Opportunities and consequences of the TPP for Canada’s exporters
Canadian Agri-Food Trade Alliance
This week trade Ministers from 12 Pacific countries, including Canada, could conclude an agreement to make it easier to trade with 40% of the world’s economy. But despite the fact that we’re a small economy that depends on trade, much of the public and political dialogue on the Trans Pacific Partnership has been focused inward. This is a mistake.
By focusing inward, we’re ignoring how improved access to international markets will grow our economy, create jobs and support communities. With so little attention to what exporters need from the TPP, who is standing up to keep Canada competitive in the global economy?
The opportunities and consequences of the TPP for Canada’s exporters are real. A substandard deal or Canada not being part of the TPP would handicap economic growth and job creation for at least the next two generations of Canadians. Take the agri-food sector as an example.
Over the last 10 years in Canada, agriculture and agri-food exports have grown by 77%, from $31 billion to over $56 billion - boosting farm cash receipts by 46% over the same period.
We’ve done this because we are globally competitive. An ambitious TPP deal could enable even more growth, along with the jobs that come with it.
Without a good TPP deal, farmers and processors in Canada will be disadvantaged relative to those in Australia or the US. Why should Canadians accept this?
For Canadian barley farmers and value-added processors the TPP could increase exports by 150,000 tonnes worth $80 million. More export opportunities for pork and beef would also significantly increase demand for feed barley.
For wheat, not being part of the agreement would put at risk 1.5 to 2 million tonnes of premium exports to Japan. If Canada is not a founding member of the TPP, Canadian wheat farmers would cede growing premium markets in the Asia Pacific region to our competitors.
For canola, eliminating tariffs through the TPP would boost exports of value-added oil and meal by 1 million tonnes, worth $780 million. A TPP with Canada on the outside would hamper the competitiveness of 43,000 canola farmers and the entire value chain - putting at risk our longstanding $1.2 billion annual exports to Japan.
Last year, Canada exported over $2.3 billion worth of grains, oilseeds, pulses, and special crops to Japan, Malaysia and Singapore. These sales, along with the jobs and opportunity they create, could disappear without securing a plurilateral TPP agreement, or worse, if Canada is left behind.
With the TPP the Canadian beef sector could double or triple its current $100 million in exports to Japan as well as lock in access to developing markets like Vietnam that will be of growing importance in the future. As a founding member of TPP, Canada can set the terms of entry for future members – such as seeking the acceleration of tariff elimination in our existing agreement with Korea.
A TPP with Canada on the outside would place at risk $1 billion of current meat exports, and see a rapid decline of up to forty percent in the volume of pork exports to Japan, a market where the value of Canadian pork is much higher than most other markets. This would place over four thousand jobs in jeopardy.
For Canada’s refined sugar and sugar-containing products sector, the TPP is the only opportunity to address unfinished business in the NAFTA. A successful TPP could fix the $120 million annual loss in access to the US market that came from the NAFTA and WTO, supporting investment and exports from Canada’s $18 billion sugar-using food processing sector.
With over hundreds of thousands of Canadian agri-food jobs tied to export markets, it’s clear that a successful TPP is critical to all Canadians. Not just to maintain what we have now, but to allow continued growth in exports, jobs and prosperous communities.
The question is, who is thinking about where our future growth will come from and making sure that the TPP will deliver for Canadian exporters?
Let’s hope that all political leaders recognize the importance of the TPP for Canadian exporters and support a deal that enables our economy to continue growing.
Brian Innes is the President of the Canadian Agri-Food Trade Alliance.
For further information, contact:
Claire Citeau, Executive Director, CAFTA