TRICKS OF THE TRADE DEAL
CETA hasn’t done much for Sask. yet
BRUSSELS, BELGIUM Two years after signing, Canada’s free trade agreement with the European Union is slowly beginning to pay off for Saskatchewan farmers in spite of continuing regulatory barriers.
The Comprehensive Eu-canada Trade Agreement (CETA) reduces or eliminates tariffs on trade between Canada and signatory European Union member states — but experts say non-tariff barriers are hampering Canada’s access to the market.
For Saskatchewan farmers, who are especially dependent on exports, that means tougher access to a market of more than half a billion people. Four of the province’s top five exports to the EU are agricultural; the last is potash.
However, because many Saskatchewan agricultural exports are produced under North American sanitary standards, farmers face certification hurdles if they want to sell to the European market, which are often costly and time-consuming. European farmers typically do not face the same hurdles if they want to export to Canada.
“There might have been a bit of wishful thinking on our part in Canada that we could get Europeans to agree to our means of production,” said University of Saskatchewan agriculture associate professor Eric Micheels.
“You can’t just wake up one day and say, ‘I’m going to export to the EU’ “
In Brussels, CETA has been heralded as a success. A report from the office of European High Commissioner Cecilia Malmström says European food exports to Canada grew by four per cent between 2017 and 2018 and that overall Canada-eu trade grew by 10.6 per cent, raising the union’s surplus with Canada to €14.4 billion.
In the same period, Saskatchewan’s exports declined. The value of the province’s exports fell to $585 million CAD in 2018 from more than $1 billion CAD in 2016.
Rob Swallow, executive director of trade policy with the province’s Ministry of Finance and Development, attributes that decline to falling commodity prices. He noted that this year to date, provincial exports to the EU are already at $582 million, a 34 per cent increase from last year.
“I think it just takes businesses time to look outside and take advantage of outside opportunities,” Swallow said.
At a press conference in the European Commission’s Berlaymont offices this month, Malmström acknowledged the frustrations of Canadian farmers — and stressed that European companies have their own concerns on issues like proper labelling of regional products exported to Canada.
“There are still divides, both on the Canadian side and the European side,” Malmström said.
A ministerial meeting between Canada and CETA signatories was in the works, but was delayed because of the Canadian election, she added.
Only 13 of 28 European member states have ratified CETA to date. Canadian and EU officials speculate that anxieties about foreign sanitary practices — and competition — are exacerbating political opposition to the agreement. In European media, stories about American poultry treated with chlorine and genetically modified plants create a perception that products from outside the economic union are unsafe or unhealthy, even though Canadian health regulatory standards are fairly rigorous.
There’s also the matter of domestic European producers, who are loathe to give foreign markets access. Italy, for example, has said it will not ratify the deal; France ratified last summer amid stiff political opposition.
“It seems to be a trend that whenever tariffs or quotas are reduced, non-tariff barriers seem to rise,” said Chris Dekker, President and CEO of the Saskatchewan Trade and Export Partnership. Dekker said movements against CETA are indicative of a “concerted campaign” from European firms.
Despite the rough patches, observers insist the deal will take time to bear the expected fruit.
“We have to see the holistic approach,” said Javier Moreno Sànchez, a member of the European Parliament and vice-chair of its delegation to Canada. “Some sectors are winning, some are losing. We have to hope in the end there is a balance and there’s not really a loser or a winner.”
Micheels, currently on sabbatical in Sweden, said he recently saw Canadian beef marketed as a premium product at a local butcher.
He said overcoming regulatory hurdles may take time, but he is confident the quality of Canadian products can dispel concerns about sanitary practices.
“Exploiting these trade agreements isn’t a light switch,” he said. “It’s more of a dimmer switch. We’ve got to build those relationships into the new market to bring that product in.”
Some sectors are winning, some are losing. We have to hope in the end there is a balance and there’s not really a loser or a winner.