Ag tariffs seen $5 million lower through EFTA

Agricultural exports from Canada to four European countries can expect to travel lighter, carrying a net tariff reduction of up to $5 million per year, under a new free trade deal which took effect Wednesday.

Canadian exporters and producers are expected to “immediately benefit” from duty-free access to the markets in the European Free Trade Association (EFTA), which includes Iceland, Liechtenstein, Norway and Switzerland.

The free trade agreement (FTA) between Canada and the EFTA countries immediately eliminates all duties on Canada’s exports of non-agricultural merchandise, the federal government said in a release Thursday.

Tariffs are also to be either “eliminated or reduced,” meanwhile, on selected Canadian agricultural exports such as durum wheat, frozen french fries, beer and crude canola oil.

The FTA also provides tariff reductions on a “wide range” of processed foods, the government said. For example, tariffs of imports of Canadian frozen french fries into Iceland will have been cut by about 40 per cent, and into Norway by 15 per cent.

“This is Canada’s first free trade agreement with European countries, and we have also taken the first steps toward an agreement with the European Union,” International Trade Minister Stockwell Day said in the government’s release.

“By engaging more and more European partners, we can provide Canadian exporters with greater access to a growing list of the wealthiest and most sophisticated economies in the world.”

The EFTA marks the first new FTA for Canada in six years, the government said. Its previous bilateral pacts include NAFTA and Canada’s FTAs with Chile, Costa Rica and Israel.

FTA talks are ongoing with countries including South Korea, the CA4 (El Salvador, Guatemala, Honduras, Nicaragua), the Caribbean Community, Singapore, Panama and the Dominican Republic.

Day recently signed an FTA with Jordan, while an agreement with Colombia is being reviewed by Parliament and an agreement with Peru has received royal assent.

Canadian ag export groups in recent years have urged the government to place added emphasis on bilateral trade deals while also pursuing a multilateral agreement through the World Trade Organization (WTO).

It’s been feared that other countries such as the U.S. are swooping in to sign bilateral FTAs with Canada’s major ag export markets, leaving Canadian products subject to unfavourable tariffs.

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