Canola industry keeping close eye on trade deal
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Hey there, time traveller!
This article was published 14/05/2015 (2943 days ago), so information in it may no longer be current.
THERE’S plenty of debate as to what the Trans-Pacific Partnership (TPP) will mean to different industry sectors in Canada and the 11 other countries currently negotiating the deal.
But there’s no debate about it from those in Canada’s canola industry. They believe it is an opportunity to grow the industry by close to $1 billion per year. That’s why they are keen to keep Canadian negotiators vigilant.
Patti Miller, president of the Winnipeg-based Canola Council of Canada (CCC), said a global level playing field is crucial for the industry.
It is made more urgent by the bilateral agreement Australia has already made with Japan that currently gives its canola oil exporters an advantage over Canadian exporters.
Starting today, Guam is hosting a two-week meeting of chief negotiators for the 12-country TPP, which has been described as one of the most ambitious international trade initiatives in history. Canadian canola producers believe there is the potential to see exports of canola oil increase by up to $780 million per year throughout the TPP region. That’s about one million tonnes of processed product.
The Canadian canola sector is one of the most globally dominant of any Canadian industry, and the CCC is not afraid to make sure its views are known.
“We export 90 per cent of the canola that Canada grows and processes,” Miller said. “Stable and fair trading rules and equal access are critical to us as far as our ability to achieve our strategic plans and continue to have a profitable industry.”
Canada is the largest canola producer in the world and accounts for 70 per cent of the global canola trade.
Brian Innes, the CCC’s vice-president of government relations and chairman of the Canadian Agri-Food Trade Alliance, said the industry is confident it can compete and wants to make sure it can do so on an even footing with others. Canada has been shipping canola seed to Japan — about $1 billion worth per year — for about 40 years. But it can’t ship processed canola oil, which the Japanese hit with a 15 per cent tariff.
“What we see is that Australia has a bilateral agreement with Japan that gives them better access,” Innes said. “Japan has been Canada’s backyard when it comes to the canola market for 40 years. Why should processing plants in Altona or Harrowby or Ste. Agathe be disadvantaged to canola processing plants in southern Australia?”
Most industry development groups are advocating for Canada’s involvement in the TPP. Some, including supply management agri-food businesses such as the dairy, egg and poultry sectors are worried about being able to maintain the status quo.
As the globally dominant player, the Canadian canola industry is probably at the other end of the spectrum.
“All we need is fair and open and stable markets,” Innes said. “Whether it is about access to Canada or access to other markets, we are confident in our ability to compete.”
People such as Carlo Dade, the director of the Centre for Trade & Investment Policy at the Canada West Foundation, believe those opposing trade deals such as the TPP are being counterproductive.
He is also concerned many elements of Canadian industry have become complacent after 20 years of free trade with the U.S., the largest and richest market in the world.
“After 20 years, we have gotten used to taking off early on Thursday afternoon because we have made our money in the U.S. market,” Dade said. “Everyone else in the world has been looking at us, green with envy. They would sell their grandmother to be in this position. Now (with the TPP) they will get a crack at it.”
Recent meetings between U.S. President Barack Obama and Japanese Prime Minister Shinzo Abe suggest TPP negotiations are picking up speed.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
Updated on Thursday, May 14, 2015 6:52 AM CDT: Adds photo
Updated on Thursday, May 14, 2015 9:08 AM CDT: Attributes quote to Dade