EU DEAL OPENS UP BEEF SALES
Canadian beef farmers could see a massive increase in exports to Europe in the wake of the CETA trade pact that was approved in the EU parliament on Wednesday.
Canadian beef farmers could see 100-fold increase in exports to Europe thanks to a trade deal that finally gained approval from the EU parliament on Wednesday.
Canadian beef exports to Europe are currently between $6 million and $10 million annually and the deal would allow for exports up to $600 million.
The Comprehensive Economic and Trade Agreement (CETA), almost eight years in the making, has been a difficult process and there’s still some details to be worked out. It has to be passed the Senate, which allows most of the provisions to come into effect, and then be ratified by European parliaments.
Farmers can be forgiven if they’re not celebrating in the streets just yet, considering the sheer number of roadblocks the deal has encountered so far.
“Farmers are a pragmatic bunch. They say, ‘Show me the money. I’ll believe it when I see it,’ ” said John Masswohl, the director of government and international relations for the Canadian Cattlemen’s Association.
He estimated about two-thirds of the new exports will come from Alberta, which has the two largest beef packing plants in the country — in High River and in Brooks.
The trade deal will wipe out 98 per cent of the tariffs on both sides of the deal and will allow farmers to send 65,000 tonnes of beef to the EU duty-free each year.
“The key thing it does is get rid of the tariff, which is prohibitively high,” said Masswohl.
The province’s agriculture industry as a whole already exports about $300 million worth of product each year to the EU.
It’s not just the producers who will benefit. When tariffs are dropped, prices fall and consumers can stretch their income a little further, said University of Calgary economist Trevor Tombe.
“It’s the biggest deal since NAFTA. It covers about $100 billion in trade from Canada to the EU countries last year,” said Tombe.
“And that’s not counting the trade growth the deal itself would cause going forward,” he said.
Alberta’s trade with the EU is currently the lowest of any Canadian province as a percentage of GDP, but there’s potential for growth.
“The amount of trade growth with us, the U.S. and Mexico following NAFTA was enormous,” Tombe said, although the distance between Canada and Europe may stifle that growth.
With about $2 billion in beef exports going to the United States and “another pretty healthy chunk to Mexico as well,” Masswohl said the EU could start gaining on the North American market in the years to come.
“If we can get to $600 million, Europe will definitely be our No. 2 export market by value. We think the value per pound in Europe will be probably one of our highest value markets,” Masswohl said.