Export-oriented Canadian farmers are giving the Trans-Pacific Partnership (TPP) agreement reached in Atlanta on Monday two thumbs up.
The deal, which remains to be debated in Canada’s House of Commons and could take more than a year to be ratified by all 12 member countries, will see tariffs on Canadian products in those markets eliminated or dramatically reduced over the next 15 years, Prime Minister Stephen Harper told reporters in Ottawa.
Harper said the world’s biggest trade agreement will create 1.3 million Canadian jobs by 2020.
TPP members — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam — have 800 million citizens and a combined gross domestic product (GDP) of $28.5 trillion, representing 40 per cent of the world’s economy.
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Achieving the deal meant making concessions in key areas, including Canada’s supply-managed sector, but the federal government has promised to compensate farmers through a $4.3 billion package spread out over 10 years.
Harper stressed the aid is not intended to buy quota and phase out supply management.
“Our plan is to make sure we support the value of quota going forward so quota does not lose value as a consequence of the implementation of this agreement,” he said.
“I know what the criticisms are, but the supply management system is the basis of the rural economy in significant parts of our country and its continuity and stability is essential for those parts of the country. That’s why this government is committed to it and preserving it.”
Canadian grain, oilseed, pulse, pork and beef farmers will have much improved access, particularly to the key Japanese market.
Japan’s over-gate tariff of 4.3 per cent on fresh, chilled and frozen pork cuts will end within 10 years of the agreement coming into force, a senior government official said in a technical briefing with reporters. The under-gate price tariff of up to 482 yen per kilogram will drop to 50 within 10 years.
The over- and under-gate price in Japan on all other Canadian pork cuts will end within 10 years.
Japanese tariffs of 38.5 per cent on fresh, chilled and frozen Canadian beef beef and tariffs of 50 per cent on certain other beef products will drop to nine per cent within 15 years.
Japanese tariffs on imported Canadian feed wheat and barley will be dropped to zero when the agreement comes into force.
Markups on food wheat and barley will be reduced by 45 per cent within eight years and Canada will have access to a Canada specific quota for food wheat.
Japanese tariffs of up to 13.2 yen per kilogram on imported Canadian refined and crude canola oil will end within five years.
“Eliminating tariffs on canola oil in Japan is a huge benefit to the canola industry,” Canola Council of Canada president Patti Miller said in a news release.
“Once the agreement is fully implemented, the TPP will put us on a level playing field in one of our most valuable export markets.”
Japan is a consistent market for canola seed, but tariffs of approximately 15 per cent have prevented oil exports. Once the TPP agreement kicks in, canola oil and meal exports could increase by up to $780 million per year, Miller said.
In 2014, more than $1.2 billion in canola seed was exported to Japan. As tariffs are eliminated, the canola industry estimates that exports will shift increasingly to value added oil and meal, while maintaining the overall volume of canola that is exported.
“By eliminating tariffs on value-added products, the TPP will increase the value of our exports and bring benefits to the whole canola value chain,” Miller said. “This increased value will flow through communities across the country.”
The TPP secures Canada’s ability to export pork to Japan, one of Canada’s most important markets worth about $1 billion annually, the Canadian Pork Council (CPC) said in a release.
“The TPP agreement provides important export growth potential which will encourage Canada’s 7,000 pork farmers to invest in their production facilities and to create new job opportunities for Canadians both on and off the farm,” said CPC chair and Steinbach, Man. farmer Rick Bergmann.
Had Canada not been part of the deal the U.S. and Australia, which compete for some of the same agricultural markets, would have an advantage, Cereals Canada president Cam Dahl said in a release.
Many Canadian products including cranberries, cherries, blueberries, processed potato products, maple syrup and wine will get duty-free access immediately after the deal takes effect.
“I think we got a tremendous deal here that achieves virtually all of our objectives in every sector, but fundamentally gets Canada tariff-free access into the large swath of the global economy into the 21st century,” Harper said. “So I think this is a big deal, a good deal…”
“(Canadian negotiators) reached a deal that frankly exceeded my expectations.”
The federal opposition New Democrats said Sunday, however, that Harper “has no mandate to agree to a deal that could put so much at risk.”
Federal Liberal leader Justin Trudeau said Monday his party supports free trade, but “will take a responsible approach to thoroughly examining the (TPP).”
— Allan Dawson is a reporter for the Manitoba Co-operator at Miami, Man. Follow him at @allanreporter on Twitter. Includes files from AGCanada.com Network staff.
