Thank you very much, Mr. Chair. We're very pleased to be here to represent the Canola Council of Canada.
I'm pleased to share with you how an agreement with the Pacific Alliance will help eliminate trade barriers facing our sector, will help support value-added processing here in Canada, and can help us grow our canola exports to these countries.
The Canola Council is a value chain organization representing the over 40,000 canola growers in Canada, the seed developers, the canola processors who turn canola seed into canola oil and meal for livestock consumption, as well as the exporters who send canola for processing at its destination.
Canada exports more than 90% of the canola we grow here as either seed, oil, or meal. Our industry supports eliminating trade barriers wherever they exist, including in Pacific Alliance countries. Trade agreements that eliminate tariffs and make trade more predictable are critical to helping grow the $27 billion that our industry contributes to the Canadian economy every year.
Today, I'd like to share how tariffs are hampering our exports to Pacific Alliance countries and how other trade barriers could be addressed through a trade agreement with these countries.
First of all, which tariffs currently challenge our exports to Pacific Alliance countries? As the committee understands, we currently have free trade agreements with some members of the Pacific Alliance. As a consequence, we don't have tariffs for our products going to Mexico, Chile, and Peru. Although we have a free trade agreement with Colombia, we still face punitive and unpredictable tariffs on our canola oil exports.
Despite this Canada-Colombia free trade agreement, we do not have competitive access for our canola oil to this country. This is because of tariffs applied through the Andean price band system. These tariffs make our products uncompetitive since oil from the United States does not face these tariffs going into Colombia.
Every two weeks the price band system sets tariffs that apply to canola. In recent months, this tariff has been as high as 40%. The tariff can change every two weeks. This means that not only does the tariff make our canola uncompetitive compared to American canola or soybeans or other oils but it also makes it difficult to have any predictability for our exporters. The tariff established today at the time of sale or when it leaves the port may not be the same when that shipment arrives in Colombia.
We also believe that these tariffs are inconsistent with Colombia's WTO obligations. For example, the price band systems of Chile and Peru have been successfully challenged under WTO provisions.
An agreement with the Pacific Alliance offers an opportunity to eliminate these tariffs, putting us on a level playing field and helping to make trade more predictable. This will help improve our ability to export canola oil and to add more value to our product here in Canada.
Second, I'd like to highlight how a trade agreement could address other barriers.
There are many similarities between the agriculture sectors that export in Pacific Alliance countries and our Canadian exporters. As large agricultural exporters across these countries, we face common restrictions related to the misapplication of sanitary and phytosanitary measures, non-tariff barriers, and measures around plant breeding innovation. A trade agreement with the Pacific Alliance has the potential to build momentum for a consistent approach to these issues in our economies and beyond.
Last, I'd like to highlight the need to stay focused on critical trade agreements and negotiations while we proceed with the Pacific Alliance.
We believe that trade barriers should be eliminated wherever they exist. This includes pursuing an agreement with the Pacific Alliance. We also believe that priority should be assigned to agreements where the stakes are the highest, such as maintaining current access to the United States and Mexico as well as implementing the comprehensive and progressive trans-Pacific partnership and starting trade negotiations with China.
In closing, canola has grown into a Canadian success story because we are globally competitive and we've had stable access to world markets. We're continuing to deliver growth through the stable and open trade that we have with some countries and through differentiated value and sustainable production.
We're excited to help Canada meet the government's target of $75 billion in agrifood exports by 2025, and eliminating trade barriers through an agreement with the Pacific Alliance is a key opportunity to help us do this. It will allow us to help support value-added processing here in Canada, and it's a key part of enabling our sector to continue supporting a quarter of a million Canadian jobs.
I look forward to answering your questions. Thank you very much for the invitation.