The recent signing of the Trans-Pacific Partnership (TPP) starts the clock towards implementing a deal that will bring hundreds of millions more dollars from canola exports into communities to support stable jobs across the country. While negotiations finished in October 2015, today鈥檚 signing means that the elimination of tariffs on canola is one step closer.
鈥淪igning the TPP means that Canada is at the table in a deal that could increase the value of canola exports by up to $7801 million annually,鈥� says Patti Miller, president of the Canola Council of Canada (CCC). 鈥淭he elimination of canola oil tariffs in Japan is extremely important to our sector.鈥�
Because of Australia鈥檚 free trade agreement with Japan, they already have preferential access for canola oil into Japan. Each year that passes means that Australia will have a greater advantage over Canadian canola oil.
Japan currently has tariffs on Canadian canola oil of approximately 15%, which has favoured the importation of canola seed to be crushed in Japan. Canadian exports of canola seed to Japan were worth $1.2 billion in 2014. The Canadian industry is concerned that without the TPP it will not only lose out on increased value-added exports, but will also see existing exports to one of Canada鈥檚 longest standing customers shrink.
鈥淲e have been a stable supplier of canola seed to Japan for over 40 years, but we are acutely aware that other canola suppliers now have better access to Japan than Canada does,鈥� says Miller. 鈥淲e are very pleased the Canadian government signed the agreement and look forward to a full discussion about the importance of Canada implementing the agreement in Parliament.鈥�
Through the TPP, tariffs on canola oil and canola meal will be eliminated for exports to Japan and Vietnam. This will allow more value-added processing to occur in Canada, a target of the canola industry鈥檚 strategic plan, Keep it Coming 2025. Reaching the industry鈥檚 target of 14 million tonnes of processing in Canada from the current 7.7 million tonnes will support more jobs and provide growers with more delivery opportunities.
The CCC is on the ground in Auckland to support International Trade Minister Chrystia Freeland signing the agreement on behalf of the government of Canada. As a member of the Canadian Agri-Food Trade Alliance (CAFTA), the CCC has been represented at virtually all the negotiations since Canada joined in 2012.
Now that the agreement has been signed, it can come into effect once six countries representing 85% of the economy for the TPP region have ratified the agreement through their national processes.
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鈥檚 strategic plan, Keep it Coming 2025. For more information about the importance of trade to the Canadian canola industry and our economy, please visit www.canolacountry.ca.
鹿Potential 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鈥� economies under alternative scenarios. The study was completed by Dan Ciuriak, a former deputy chief economist for the Federal government鈥檚 department of Foreign Affairs and International Trade. For more information, view the report titled 鈥淐anola Market Impacts under Alternative TPP Scenarios鈥�.
