Canada Talks Trade
International markets are opening up to Canadian agricultural products after a recent flurry of trade missions, negotiations and agreements.
To a country that exports almost half of its total agricultural production, Canada’s access to international markets is crucial. Over the past two years, market access has been a priority of the Canadian government after its recognition of the role Canadian agriculture plays as a key driver of Canada’s economy. Several successful international trade missions have expanded existing markets and created new trade opportunities for Canadian agricultural products, which is great news for the seed industry, says Canadian Seed Trade Association president, Stephen Denys. 
“Overall, the CSTA views the extensive work that is being done on international trade agreements very positively,” says Denys. “Every crop sector has opportunities coming from these agreements. It doesn’t matter where you are in the country—there are some nuggets in there for everybody.”
For example, a trade mission to China last February resulted in an increase of Canadian canola meal exports to the Chinese feed company Tongwei Co. Ltd.—up to $300 million annually by 2015 and $900 million over the next decade—as well as the signing of a Memorandum of Understanding on joint canola research between Canada and China.
“China is becoming a more consistent and larger market for canola,” says Jim Everson, vice-president of corporate affairs for the Canola Council of Canada. “They are importing more oilseeds, and we are now consistently supplying them with volumes that are increasing regularly.” He says a number of commodities, including canola, will benefit from China’s increases in meat and milk production. “They need greater supplies of quality feed,” says Everson.
Last March also marked the first Canadian commercial shipment of alfalfa hay to enter the Chinese market. The government is currently negotiating market access for timothy hay. According to an AAFC press release, the growing Chinese dairy industry is also increasing demand for alfalfa hay, opening up more opportunities for Canadian producers.
Negotiations for an Economic Partnership Agreement with Japan were launched in March for the betterment of the agriculture industries of both countries. Trade mission delegates met with Japanese beef, pork, grain and oilseed buyers in an effort to grow market opportunities. In partnership with the Canadian Wheat Board, the Canadian Grain Commission and the Grain Growers of Canada, Agriculture Minister Gerry Ritz also guaranteed the continued supply of Canadian wheat and barley to the Japanese grain industry. Minister Ritz then travelled to South Korea to restate Canada’s support for increased agricultural trade between the two countries.
A trade mission to Morocco the following month resulted in discussions of a Canada-Morocco free trade agreement as well as the signing of an MOU on agricultural cooperation. Morocco is an important market for Canadian durum wheat and pulses. Minister Ritz travelled from Morocco to Saudi Arabia in an effort to deepen economic ties with the Middle East.
However, it is the Canada-European Union Comprehensive Economic and Trade Agreement and the Trans-Pacific Partnership Agreement negotiations that may most profoundly affect the seed sector.
Negotiations
Canada and the European Union have completed the ninth round of negotiations toward the CETA with the hope of concluding talks in 2012. The EU is a major market for the Canadian seed industry, says Denys, purchasing over $81 million in seed exports from 2007 to 2008, forage markets worth more than $10 million from 2006 to 2007, and $3 million in timothy hay exports. “The seed trade believes there is potential to increase exports to the EU,” he says. “We hope those markets will expand as we go forward.”
Everson says a trade agreement with the EU could also help lift barriers to trade. “There are some tariffs in place on oil imports into the EU. Any reduction in tariffs usually leads to easier opportunities to enter the marketplace.” He says the negotiation of trade agreements with countries of larger economies is also exciting.
“While Canada has a reputation for negotiating free trade agreements, in the past they have been with smaller economies. These are important to some sectors, but from an agricultural point of view and [particularly] canola, we’re encouraged by negotiations with larger economies. Generally speaking, coming to agreements like this where the end result is a more predictable and liberalized trading environment—that’s also encouraging to us,” says Everson.
Meanwhile, in June, Canada was the eleventh country invited to participate in the TPP negotiations aimed at regional trade liberalization. “If you consider the countries involved, [they] account for 76 per cent of our seed exports. It’s already a major market for us, but there’s also a good opportunity for expansion if the agreement is put into place,” says Denys.
Everson says Canada’s invitation to the TPP negotiations is an interesting development. “Multilateral agreements are preferential to bilateral agreements because there are elements of international trade that are not easily resolved through bilateral agreements.” He says a regional trade agreement involving a number of important nations may be another way of finding solutions to trade issues and could set a precedent for other trade arrangements. “The Asia-Pacific market is really important, so we’re very pleased that Canada has been able to get a seat at the table, and we look forward to those negotiations,” says Everson.
“Both of these agreements are tremendously important to the seed sector,” says Denys. However, industry must continue to work closely with government to resolve tariff and non-tariff issues impeding trade, he says. “As part of the negotiations, we have to put a zero-based tariff environment in place across the board. We need synchronicity of approvals of biotechnology products and seed treatments, and progress in terms of low level presence policies for biotechnology traits.”
Although progress has been made over the past few months at international meetings to move toward some sort of consistency in terms of LLP measurements, work continues to resolve this issue in order to reduce trade disruptions. “With the equipment we’ve got today, zero is not really an option,” says Denys.
“A Leap Forward”
Another area in which progress must be made, says Denys, is attracting investment to the Canadian seed industry. “In crops such as cereal grains, forages and, especially, open-pollinated crops—pretty much any crop outside of canola, soybean and corn—we must strengthen our intellectual property protection laws so that companies want to invest in Canada,” he says. While many nations are in agreement with the 1991 Act of the International Convention for the Protection of New Varieties of Plants, Canada’s legislation does not comply with this most recent convention.
“We must take a leap forward to catch up with the rest of the world just so we can level the playing field,” says Denys. “The reality is that in order for producers to succeed and be competitive globally, they need the best technologies. At the end of the day, the producer benefits—if the producer doesn’t benefit you won’t be able to sell anything on the market.”
So far, the Canadian government has been a willing listener to the needs of the seed trade, says Denys, who wants the government to continue on its negotiating path, keeping the seed sector in mind. “At the end of the day, these agreements are not only positive for agriculture, but are positive for the seed industry,” he says. “Most importantly, it’s positive for our producers and that makes it good for the farm economy as a whole and for the country. I see Canada in a very good position going forward.”
Kari Belanger
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