This op-ed was submitted by Daniel Ramage, director of market development with Cereals Canada
Implementing legislation for the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) is now in Parliament. Canada has a chance to demonstrate much-needed leadership and cooperation on trade with like-minded global partners. It is imperative for parliament to pass this legislation before its summer recess. This agreement will unlock valuable trade opportunities all while enhancing prospects for the growth and diversification of Canadian agriculture.
The Government of Canada recognizes the important growth potential for agri-food exports and increased contributions to our economy. The latest budget set an ambitious target to increase agri-food exports to $75 billion annually by 2025, up from $64 billion today. The CPTPP offers a path towards this goal.
The case for trade diversification is stronger in today’s political climate. The uncertainty and risk surrounding the ongoing renegotiation of NAFTA are troubling enough. The acrimony after the G7 meeting in Charlevoix drives home the need to expand export horizons. Implementing the CPTPP is a concrete opportunity for Canada to improve access and competitiveness in new markets.
Livelihoods across the country are tied to agricultural trade. From our ports in Vancouver and Montreal, mills and manufacturing plants in Winnipeg and Toronto, to family farms and agri-businesses, international trade sustains jobs in every region, city and rural area of Canada.
Looking more closely at the CPTPP, we see that its benefits for Canadian agriculture revolve around three key areas.
First, lower tariffs achieved through this agreement have a direct impact on Canadian competitiveness. This is particularly important for value-added agri-food products, many of which have traditionally faced high tariffs in export markets. But it is also critical for commodities like wheat and canola, where Canada will have preferential access to key markets such as Japan and Vietnam, thereby matching the gains achieved by Australia. Somewhat ironically, the CPTPP will also give Canada a leg up against the U.S. in high value Asian markets. Many agriculture groups in the U.S. are openly disappointed by their country’s withdrawal from the CPTPP for this reason. But to lock-in these benefits, Canada must be among the first countries to ratify the agreement.
Second, through the CPTPP Canada and its partners are upgrading the rules of trade. Predictable, risk- and science-based trade rules play a key role in facilitating access to markets. As a modern, ambitious and comprehensive trade agreement, the CPTPP sets higher standards for participating countries while creating a more predictable and transparent trade environment. Stronger science-based and risk-based rules for agricultural trade will help limit the potential for protectionist barriers and encourage greater investment in innovation. Adoption of new technologies leads to productivity enhancements and new commercial opportunities.
The improvements to the trading rules through the CPTPP are critical for Canadian farmers and exporters who are increasingly facing unjustified market barriers around the world. A strong and ambitious agreement between Canada and CPTPP partners sets common standards that reduce the likelihood of trade friction, while offering stronger dispute resolution mechanisms when issues arise. It should be noted, however, that Canada also has an onus to enforce these rules when issues emerge – as is the case with Canada’s ongoing challenges for durum exports to Italy, under the Canada-European Union Free Trade Agreement (CETA).
The third benefit, and perhaps the most important, is that the CPTPP is viewed as an opportunity to provide leadership in promoting multilateral trade policy cooperation. In the wake of withdrawal and rising protectionism by traditional trading partners, the importance of achieving these outcomes is clearer than ever. What’s more, as the global economic and political centre of gravity shifts towards Asia, Canada will be well positioned to deepen its trading relationships and shape global business standards. Once the agreement is in place, it is highly likely that new countries, perhaps even the U.S., will seek to join, further strengthening the agreement’s scale and benefits. Canada must be at the table with the terms for new entrants are set.
The CPTPP is a tremendous opportunity to build and diversify markets. The agreement will build jobs in both rural and urban Canada and it will help grow the Canadian economy. With the implementing legislation for the CPTPP now in Parliament, Canada has a chance to play a leading role by joining the first six countries to ratify the agreement. This will demonstrate Canada’s commitment to international trade while promoting continued cooperation, against the backdrop of rising protectionism and uncertainty.
The spotlight is now on parliament to ratify the CPTPP. Farmers can do their part by taking the time to write, call, or meet with their Members of Parliament to encourage ratification before the expected June 22 recess of Parliament. Farmers’ voices matter, so take the time — it will be good for your business.