Markets

EU-Canada free trade agreement ‘unacceptable’

22-Oct-2013
Last updated the 22-Oct-2013 at 17:09 GMT - By Fiona Barry
Prime Minister Stephen Harper and President Jose Manuel Barosso
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The signing of a trade agreement establishing tariff-free European access to the Canadian dairy market has been welcomed by the European Dairy Association but roundly condemned by Canadian dairy stakeholders, who branded the deal “unacceptable” and demanded its withdrawal.

Canadian Prime Minister Stephen Harper and European Union (EU) Commission President Jose Manuel Barosso made the the Comprehensive Economic and Trade Agreement (CETA) in Brussels on October 18 after four years of negotiation.

Harper described it as “the biggest deal our country has ever made," adding that it topped even the North American Free Trade Agreement between Canada, the United States and Mexico.

In addition to dairy imports, the multi-billion dollar-deal covers fruit and vegetables, processed foods, oils, and shellfish.

The deal would allow tariff-free access of an estimated 18,000 extra tons of EU cheese into the Canadian market.  

The European Dairy Association (EDA) congratulated the negotiatiors, but added “the European dairy industry must stay vigilant” as details of import licences remained to be worked out.

“This is unacceptable”

Dairy organizations across the Atlantic were not so welcoming.

Dairy Farmers of Canada (DFC) hit out against the deal, saying it “gives away the Canadian cheese market that Canadian dairy farmers and cheese makers have worked so hard to develop over the years.”

The association said it was “angered and disappointed” and believed the deal would mean Canada swiftly losing its small cheese-makers:

If this deal proceeds, the Canadian government will have given the EU an additional exclusive access of 32% of the current fine cheese market in Canada, over and above the existing generous access.

DFC complained that Canadian products would be displaced with subsidized EU cheeses, calling the move “unacceptable” and “a loss for Canadian dairy farmers and industry” and for wider economic development.

A statement said its farmers were “demanding” a withdrawal from the agreement. The organization complained the trade deal was unbalanced, as “the EU already has a large proportion of the Canadian cheese market. Canada’s TRQ already allows imports of 20,412 tonnes of cheese tariff-free. Two-thirds of that is already allocated to the EU.

Consumers will not see any difference in price as a result of this CETA giveaway as the vast majority of EU cheese already comes into Canada with little or no tariffs.”

Risk of aggressive foreign imports?

Dairy Farmers of Ontario joined calls against the agreement, saying the impact on Canadian industry would be “significant” and “represents at least 4.5 % of the Canadian milk produced for the cheese market and is approximately 2.25% of all milk produced in Canada.”

According to the Ontario association, opening Canadian barriers to the EU would increase the likelihood of greater market access being granted to other countries in the on-going Trans-Pacific Partnership negotiations. 

There is little doubt that the US, Australia and New Zealand will see this as an opening and pursue their interests aggressively; certainly for cheese and likely other dairy products, as well,” it said.

Related topics: Emerging Markets, Markets, Fresh Milk, Cheese