Assessing the Recent Trade Deal – Canada and the European Union

(Oct 28, 2013 – Westmeath, ON) Tony Straathof, President of the Renfrew County/Ontario National Farmers Union advises Renfrew County farmers, businesses and consumers should critically assess the implications of the Trade Agreement with Europe which was recently signed in principal by Prime Minister Harper.

The information pertaining to the agreement, known formally as the Comprehensive Economic and Trade Agreement, comes from leaked documents and spotted media releases. Our first priority must be to obtain the actual document in order to better analyze the fine print.

As Canadians we support free trade but a trade deal should be fair for all those involved. We read that this trade deal promises to open 28 European Country markets to Canadian goods and services, such as high tech, seafood, agricultural products, lumber, pharmaceuticals, and aerospace products. For some of our consumers, producers and services this deal may not be so promising.

It is apparent that all drug costs will increase (impact of the brand-name pharmaceuticals). Cost of drugs to farmers and pet owners will increase likewise. The promoters of this trade deal will not be on hand to help absorb those speculated increased costs.

The procurement clauses in the draft trade agreement have hinted that local and Canadian public purchasing policy (for construction projects, supplies and food tenders) may have to be open to those European countries as well. This policy may cause devastation for local businesses and local farmers who traditionally supply those services. Canadians don’t have the luxury of the subsidy levels that our European counterparts have. Who stands to win and who stands to lose?

For dairy farmers and cheese producers reports reveal that this trade agreement opened Canada to 4.2 percent of the Canadian cheese market (in other words, Europe under the new trade rules can put 30,000 tonnes of cheese into our Canadian market). This accounts for about one third of the specialty cheese sold in Canada. The reports failed in telling Canadians that the European Union subsidizes its dairy industry to the tune of 7.3 billion dollars annually. Fact is; the Canadian dairy industry is not subsidized.

Promoters of the cheese imports also sought to downplay the impact of the above greater access to European cheese saying the new quota represents just 4.2 percent of the Canadian market (Canadian cheese consumption has risen near that figure). It must be noted that cheese consumption in Canada has risen as a result of Canadian dairy farmers launching and paying for an extensive advertising program for specialty cheeses. In due time the European countries may be taking advantage of Canadian Dairy Farmer’s dollars spent on advertising programs. Obviously, there will be no level playing field. 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. In addition it is feared that small specialty cheese factories may be forced out of business. Canadian and local dairy farmers have real concerns. Any amount of promised compensation would just be a band aid. Dairy farmers and cheese factories will need more than a band aid when the final text is posted.

Straathof continued; the real red ink may appear when beef and pork farmers are told that beef and pork exports to Europe will be greatly increased. In the past, Canada hasn’t been able to fill its beef export quota to Europe. In fact, Europe has rejected beef destined for Europe because the beef did not meet the European standards (hormone and GM feeds use) in Canadian beef production. This issue is still under negotiation as to how much hormone and/or GM feed, if any, may be allowed in the production of Canadian beef/pork for export. Speculation is that the figure may be minimal. There are also two other critical issues here; Canadian processing plants will have to upgrade their plants to meet those European standards. A costly process and of course beef/pork producers may have to pick up all of the tab. In addition European subsidies enter this equation as well.

Straathof concluded; Yes, there may be some real positives in the trade deal in some segments of the Canadian economy. Other segments for example farmers, some businesses, and consumers must be vigilant they are not dealt another losing hand in this trade deal. Already the Renfrew County NFU along with other farm organizations have met with M.P. Cheryl Gallant to outline the above.

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Renfrew County Local

National Farmers Union – Ontario

For more information:

Tony Straathof – 613-587-4343 straath@nrtco.net