Canada Trade Agreement Causes Schism As Dairy Industry Finds Fault

CANADA – Canada’s new Comprehensive Economic and Trade Agreement (CETA) with the European Union presents opportunities for agricultural exports, but has prompted strong opposition from a dairy standpoint.

4 November 2013

4 minute read

North America

The European Commission has said that CETA, which is yet to be fully ratified, will erase 99 per cent of tariffs between the two countries, expanding bilateral trade by 23 per cent, equivalent to €26 billion.

But, farmers are concerned with the prospect of being put head-to-head against subsidised EU farmers in a more liberal trading system.

Speaking after the agreement was signed on 18 October, Canadian Agriculture Minister, Gerry Ritz backed the agreement.

He explained the expected boost to service trade, such as communications, transport and insurance, as well as agricultural produce, which is set to benefit Saskatchewan in particular.

The area boasts 10 per cent of the world's wheat supply in an agricultural industry employing over 43,000. What's more, the EU is third on the province’s export list.

“When our agreement with the European Union is fully implemented, over 95 per cent of agricultural tariff on Canada’s high-quality products will be eliminated,” added Minister Ritz. “Creating an opportunity to increase sales will benefit hard-working folks in Saskatchewan through more jobs, higher wages and greater long-term prosperity.”

While the benefits of the agreement could potentially be far reaching -crating jobs both sides of the atlantic - the Canadian NFU has stated that this could be the worst decision of President Stephen Harper’s tenure.

Tony Straathof, President of both the Ontario and Renfrew County National Farmers Union, has warned that the agreement pits a government supported dairy market against the Canadian system.

“Fact is; the Canadian dairy industry is not subsidized,” said Mr Straathof. “For dairy farmers and cheese producers reports reveal that this trade agreement opened Canada to 4.2 per cent of the Canadian cheese market.”

“Under the new trade rules, Europe can put 30,000 tonnes of cheese into our Canadian market," revealed Mr Straathof.

He added that the recent upturn in dairy consumption faces being swallowed by European imports after considerable work from within the industry to boost the profile of dairy in advertising campaigns.

Moreover, liquid milk could be affected, he added: “Dairy farmers stand to lose some of their market share and possibly have to sell their milk at a reduced price and below cost of production just to compete.”

He forecast the closure of some smaller speciality cheese producers, adding the concerns are ‘very real’ for dairymen.

“This is disastrous for our economic sovereignty,” NFU Canada President, Terry Boehm said, adding that the agreement will ‘severely’ restrict local food chains.

“We are witnessing the destruction of our autonomy as farmers, governments and citizens. Harper’s negotiating tactic - allowing increased importation of European cheeses - will have negative effects on dairy farmers," warned Mr Boehm.

He added: "As well, the increase in beef exports to the EU is a red herring - we have not filled existing export quotas for hormone-free beef to this point."

Dairy Farmers of Canada has called on the government for supply management measures to be installed at the next international agreements.

In a release last week, DFC cautioned that many businesses are at risk as a result of CETA as dairy farmers are put into rivalry with European counterparts.

DFC spokesperson Frederic Marcoux said he now feared for the young farmers in the industry adding: “Canadian dairy products are the pride of dairy farmers and consumers. However, they have one weakness: in the context of our northern agriculture, they can hardly compete against Europe's public purses. I refuse to have our profession become one of rivalry among nations.”

European Commission President, José Manuel Barosso focused on the broader economic benefits of the partnership, which was worth €61.6 billion in trade between the two countries last year.

The lion’s share of trading in recent years has been in machinery, transport equipment and chemicals. Total exports between the nations are expected to lift a quarter for Europe and one fifth for Canada.

"This is a highly ambitious and far-reaching trade agreement of great importance for the EU's economy," said President Barroso. "Canada is one of the most advanced economies in the world.

"This agreement will provide significant new opportunities for companies in the EU and in Canada by increasing market access for goods and services and providing new opportunities for European investors.”