October 5, 2015 – Today in Atlanta, Georgia, trade ministers from 12 pacific countries announced the conclusion of a landmark Trans-Pacific Partnership (TPP) agreement that will allow canola exports to grow substantially. By eliminating tariffs and bringing new disciplines to non-tariff barriers like those related to biotechnology, the agreement will improve the competitiveness of the Canadian canola industry.
“Eliminating tariffs on canola oil in Japan is a huge benefit to the canola industry,” says Patti Miller, president of the Canola Council of Canada. “Once the agreement is fully implemented, the TPP will put us on a level playing field in one of our most valuable export markets.”
Japan is a long-standing and consistent market for canola seed, but tariffs of approximately 15% have prevented oil exports. Through the TPP, the canola industry estimates that when tariffs are fully eliminated in Japan and Vietnam over five years, exports of canola oil and meal could increase by up to $780 million per year.¹
In 2014, more than $1.2 billion in canola seed was exported to Japan. As tariffs are eliminated, the canola industry estimates that exports will shift increasingly to value added oil and meal, while maintaining the overall volume of canola that is exported.
“Canada has a globally competitive canola processing sector,” says Miller. “By eliminating tariffs on value added products, the TPP will increase the value of our exports and bring benefits to the whole canola value chain. This increased value will flow through communities across the country.”
The inclusion of commitments to prevent biotechnology related measures from being trade barriers in the TPP could also be beneficial to the canola industry. Commitments around approval processes of new biotech products and measures to minimize the impact of low level presence incidences could benefit the canola industry. Biotech canola has been an important tool contributing to the competitiveness of Canadian canola growers. With 12 countries participating in the TPP, and several more expressing interest in joining, setting a new standard of rules will help the Canadian canola industry continue innovating.
“Leadership shown by the Government of Canada to make sure that Canada benefits from this landmark agreement will help the canola industry to continue growing and supporting communities,” says Miller. “We congratulate Minister Ed Fast and the Canadian negotiators for obtaining a deal that will grow canola exports and hope all parties will recognize the importance of implementing this agreement as quickly as possible so that the benefits can be realized.”
Implementing the agreement quickly is important for the canola sector as Australia currently has preferential access to ship canola oil to Japan through their bi-lateral free trade agreement implemented earlier this year. Once the TPP is fully implemented, Canadian canola will be on a level playing field with other oils into Japan.
As a regional agreement that allows food processors to use ingredients from 12 countries and then have preferential access to ship the finished product to any of the 12 countries, the agreement could also help boost exports of processed oil products containing canola, like margarine and shortening. This would further increase the demand for canola oil from domestic processors, and bring more value to the canola industry.
The CCC is a member of the Canadian Agri-food Trade Alliance that advocates for fair and open trade in agriculture and agri-food products.
For more information about the importance of trade to #canolacountry, please visit www.canolacountry.ca.
The CCC is a full value chain organization representing canola growers, processors, life science companies and exporters. Improving market access for canola by eliminating tariffs and non-tariff barriers is part of the canola industry’s strategic plan, Keep it Coming. The TPP is a necessary step to achieve the industry’s goals of 26 million tonnes of production and 14 million tonnes of processed products by 2025.
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 from Ciuriak and Xiao (2014) that examined impacts of a TPP on each sector of the 12 countries’ economies under alternative scenarios. Dan Ciuriak is 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”
Media may contact:
Brian Innes, VP Government Relations