Business & Policy
Canola industry urges TPP implementation to keep Canadian canola competitive
By Canadian Canola Council
A meeting of Trans-Pacific Partnership countries in Vietnam this week provides a window of opportunity for Canada to take the next step in TPP implementation, increasing the value of canola exports and benefiting the entire canola value chain. The 11 country members are meeting in Da Nang, Vietnam for the Asia-Pacific Economic Cooperation Leaders’ Week, November 6 to 11.
“The canola industry is urging the federal government to advance the TPP during these discussions,” says Jim Everson, president of the Canola Council of Canada. “Implementing the TPP will increase value-added processing in Canada, maintain existing markets and ensure that Canada remains competitive to other oilseed producing countries.”
The United States has decided not to proceed with TPP negotiations. However, implementing an agreement with the remaining 11 countries would provide Canadian canola a competitive advantage over competing oilseed products entering TPP countries, such as U.S. soybean oil into Japan.
Japan is a long-standing and consistent market for canola seed, but tariffs of approximately 16 per cent have prevented oil exports. As agreed to during the TPP negotiations, the TPP would open new markets for value-added canola products by eliminating canola oil and canola meal tariffs and establishing more effective rules to prevent non-tariff barriers. When tariffs are fully eliminated in Japan and Vietnam over five years, exports of Canadian canola oil and meal could increase by up to $780 million per year.
In addition, Australia already has a free trade agreement with Japan that is eliminating tariffs on Australian canola oil. As a result, Canadian canola oil currently faces a six per cent higher tariff than Australian canola oil – a competitive disadvantage that will grow each year that the TPP is not implemented.
“Australia is able to ship value-added product to Japan, while Canada cannot,” says Everson. “Each year that passes without implementation means that Canada falls further behind our main competitor in the Asia-Pacific region – risking our current $1.2 billion annual exports to Japan.”
The TPP is an important enabling step for the canola industry to increase value-added processing and productivity. The industry’s strategic plan, Keep it Coming 2025, includes the objective of nearly doubling the amount of canola processed in Canada over the next 10 years. Processing 14 million tonnes of canola in Canada requires that barriers to exporting canola oil and meal are removed – such as tariffs that the TPP would eliminate.