“Market access issues in general are becoming a bigger issue globally,” said Ian Epp, an agronomy specialist and lead on market access and pesticides with the Canola Council of Canada. “We see more scrutiny under those things.”

And the reality is that the burden of that increased scrutiny falls directly into the laps of farmers.

The Keep it Clean program is designed to help farmers deal with that burden. It’s a joint initiative of the Canola Council of Canada, Cereals Canada, Pulse Canada and the Prairie Oat Growers Association, funded in part by the federal AgriMarketing program, and offers tools to help farmers ensure their crops meet the ever-changing marketing standards of Canada’s international trade partners.

“It’s kind of a one-stop shop for growers to get information around market access issues,” Epp said.

“Across commodities, we deal with a lot of similar issues, whether it’s similar active ingredients or similar markets of concern… So it’s a good way to give growers clean, uniform messaging on the things they should be thinking about as they plan for the growing season.”

The Keep it Clean website breaks down how farmers can meet these challenges into five tips:

• Use acceptable pesticides: The website offers an annual product advisory list (updated at the end of April) that lists products that are off limits. Farmers should only apply pesticides that are both registered for use on their crop in Canada to avoid trade concerns.
• Always read and follow the label: Before applying any crop protection product, read the label to find the application rate, timing, and pre-harvest interval (PHI).
• Manage disease pressures: Using an integrated disease management plan helps to maintain yield and profitability and can help protect Canada’s reputation as a supplier of high-quality canola, cereals and pulses.
• Store your crop properly: Proper storage helps to maintain crop quality and keeps the bulk free of harmful cross-contaminants.
• Deliver what you declare: The Declaration of Eligibility affidavit is a legally binding document, and any incorrect information, intentional or unintentional, can be traced back to the farm, and individuals can be held liable for the costs associated with the contamination of a bin or shipment.

While there is good buy-in for the program, Epp said, it’s easy to forget about these issues with all the pressures associated with getting the crop in the bin.

“There are a lot of things to manage throughout the season to get the most bushels into the bin, and that’s often when we check out,” he said. “But the next step, that is more and more important, is you actually have to sell that grain.”

With the vast majority of Canadian grain being sold outside the country (90 per cent of the canola, 85 per cent of pulses and 65 per cent of cereals are exported), Epp said it’s critical that those products destined for other countries be clean.

“Grain companies have to meet obligations in those other countries. So, we have to make sure that not only is it in the bin, but that it is ready to market,” he said. “Our customers are demanding that of us.”

Epp says one ever-present cross-commodity issue that the grain companies face is the international scrutiny on glyphosate, especially in the pre-harvest window. “If the timing and application are done correctly, it works really well agronomically, and we don’t have residue issues,” Epp said. But with the amount of scrutiny, glyphosate is something on which growers should keep a close eye.

“This is the time when growers are setting up their pesticide plans for the year,” he said. “So, now is a good time to run through pre-harvest intervals.”

Keep it Clean will hold a webinar April 26 to coincide with the release of its latest product advisory. Keep an eye on its website for details.

— Don Norman reports for the Manitoba Co-operator from Winnipeg.

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The Canadian Cattlemen’s Association on Oct. 18 noted the official applications to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) from the United Kingdom, China and Taiwan along with “further interest” from South Korea.

“We expect the Asian region to hold the largest potential for growth in beef demand over the next 25 years and securing further access to key Asian markets is a priority for us,” CCA president Bob Lowe said in a release.

“We are encouraged to see other countries’ interest in joining CPTPP, as long as they meet the ambitious nature of the trade agreement, which should open and expand exports for Canadian beef farmers and ranchers.”

The CCA noted it’s been a “consistent advocate” for further expansion of the CPTPP, “subject to review of specific country barriers and potential for beef trade.”

With the CPTPP trade pact in effect at the end of 2018, Canadian beef exports for 2020 rose 37 per cent in volume and 35 per cent in value compared to calendar 2018.

From January through August 2021, the CCA said, exports “continue to rise to CPTPP countries and are up 60 per cent in volume and 66 per cent in value.”

The CPTPP group so far includes Canada as well as Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The United States, which had been in on Trans-Pacific Partnership talks since 2010, dropped out of the bloc in 2017 when then-president Donald Trump declared the U.S. would not ratify the agreement.

As to the new applicant countries’ chances of CPTPP membership, Global Affairs Canada says any “aspirant economies” seeking entry to the group “must be able to meet and comply with the CPTPP’s high-standard rules and ambitious market access commitments.”

Applicant countries also must have “a demonstrated history of compliance with their existing trade commitments.”

From Canada’s specific perspective, China’s interest in CPTPP could blow back on Canada’s participation in another trade bloc, the Canada-U.S.-Mexico free trade agreement (CUSMA).

New rules in CUSMA call for each of three signing countries to inform the other two if it intends to negotiate a free trade pact “with an economy that is determined by one party to be a non-market economy.”

The CUSMA member country would have to “provide information on objectives, and make available the text of the (other) agreement 30 days before signing,” a Global Affairs Canada spokesperson said via email.

Canada’s membership in the CPTPP has also been a sore spot for Canadian supply-managed sectors, although federal compensation has been committed to the dairy, poultry and egg sectors for domestic Canadian market share lost to imports.

That said, further expansion of the CPTPP would not lead to any increase in the total quota granted to the bloc for dairy, poultry and egg products, Global Affairs Canada said.

“Canada’s (tariff rate quota) commitments under the CPTPP are fixed and could be accessed by new acceding partners, provided they demonstrate a commensurate level of ambition in sectors of export interest to Canada,” a Global Affairs Canada spokesperson said via email.

Canada has already committed that it will not provide additional market access in supply-managed sectors in any future free trade talks — and that commitment would apply to CPTPP expansion as well, the department said.

“Canada’s market access commitments under the CPTPP, including tariff rate quota (TRQ) volumes, are set and will not be renegotiated,” the spokesperson said.

“Canada would immediately reject any request that does not uphold the government’s commitment.” — Glacier FarmMedia Network

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The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) removes 95 per cent of tariffs between its members: Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile and Malaysia.

Britain hopes to carve out a niche for itself in world trade as an exporter of premium consumer goods and professional services. Accession to the pact would supplement trade deals London is seeking, or has already agreed, with larger members.

“This part of the world is where Britain’s greatest opportunities lie. We left the EU with the promise of deepening links with old allies and fast-growing consumer markets beyond Europe,” trade minister Liz Truss said. “It is a glittering post-Brexit prize that I want us to seize.”

The CPTPP is not expected to lead to a surge in British exports. But it locks in market access, including for legal, financial and professional services sectors, and is seen by ministers as an important way to gain influence in a region where China is increasingly the dominant economic force.

Unlike the European Union, the CPTPP does not impose laws on its members, it does not aim to create a single market or a customs union, and it does not seek wider political integration.

Removing tariffs

The process of negotiating membership is largely about proving to existing members that Britain can meet the group’s standards on tariff removal and trade liberalization, and then setting out details of how and when it will do so.

“The CPTPP agreement has strong rules against unfair trade practices like favouring state-owned enterprises, protectionism, discriminating against foreign investors, and forcing companies to hand over private information,” the trade department said in a statement.

“The UK’s joining will strengthen the international consensus against such unfair practices,” it added.

The government is expected to publish documents setting out its assessment of the benefits of membership on Tuesday, but highlighted cars and whisky as goods exports that would benefit.

The U.S. withdrew from an earlier planned trans-Pacific trade pact under then-president Donald Trump. His successor, Joe Biden, spoke prior to his election last November about the possibility of renegotiating the deal, but has not laid out any firm plans since taking office.

— William James is a U.K. political correspondent for Reuters in London.

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Canada’s Trade Minister Mary Ng and her Indonesian counterpart Muhammad Lutfi on Sunday declared the launch of negotiations on a comprehensive economic partnership agreement (CEPA).

In a statement, they said they’ve “instructed officials to hold the first round of negotiations at the earliest opportunity,” expected in late 2021.

Canadians “expressed a high level of support for a possible Canada-Indonesia CEPA” during public consultations earlier this year, the government said in a release.

About 78 per cent of respondents to those consultations, launched in January, were deemed supportive of a free trade agreement.

Of those, about a third came from the agriculture and agri-food sectors, listing market access, dealing with technical trade barriers, investment and sanitary and phytosanitary measures as priorities. Environment, inclusive trade and labour issues ranked lower.

Meat exporters want challenges of entering the Indonesian market addressed. Particularly, they mentioned challenges from importing products with Halal certification, and issues stemming from how Canada’s meat inspection system meshes with packaging or labelling requirements in Indonesia.

Supply-managed sectors expressed support for a deal, so long as the federal Liberals uphold a commitment to not provide any more market-access to supply managed goods.

Across the board, there is broad support for Canada to pursue a bilateral deal with Indonesia at the same time it seeks a broader pact with the 10-nation Association of Southeast Asian Nations (ASEAN), which is headquartered in Indonesia.

Canada and the ASEAN group held two rounds of exploratory talks, in 2018 and 2019, toward a possible trade pact. Four ASEAN nations — Vietnam, Malaysia, Singapore and Brunei — are already parties to the Trans-Pacific Partnership (CPTPP) trade pact with Canada.

“References were made to the fact that pursuing a trade agreement with Indonesia would complement Canada’s other trade policy priorities, such as Canada’s overall trade diversification strategy, expansion of the (CPTPP) through accessions, and deepening commercial ties with the fast-growing Indo-Pacific region,” a consultation report from Global Affairs Canada said.

Indonesia has expressed a desire to negotiate a broader deal in parallel with a bilateral one.

“We see the benefit of both (deals),” Iffah Sa’aidah, a trade attaché in Ottawa with the Indonesian government, said. “There will be a benefit of both of the trade deals, usually the bilateral trade deal is more broad and deeper, maybe more technical and economic co-operation.”

Indonesia is a co-ordinator of ASEAN’s pursuit of a trade deal with Canada, for which formal negotiations are expected to begin in early 2022.

By itself, Indonesia is “one of the top destinations for Canadian cereal crops and a gateway into the rapidly growing Asia Pacific region,” Dean Dias, CEO of Cereals Canada, said in a release Monday hailing the two countries’ announcement.

Indonesia, he said, “is a major market and source of growth, especially for Canadian wheat exports. Consumers there buy 11 per cent of Canada’s wheat exports to the world, bringing over $600 million in value on average to Canadian farmers and exporters each year.”

Cereals Canada, he said, expects the CEPA negotiations to “strengthen the stability of market access over the long-term. For Canadian farmers and exporters, promoting science-based policies that elevates the trade and business environment is a real priority.”

Global Affairs Canada, meanwhile, said in its report that a bilateral pact with Indonesia could “contribute significantly to Canada’s overall economic, social and environmental priorities, in line with Canada’s commitment to an inclusive approach to trade.”

Including issues such as the environment or labour rights in trade deals are relatively new to Indonesian negotiators, who have expressed caution over Canada’s insistence on including such measures.

Despite such issues ranking as a lower priority, Global Affairs noted in its report “many submissions indicated support for Canada’s inclusive approach to trade, which aims to ensure that the benefits of trade are more widely shared. A few submissions mentioned that Canada is well-placed to ensure that any future agreement promotes equality, non-discrimination and human rights in both Canada and Indonesia.”

Some stakeholders suggested labour standards and human rights issues be addressed through a dedicated chapter in the trade agreement.

“Several stakeholders mentioned that poor health and safety regulations, low compensation and forced child labour in Indonesia are all factors that Canada should consider when negotiating an agreement,” read the report from Global Affairs.

Environmental concerns, including Indonesia’s limited environmental regulations, were also raised as a concern.

In Sunday’s announcement, the two countries’ trade ministers said jointly that “without prejudice to the final outcomes, the negotiations would cover mutually agreed areas of interest to both Indonesia and Canada, including market access, rules to facilitate trade and investment, and co-operation.”

Those talks, they said, would take into account “each other’s sensitivities and different levels of development.”

— Includes files from Glacier FarmMedia reporter D.C. Fraser in Ottawa.

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The compensation follows promises by the Trudeau government — and the Harper government before it — that dairy farmers would be compensated in some form for the loss of market.

Why it matters: The program will put $1.75 billion into the hands of dairy farmers over the next eight years, money that’s expected to help them adapt to changing market conditions.

The program is worth $1.75 billion and will compensate farmers for the close to five per cent of the dairy market given up in the Comprehensive Progressive Trans-Pacific Partnership (CPTPP) deal and the CETA trade deal between Canada and Europe.

A previous program, designed to aid farmers with technology adoption to help adapt to the CETA trade agreement with Europe, was heavily criticized because the only farmers who got funding were those with a current technology project underway, had the connections to get the applications in quickly and who had a bit of luck.

Many farmers looking for funds from that $250 million program did not get them. About 3,300 dairy farmers got funds from the program.

The new program aims to fund every farm, with payments expected to flow through the Canadian Dairy Commission and to be issued “in proportion to (farmers’) quota held.”

The payments to be made in the first year are budgeted to take up $345 million from the $1.75 billion funding envelope.

Federal Agriculture Minister Marie-Claude Bibeau made the announcement Friday at a Compton, Que. dairy farm.

“As promised, the compensation is deployed fully and fairly to allow everyone to make the best decisions based on the new market realities and their respective situations,” she said.

Dairy farmers will be compensated depending on the size of their farm.

Farmers who milk 80 cows, for example, will receive a direct payment of $28,000 in the first year, for a total first year payment of $345 million.

The federal government said it “will continue to work with the Dairy Farmers of Canada to determine terms and conditions for future years.”

DFC said Friday’s pledge lines up with the recommendations of the working group of dairy farmer, processor and government representatives following the recent signing of the Canada-U.S.-Mexico (CUSMA) trade agreement.

“There is no doubt that conceding part of our domestic dairy market has had a major impact on the livelihoods of dairy producers,” DFC president Pierre Lampron said in a separate release Friday.

“While we are grateful for today’s announcement, we would have preferred no concessions to our domestic dairy production,” he said.

Prime Minister Justin Trudeau “has made another commitment: no further concessions would be made to our domestic dairy market in future trade negotiations,” Lampron added. “Our expectation is that he will keep that commitment as well.”

Bibeau on Friday “also reiterated the government’s commitment to the other supply-managed sectors,” the government said in its release.

Federal Conservative agriculture critic Luc Berthold on Friday described the Liberal government’s plan as “a cheque for the elections for milk producers, nothing for egg and poultry producers, and no firm commitment for direct compensation after 2019.”

The government, he said on Twitter, has “waited four years to deliver to producers a plan that the Conservatives announced four years ago… and waited until the eve of the election to make the announcement.”

— John Greig is editor of Farmtario.

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The pledge comes as the federal Liberals face pressure from supply-managed sectors and the federal opposition Conservatives to deliver on compensation for access granted to the Canadian market under Canada’s free trade pacts with the European Union and Trans-Pacific Partnership.

Compensation for supply-managed sectors in the wake of the CETA and Trans-Pacific deals has been pledged since well before the previous federal election in 2015.

“These agreements are in place and their negative impacts can already be felt by the dairy sector across the country,” DFC president Pierre Lampron said in a statement Friday, at the end of the federal/provincial/territorial agriculture ministers’ two-day meeting in Quebec City.

Details and allocation on compensation “are essential to restore stability and confidence in the dairy sector,” he said.

However, he noted, during the DFC’s annual meeting last week in Saskatoon, Bibeau “committed to providing the details of the compensation package before the end of the federal government’s current mandate.”

DFC, he said, “is holding the minister to account to follow through on her commitment.”

The Conservatives’ agriculture critic Luc Berthold, in a separate statement Tuesday before the ag ministers’ meeting, said Bibeau “promised Canadian milk, egg and poultry farmers that a compensation plan would be in place by June 30, but the Liberals have blown past their own deadline and failed to deliver any of the $3.9 billion farmers are counting on.”

With the next federal election coming up Oct. 21, he said, “the Trudeau government would rather play politics and delay compensation for their re-election campaign than deliver on their promises. Justin Trudeau must finally release the compensation details promised to Canadian farmers so they can finally receive the support they need.”

Bibeau, in a separate statement Sunday, said the federal government “with the collaboration of representatives from supply-managed industries, is working hard to put in place funding mechanisms that meet the needs of producers.

“We are committed to unveiling the details of the compensation before the end of this mandate, and we will begin to get processes underway to ensure the sector can benefit from it as soon as possible.”

Bibeau reiterated Ottawa has committed up to $3.9 billion for supply-managed farmers in response to the CETA and CPTPP trade agreements and is “also committed to a second block of compensation that will come after the ratification of the new NAFTA,” also known as the Canada-U.S.-Mexico Agreement or CUSMA.

Berthold said Tuesday the lack of details on compensation “comes as no surprise since the Liberals have been failing our agriculture sector for the last four years — raising taxes, making concessions to Donald Trump during NAFTA negotiations, failing to stand up for Canada when China banned meat, soy and canola seed exports, and leaving our farmers with greater uncertainty.”

Bibeau retorted Sunday that “nearly half of Conservative members are in favour of seeing the supply management system in Canada dismantled. While the Conservatives wanted us to capitulate on NAFTA, we did not give in to Conservative calls to abandon our supply managed farmers in response to very strong American attempts to see it dismantled.”

The government, she said, “did not take lessons from the Conservatives, and instead we have safeguarded more than $2 billion a day in cross-border trade and tariff-free access to our No. 1 market for Canadian exports.” — Glacier FarmMedia Network

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Dairy: ‘Who needs an enemy?’

The new agreement, announced Sunday and dubbed the United States-Mexico-Canada Agreement (USMCA) by the U.S. government, is expected to put an end to Canada’s milk pricing Classes 6 and 7 and create additional tariff rate quotas “exclusively” for U.S. dairy products over and above existing levels, according to the U.S. Trade Representative’s office.

By year six under the USMCA deal, additional market access will be granted for 50,000 tonnes of fluid milk; 12,500 tonnes of cheese; 10,500 tonnes of cream; 7,500 tonnes of skim milk powder; 4,500 tonnes of butter and cream powder; 4,135 tonnes of yogurt and buttermilk; 1,380 tonnes of concentrated and condensed milk; 690 tonnes of ice cream and ice cream mixes; 690 tonnes of “other” dairy; 520 tonnes of powdered buttermilk; and 2,760 tonnes of “products of natural milk constituents.”

In each of those categories, access for U.S. tonnage will increase by one per cent for an additional 13 years, the USTR said in a release.

In the fluid milk category, 85 per cent of the quota will be reserved for further processing; meanwhile, in the cream category and the butter and cream powder category, 85 per cent of the volume in year one of the deal will be reserved for further processing. By year five, the quota in the butter and cream powder category reserved for further processing will be cut to 50 per cent.

U.S. whey will get 4,134 tonnes of additional access by year six of USMCA, growing one percent for an additional four years, the USTR said, adding whey’s over-quota tariff is to be eliminated in 10 years.

The U.S. pledges to provide “reciprocal” access on a ton-for-ton basis for imports of Canada’s dairy products through “first-come, first-served” tariff rate quotas, the USTR said.

One of the U.S. government’s stated key objectives in NAFTA renegotiations was the elimination of Canada’s milk price class 7, which along with class 6 is to be eliminated six months after the USMCA enters into force.

Canada “will ensure that the price for skim milk solids used to produce nonfat dry milk, milk protein concentrates, and infant formula will be set no lower than a level based on the U.S. price for nonfat dry milk,” the USTR said.

The agreement also binds Canada to “adopt measures designed to limit the impact of any surplus skim milk production on external markets.”

Those measures, the USTR said, include resuming Canada’s program to use skim milk domestically as animal feed — and a “new commitment” to cap exports of skim milk powder, milk protein concentrates and infant formula.

For skim milk powder and milk protein concentrates, the aggregate export cap will be 55,000 tonnes in the first year after USMCA enters into force, falling to 35,000 in the second year. Exports beyond that threshold will be subject to an export surcharge of 54 Canadian cents per kilogram.

For infant formula, the export cap will be 13,333 tonnes in the first year, rising to 40,000 in the second and subsequent years, subject to a surcharge of C$4.25/kg on any export overages.

Both caps, the USTR said, will rise by 1.2 per cent a year, “an amount equivalent to Canada’s historical population growth.” Canada is also committed to discuss “any matter” related to this mechanism upon the U.S. government’s request. Both countries will review the agreement five years after its entry into force and “every two years thereafter.”

Canadian dairy groups were quick to respond to the trilateral deal’s announcement. “Essentially, this will not fix a broken American system that continually overproduces milk,” Alberta Milk said in a release. “Our Canadian farmers will suffer and no wide-ranging long-term benefits will be seen in American dairy; it will remain broken.”

“Over the past year and a half, we have repeatedly heard our government state that it would stand up for the Canadian dairy sector. However, what was agreed to last night demonstrates very little support for our interests,” Dairy Processors Association of Canada CEO Mathieu Frigon said in a separate statement Monday.

The decision to eliminate class 7, DPAC added, “will stifle innovation, stunt market growth, and create additional losses for those dairy processors who have made significant capital investments recently to improve Canada’s domestic processing capacity.”

Dairy co-operative Agropur’s president Rene Moreau, for one, said separately that the “constant changes to trade agreements to which Canada is a party (are) increasing the level of uncertainty and greatly complicating long-term planning of our investments in our Canadian facilities.”

“Today, the message sent to our passionate, proud and quality-conscious farmers and all the people who work in the dairy sector is clear: they are nothing more than a bargaining chip to satisfy President Trump,” Dairy Farmers of Canada president Pierre Lampron said Monday.

Chicken Farmers of Canada said it was also “very disappointed” with the “unprecedented” additional access conceded for dairy products and “shares the concerns that these changes will impact the overall supply management system in Canada.

“When increased levels of market access are granted to supply management sectors, it weakens the import control pillar of the system, which allows farmers to safely predict imports and ensure that they produce enough to satisfy our country’s needs.”

“Successive Conservative and Liberal governments in Canada have protected supply management while causing a death by a thousand cuts,” dairy farmer Jan Slomp, vice-president for policy for the National Farmers Union, said in a separate release Tuesday. “If this is support from a supply management-friendly government, who needs an enemy?”

Poultry and eggs: ‘Uncertainty is over’

The USMCA also commits Canada to open up additional tariff rate quotas (TRQs) specifically for U.S. chicken and eggs, including an additional 57,000 tonnes of chicken by year six of the agreement, rising one per cent for an additional 10 years.

The deal also provides additional TRQs for 10 million dozen U.S. eggs and “egg-equivalent” products in year one, growing one per cent for an additional 10 years. Canada has agreed to allow 30 per cent of import licenses for shell egg imports to be granted to “new entrants,” USTR added.

On top of those country-specific TRQs, the USTR said, the U.S. remains eligible to export up to 39,844 tonnes of chicken and up to 21.37 million dozen egg and egg-equivalent products under Canada’s World Trade Organization (WTO) TRQ regime.

Under the USMCA, Canada has also agreed to provide the U.S. and “other country members” of the WTO with turkey market access “equivalent to no less than 3.5 per cent” of the previous year’s total Canadian turkey production, the USTR said.

For the U.S., that translates to additional allowable turkey product exports of up to 1,000 tonnes per year for the next 10 years compared to current access levels, plus “potentially more thereafter.”

The USMCA also maintains U.S. market access for broiler hatching eggs at 21.1 per cent of Canadian domestic production, a level previously agreed to under the Canada/U.S. Free Trade Agreement.

“These concessions offer very little value to Canadian consumers who have said time and time again that they want Canadian eggs,” Egg Farmers of Canada chairman Roger Pelissero said in a release. “Yet the very farm families who make sure high-quality, locally produced eggs end up on our tables will see their livelihoods weakened.”

“Despite the fact Canada’s chicken sector is giving up additional access, chicken farmers are relieved that over a year of uncertainty over the future of the agricultural landscape in Canada is over,” Chicken Farmers of Canada said in a separate release.

That said, the USMCA concessions “will result in an increased market access of over 12 million kg” for U.S. production, on top of existing WTO access and additional access granted under the Trans-Pacific Partnership (CPTPP) agreement, “representing more than 10.7 per cent of our existing production,” CFC noted.

Canola and margarine: ‘Processes have changed’

The USMCA calls a halt on tariffs for margarine in five years, the USTR said, and the margarine rule of origin, as applied to trade between the U.S. and Canada, will allow for the use of “non-originating” palm oil in margarine manufacturing.

“At first glance, we’re pleased that open trade for canola will continue and that we’ll now be able to export further-processed products like margarine without tariffs being applied,” Canola Council of Canada president Jim Everson said in a separate release.

Canola seed, oil and meal will remain “free of tariffs,” the CCC said, while further-processed products such as margarine will trade freely due to “modernized” rules of origin.

“Manufacturing processes have changed since the original (NAFTA) was negotiated, and the USMCA has been updated so that margarine produced in Canada can meet the rules of origin required for tariff-free access,” the council said.

Wheat grading: ‘Greater simplification’

The USMCA binds Canada to grade imports of U.S. wheat “in a manner no less favourable than it accords Canadian wheat, and to not require a country-of-origin statement on its quality grade or inspection certificate,” the USTR said.

Canadian grain industry groups that had pressed for such changes hailed the move. Grain Growers of Canada said the updated agreement “will remove legal barriers that prevent grain grown on both sides of the border from being treated equally.”

Cereals Canada president Cam Dahl described the move as “a modernization that addresses issues that did not exist when the original NAFTA was drafted.”

Dahl noted there had been “some concern that the adjustments to the grading system would undermine Canada’s classification system for wheat. This is not the case as the agreement continues to allow both countries the ability to develop national policy.”

“The USMCA will require legislative and regulatory changes in order to ensure that the 2019 harvest is dealt with on a level playing field,” the Western Canadian Wheat Growers said in a separate release. “It is anticipated that this will lead to greater simplification of the Grain Act (and) fewer barriers to trade as well as more open and free markets.”

The three countries under the USMCA have also agreed to “strengthen disciplines for science-based (sanitary and phytosanitary, or SPS) measures, while ensuring parties maintain their sovereign right to protect human, animal, and plant life or health,” the USTR said.

The agreement calls for increased transparency on development and implementation of SPS measures; advancing “science-based” decision making; improving processes for certification, regionalization and equivalency determinations; conducting systems-based audits; and improving transparency for import checks.

The new agreement also commits all three countries to set up a new mechanism for SPS technical consultations to resolve issues between the parties.

‘Do no harm’

Overall, the Canadian Federation of Agriculture noted “beneficial results” have been shown for “some sectors within agriculture,” such as increased U.S. market access for Canada’s sugar beet producers, but “initial indications suggest the livelihood of producers in Canada’s supply managed sectors will be hurt by the concessions included within this new trade deal.”

CFA said it had “continually recommended a ‘do no harm’ approach to the agricultural terms of the agreement, advocating for regulatory modernization to help relieve logistical barriers to trade” but issues such as meat re-inspection at the border “were not addressed.”

CFA said it’s “relieved” to see the Chapter 19 dispute settlement mechanism has been maintained, as it “remains essential to all sectors that conduct international trade between the three USMCA countries.”

“While negotiations always involve some give-and-take, right now it seems like the USMCA negotiations missed a key opportunity to relieve some non-tariff barriers to trade, which would have been a great help to farmers from every country involved in the deal,” CFA president Ron Bonnett said.

“Couple that with more market access being given to the U.S. in our supply managed sectors and there aren’t many farmers under supply management who are happy right now.” — Glacier FarmMedia Network

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U.S. Trade Representative Robert Lighthizer, showing impatience at the slow pace of the talks, said Mexico’s presidential election and the looming expiry of a congressional negotiating authorization in July put the onus on the U.S., Mexico and Canada to come up with a plan soon.

“We probably have a month, or a month and a half, or something to get an agreement in principle,” Lighthizer told reporters at the conclusion of a seventh round of talks to overhaul the North American Free Trade Agreement in Mexico City.

He was speaking after meeting Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Minister Chrystia Freeland for a joint event marked by a more cordial mood than in previous rounds, despite major disagreements over U.S. President Donald Trump’s plan to impose steel tariffs.

Trump has threatened to dump NAFTA unless it boosts U.S. manufacturing and employment, arguing the 1994 accord has caused the migration of jobs and factories southward to lower-cost Mexico.

Guajardo told reporters the three countries aimed to hold lower-level discussions on NAFTA over the next five weeks before an eighth round, probably in early April.

During that period, he and his two counterparts also aimed to meet to narrow differences on the most complex issues in the talks, which include agreeing on new auto content rules, a dispute-resolution mechanism and agricultural market access.

Lighthizer said time to rework the deal was running “very short” and again raised the possibility of the U.S. pursuing bilateral deals with its partners — albeit stressing that his government would prefer a three-way agreement.

He said the U.S. was making more headway with its southern neighbour than with Canada.

Freeland declined to give details on a prospective timeline for the next round and said alongside Lighthizer that Trump’s plan to impose a 25 per cent tariff on steel imports and a 10 percent tariff on aluminum imports was “unacceptable.”

U.S. trade promotion authority (TPA) is authorized by Congress and is needed to implement legislation for new trade agreements such as the renegotiation of NAFTA. The TPA expires on July 1 and analysts expect it to be extended.

The U.S. also holds congressional elections in November.

Tariff exemption lure

Early on Monday, the U.S. president ratcheted up tension before the ministerial meetings in Mexico by tweeting that “Tariffs on Steel and Aluminum will only come off if new + fair NAFTA agreement is signed.”

Lighthizer said that meant Canada and Mexico would enjoy tariff exemptions once a NAFTA deal was reached, calling the tariffs an “incentive” to conclude the talks.

Canada and Mexico say they should be exempted from such moves, and have warned they could retaliate.

Guajardo said there would be no concessions made in the NAFTA negotiations to placate Trump on steel and aluminum, while Freeland said the two issues were separate.

Guajardo urged all sides, however, to avoid a trade war and said Mexico would wait for a U.S. decision. If the U.S. did impose tariffs, a response should be tailored to the sector in question to avoid complicating other issues, he added.

“Contaminating strategies just ends up making you escalate the nature of the conflicts,” Guajardo said.

Trump early Monday also tweeted that Canada “must treat our farmers much better. Highly restrictive,” and Mexico “must do much more on stopping drugs from pouring into the U.S.”

Talks to overhaul the 24-year-old pact are moving slowly, in part because Canada and Mexico have resisted U.S. demands to boost the North American content of autos produced inside NAFTA.

When asked about the discussions on the rules of origin for autos, Guajardo noted that no trade deal could depend only on the interests of one particular sector.

Although Mexico holds its election in July, it will not change governments until December, and Guajardo pledged to keep negotiating for as “as long as necessary” while President Enrique Pena Nieto’s administration is in office.

Lighthizer said only six chapters had been concluded since talks began in August. Negotiators are working on 30 chapters overall, he said, including a new one on energy.

Uncertainty over the talks, and the potential for a wider global trade war, are making investors nervous.

During the latest round, negotiators concluded talks on rules governing food safety and animal health, good regulatory practices, plus administration and publication, officials said.

— Reporting for Reuters by Lesley Wroughton and Sharay Angulo; additional reporting by David Ljunggren, Dave Graham, Adriana Barrera and Anthony Esposito in Mexico City and Fergal Smith in Toronto; writing by Lesley Wroughton and David Ljunggren. Includes files from AGCanada.com Network staff.

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“Because of the NAFTA negotiations going on, we have to be careful what we say publicly,” MacAulay said at the Dairy Farmers of Canada policy conference this week in Ottawa, after multiple questions on trade policy from farmers.

“I’ve been quite clear and publicly said what I thought about what they put on the table. What Americans put on the table is a non-starter,” he said.

The U.S. proposal on supply management was to dismantle the system over the next decade. The Liberal government has repeatedly supported the maintenance of supply management, but has not been willing to guarantee access to the Canadian dairy market will not be granted under a new NAFTA.

The current NAFTA does not include dairy products.

Dairy farmers pushed MacAulay on NAFTA because of U.S. threats and the recent agreement that Canada would join the Comprehensive Progressive Trans-Pacific Partnership (CPTPP).

When the original Trans-Pacific Partnership was negotiated, the U.S. was also involved and were part of the 3.25 per cent access provided to Canada’s dairy market for TPP countries. The new agreement didn’t include the U.S., as President Donald Trump withdrew from the pact.

However, the 3.25 per cent access remains for CPTPP countries such as Australia and New Zealand, which previously would have had to share the 3.25 per cent with the U.S.

Thus, if there’s access to the Canadian dairy market negotiated under NAFTA, dairy farmers will lose more market share than they expected to the U.S. under CPTPP.

Ralph Dietrich, chair of Dairy Farmers of Ontario, told MacAulay he agreed with the minister’s remarks that dairy farming is a great industry and it has a bright future, “but the way for that to continue is to tell the U.S. to go through the CPTPP.”

MacAulay also refused to say if the government would have a program to help dairy farmers adjust to increased imports under CPTPP, as it did under the Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada.

MacAulay highlighted the $250 million for producers and $100 million for processors in the CETA adjustment fund. He said 500 projects have been approved worth $23.5 million.

There needs to be more industry consultation before a CPTPP adjustment program is created, MacAulay said.

“We will come up with a program that will make the dairy industry stronger than it has ever been. For me to just tell you that I’m going to have the solution right here and now, it would be totally inappropriate,” he said.

— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.

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Chicken Farmers of Canada on Wednesday said the CPTPP deal, on which Canada pledged Tuesday it will sign in March, still includes concessions on market access for chicken products in response to U.S. demands.

Canada granted those concessions in 2016 coming out of negotiations for the original Trans-Pacific Partnership trade deal, before the U.S. withdrew from the 12-country agreement early last year, CFC said.

With the U.S. out of the partnership, the group said, “those concessions should have been taken off the table.

“This is especially true since none of the other partners have provided anything in exchange for this increased access to the Canadian chicken market.”

Other CPTPP signing nations include Japan, Australia, Malaysia, New Zealand, Singapore, Vietnam and Brunei Darussalam along with Canada’s other existing free-trade partners, Mexico, Chile and Peru.

Specifically, CFC said, CPTPP access represents an additional 2.1 per cent of Canadian production that will be imported, on top of Canada’s existing commitments of 7.5 per cent, for a total of 9.6 per cent.

Turkey Farmers of Canada said Thursday the CPTPP translates to a 71 per cent increase in import access to the Canadian turkey market, worth “$270 million in lost farm cash receipts over the next 19 years, and a farm output loss of at least 4.5 per cent.”

Egg Farmers of Canada said the deal, once fully implemented, will cost its members the right to produce almost 291 million dozen eggs, plus 19 million dozen additional eggs each year after the implementation phase. Egg farmers stand to lose $1 billion in income, the group said.

“We need to make it clear that we have reached the limit of what we can give in any future negotiations,” CFC chair Benoit Fontaine said in a release Wednesday, referring in part to the current round of North American Free Trade Agreement renegotiations in Montreal.

“If the U.S. wants access to our market, for example, they are welcome to rejoin the CPTPP.”

Dairy Farmers of Canada, which on Tuesday cited reports that dairy market access provisions from the original TPP deal would remain in the CPTPP pact, described NAFTA as “another vehicle that threatens to weaken the Canadian dairy industry.”

The federal government, DFC said, “must realize that there is a cumulative effect to these (market) carve-outs, which cannot be understated.”

“Our message to the Canadian government as it is negotiating NAFTA is simple: no more concessions — enough is enough, they cannot continue to carve out portions of the dairy sector,” DFC president Pierre Lampron said in a release.

CFC on Wednesday also called on Ottawa to start delivering on its commitments it made in October 2015 at the conclusion of TPP talks, including support programs and anti-circumvention measures relating to chicken.

Among those measures, the group said, were pledges to address mislabeled broiler chicken imported as spent fowl and the addition of sauce to circumvent import quotas.

The government also pledged at that time, CFC noted, for dairy, poultry and egg tariff lines subject to tariff rate quotas (TRQs) to be excluded from the Canada Border Services Agency’s Duties Relief Program (DRP).

“Increased access to the Canadian chicken market, especially without gaining something in return, is going to impact jobs from coast to coast,” Fontaine said. “These programs will help lessen the damage being done by the giving away of our market access.”

Canadian poultry and egg producer groups and related companies last week released a study by PwC Canada which warned that dropping Canada’s supply management system could pare the Canadian chicken market’s value by 40 to 70 per cent along with “most” of the Canadian turkey industry.

Dairy farmer co-operative Agropur last week cited a 2015 study by Boston Consulting Group forecasting similar losses, finding 4,500 to 5,000 farms or 40 per cent of production would be at risk if supply management were to end, due to raw milk price convergence with U.S. levels.

The 2015 study also forecast about 40 per cent of processing, largely in consumer dairy products such as cheese, yogurt and butter, would be at risk of shifting to countries with lower processing costs such as the U.S., New Zealand and the European Union, “with no guarantee of lower prices for consumers,” Agropur said. — AGCanada.com Network

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