October 1, 2018 – The Canola Council of Canada (CCC) welcomes the announcement that a modernized trade agreement with the United States, Canada and Mexico has been reached. The United-States-Mexico-Canada Agreement (USMCA) stabilizes this important North American trading relationship.
“We are pleased that an agreement for continued stable trade with two of our four largest markets has been reached,” says Jim Everson, president of the CCC. “At first glance, we’re pleased that open trade for canola will continue and that we’ll now be able to export further processed products like margarine without tariffs being applied.”
Text of the agreement that has been released shows that canola seed, oil and meal will remain free of tariffs, while further processed products like margarine can now trade freely between Canada and the U.S. because of modernized rules of origin. Manufacturing processes have changed since the original North American Free Trade Agreement (NAFTA) was negotiated, and the USMCA has been updated so that margarine produced in Canada can meet the rules of origin required for tariff free access.
“This modernized agreement removes the tariff on canola-based margarine going to the U.S.,” says Everson, noting this was one of the opportunities that the CCC encouraged negotiators to consider during NAFTA talks. “This update enables more value-added canola exports.”
“We commend the work of Foreign Affairs Minister Chrystia Freeland and Canadian negotiators, as well as the efforts of Agriculture and Agri-Food Minister Lawrence MacAulay in supporting the negotiations,” says Everson.
Since NAFTA was signed in 1994, exports of canola seed, oil and meal to the U.S. and Mexico have grown. Canola has also been a significant source of jobs and economic activity in the importing nations, contributing CDN$7.9 billion/year in the U.S. and CDN$1.5 billion/year in Mexico. This is largely due to the food manufacturing sector and feed industry.
Additional positive outcomes of the USMCA include:
- Retention of dispute settlement mechanisms;
- Inclusion of text on biotechnology and plant breeding innovation – which aren’t a current concern in North America, but beneficial in setting a new bar for future agreements; and
- Inclusion of new chapters on Competitiveness and Good Regulatory Practices – helpful when resolving regulation-related issues that can be costly and harmful trade barriers.
The CCC awaits more detail on tariffs that both countries have applied over the last several months.
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.
Media may contact:
Heidi Dancho, Director, Communications