New markets

Trans-Pacific Partnership opens possibilities for agricultural products

This past week, the Government of Canada announced that it will sign the Trans-Pacific Partnership (TPP).

The new trade agreement, which has yet to be ratified by participating nations, is the most comprehensive trade agreement in the world. The TPP will help deepen Canada’s trade ties in the dynamic and fast-growing Asia-Pacific region while strengthening existing economic partnerships with partners in the NAFTA and across the Americas.

TPP will open up new markets not only for agricultural commodities. It will also open up new markets for the food processing and beverage industry.

It currently comprises 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam), representing a combined market of nearly 800 million people and a gross domestic product (GDP) of $28.5 trillion. With the TPP, Canada has now concluded free trade agreements with 51 nations, ensuring Canadian businesses have access to over 60 percent of the world’s economy. The TPP and trade agreements with the European Union and South Korea make Canada the only G7 nation with free trade access to the United States and Americas, Europe and the Asia-Pacific.

In 2014, Canada’s agriculture and agri-food sector employed close to 2.3 million people and accounted for close to 6.6 percent of Canada’s GDP. Canada is the fifth-largest exporter of agricultural and agri-food products globally.

The gains from tariff elimination and improved market access for Canadian agriculture in the TPP are especially significant in the markets of Japan, Malaysia and Vietnam.

These are markets where Canada faces high tariffs and no prior preferential access. The average agricultural tariffs that Canada faces in these countries are 17.3 percent in Japan, 17 percent in Vietnam and 10.9 percent in Malaysia.

The TPP Agreement will give Canadian products preferential market access to all TPP countries.

It will provide new market access opportunities for Canadian pork, beef, pulses, fruits and vegetables, malt, grains, cereals, animal feeds, maple syrup, wines and spirits, baked goods, processed grain and pulse products, sugar and chocolate confectionery, and processed foods and beverages. It will also ensure that Canadians have a competitive advantage over competitors outside of the TPP, benefitting the entire sector, from producers to processors.

From 2012 to 2014, Canada’s agricultural and agri-food exports to TPP countries were worth, on average, $31.2 billion annually. Top exports were canola oil, wheat, live swine, baked goods, beef and processed potatoes.

For more information on the Trans-Pacific Partnership, go to international. gc.ca/tradeagreements-accords-commerciaux/-avantages/sectorssecteurs/01AgriSector.aspx?lang=eng