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Tariff elimination major factor in boosting trade to China

The Canadian Agri-Food Trade Alliance (CAFTA) has released a report that outlines the potential for expanding trade in China: a market that accounted for $5.6 billion in Canadian agri-food and agri-food exports last year. China is Canada’s second-largest two-way trading partner (after the U.S.) and is projected to be the world’s largest agri-food importer by 2021.

The report, entitled “Chasing China - Expanding Canada’s Agri-Food Exports to China,” describes the growing opportunity in the country for Canada’s agri-food exports. Currently, agri-food exports to China are already significant – China demands one third of Canada’s canola exports and represents an important market for soybeans, pulses, wheat, barley, beef and pork.

Despite the large and growing demand for Canadian agri-food products in China, the report points out that Canadian exporters continue to face serious barriers that are hampering growth. For example, tariffs and non-tariff barriers reduce the range of products that can be exported and raise uncertainty for exporting businesses.

While overcoming the barriers will be tough for many agri-food commodities and value-added food products Chinese production can’t keep up with demand and there are opportunities to improve trade.

Tariff elimination and tariff quota expansion for wheat, barley, pulses, soybean, canola as well as sugar and sugar-containing products would provide opportunity for the Canadian industry. In some cases, Canada faces a significant trade imbalance with China, particularly in value-added prepared foods and is at a competitive disadvantage compared to other countries like Australia who have signed free trade agreements.

The full report can be found here.