Meat, grain sectors hail trade proposal with Japan

Plans for a joint study of the potential for a “economic partnership” deal between Canada and Japan find Canadian meat and grain producer groups already well aware of the potential of the Japanese market.

International Trade Minister Peter Van Loan on Wednesday announced the launch of the study to “examine the economic impact of an economic partnership agreement and consider its benefits for workers and exporters in both countries.”

As the Canadian Pork Council explained in a separarte statement, such a study “will serve to better inform our Canadian representatives what to negotiate should the decision be made to pursue a free trade agreement.”

The announcement is seen as a sign of Japan’s interest in boosting its economy by liberalizing trade.

“With today’s announcement, Japan is taking an important step toward opening markets for the mutual benefit of both our countries,” Van Loan said in the federal government’s release.

Other than to note Japan’s status as the world’s third-largest economy, Canada’s largest source of “job-creating investment” from Asia, and Canada’s fourth-largest merchandise export market, the federal announcement didn’t specify which sectors would benefit from a bilateral partnership deal if one were to develop from this study.

More generally, the government noted, Canada’s exports to Japan hit almost $9.2 billion in 2010, up more than 10 per cent from the previous year.

“Success story”

The Canadian Meat Council, which represents federally-inspected meat processors, reiterated in a statement Wednesday that Canada exported 227,000 tonnes of pork, worth $865 million, to Japan in 2009, along with 11,000 tonnes of beef ($58 million) and 3,200 tonnes of horse meat (over $20 million).

The CPC noted Canada’s pork exports alone to Japan in 2010 weighed in at 225,000 tonnes, worth $852 million, representing 20 per cent of Canada’s pork exports by volume and 31 per cent by value.

“Pork exports from Canada to Japan have been a major success story and have been steadily increasing each year,” CPC chairman Jurgen Preugschas said in Wednesday’s release. “The government will have our full support to seek more liberalized bilateral trade and investment between the two countries.”

CPC’s export arm, Canada Pork International, just recently set up shop in Tokyo, opening its first office outside Canada “to further strengthen the relationship with our customers,” CPI president Edouard Asnong said.

Barriers

Canada’s beef exporters haven’t enjoyed nearly the same market access, due to Japan’s continued restrictions on Canadian beef plus a tariff wall.

Where it shut its ports completely to Canadian beef after the discovery of Canada’s first domestic case of BSE in 2003, Japan since 2005 has limited its imports of Canadian beef to meat from cattle under 21 months of age.

Japan’s restrictions continue despite the recommendations of the World Organization for Animal Health (OIE), under whose standards no age limits need be placed on Canadian beef, according to the Canadian Cattlemen’s Association.

“Full and free access to the Japanese market is a very high priority for the Canadian beef industry,” CCA president Travis Toews said Wednesday, adding the cattle producer group “strongly supports the initiation of this exploration study and we are hopeful that the process will eventually lead to Canadian beef reaching its potential in Japan.”

Canada’s pre-BSE exports of beef to Japan were near 30,000 tonnes per year to Japan. In 2009 and 2010, Canada shipped less than half that total each year, the CCA said.

Japan also sports an import tariff on beef of 38.5 per cent, rising to 50 per cent when imports reach a trigger level, the association noted.

“With the removal of tariffs and other restrictions, Canadian beef exports to Japan could exceed a quarter billion dollars per year.”

The association said its eventual support for ratifying and implementing a trade deal with Japan would be “contingent on the removal of these and other barriers that might be identified.”

All that said, the CCA added, “the process of negotiating, ratifying and implementing a free trade agreement is many steps beyond today’s announcement to begin a scoping study.”

Asian markets

The Grain Growers of Canada, meanwhile, said Japan’s willingness to talk trade represents “a real opportunity” for Canadian farmers, not just in Japan itself but as a foothold into broader Asian markets.

“Japan is well known for paying a premium price for agricultural imports that meet its exacting specifications,” GGC president Stephen Vandervalk said Wednesday.

“Canada is well positioned to gain because we have the ability to segregate cereals and oilseeds to capture those premium prices, which means more dollars in farmers’ pockets,” he said, noting Canadian agrifood processors would also stand to gain from freer trade.

“Any initiative that could enhance Canada’s and Japan’s relationship and address commercial challenges is particularly welcome,” the CPC said, but added that “at the same time, we hope this study does not diminish the importance of resuming free trade talks with South Korea.”

The pork industry and other sectors have previously warned that Canada postponing its bilateral Korean trade talks any further would seriously affect the competitiveness of the pork industry, as “all of our key competitors have previously reached or have negotiated (trade agreements) with Korea.

“It is fair to assume that Canada’s current pork trade with Korea would completely disappear.”

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