EU, Canada food bodies expect to benefit from free trade deal

EU, Canada food bodies expect to benefit from free trade deal

Canadian and European food manufacturers are poised to benefit from a free trade agreement signed between the two trading partners that would see import taxes dropped on various products, including food stuffs.

The Comprehensive Economic Trade Agreement (CETA) was signed in Brussels on Friday (18 October) by Canadian Prime Minister Stephen Harper and EU Commission President Jose Manuel Barosso. The agreement follows nine rounds of negotiations and has been under discussion since 2009.

The agreement in principle will provide tariff-free access across various industries, including food. Overall, both sides will fully eliminate tariffs on more than 99% of all tariff lines, Brussels said in a statement.

The deal also provides for working groups to look at non-tariff barriers, such as health regulations, that could interfere with trade.

In particular, the European Commission emphasised the impact the deal will have on agricultural trade between the two groups. "Canada is a very valuable export market for EU agricultural and processed agricultural products, with annual sales of over EUR2.9bn. The agreement will rapidly - largely at entry into force - eliminate duties on agriculture. By the end of the transitional periods, Canada and the EU will liberalise, respectively, 92.8% and 93.5% of trade lines in agriculture."

In the "sensitive" areas of dairy into Canada and beef and pork into the EU, it has been agreed that new market access, amounting to a further 1% and 1.9% of tariff lines respectively, will be granted in the form of tariff rate quotas, the EC added.

The European dairy industry and Canadian meat processors have welcomed the news.

Industry association Canada Beef estimated the agreement delivers the potential for 64,950 tonnes of duty-free market access for Canadian beef and veal in the EU, worth over C$600m. "The European market holds great opportunity for Canadian beef and veal," the association insisted.

Meanwhile, the European Dairy Association (EDA) said the EU dairy industry would benefit from 18,000 additional tons of tariff-free cheese exports, around 0.3% of the annual European cheese production. However, the EDA adds that the European dairy industry must "stay vigilant" as the "details of the attribution of import licences" for those additional quotas are yet to be defined by the Canadian authorities.

Moreover, the EDA suggested the trade negotiations were a reflection of the EU's assessment of the potential offered by the dairy sector. "This strategy was and is obviously based on the EU Commission's positive analysis of the market outlook of the European dairy sector. Dairy is one of the innovative and competitive branches of the European agriculture... We are confident that the EU Commission will support the dynamic of the European dairy sector through its future policies."

Other areas that look set to benefit include fisheries, where the EC said "most duties will be eliminated". This will provide "better access to Canadian fish for the EU processing industry", the Commission said.