Evidence of meeting #5 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was chicken.
A recording is available from Parliament.
Executive Director, Canadian Agri-Food Trade Alliance
I cannot talk about the sectors that would be adversely affected, because we do not represent them.
Our members all see advantages to the TPP. Some may see more than others, but I would let them speak for themselves on that.
Take sugar as an example, one of the sectors that is sensitive in world trade in general. We see that the sugar sector and products that contain sugar will gain additional access to the American market. That is access they appreciate, but it is less than they had hoped for.
Executive Director, Canadian Agri-Food Trade Alliance
Generally all of our members see nothing but advantages to the TPP.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
What I understand is that those you represent are favourable to it.
It may be more difficult for some, but the others are all in agreement.
Executive Director, Canadian Agri-Food Trade Alliance
I would say that it is very positive for sugar, but there are nuances.
I would let the representatives of that sector comment further on that.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Fine.
You also said that the signature of the TPP “[...] provides the opportunity to negotiate the terms of entry of potential future TPP countries such as South Korea, Thailand, Taiwan, the Philippines [...]”.
Have you quantified what this might mean in terms of increased markets?
Executive Director, Canadian Agri-Food Trade Alliance
You mean additional markets?
Executive Director, Canadian Agri-Food Trade Alliance
We have not done that yet.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Very well. You cannot tell us what beneficial effect this might have on our economy.
Executive Director, Canadian Agri-Food Trade Alliance
No, not yet. However, just for the TPP, you will note that I have already provided preliminary figures and anticipated benefits. Furthermore, there are other countries that might join the accord and have indicated their intent to do so, such as Thailand, the Philippines and others, and these are large markets that are undergoing a period of strong growth in Asia. In our opinion, this can only be beneficial and advantageous.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Fine.
Concerning pork and South Korea, you spoke earlier of not repeating the same mistake. Japan and the United States were involved. You said that from one day to the next, because of tariffs, we lost 50% of our market. This was due to tariffs.
Are tariffs the only barriers to trade in agricultural and agri-food products in TPP countries right now? If that is not the case, how could we eliminate the technical barriers that are interfering with trade in agricultural and agri-food products in the context of the TPP?
Executive Director, Canadian Agri-Food Trade Alliance
To answer your question on South Korea, that was in 2011. South Korea was our biggest market. South Korea concluded an agreement with the United States and Australia and our market share was reduced by half. It was a $1-billion market. Generally, when it comes to the agricultural and agri-food sectors, you must remember that there are a whole series of measures that can be considered as non-tariff barriers. What we generally see is that despite free trade agreements, once the tariffs have been eliminated, there is an increase in the number of non-tariff barriers.
As tariffs go down non-tariff barriers go up. What we see in the TPP agreement is a number of mechanisms that basically reaffirm the WTO commitments in terms of non-tariff barriers but also go a little bit beyond. I spoke briefly about some of the mechanisms that are to be put in place. There's a chapter, for example, on modern biotechnology. There's a chapter on sanitary and phytosanitary measures. I think there are close to 20 or maybe 25 different committees that will be established to facilitate co-operation amongst officials on things like the timely approval of biotechnology trades and the removal of non-tariff barriers as they arrive.
It will be very important to watch how these are implemented because this is going to be critical to ensure that our exporters realize commercial benefits and that market access is viable in the end. There are committees to address these issues.
Liberal
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you.
Mr. Paszkowski, you spoke earlier about federal assistance for the wine industry and producers, should the agreement be signed. What did you mean by that?
President and Chief Executive Officer, Canadian Vintners Association
We're different, for example, from the dairy sector, which has 100% market share in Canada; we only have 30% market share. In order to support our growth, we have to grow domestically to be able to take advantage of the opportunities that the TPP has to offer us, and we do believe there are opportunities.
The things that we're talking about are support for innovation and infrastructure in the wine industry, so that we can produce better quality wines, so we can put in place some climate resilient technology. As David mentioned, with the cold snap in southwestern Ontario, if there had been wind machines there that could keep the warm air down on frosty evenings, it would have protected that entire crop, and these winemakers wouldn't now be waiting three years to take advantage of profitability. Those types of things would be helpful for our industry, and help us to take advantage of what the TPP has to offer.
Also, we're working with one hand behind our back—actually two hands—because we don't have free trade within our own country. British Columbia, Manitoba, and Nova Scotia are the only three provinces that have opened up their borders since a unanimous bill passed in the House of Commons and was approved in the Senate in 2012.
If we had those types of things in place, we could grow our domestic market, and therefore, take advantage of these agreements. With reduction in tariffs, New Zealand and Australia will continue to grow their market share here. If we can't compete, we won't benefit domestically and we won't benefit from the TPP.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
What I understand is that you also have a problem within Canada because of interprovincial barriers.
Liberal
The Chair Liberal Mark Eyking
There's other time, if somebody wants to pick it up, but we have to move on to the NDP.
For six minutes, we have Madam Ramsey.
Tracey Ramsey NDP Essex, ON
Thank you so much for your presentation. It was very informative.
There are over a dozen wineries in my riding in Essex County, so I really listened closely to what you had to say today.
I recently met with Colio Estates, whom you represent. We discussed some of their concerns around the icewine designation, certainly around the interprovincial barriers, the role that potentially the federal government could play in helping to alleviate that. Like you say, there could be a level playing field across Canada and not the borders that currently exist.
The question that I have focuses around that market share that you currently have. The Canadian Vintners Association has indicated that the Canadian wine sector's domestic market share is 32%, the lowest of any wine-producing region in the world. If Canada ratifies the TPP, would wine producers from other TPP countries gain additional access to the Canadian wine market? Would your share go down?
President and Chief Executive Officer, Canadian Vintners Association
Potentially the answer would be yes. I mean, the tariffs aren't significantly high in Canada. They range between 2¢ to 5¢ per litre, so they're not overly significant.
As I mentioned, the United States and Chile are already entering tariff-free. There's a potential for Australia and New Zealand to sell more wine in Canada. The benefit would be somewhere around $6 million to $8 million per year. With that $6 million to $8 million, they could lower their prices. They could use that money towards additional market promotion in Canada. Liquor boards would love to sell more products.
It is a risk. We're not scared of competition, but as I mentioned, if there were some support to help us grow, that would be extremely helpful.
We are very happy that the previous government and the current government has enabled the agri-marketing program to use some of that funding to do domestic market promotion. In December, the government provided us with $1.7 million, matched by industry for a total of $3.4 million over the next two years, to do domestic and international promotion. That will help.
NDP
Tracey Ramsey NDP Essex, ON
Can you speak to us a little about the impacts that NAFTA had on your industry?
President and Chief Executive Officer, Canadian Vintners Association
Sure.
I think most people, going back in history, thought that when the Canada-United States Free Trade Agreement was signed in 1988, that the Canadian industry would be decimated and would die. The federal government and provincial governments did help us at that time to replant some of the hybrid varieties that we had—cold climate varieties—into more mainstream Chardonnay, Cabernet Sauvignon, Merlot varieties.
We did that replant program. We did research and development. We created a VQA quality assurance system, and our industry flourished.
NDP
Tracey Ramsey NDP Essex, ON
Can you tell us the percentage of market share you had before NAFTA and the percentage that—we know you have 32% now.