce non-tariff trade barriers related to biotechnology. In addition, TPP includes provisions that will help ensure sanitary and phytosanitary regulations are based on sound science, and provide dispute resolution mechanisms that are put in place to resolve differences. This is a major element. It tends to be glossed over, but we need those processes where we can resolve our disputes.
One of the earlier presenters made mention of this, but I think it bears repeating.
In addition to increasing Canada's market access, we must also ensure we have the necessary infrastructure to facilitate trade. Canada requires a demand-driven rail freight system in order to meet its trade opportunities, and a rail freight system with clear accountability and corresponding penalties for non-performance. We have to look at that carefully when we're talking about the review of the CTA.
Thank you very much for this opportunity to share Viterra's views on this important agreement.