Beef Industry Praises TPP Benefits

The CCA provincial member associations participated as witnesses in the CIIT field hearings along with representatives from other agricultural commodity groups, industries, and stakeholders from the Western Canadian provinces. The hearings, held in Vancouver, Calgary, Saskatoon, and Winnipeg from April 18-22, are part of International Trade Minister Chrystia Freeland’s ongoing public consultation process on the TPP. While Canada has signed the TPP, it has yet to ratify the groundbreaking, 12-country trade agreement, opting to first consider the opinions of a broad swath of citizenry and business through a nation-sweeping consultative process.

The TPP marks a significant breakthrough for the beef industry as, once ratified, it will level the playing field for access to Japan for Canadian beef. The Japanese tariff on Canadian beef will immediately match the rate for Australia and then decrease to nine per cent over 15 years. With the TPP, Canada’s beef industry can double or nearly triple its exports to Japan to about $300 million per year.

In Vancouver, B.C. Cattlemen’s Association (BCCA) Executive Director Kevin Boon said the beef cattle industry is very supportive of the ratification of the TPP trade deal. B.C.’s beef industry sees tremendous value in the competitive market access the TPP will allow, which in turn will enable better cut-out value for their cattle.

B.C. Cattlemen’s Association (BCCA) Executive Director Kevin Boon)
The B.C. beef industry’s lone concern about TPP is that it might not be implemented, Boon said. According to the agreement’s implementation formula, the TPP cannot come into effect without the U.S. With the U.S. currently caught up in the 2016 primary elections, it is not yet certain if support for the TPP will carry forward following the U.S. presidential election. Canada needs to have strategies in place to secure trade with Japan should the U.S. support not materialize, Boon said. “It is unfair to Canadian exporters to have to try to compete with other countries who have achieved free trade agreements (FTAs),” he said. In this case, Canada would need to establish a bilateral free trade agreement with Japan separate from the TPP.
Without the TPP or a bilateral agreement with Japan, Canada will likely lose around 80 per cent of the value of its beef exports to Japan. In Calgary, Alberta Beef Producers (ABP) executive director Rich Smith underscored the need for Canada to ratify the TPP as soon as possible – and ideally before the U.S. presidential election. Market access and trade are vital to the Alberta cattle and beef industry, which exports 86 per cent of its beef, he noted.

Already, Canada is seeing the effects of slipping into a competitive disadvantage to Australia, which has a FTA with Japan. Canadian beef is still subject to a 38.5 per cent tariff in Japan, while Australian beef is at 27.5 per cent and dropping. In 2015, the impact of the tariff disadvantage on exports of Canadian beef to Japan on a year-over-year basis amounted to a 24 per cent drop in tonnage to 14,000 tonnes and a 9.3 per cent drop in value to $93 million – with the loonie partially mitigating the impact.

Saskatchewan Cattlemen’s Association (SCA) Chair Ryan Beierbach
A major priority for Canadian beef producers during the TPP negotiations was to ensure that the agreement would result in a level playing field for all beef competitors in the TPP region. In Saskatoon, Saskatchewan Cattlemen’s Association (SCA) Chair Ryan Beierbach addressed the value of the TPP in terms of access to potentially important markets like Vietnam. Widely anticipated to be a market of growing importance for beef in the future as their level of economic development increases, Vietnam’s existing tariff of 15 to 20 per cent on beef cuts will be fully eliminated under the TPP in three years, while its 10 per cent tariff on beef offals will be eliminated in five years.
Malaysia has also been identified as a potentially important market and the TPP also addresses the exclusion of some beef access from a previous agreement with Peru.

In Winnipeg, Manitoba Beef Producers (MBP) President Heinz Reimer noted the spin-off benefits of the TPP go well beyond producers. In addition to supporting capacity at new and existing processing plants, others in the value chain, such as livestock transporters hauling to plants, would benefit as well.

The provincial beef association representatives also answered questions from panel members. In each city, the main topics of questioning for the beef sector were around the ability of Canada’s herd size to supply the export demand from these markets, the outlook for herd expansion, and potential impacts to the chronic shortage of skilled labour in agriculture.

Source: MeatBusiness