TPP could mean hundreds of millions or billions in new agri-food sales.
By: Robert Arnason
Source: The Western Producer
OTTAWA — Yesterday, groups representing canola, pork, beef, wheat and other commodities celebrated the news that Canada will be part of the Trans-Pacific Partnership.
One ag group was not celebrating — the Dairy Farmers of Canada.
In a release, the Dairy Farmers said that Jan. 23 was a “somber” day for Canada’s dairy industry.
“We are still giving up access to the remaining countries without the benefits of access to the American market,” a Dairy Farmers spokesperson said in an email.
“This is not in the best interest of Canadian dairy farmers and the 221,000 Canadians that depend on the dairy sector for their livelihood.”
On Jan. 23 the federal government announced that Canada will sign a revised version of the TPP, now known as the Comprehensive Progressive Trans-Pacific Partnership (CPTPP), a free trade deal with Japan and nine other Pacific nations.
Canada’s trade negotiators were in Japan for meetings on TPP. The deal was announced following those discussions.
The U.S. was part of the original TPP but U.S. President Donald Trump pulled America out of the agreement last January.
The remaining countries almost signed a revised deal in November at a meeting in Vietnam. However, Prime Minister Justin Trudeau had second thoughts and threw a wrench into the works. Trudeau asked for new provisions, such as chapters on the environment, worker’s rights and gender issues.
Since November, Canada’s pork, beef, canola and wheat industries have been urging the federal government to finalize the new TPP.
The deal should help those commodities compete in the lucrative Japanese market and provide more access to emerging markets like Vietnam.
The TPP-11 could mean hundreds of millions or billions in new agri-food sales to Japan and other nations. The Canadian Cattlemen’s Association expects additional beef exports of $200 million because TPP will reduce tariff levels in Japan.
But the trade deal may have negative consequences for Canada’s dairy sector.
Under the agreement, the other 10 nations will have market access that equals 3.25 percent of Canada’s annual milk production.
If dairy imports from TPP countries reach that level, it would represent a $246 million hit, annually, for Canada’s dairy industry.
Since the U.S. is no longer part of the deal, it doesn’t make sense to give up 3.25 percent of Canada’s dairy market, the Dairy Farmers said.
“The loss of the U.S. represents a loss of approximately 60 percent of the original TPP market,” they said. “We are still giving up the same amount of access (3.25 percent) to the remaining countries without the benefits of the access to the American market.”
The 3.25 percent figure, in terms of volume, would be comparable to the yearly milk production in Saskatchewan. In 2016, Saskatchewan’s share of the national milk quota was three percent.