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Saskatchewan Welcomes Trans Pacific Partnership Deal

Posted by Flaman Agriculture Oct 05, 2015

Released on October 5, 2015
Premier Brad Wall is applauding today’s announcement from Atlanta of an agreement, and Canada’s participation in the Trans Pacific Partnership (TPP), one of the most ambitious free trade agreements in history.
Negotiations involving 12 nations have just concluded on the TPP, which will represent a market of nearly 800 million consumers and a combined GDP of $28.5 trillion.  Member countries include Canada, the United States, Mexico, Japan, New Zealand, Australia, Singapore, Vietnam, Malaysia, Chile, Peru and Brunei.
“This is a huge deal for Canada as a trading nation and Saskatchewan as a trading province,” Wall said.  “The agreement builds on the strengths of the other free trade deals Canada has struck and opens up new opportunities for our exporters in the fast-growing and lucrative pacific markets.”
Saskatchewan exported more than $25 billion in goods to TPP countries in 2014, or 71 per cent of our international exports.  The premier said the TPP increases access to those markets for our exporters and keeps them on a level playing field with their competitors.
“International trade has always been vital to our province’s economy and our government’s Growth Plan calls for us to double our global exports by 2020,” Wall said.  “Agreements like the TPP and Canada’s free trade deals with the European Union and Korea will help us reach that goal.”
From 2007 to 2014, Saskatchewan’s total exports to the world increased by 77 per cent to more than $35 billion a year. Saskatchewan’s agricultural exports more than doubled in that same period.
Wall said the TPP agreement will open new markets and increase Saskatchewan exports even further.
“Our agricultural producers are looking forward to having an even stronger presence in pacific markets, in particular Japan,” Wall said.  “The TPP will encourage major growth and investment in our value-added agriculture sector through better access to these markets for our processed products, such as canola oil and meal, malt barley, beef and pork.”
Wall called on all the federal party leaders to commit to honouring the agreement if they are elected on October 19.
“This trade agreement is now in place with 11 of our most important trading partners representing 800 million people,” Wall said.  “It would be disastrous if Canada were to pull out now and leave Canada and Saskatchewan on the outside looking in when it comes to selling our exports to these countries.  I urge all the parties and leaders to support this important agreement when it comes before Parliament following the election.”

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Canadian business owners applaud signing of TPP

Posted by Flaman Agriculture Oct 05, 2015

The Globe and Mail is reporting this morning that . . .

A broad-cross section of Canadian businesses – from cattle ranchers and grain exporters to small-scale manufacturers – applauded Canada’s signing of the Trans Pacific Partnership, a monumental trade deal that will open up new export opportunities in a number of fast-growing markets along the Pacific Rim.

The deal – signed Monday following negotiations that stretched over the weekend between 12 nations representing 40 per cent of global GDP – has the potential to dramatically reshape Canada’s trade landscape. It will gradually reduce steep tariffs on a number of Canadian exports to mature markets such as Japan and Australia, as well as emerging markets such as Malaysia and Vietnam, even as it opens up Canada to imports from those countries.

Outside of a few sectors in Canada that will face bruising new competition from Japanese and U.S. companies – such as Canadian dairy farmers, domestic automobile-makers and car-parts manufacturers – many businesses were hopeful that the TPP deal would give their businesses and sectors new momentum, even if details were thin on Sunday evening.

“From our perspective, agreements that work to remove tariffs and other barriers to our products are good news,” said Wayne Guthrie, a senior vice-president for sales and marketing at Canfor Corp., one of Canada’s largest forestry companies. “About $1-billion in Canadian forest products were subject to tariffs last year, so we are hopeful the TPP will improve access and eliminate unfair treatment of Canadian products in key Pacific markets.”

For many exporters in Western Canada, the best part of the new trade deal was clearly better and cheaper access to Japan, the world’s third-largest economy after the United States and China – the latter of which is not part of the TPP. Betty Lou Pacey, who founded a firm that offers optical fiber lights and other lighting products in Vancouver, said that just last week she had a meeting about hiring new staff – including one who could speak Japanese. “I do feel that it will provide opportunities for us to grow as a company,” Ms. Pacey said of the new trade deal.

For ranchers in Alberta, too, TPP offered the prospect of reduced tariffs and better access to 127-million Japanese consumers, many of whom are wealthy and discriminating buyers of seafood and beef. For Doug Sawyer, a fourth-generation cattle farmer near Pine Lake, Alberta, the trade deal promised a chance to catch up with cattle ranchers in Australia, which had already struck a bilateral partnership with Japan that reduced the steep tariffs that protected Japan’s dwindling number of ranchers – who produce extremely high quality, intensely marbled wagyu beef.

“This is a huge deal for the beef industry,” said Mr. Sawyer, who also sits on the foreign trade committee of the Canadian Cattlemen’s Association.

“Before our exports were to Calgary. That was a big ‘to do,’ ” he said with a laugh, before noting that roughly 50 per cent of what Canadian beef producers put on the market is exported around the world. “At present, we’re selling about $100-million a year into Japan at a 38.5-per-cent tariff. As the deal progresses, and the tariffs come down, we feel we could double or triple that,” he said.

The Mining Association of Canada welcomed the deal, saying it provide greater access for metals and minerals producers. The sector exported an average $158.6-billion (U.S.) per year to members of the TPP deal. Canadian exporters face tariff walls in key countries, including 40 per cent in Vietnam and 50 per cent in Malaysia.

“This will be beneficial to Canada’s mining sector,” association president Pierre Gratton said. “I am not expecting any downside.… The risks to our sector would come from Canada pulling out.”

But not all Canadian industries looked forward to TPP coming into effect. For some producers in Canada’s protected dairy sector, the deal could spell disaster. It is for this reason that Canadian dairy farmers and auto-makers lobbied intensely against the bill, as did Japan’s farmers – who fear their smaller operations would be bankrupted by large U.S. agri-businesses flooding their market with cheaper, inferior products.

But Yuen Pau Woo, a fellow at Simon Fraser University’s Jack Austin Centre for Asia Pacific Business Studies, notes – like Mr. Sawyer, who is already behind Australian competitors – that even if the fine print of the trade deal is not yet known, Canada would likely be left behind if it had been frozen out of the TPP.

“It is impossible to know if Canada negotiated a good deal or not until we see the final TPP agreement. But we will almost certainly be worse off outside the deal than in it because of the erosion of our NAFTA preferences,” said Mr. Woo.

Of course, not every industry sees immediate benefit from the TPP. At Burnaby, B.C.-based Ritchie Bros. Auctioneers Ltd., the world’s largest auction house for used industrial equipment, CEO Ravi Saligram said TPP could “buoy the overall Canadian economy” as businesses make new investments and build new infrastructure to handle the increase in trade, but that it wouldn’t have a clear impact on Ritchie’s.

“We don’t expect it will have an immediate or direct impact on our business,” Mr. Saligram said. “Cross-border transactions in used machinery, which Ritchie Bros. specializes in, are impacted most by non-tariff trade barriers such as differing emission standard certifications, and it’s still unclear whether these barriers would change with the new proposed trade agreement.”

And although the biggest markets for Canadian grains, pulses and oilseeds remains China and India, not signing the TPP agreement would still have left producers on the Prairies out of fast-growing markets such as Vietnam and Malaysia, as well as at a disadvantage selling into mature economies such as Japan and the U.S.

“We cannot afford to be left out,” said Jean-Marc Ruest, Winnipeg-based Richardson International Ltd.’s senior vice-president for legal and corporate affairs.

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