Ag groups urging Europe to live up to CETA obligations as exports to EU fall

Ag groups urging Europe to live up to CETA obligations as exports to EU fall
Since the between Canada and the European Union went into provisional force in September 2017, Canadian farmers and agri-food exporters have not seen their sales to Europe increase as expected. In fact, according to the Canadian Agri-Food Trade Alliance (CAFTA), EU imports of Canadian agri-food products have actually decreased by 10 per cent, to a total of $2.6 billion, since the trade deal was implemented.

While fluctuating global demand and market prices do affect Canadian export destinations, farm groups say the biggest reason trade to the EU is falling is because of a host of non-tariff barriers and technical disagreements that make market access a struggle in spite of CETA. They are calling on leaders on both sides of the Atlantic to address the issue this week, as Prime Minister Justin Trudeau hosts a two-day summit in Montreal with European Council President Donald Tusk and European Commission President Jean-Claude Juncker.

“We need to have these issues resolved in a timely manner, so the agreement can actually work for our exporters,” said CAFTA executive director Claire Citeau, who added that when CETA was signed some believed the deal could increase Canadian agri-food exports by up to $1.5 billion annually. “We knew it would take some time, but we’re getting close to the two-year mark and little progress has been made.”

One of the biggest challenges facing Canadian farmers in the European market right now is Italy’s country of origin labelling legislation, which has dramatically affected exports of Canadian durum wheat. Tom Steve, general manager of the Alberta Wheat Commission, said up to 25 per cent of Canadian durum wheat production — or one million tonnes annually — was once destined for Italy, where it is used in the making of pasta. But with the new “Made In Italy” preferential labelling system in effect, Canadian durum exports to that country have plummeted by about 70 per cent to just 380,000 tonnes last year.

Italy has been buying less Canadian wheat for pasta since enacting country-of-origin labeling laws. Getty Images

“It’s concerning,” Steve said. “We’ve been pressing the government of Canada to take some aggressive measures and that has yet to materialize. We’ve been asking them to initiate a World Trade Organization challenge. Because it’s one thing to conclude trade agreements and it’s another to enforce them. And, unfortunately, we’re seeing rising protectionism across the globe.”

Not all commodities are facing the same degree of difficulty — Canadian pork and beef exports to the EU increased by 107 per cent and 113 per cent respectively from 2017 to 2018. However, since Canada exported hardly any beef and pork to Europe prior to CETA, the increases still represent very small volumes.

John Masswohl, director of government and international relations for the Canadian Cattlemen’s Association, said Canada has exported just 600 tonnes of beef to the EU so far this year, “far short” of the potential that exists under the terms of CETA. He said the Canadian industry is struggling to come up with a mutually recognized protocol to verify livestock production practices, since Europe insists on beef raised without the use of growth-promoting hormones.

“We’re not trying to get around the hormone ban, we have enough cattle that are raised that way to meet the demand,” Masswohl said. “We just need an alternate way of proving that.”

Canadian agri-food producers have also pointed out the increasing level of EU food products being imported into the Canadian market. At the same time, Canadian exports to Europe declined, EU exports to Canada rose by almost 10 per cent in 2018, increasing the trade deficit in favour of EU exporters to $3.5 billion.
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