This little piggy… should go to Europe

Hey there, time traveller!
This article was published 04/08/2020 (1942 days ago), so information in it may no longer be current.

Manitoba pork producers want the federal Liberals to pressure the European Union to buy more Canadian meat, with internal records suggesting a 2017 trade deal has been bogged down in regulatory barriers.

The European market is more of a back-up for Canadian hog farms, which primarily export to Asia, though a global swine disease could drive up demand for pork.

“Canada has raised this issue with the EU a number of times… including at the ministerial and senior-officials levels,” reads an August 2019 briefing note for MP Jim Carr, who was minister for international trade diversification at the time.

The EU-Canada trade deal, known as CETA, took effect in 2017.

Canada’s pork exports to Europe rose by nine per cent in the first year of the trade deal, but the industry “has expressed unhappiness with CETA implementation, often linked to EU non-tariff barriers,” reads the internal document.

The document noted that industry groups in Manitoba, which make up a quarter of Canada’s pork exports, had lobbied Carr about issues in selling pork to various countries.

“Canada is of the view that the EU’s… regulation and import-licensing system are inconsistent with the negotiated (trade-deal) text, as they do not allow importers to obtain permits automatically on demand,” reads the briefing, obtained through a freedom-of-information request.

It noted that Canada isn’t filling its tariff-rate quota, a measure of how much pork Canada exports before the EU applies a tariff.

Little has changed in the intervening years, analysts say.

The six classes of pork listed in the Canadian International Merchandise Trade Database show only slight changes in exports to Europe.

In fact, Canada sends more fresh pork to Saint Pierre and Miquelon — a French territory off the coast of Newfoundland that has fewer than 6,000 people — than to mainland France.

The issue involves how Canadian farms wash hog carcasses and, to a lesser extent, the sustainability of wooden crates used to ship pork meat.

“That’s not to say ours is bad or theirs is bad; it’s just that we have different approaches,” said Andrew Dickson, head of the Manitoba Pork Council.

He said Europeans can sell pork into Canada with very few barriers, making EU rules unfair. But he added that Canadians pay a low cost for meat, and thus he doesn’t expect European meat to eat into domestic market share.

For decades, Manitoba has exported its pork to the United States and especially Japan, with whom it’s had decades of experience.

Entire supply chains are crafted around cutting and packaging cuts of meat to fit the expectations of Japanese restaurants and supermarkets.

“Until this gets resolved, it’s difficult for the processing industry in Canada to get terribly excited on selling a lot of stuff to the European market, because it’s an investment,” Dickson said.

“The Canadian approach has always been to keep talking, and keep representing our case and keep doors open, so at some point we’ll come to an agreement,” said Dickson, who supported the Liberals’ approach so far.

Agriculture Minister Marie-Claude Bibeau’s office said she raised the pork issue in a June 23 call with her EU counterpart, “to ensure that our farmers and processors benefit from the trade agreement, underscoring the importance of improving EU market access for Canadian agricultural products through the removal of technical barriers to trade,” wrote spokesman Cameron Newbigging.

He said companies exporting pork to Europe are likely making Canadian specialties that would be harder to produce aborad, like maple-flavored bacon.

Market analyst Al Mussell said pivoting to the European market involves seeing different cuts.

Europeans tend to consume sausages and ground meat more than barbecued meat, meaning their market would seek parts like shoulders and hams instead of ribs.

“You can get bogged down in technical details pretty quickly,” said Mussell, the research lead at Agri-Food Economic Systems, an independent research group in Guelph, Ont.

Optimally, there would be cross-Atlantic swapping of pork parts that local consumers want, but he said disagreements around what type of disinfectants are used to clean pigs make it hard to imagine such s system.

“This has been a source of friction,” he said.

He said Canada strengthened its pork exports to Japan after both countries signed a free-trade deal, and Canada also managed to sell hogs to Mexico when that country taxed American pork in retaliation for U.S. metal tariffs.

Similarly, China temporarily blocked Canadian pork imports last summer, but removed that restriction around the time that the country’s trade feud with the U.S. escalated.

“There’s so many moving parts; bizarre things come up,” he said.

Another wildcard is the African swine fever. The virus has killed pigs in Eastern Europe and disrupted China’s domestic pork supply.

Mussell noted that the EU’s own documents suggest countries normally exported within the continent, and recently started selling to China, meaning the virus could leave a gap in either region for Canadian farmers to fill.

“They probably oversold to China, so they may need our product,” he said. “But what incentive do Canadian producers have to start selling to Europe, when they’re so much business going on in Asia.”

That doesn’t even factor in supply-chain disruptions and changes in demand caused by COVID-19, which both Dickson and Mussel say are still being understood.

“We should be cautious jumping in with both feet here,” Mussell said.

dylan.robertson@freepress.mb.ca

Internal briefing on Manitoba pork industry's export issues