OTTAWA — After years stuck in the doldrums, Canadian beef exporters finally see opportunity for growth. Thanks to the Trans-Pacific Partnership, they say their exports to Japan could double, or even triple, after years of trade difficulties imposed, in part, by Canadian mad-cow scares.
Debate in Canada over the TPP has mostly focused on the possible negative impact of the recently inked 12-nation trade agreement — in particular, how increased global competition will eventually play out in the auto and dairy sectors — but for many export-oriented industries the deal has been getting a positive reception. Across the TPP markets, Canada’s annual exports are already worth $366 billion, and that number is likely to grow.
For Canadian beef exporters, who saw their exports wiped out by mad-cow disease — or bovine spongiform encephalopathy (BSE) — more than 10 years ago, Japan is a crucially important market.
The crippling brain-tissue disease “had a huge impact on beef producers, Canada in particular,” said Dave Solverson, president of the Canadian Cattlemen’s Association.
“We were out of the (Japanese) market for a few years completely, and then we started to regain it in stages. We’re not back to 2002 levels yet, which was prior to the BSE.”
The landmark TPP agreement should help complete that recovery.
Japan is the leading destination for Canadian beef — after the United States — with a market accounting for $100 million in 2014.
Under TPP, tariffs on beef entering Japan will drop from 38.5 per cent to nine per cent within 15 years. Pork tariffs, now at 4.3 per cent, will be eliminated altogether over 10 years.
“It was crucial that Canada be included (in TPP) because our competitors in the Asia market are mainly the U.S, and Australia, as well as exporters into Japan and emerging Malaysia and Vietnam markets,” said Solverson.
“They are there (in Japan) as well, and they’ve got the same deal,” he said. “We have market share now, but the market is not going to fall in our lap. We’re going to have to compete, even with this good tariff reduction under the TPP.”
Emerging markets are a growing destination for Canadian beef exports, Solverson added.
“In countries like Malaysia and Vietnam, there are a lot of people rising out of poverty and into middle class. And the first thing most cultures want to do is improve their diet — more protein and, in our case, beef. So we see it as a real opportunity,” he said.
“We’re expecting our Japan exports to double, even triple, if the TPP is implemented,” Solverson added. “That’s where we can differentiate ourselves in Japanese markets. (Canadian beef) is closer to their Kobe beef, which is highly marbled, well grain-fed.”
The 6,000-page text of the TPP agreement — reached Oct. 12 after years of talks — is now out, but the broad implications of the world’s most far-reaching trade liberalization pact remain largely uncertain.
It may be even more uncertain for Canada, which elected a new government — the Liberals in, Conservatives out — just one week after the document was signed, leaving Prime Minister Justin Trudeau with the option to push for changes after the fact.
Regardless of political implications, the TPP is likely to become reality in 2017.
“What TPP does is it ensures Canada is at the table and in the game,” said Joy Nott, president of the Canadian Association of Importers and Exporters.