Madam Chair, members of the committee, thank you for having me here today.
My name is Mark Walker. I'm the vice-president of markets and trade with Cereals Canada.
Cereals Canada is the national industry association for wheat, durum, barley and oats in Canada. We represent the full value chain, from farmers to crop development companies, grain handlers and exporters. Our members are focused on the benefits of export-led growth, facilitated by access to diverse global markets.
Canadian cereals are a staple food exported to every corner of the world and over 80 countries. In an average year, our sector contributes $68.8 billion to the Canadian economy, including more than 370,000 Canadian jobs. With Canadian wheat’s global reach and long-standing place as a key agricultural export, we have witnessed the shift in trade barriers from tariff-based to non-tariff based barriers, or NTBs, as the primary means of controlling imports.
The most recent and impactful use of an NTB for wheat has been the use of sanitary and phytosanitary restrictions in Vietnam. Following the implementation of the CPTPP, Vietnam’s regulator added creeping thistle to its list of prohibited pests, thereby restricting Canadian wheat imports due to these seeds bring present in Canadian cargoes.
Since the restriction of trade in 2019, Canadian wheat shipments have been feasible only in container quantities. Instead of increased market access, Canadian exporters have experienced increased logistics costs and regulatory uncertainty, which saw Canadian wheat imports to Vietnam fall from 375,000 tonnes in 2019 to only 20,000 tonnes last year. We are currently working with the Government of Canada and Vietnamese stakeholders on a path forward to return to normalized trade and recognition of the safety and cleanliness of Canadian wheat exports.
The cereal sector is also closely watching developments in Mexico, where presidential decrees have been issued that will prevent farmers there from having access to key seed and farm input technologies. Additionally, products produced using these technologies will be barred from entry. If these measures were to extend to Canadian cereals, it would have significant impacts, both on Canadian industry and on Mexican consumers.
Industry and government can work together to support open, predictable and sustainable trade. Cereals Canada has seen the benefits of industry-to-industry advocacy with international customers. In the Peruvian market, Canadian cereals faced import restrictions that were similar to those I referenced in Vietnam. In 2019, Canadian industry, working with millers in Peru as well as the Government of Canada, established a protocol that allows Canadian wheat to be imported with in-country control measures that satisfy Peruvian regulators.
We applaud the government’s ambitious work to grow our free trade agreements, or FTAs, with cereal-importing countries. These agreements have worked to reduce cereal import tariffs in the relatively small number of markets where these tariffs still exist. Unfortunately, there have been instances in which, despite an FTA, market access has not increased. In these cases, the use of non-tariff barriers frustrate the potential gain from an FTA.
When negotiating future trade agreements and in implementing already agreed-to FTAs or renegotiating existing FTAs, Canadian trade officials should look to increase their focus on including language governing the use of non-tariff barriers, risk-based scientific assessments and binding dispute resolution processes to reopen borders when barriers are put in place—a framework for a fourth-generation trade agreement, if you will.
The government must continue to support harmonized standards and the use of science-based standards relating to maximum residue limits, or MRLs. The use of MRLs recognizes that modern testing protocols can identify minute amounts of contaminants, making zero-tolerance policies untenable. Science-based MRLs, harmonized at levels consistent with international guidance, such as the Codex Alimentarius, provide transparent levels that protect consumers and support predictable, open trade.
I would highlight that we applaud the announcement of the Indo-Pacific agriculture and agri-food office as part of the larger Indo-Pacific strategy. Government and industry partnerships are key to managing market access. Industry-to-industry advocacy is supported when government-to-government dialogue is happening at the same time.
Sustained in-region relationships between Canadian regulators and their counterparts in export markets will build trust and lines of communication that can pre-empt the use of NTBs and help resolve regulatory misalignments when they occur. It will support ongoing engagement in the region and provide opportunities where industry and government can work together to achieve positive outcomes for Canada.
Limiting the use of non-tariff trade barriers will foster a stronger, predictable trade environment that allows food to reach markets where it is needed. Implementing harmonized and science-based regulatory approaches will allow food producers to utilize modern agricultural tools to produce safe and affordable food, contributing to global food security.
On behalf of our members, Cereals Canada expresses its gratitude to the committee for its interest in learning more about the impacts of non-tariff trade barriers in agriculture. I look forward to any questions you may have.