Reducing tariffs likely to lead to more exports abroad and greater
choice at home
OTTAWA, July 31, 2013 /CNW/ - Canada should be a leader in reducing
trade barriers on food products - instead of being one of the strongest
holdouts in the developed world. A new Conference Board of Canada
report, Liberalization's Last Frontier: Canada's Food Trade, argues that the food industry and Canadian consumers would benefit if
import duties on food were significantly lowered.
"The benefits of freer trade in food are similar to those from trading
any other product," said Michael Burt, Director, Industrial Economic Trends. "The Canadian food industry can
become more prosperous by serving fast-growing markets, which benefits
all Canadians. And consumers benefit from a greater variety of food
products at lower cost - including staples like year-round fruits and
vegetables, coffee, sugar and tea. The only thing preventing Canada
from gaining these benefits is ourselves."
Trade barriers for food have fallen over the past 20 years, but Canada
still maintains high tariffs, especially compared to similar countries.
Canada is unlikely to gain the full benefits of its current trade
negotiations without agreeing to reductions in tariffs on food
Food imports provide Canadians with products they could not otherwise
obtain at affordable prices.
Among the 34 countries in the Organisation for Economic Co-operation and
Development, Canada is one of the very few that export considerably
more food than they import, along with Australia, New Zealand and
Chile. Unlike these countries, however, Canada still maintains very
high tariff barriers on all dairy products, chicken, and eggs. And
Canada has high barriers on wheat and barley.
Canada is currently negotiating two key trade agreements - the
Trans-Pacific Partnership and the Comprehensive Economic and Trade
Agreement between Canada and the European Union. This report looks at
the expected future effects of reducing barriers based on the findings
of recent studies.
The Trans-Pacific Partnership currently involves 12 countries. If it
could be expanded into a 21-member Free Trade Area of the Asia-Pacific
(FTAAP) over time, Canadian output and exports from the food sector
would be eight and 18 per cent higher by 2025, respectively, compared
to a baseline scenario.
In the event that an FTAAP is unrealistic, Canada could form bilateral
free trade agreements with key emerging markets, starting with China
(New Zealand and Chile already have such agreements).
A 2011 sustainability impact assessment (SIA) by the European Commission
dealt with two scenarios involving liberalized food trade between
Canada and the European Union. Under the scenario of full trade
liberalization of the food sector nearly all Canadian food products
would see increased output.
In light of these and other findings by the Conference Board, the report
recommends that the federal and provincial governments re-evaluate
supply-management policies in terms of trade gains. Extremely high
barriers in dairy, egg and chickens are holding back opportunities for
growth in other less-protected agricultural commodities, like pork and
beef. A forthcoming Centre for Food in Canada report will consider potential options for reforming supply management
The principal goal of the Centre is to engage stakeholders from
business, government, academia, associations, and communities in
creating a Canadian Food Strategy —one that will meet the country's need for a coordinated, long-term
strategy on industry prosperity, healthy and safe food, consumer
security, and environmental sustainability.
SOURCE: Conference Board of Canada
For further information:
Telephone: 613- 526-3090 ext. 221
Link to publication: http://www.conferenceboard.ca/e-library/abstract.aspx?did=5653