Canada-European Union Comprehensive Economic & Trade Agreement An Opportunity for Canadian Agriculture & Agri-Food Exporters Jennifer Higginson, Deputy Director Market Access Secretariat Agriculture and Agri-Food Canada
CETA is an opportunity not to be missed The purpose of today’s presentation is to: • Discuss Canada’s market potential in the EU, and highlight trends of interest to Canadian agriculture and food companies • Provide you with an overview of the benefits of CETA for Canadian agriculture and food exporters • Direct you towards the multiple resources and services available for support 2
T he EU is the world’s largest importer of agriculture and agri- food products… Global Agriculture & Agri-Food Imports, 2015 Millions of Canadian Dollars Canada, Japan, $67,877 Russia, $32,563 43,667 China, $137,235 USA, $159,091 ROW, 875,564 EU28, $169,417 Source: Global Trade Tracker 3
And demand for imports is growing Billions of EU Agriculture and Agri-food Imports, 2006 - 2015 Canadian Dollars 180 160 140 120 100 80 60 40 20 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 4 Source: Eurostat
There are real opportunities for Canadian producers CETA opens up new prospects for Canadian exporters Canadian Agriculture and Agri-food Exports to the EU, 2006 - 2015 Billions of Canadian Dollars 4 3 3 2 2 1 1 - 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 5 Source: Statistics Canada
Exports are spread over multiple countries… Top 10 EU Market Destinations for global Top 10 EU Market Destinations for Canadian Agriculture Agriculture and Agri-Food Products, 2015 and Agri-Food Products, 2015 Source: Global Trade Tracker 2015
… and there are common consumer food trends within the EU EU consumers are increasingly interested in: • convenient on-the-go meals • vegetarianism, veganism, and flexetarianism (reduced meat consumption) • natural, organic, and functional foods • the use of the web both for shopping and for information on healthy eating habits and trends 7
CETA will open up new prospects for Canadian food exporters… Canada’s Market Share = 2.90% $163.4 B $114.4 B Total EU food imports from the world $3.3B EU imports of food products supplied by Canada from the world EU food imports from Canada 8 Source: Global Trade Tracker, 2015
But, we are faced with a number of competitors for market share in the food industry Market share, Top Non-EU Competitors Top food exports to the EU by market EU world imports Oilcakes 10.2% Brazil Coffee Soy Beans Fresh/Dried Almonds 9.5% United-States Soy Beans Whiskies 5.0% Edible Offal China Frozen Fillets Cod Fillets Fresh/Chilled Atlantic Salmon 4.8% Norway Fresh/Chilled Fillets Dried Cod Oilcakes 4.6% Argentina Groundnuts Fresh Shrimps and Prawns 9 Source: Global Trade Tracker, 2015
CETA will provide Canadian agriculture producers with an advantage over those competitors… • For example, current EU tariffs on processed foods are complex and trade restrictive: - For many processed foods, tariffs are calculated based on dairy, sugar and starches/cereal content. - EU tariffs can reach 20%, with ad-valorem equivalents that can often be over 50%, and as high as 100%. • CETA will eliminate all tariffs on processed foods - With the exception of sweet corn and refined sugar, all processed food tariffs will be eliminated immediately. 10
…particularly vis -à-vis competitors who do not have a trade agreement with the EU… 11 Source: European Commission
CETA will eliminate tariffs on many agriculture and agri- food products… Upon CETA’s entry into force, almost 94% of EU Many EU lines* will be agriculture lines* will become duty-free: phased out over … 7 years: • Durum Wheat (up to 148 € /tonne) • Pet Food (up to 948 € /tonne) • Rye & Barley Grain (up to 93 € /tonne) • Frozen French Fries (14.4-17.6%) • Common Wheat, low-medium quality (up to • Sweet Dried Cranberries (17.6%) 95 € /tonne) • Processed Pulses (7.7%) • Oats (89 € /tonne) • Soybean and Canola oil (3.2-9.6%) • Prepared Vegetables (20%) • Fruit Juices (e.g. cranberry, blueberry) (17.6%) • Condiments/sauces (up to 10.2%) Tariff Rate Quota* (TRQ) established for… • Maple Syrup (8%) • Common Wheat (100,000 tonnes) • Fresh Cherries (up to 12%, seasonal) Immediate ** • Fresh Apples (up to 9%, seasonal) • Sweet Corn, processed (8,000 tonnes) 5 year phase-in • Bison (3,000 tonnes) Immediate *Not an exhaustive list/Rules of origin will apply • Beef (50,000 tonnes) 5 year phase-in • Pork (80,549 tonnes) 5 year phase-in **Full volume available immediately. Duty-free and quota-free after 7 years. 12
However, Canadian companies must comply with CETA Rules of Origin for Agri-Food Products… • Exporters must ensure their product meets the applicable rules of origin (RoO) to benefit from the preferential tariff that CETA provides. • Products that satisfy these RoO are described as originating and only originating products receive preferential tariff treatment under the agreement. • Products that are “wholly obtained” in Canada, such as grains, Rules of Origin fruits and vegetables are originating. • Products that are produced in Canada using non-originating materials (e.g. materials imported from the US), are originating, providing they satisfy the applicable product-specific rule of origin (PSRO). • A binding, written ruling on tariff classification can be obtained in advance of exporting your products to the EU by submitting an application to the EU’s Binding Tariff Information (BTI) system. 13
As well as CETA Origin Quotas for Agri-Food Products Origin Quotas • Under the CETA Origin Quotas, certain processed products that are made in Canada using non-originating materials can qualify for preferential treatment when exported to the EU. • Origin Quota goods will be subject to annual quotas. Once the quota is filled, products will not be eligible for preferential tariff treatment based on these more liberal rules of origin. Origin Quotas Origin Quota for certain processed agricultural products: • high-sugar containing products; sugar confectionery and chocolate preparations; processed foods; and dog and cat food. 14
Requirements will remain the same for shipments to the EU • CETA does not change on-going EU import requirements and/or sanitary requirements exporters need to meet. For example: – Federally registered establishment (e.g. meat, fruits, vegetables, maple products) and/or EU approved facility (e.g. pork, beef, pet food) – CFIA export and/or health certificate (e.g. meat products, plants) – Hormone free requirement (e.g. beef, veal) – Ractopamine free requirement (e.g. pork, beef) – Labelling (e.g. Font size, nutrition information, identification of GM ingredients, etc.) • Visit www.inspection.gc.ca or contact MAS-SAM@agr.gc.ca for more information. 15
AAFC has a number of resources available to you Visit www.agr.gc.ca/Europe Our CETA page includes: • Useful links to GAC and trade commissioner content as it relates to the EU and CETA • Sector reports explaining how stakeholders can export to the EU and how to obtain the preferences available under CETA • Infographics highlighting some of the advantages businesses will derive from CETA, and • An infographic covering the opportunities that will be shared with you via webinar in January. Targeted reports for each opportunity are to be expected in the next few months. Our trade commissioners in market provide us with recent news and hot topics in the EU 16
Including information meant to help you navigate opportunities in the EU Market Information: • Over 150 reports, covering: • Trade data • Consumer profiles • Market overviews • Distribution channels (foodservices, Retail, e- commerce) • Sector trends • Trends covering health and wellness • Commodity innovations • Videos covering opportunities in the EU, with 3 new videos in the pipeline: • Sector snapshot: pet food in the EU, • sector snapshot: Organic foods in the EU, • Labelling for the EU 101 featuring our TC in Paris • Webinars will be featured on the website in the few months for companies to register – topics are to be confirmed based on business needs and interests Customized Market Research: • We can leverage our network to give you information critical to your international success. • Contact mas-sam@agr.gc.ca with your questions. 17
Stay tuned for various webinars and information products in 2017 Jan 2017 Spring 2017 Fall 2017 Winter 2017 Over the next year, AAFC will be providing a number of information products to support Canadians Videos companies looking to Sector snapshot: pet food in the EU Webinars export to the EU Webinar series featuring Sector snapshot: Organic our trade commissioners foods in the EU in market Video Labelling for the EU 101 Webinar featuring our TC in Paris The EU’s most promising opportunities for Canadians post CETA implementation Intelligence reports will be published on the AAFC website throughout the year – We are planning on developing some 20-25 EU reports in 2017, based on extensive analysis of sector opportunities and challenges. 18
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