Thank you. Good morning, and thank you for the invitation to address you this morning.
Very quickly, ASP is the industry trade association representing seafood processors in the province. Total production is around $1 billion—it varies year in, year out—and my members produce the vast majority of that volume.
As you well know, the seafood industry is a trading industry. I've appeared before three parliamentary committees to date, and two of those three, 66%, have been before the trade committee, and not, as one might expect sometimes, before fisheries and oceans. And while there's obviously merit in that when we talk about licensing and allocations, the trade committee is really a very appropriate committee for this industry, because we are a trading business.
A few years ago, just to illustrate, when I was in Boston, I was impressed with the P.E.I. ministerial delegation at the time, which included a number of ministers. I shook hands with one, and I said, “You must be Minister of Fisheries.” He said, “No, I'm the Minister of Business, and I'm the host of the reception, because this is a business. We're not here about licensing or allocations. We're here to sell and make trade and do business together.” I thought that made a lot of sense.
This year in Boston we were represented by both our Minister of Fisheries and our premier, and we really appreciated that.
As I say, we're a trading industry, and if Canadians doubled, tripled, or even quadrupled their seafood consumption—which would be nice—we could never eat all of the seafood we produce. We have to sell. And while we're pleased to sell in Canada, in our respective home provinces or across the country, the reality is 80% to 90% of Newfoundland and Labrador's seafood, I think 76% for Canada, will be sold in international markets. Thus it ever was, and ever shall be. That was the reason we were settled in the first place—when cod, in our case, was a proxy for the European stock market historically. It's quite amazing. We have hundreds of years of experience in trade, and that will always be the case.
So if we have to sell—that brings me to support for TPP—quite simply we want to ensure we have level playing fields, that the sales and the distributions of our products are in channels that don't apply prejudicial or punitive tariffs or other non-trade barriers, like those that Christina just alluded to.
We sell a great product. That much we know. It's the last wild protein, as I often tell people. Apart from sport hunting, this is the last wild protein in the world, and that underscores the importance of getting it right in terms of fisheries management and sustainability, and we appreciate the government's support in that respect from DFO.
We also know there's great demand for seafood, wild and aquacultured. My members are mostly in the wild business, and there's a lot implied in that statement to be fair, but there's great demand we know, and we know we have a great product.
More precisely, when it comes to TPP and why we think this is a good deal for seafood and our industry, and why we, as the industry trade association, support it, let me give you a few quick reasons.
The first is because we export most of our seafood, as I said earlier. We will always do that, and we want to conduct that business on good terms.
Secondly, the countries in TPP represent a significant and growing proportion of the world's key markets for seafood, both established markets and new opportunities, growing opportunities.
Thirdly, the tariffs on seafood in the countries represented in the TPP are quite high. They can be as high as 34%. Those are high costs. If you think about any small business, or large or medium-sized business, and what margins might be required to make that business sustainable, and then think about those kinds of tariff rates that you pay, which prevent consumers from getting access to quality fish, they thwart market access and they limit where we can sell.
That brings me to the fourth point. Reducing tariffs is not really just about the straight math calculation of what happens in those given markets, for example here in the TPP countries. When tariffs change in a given market, or several markets, as represented by this deal, the trade flows that can be impacted in other non-TPP countries might give us benefits as well.
I've made this point before with respect to the CETA deal. Just to illustrate, we sell on average 70% of our snow crab to the U.S. and 30% to Japan. In respect of CETA, as the 8% tariff on snow crab is eliminated in that market, and as that market opens up for trade in snow crab, the question is not simply how much more snow crab we might sell in Europe, but also—get this—how will that changing dynamic with sales opportunities in Europe change our returns in the U.S. or Japan?
Academically, I think we will sell snow crab in Europe; academically we might not sell another pound of snow crab there. But the sales returns from the other markets could still increase, because we have that potential.
That's how these things work. I think that applies to TPP. It's why we support trade deals that eliminate or reduce tariffs, and it's why we supported the CETA deal, as well.
In closing, we support CETA, we support the elimination of tariffs on seafood, and we support levelling the playing field for the sale of our products, because we're a trading industry.
I want to thank you again for the opportunity to address you today, and I am pleased to respond to any questions you might have.
