Business & Policy
Better access for value-added canola to Asia is near
By Canola Council of Canada
The passing of Bill C-79 on Oct. 16, an act to implement the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), by the House of Commons is an opportunity for the canola industry to increase value-added exports and benefit the entire canola value chain, according to a statement by the Canola Council of Canada.
The Canadian industry currently cannot export value-added products to countries like Japan because of the high tariffs they apply to Canadian canola oil. Australia already has a free trade agreement with Japan that is eliminating tariffs on Australian canola oil, putting Canadian canola oil at a competitive disadvantage. When tariffs are fully eliminated in Japan and Vietnam through the CPTPP over five years, exports of Canadian canola oil and meal could increase by up to $780¹ million per year.
The CPTPP will come into force 60 days after it is ratified by the first six countries – and as Mexico, Japan and Singapore have already ratified, and as Australia and others are on track to complete ratification soon, the race is on to be one of the first six nations to gain this competitive foothold. In order for tariffs to be reduced in 2018, the agreement needs to be ratified by six countries by November 1, 2018.
The Canola Council of Canada is a full value chain organization representing canola growers, processors, life science companies and exporters. Keep it Coming 2025 is the strategic plan to ensure the canola industry’s continued growth, demand, stability and success – achieving 52 bushels per acre to meet global market demand of 26 million metric tonnes by the year 2025.
¹Potential impacts of tariff elimination reflect a consensus of the canola value chain – which includes processors and exporters with in-depth knowledge of international market dynamics. Members were informed by research incorporating general equilibrium modeling that examined impacts of a TPP on each sector of the 12 countries’ economies under alternative scenarios. The study was completed by Dan Ciuriak, a former deputy chief economist for the Federal government’s department of Foreign Affairs and International Trade. For more information, view the report titled “Canola Market Impacts under Alternative TPP Scenarios”