Last month the Government of Canada announced the recently negotiated free trade deal between Canada and the European Union. The Canadian-European Union Comprehensive Economic and Trade Agreement (CETA) promises benefits to every region in Canada. The European Union is one of the most lucrative markets in the world, and in Alberta it is already the fourth largest export destination after the United States, China and Japan.
This opens up a major market opportunity for agriculture food producers in Western Canada. Canadian grain growers will be able to export products to a new market. On the downside, the Canadian Dairy producers oppose the free-trade agreement. They do not welcome the competition from the large European cheese market that will now be able to easily access Canadian consumers.
However, beef producers along with Canadian wheat, barley and oilseed producers have shown enthusiasm for the new deal. Gaining access to this large and lucrative market forecasts an incredible revenue growth for Canadian grain growers.
In regards to CETA, Matt Sawyer, chair of the Alberta Barley Commission, told the Globe and Mail that “It’s good for Alberta, it’s good for Canada. To have this opportunity for producers in Alberta and Canada to have access to basically 500 million more people is absolutely fantastic.”
CETA will also benefit Canadian canola growers. The Canadian Canola Growers Association, which represents more than 43,000 canola farmers on national and international issues, is anxiously waiting a successful conclusion to the deal. CETA will expand European market opportunities for Canadian canola products including canola oil for biofuels and canola meal for livestock feeds.
“By lowering oil tariffs, the exports of Canadian canola oil to Europe will increase in value by approximately $90 million, creating new demand for canola seed to feed our expanding oilseed crushing capacity,” said Rick White, General Manager of the Canadian Canola Growers Association.
“Our farms depend on trade, and the CETA is an excellent example of how the Government of Canada is helping Canadian farmers achieve export success,” said White.
Presently, Canadian agriculture exports to the EU face high tariff rates, with the average tariff rates of 13.9 percent. The removal of the current tariff on ‘common wheat’ or lower protein wheat varieties will benefit Canadian wheat. Canada is known most for its high quality wheat but if tariffs are removed from other wheat varieties, Canadian wheat growers can more easily diversify their crops and focus on marketing several different varieties of wheat around the world.
In addition, almost 94% of EU agriculture tariff lines will be duty free. This will give Canadian agricultural goods access to the EU market and a competitive advantage over producers from other countries that do not have a free trade agreement with the EU. According to the Canada-European Union Comprehensive Economic and Trade Agreement website, EU tariffs will be eliminated on:
- grains, including oats (EU tariffs of $114/tonne), low- to medium-quality common wheat (EU tariffs of up to $122/tonne), and barley and rye (EU tariffs of up to $120/tonne);
- durum and high-quality common wheat (maximum tariffs up to $190/tonne and $122/tonne respectively), for which CETA will lock in permanent duty-free access; and
- oils, including canola oil (EU tariffs of up to 9.6 percent).
Having access to this market is a positive thing for Canadian grain growers and exporters like Bar-Agg Hay and Grain Exporters. Barr-Ag is already an exporter of Canadian grains to countries around the globe and anticipates the expanded opportunities to market to the European Union.