March 7, 2018 – Meeting just ahead of tomorrow’s signing ceremony in Santiago, Chile, the board of directors for the Canola Council of Canada discussed how critical it is for Canada to implement the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in order for the canola industry to continue thriving. The agreement will enable a significant increase in value-added canola exports.
“This week is a very positive step towards enabling more sustainable growth from canola exports,” says Jim Everson, president of the Canola Council of Canada. “In today’s uncertain times, Canada’s signing of the CPTPP demonstrates how we can continue to be globally competitive by eliminating trade barriers through trade agreements.”
Canada’s canola industry has grown into a world leader because of competitive access to world markets. More than 90% of canola produced in Canada is exported, though the Canadian industry cannot export value-added products to countries like Japan because of the high tariffs they apply to canola oil.
“When our value chain comes together around the board table, we look at what is required for our sector to continue supporting jobs and prosperity for Canadians across the country, including those in the middle class,” says Everson. “The CPTPP is critical for our sector, and we’re very pleased that the Government of Canada is committed to implementing this landmark agreement.”
When implemented, the CPTPP will open new markets for value-added canola products by eliminating canola oil and canola meal tariffs and establishing more effective rules to prevent non-tariff barriers. When tariffs are fully eliminated in Japan and Vietnam over five years, exports of Canadian canola oil and meal could increase by up to $780 million1 per year
The CPTPP will help Canada recover from falling behind competitors. Australia already has a free trade agreement with Japan that is eliminating tariffs on Australian canola oil, putting Canadian canola oil at a competitive disadvantage. As of April 1, tariffs on Australian canola oil will be approximately half those applied to Canadian canola oil – 9% versus the 16% that are applied to Canadian canola oil.
The Japanese market is very valuable for Canadian canola exports, demanding $1.4 billion of Canadian canola in 2017.
The CPTPP is an important enabling step for the canola industry to increase value-added processing and productivity, and help achieve the government’s Budget 2017 goal to increase Canadian agri-food exports by $20 billion by 2025.
“We appreciate the significant leadership shown by trade minister François-Phillipe Champagne and agriculture minister Lawrence MacAulay in getting to this week,” says Everson. “The canola industry urges the Government of Canada and all Parliamentarians to implement the CPTPP as soon as possible.”
The industry’s strategic plan, Keep it Coming 2025, includes the objective of significantly increasing the amount of canola processed in Canada over the next 10 years. Processing 14 million tonnes of canola in Canada requires that barriers to exporting canola oil and meal are removed – such as tariffs that the CPTPP would eliminate.
The Canola Council of Canada is a full value chain organization representing canola growers, processors, life science companies and exporters. Keep it Coming 2025 is the strategic plan to ensure the canola industry’s continued growth, demand, stability and success – achieving 52 bushels per acre to meet global market demand of 26 million metric tonnes by the year 2025. Visit canolacouncil.org to learn more.
1Potential impacts of tariff elimination reflect a consensus of the canola value chain – which includes processors and exporters with in-depth knowledge of international market dynamics. Members were informed by research incorporating general equilibrium modeling that examined impacts of a TPP on each sector of the 12 countries’ economies under alternative scenarios. The study was completed by Dan Ciuriak, a former deputy chief economist for the Federal government’s department of Foreign Affairs and International Trade. For more information, view the report titled “Canola Market Impacts under Alternative TPP Scenarios”.
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Heidi Dancho, Director, Communications