Thank you, Madam Chair.
Good morning, everyone, or good afternoon for some of you now.
My name is Doug Sawyer, and I'm a cattle rancher here in Pine Lake, Alberta. I am also a board member of the Canadian Cattlemen's Association, the national voice of 60,000 beef operations from coast to coast in Canada.
With me today is Fawn Jackson, director of government and international affairs with the CCA.
We thank you for the opportunity to speak with you about the recently announced interim trade agreement with the U.K.
Before I get into the details, I would like to highlight our key message that we strongly encourage a swift return to the negotiation table to establish a permanent and ambitious FTA with the U.K.
The beef industry is one of Canada's largest agricultural sectors, supporting 228,000 jobs, and contributing $17.9 billion to our GDP. Canadian beef and livestock genetics are sold into 58 markets around the world, and we export about 50% of what we produce.
Although COVID has been extremely difficult for all Canadians, agriculture stands out as a vital and resilient part of our economy. Export Development Canada reports Canada's agriculture exports are growing three times faster than the overall Canadian average, confirming that agriculture products are a net cash generator for Canadians and the Canadian economy, and an area for continued growth. This is an important context, indeed, for the conversation we're having today about trade, both for recovery and for the long-term economic benefit of Canada.
With regard to a Canada-U.K. continuity agreement—let's call it CanUKCA—I have the following comments. In 2019, Canada exported about $19 million worth of beef to the U.K., while the U.K. exported $16 million worth of beef to us. So far this year, we are on track to be up more than 20%, while the U.K. is on track for 160% growth in its beef exports to us. This means it will have a 2:1 trade value advantage over us this year.
Despite the growth of Canadian exports into the EU and the U.K., CCA remains concerned with obstacles preventing Canada from reaching its full potential under CETA. I must refer to the CETA, because although we have not seen the details of the CanUKCA, we understand the negotiating mandate was to simply replicate CETA as much as possible. As much as the CCA recognizes the Government of Canada's efforts to maintain uninterrupted trade market access into the U.K., we are equally concerned with the EU obstacles being carried over to the U.K. agreement.
Consequently, we place great importance on the fact that the government's announcement included a commitment to return to the negotiating table within a year. We look forward to reviewing the completed text of the CanUKCA once it has been made available, and engaging the government on any shortfalls needing to be addressed in a future long-term FTA.
To start, we note that under CETA the EU has unlimited duty-free access to the Canadian beef markets, while Canadian exports, on the other hand, are subject to tariff rate quotas. We understand that the replication mandate causes this inequity to persist in the CanUKCA.
While the government has not yet published the amount of access for Canadian beef to the U.K. in the Canada-United Kingdom Trade Continuity Agreement, we understand that its objective was to achieve enough to allow those who are interested in beef production and marketing into the U.K. to continue through the next couple of years, but with little opportunity for growth—and certainly not enough to match the growth of the U.K. exports expected to come here to us.
We would like to re-emphasize the fact that British beef exports to Canada are expected to be double the value of Canadian beef to the U.K. this year. While our exports to the U.K. and the EU are growing, British beef is doing extremely well here in Canada and could realistically outpace us fourfold to fivefold over the next two years.
In a future agreement it is imperative that the beef industries in Canada and the U.K. can equally benefit from and grow this relationship and that the factors currently limiting the growth of Canadian beef exports be removed.
We also advocate for a full systems approval under both the transitional and the long-term agreement. Canada has a world-class food safety and meat inspection system that is recognized through full systems approval by most of the countries to which we export. Full systems approval is based on the two sides gaining confidence in each other's protocols and compliance. While we understand that achieving such mutual confidence was a challenge with the full 28 EU member states, we are likely closest to the U.K. and it is very achievable in a bilateral context.
Finally, we would seek to have the U.K. come into line with international guidelines and remove the EU-imposed requirements to raise cattle without the use of modern technologies, such as hormone implants and feed additives, which enable efficient use of our resources here.
We see all of these objectives as a natural step towards a future U.K. accession to the CPTPP, which they have indicated an interest in.
I would also like to make a comment on trade and the environment, which perhaps applies more broadly than in the Canada-U.K. context. The environment is a key priority for all of us, particularly to those of us who are living and working within that environment. Many anticipate that trade and environment will be intertwined in the future.
What I would like to say on this front is that Canada is already leading the world in sustainable agriculture. In the beef sector, we take our responsibility of stewarding and protecting Canadian grasslands very seriously and have set out numerous environmental goals on grassland conservation, GHG reductions and many other areas. We need to make sure that any future discussions on this within trade agreements are related to trade as outcome-based, and not as prescriptive in nature.
CCA recognizes the importance of avoiding trade interruptions and the need for a transitional agreement, but we are also strongly advocating for a swift return to the negotiation table to establish an ambitious agreement that addresses the current trade-limiting factors.