(Updated Nov. 25) — Prairie grain and pulse crop producers expect to be among the beneficiaries of Canada’s signature on a free trade agreement (FTA) with Colombia.
Foreign Affairs Minister Lawrence Cannon and International Trade Minister Stockwell Day signed the FTA and others relating to labour, the environment and taxation on Canada’s behalf on Friday, witnessed by Prime Minister Stephen Harper and Colombian President Alvaro Uribe.
“We now urge (the FTA’s) swift ratification to ensure Prairie grain farmers continue to have competitive access to this valuable market,” Canadian Wheat Board CEO Ian White said in a CWB release Monday.
Prairie farmers export over $100 million worth of wheat and $23 million of malting barley to Colombia each year, the CWB said. Based on five-year averages, the CWB’s annual exports amount to about 360,000 tonnes of wheat and 100,000 tonnes of malting barley.
The CWB said the new FTA is “especially important” given a bid by the U.S. government to secure a similar bilateral FTA with Colombia as well as Peru. Both Canada and the U.S. were pursuing bilateral FTAs with both Colombia and Peru, but implementation of a U.S./Colombia FTA has stalled while Canada’s FTA requires approval from Parliament.
The two markets are together worth about $230 million a year to western Canadian farmers, the CWB said. “Without these agreements in place, we risk being shut out of those markets if the U.S., our main competitor in those countries, were to implement deals that left Canada at a serious tariff disadvantage,” White said.
The CWB, among other ag commodity exporters, has long urged Ottawa to pursue bilateral deals with a number of countries to prevent international competitors such as the U.S. from eating Canada’s lunch in a number of key ag export markets.
Pulse Canada, the industry group for pulse growers and processors, recently concurred.
“We are a nation and industry dependent on trade. It is critical that Parliament approves Canada’s trade agreements with Peru and Colombia as soon as possible,” said Pulse Canada chair Lloyd Affleck, who farms at Beechy, Sask., in a release Oct. 31. Peru and Colombia combined are a $70 million market for Canadian pulse crops, he said.
“We cannot rely on multilateral trade negotiations to offset preferential access obtained in bilateral trade agreements” said Jurgen Preugschas, a hog farmer at Mayerthorpe, Alta. and president of the Canadian Pork Council, in a separate release Monday, referring to the multilateral World Trade Organization talks.
“Without this dual-focus on both multilateral and bilateral trade agreements, Canada’s ability to supply current export markets, as well as breaking into emerging markets, will be undermined,” he said.
A reduction in Colombia’s tariffs through an FTA would “enhance opportunities for trade” in products of export interest to Canadian farmers, the government said Friday.
Colombia maintains an average applied tariff on agricultural products of 16.6 per cent, the government said Friday. Lower tariffs will contribute to enhancing the competitive position of Canadian exports in the Colombian markets, and create opportunities for Canadian agricultural exports such as beef, pork, liquor and wines, animal feed, wheat, barley and pulses, and non-tropical fruits such as apples, peaches and berries.
Wheat, barley and lentils are currently among Canada’s main exports to Colombia, along with non-ag exports such as newsprint (paper) and off-road dump trucks. Colombia’s principal exports to Canada include coffee, bananas, coal and fuel.
Under this FTA, Canada has achieved the elimination of all non-agricultural tariffs, including those on fish. But the deal also emphasizes “faster tariff elimination” for those products of “highest importance” to Canadian industry, such as Canada’s main ag exports.
For example, the Canadian Pork Council on Monday explained that from Canadian pork producers’ perspective, this FTA creates a 5,000-tonne tariff-rate quota (TRQ) and the elimination of the in-quota tariff over five years. The TRQ will increase annually and the in-quota tariff will be eliminated over the first five years of the agreement’s implementation, the council said.
Canada will also exclude its own over-access tariffs on supply-managed products (eggs, poultry, dairy) from tariff reduction.
“While there is no denying that Colombians continue to live with serious security challenges, the improvements we have seen over the last several years gives us much reason for optimism,” Harper said in a release Friday.
“Deepening both economic and political engagement between our countries is the best way Canadians can support the citizens of Colombia in their efforts to create a safer and more prosperous democracy.”