Late last month, Canada became the fifth country to ratify the CPTPP. Australia then ratified shortly thereafter, triggering the 60-day countdown to this international trade deal moving to implementation.
CPTPP has huge potential for Canada’s beef industry, says John Masswohl, director of government and international relations for the Canadian Cattlemen’s Association. “The clouds have parted and we have some clarity on this trade deal,” he says.
What does this really mean for the beef industry? This deal is all about Japan, for now, Masswhohl says. “Immediately the 38.5% tariff on fresh beef into Japan will drop to match Australia’s tarriff of 27.5%,” he says. Frozen beef into the country will face a 26.9% tariff for now, and then on April1, both fresh and frozen beef will face a 26.6% tariff.
The impact on Canada’s beef industry may be huge, through added market share in the CPTPP countries. What’s more, our tariff advantage into these countries (over the U.S.) will likely make processing in Canada more profitable, keeping more Canadian cattle north of the border.
Story continues below interview with John Masswohl:
CPTPP is just one of the big three trade deals either recently underway or signed. CETA is a year old, and the beef industry is working hard on some bottlenecks in the system. Delivering products that meet European Union rules requires additional veterinarians, meeting the CETA verification standards, and packers having dedicated lines and and processing days. There are extra costs and hoops to jump through so the industry needs certainty that the extra cost and effort will pay off. “It’s a good problem to have,” Masswohl says, but it will take time to capitalize on fully.
USMCA is the most recent of the trade deals, and the one still some distance from coming into force. How did the beef industry fare in the deal? “No harm was done,” Masswohl says. Canada maintains its duty free, quota free U.S. access, and while there was talk of bringing mandatory country of origin labeling, it was successfully avoided. The dispute resolution language stayed in the deal, as well, something that was very important for Canada.
All told, there is significant added market access and opportunity for Canadian beef across the globe, but it’s going to take a little time for the industry to adapt and fully serve this market. The future, though, is very bright.