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Prosperity Through Trade Sharing Canola With the World Tackling Trade Barriers Presentation to the Canola Council of Canada Convention March 23, 2004 Liam.

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Presentation on theme: "Prosperity Through Trade Sharing Canola With the World Tackling Trade Barriers Presentation to the Canola Council of Canada Convention March 23, 2004 Liam."— Presentation transcript:

1 Prosperity Through Trade Sharing Canola With the World Tackling Trade Barriers Presentation to the Canola Council of Canada Convention March 23, 2004 Liam McCreery, President Canadian Agri-Food Trade Alliance

2 Prosperity Through Trade Presentation to Canola Council of Canada Convention 1.Introduce CAFTA 2.The Importance of Trade to the Canadian Canola Industry 4.Goals for this Round 3.Why Liberalize Trade? 5.Update on Negotiations

3 Prosperity Through Trade 1.Introducing CAFTA Officially Formed in Spring, 2001 Roots in dissatisfaction with the results of the Uruguay Round

4 Prosperity Through Trade The Uruguay Round: Took the first steps to agricultural trade reform, but: Allowed Japan to bind tariff on wheat at $US 440 per tonne and $US 310 per tonne on barley Allowed for tariff escalation eg. Japan, canola seed enters free of tariff, oil hits tariffs of $130 to $150 per tonne Allowed Norway to bind a 318% tariff on canary seed

5 Prosperity Through Trade OECD Countries still provide $US 318 B in trade distorting subsidies Export subsidies are still used – e.g. EU can use export subsidies on 11 million tonnes of grain Grain and oilseed industry in Canada loses $1.3 billion annually Took the first steps to agricultural trade reform, but: Tariff discrimination between competing products e.g. canola and soybeans The Uruguay Round:

6 Prosperity Through Trade Introduction to CAFTA- Roots in the Uruguay Round Minimal results was partly the fault of our sectors A lack of direction from the international market reliant sectors Isolation of Canada in negotiations

7 Prosperity Through Trade Canadian Alliance of Agri-Food Exporters formed in 1998 Founding members included Prairie Pools, Cattlemen, Pork Council and Sugar Institute Merger with AITG resulted in formal organization CAFTA in 2001

8 Prosperity Through Trade Agricore United Canada Beef Export Federation Canadian Cattlemen’s Association Canadian Meat Council Canadian Oilseed Processors Association Canadian Sugar Institute Canola Council of Canada Cargill Food and Consumer Products Manufacturers Grain Growers of Canada Malting Industry Association of Canada Membership :

9 Prosperity Through Trade 2.The Importance of Trade Exports account for 40% of Canada’s GDP (4X US) 1 in 3 jobs depends on exports 7% of total exports are of agriculture and food = over 80% of farm cash receipts 75% of wheat and durum 98% of canary seed 70% of cattle and beef 68% of dry peas 60% of canola 50% of hogs and pork

10 Prosperity Through Trade 2.The Importance of Trade Canada is the world’s third largest exporter and 5 th largest importer of agriculture and food Exports are important to Provincial economies B.C. - $2.1 billion Alberta - $5.2 billion Saskatchewan - $4 billion Manitoba - $2.5 billion Ontario – $8.4 billion Quebec – 3.3 billion

11 Prosperity Through Trade 2.The Importance of Trade If Canada Didn’t Trade – The domestic market would only require: 6.5 million tonnes wheat million acres 842 thousand tonnes of durum million acres 2.1 million tonnes of canola million acres

12 Prosperity Through Trade 2.The Importance of Trade If Canada Didn’t Trade (wheat,durum and canola) Trade is important, even in a distorted market 25.9 million acres currently in grain and oilseed production wouldn’t be required 20,000 farmers wouldn’t produce grains and oilseeds Revenue to the agriculture and Canadian economies would drop by about $5.6 billion

13 Prosperity Through Trade 3.Why Liberalize Trade? 1/3 cut in global agricultural tariffs means $100 million for Canada Elimination of ALL tariffs globally means $60 billion for Canada From DFAIT, Stats Canada and AAFC $7 million for B.C. $21 million for Alberta $15 million for Saskatchewan $11 million for Manitoba $25 million for Ontario $16 million for Quebec $5.0 billion for B.C. $7.2 billion for Alberta $1.8 billion for Saskatchewan $1.4 billion for Manitoba $29.7 billion for Ontario $11.6 billion for Quebec

14 Sector Gains from Tariff Elimination British Columbia Cattle & Beef$77 million Hogs & Pork$11 million Grains& Oilseeds$6.5 million Alberta Cattle & Beef$660 million Barley$123 million Hogs & Pork$117 million Wheat$ 97 million Saskatchewan Canola$202 million Wheat$139 million Cattle & Beef$ 90 million Barley$ 75 million Manitoba Hogs & Pork$212 million Canola$189 million Cattle and Beef$132 million Prosperity Through Trade 3.Why Liberalize Trade? George Morris Centre, 1999

15 Sector Gains from Tariff Elimination Prosperity Through Trade 3.Why Liberalize Trade? George Morris Centre, 1999 Ontario Cattle & Beef$192 million Soybeans$ 63 million Corn$ 52 million Wheat$ 4 million Quebec Cattle & Beef$67 million Corn$31 million Soybeans$11 million Wheat$ 2 million

16 Prosperity Through Trade 3.Why Liberalize Trade? Tariff elimination over 10 years could return $485.6 million to the Canadian canola industry annually $81 per tonne $45 per acre Elimination of export and trade distorting domestic subsidies could return $234 million to the Canadian canola industry annually $39 per tonne $22 per acre George Morris Centre, 1999 and AAFC

17 Prosperity Through Trade 3.Why Liberalize Trade? End of Subsidies and Tariff Barriers could return $719.6 million annually $120 per tonne $67 per acre George Morris Centre, 1999

18 Prosperity Through Trade 3.Why Liberalize Trade? India Tariffs - Canola oil 85%, Soybean oil 45% Tariff Equity = increased exports for Canada of 200,000 tonnes of oil requiring 500,0000 tonnes of seed = about $200 million Korea Tariffs – Canola 20% Soybeans 5% Tariff Equity = increased exports for Canada of 200,000 tonnes = about $70 million

19 Prosperity Through Trade 4.Goals CAFTA’s long term goal is the establishment of global tariff and subsidy-free trade in agriculture and food products For this round: 1.Elimination of export subsidies 2.Elimination or at least substantial reduction in trade distorting support 3.Substantial and meaningful increases in market access

20 Prosperity Through Trade 4.Goals Cancun Framework provides the opportunity for substantial reform Export Subsidies – provides for the negotiation of a date for elimination Domestic Support – provides for substantial disciplines on trade distorting support and disciplines non-trade distorting support Market Access – formula for tariff reduction is complemented by an overall cap on tariffs, and requirements for expansion of minimum access

21 Prosperity Through Trade 5.Negotiations Update New chair – Tim Groser of New Zealand No more negotiating with the Chair Establish work plan Framework in May to July period – Ministers and General Council end of July WTO Agriculture Committee meets this week in Geneva

22 Prosperity Through Trade 5.Negotiations Update Renewed commitment to the round US and EU determined to get a framework this year G-20 holding firm on subsidies Cairns Group trying to be the bridge – focus on market access Can We meet the Dec 31, 2005 Deadline? Elections in U.S. and India – US grows more protectionist EU Expansion and Change in Commission

23 Prosperity Through Trade Canada Needs To Be a Leader A highly trade dependent sector in a highly trade dependent country Seek opportunities for the future – build on Canada’s competitiveness and innovation – look out, not in CAFTA and its members have an important role to play

24 Prosperity Through Trade Canadian Agri-Food Trade Alliance Suite Metcalfe Street Ottawa, Ontario K2P 1P1 Tel: (613) Fax: (613) Liam McCreery, President Patty Townsend, Executive Director


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