Canada-European Union

Comprehensive Economic & Trade Agreement An Opportunity for Canadian

Agriculture & Agri-Food Exporters

Jennifer Higginson, Deputy Director Market Access Secretariat

Agriculture and Agri-Food Canada

CETA is an opportunity not to be missed

The purpose of today’s presentation is to:

• Discuss Canada’s market potential in the EU, and highlight trends of interest to

Canadian agriculture and food companies

• Provide you with an overview of the benefits of CETA for Canadian agriculture

and food exporters

• Direct you towards the multiple resources and services available for support

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The EU is the world’s largest importer of agriculture and agri-food products…

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Source: Global Trade Tracker

ROW, 875,564

EU28, $169,417

USA, $159,091

China, $137,235

Japan, $67,877 Canada, 43,667

Russia, $32,563

Global Agriculture & Agri-Food Imports, 2015 Millions of Canadian Dollars

And demand for imports is growing

4 Source: Eurostat

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20

40

60

80

100

120

140

160

180

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

EU Agriculture and Agri-food Imports, 2006 - 2015 Billions of Canadian Dollars

There are real opportunities for Canadian producers CETA opens up new prospects for Canadian exporters

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1

2

2

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3

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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Canadian Agriculture and Agri-food Exports to the EU, 2006 - 2015 Billions of Canadian Dollars

Source: Statistics Canada 5

Exports are spread over multiple countries…

Top 10 EU Market Destinations for global Agriculture and Agri-Food Products, 2015

Top 10 EU Market Destinations for Canadian Agriculture and Agri-Food Products, 2015

Source: Global Trade Tracker 2015

… and there are common consumer food trends within the EU

EU consumers are increasingly interested in:

• convenient on-the-go meals

• vegetarianism, veganism, and flexetarianism (reduced meat consumption)

• natural, organic, and functional foods

• the use of the web both for shopping and for information on healthy eating habits and trends

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CETA will open up new prospects for Canadian food exporters…

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$163.4 B

$114.4 B

$3.3B

Total EU food imports from the world

EU imports of food products supplied by

Canada from the world EU food imports

from Canada

Canada’s Market Share = 2.90%

Source: Global Trade Tracker, 2015

But, we are faced with a number of competitors for market share in the food industry

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Top Non-EU Competitors Top food exports to the EU by market

Brazil Oilcakes Coffee

Soy Beans

United-States Fresh/Dried Almonds

Soy Beans Whiskies

China Edible Offal

Frozen Fillets Cod Fillets

Norway Fresh/Chilled Atlantic Salmon

Fresh/Chilled Fillets Dried Cod

Argentina Oilcakes

Groundnuts Fresh Shrimps and Prawns

Source: Global Trade Tracker, 2015

4.6%

4.8%

5.0%

9.5%

10.2%

Market share, EU world imports

CETA will provide Canadian agriculture producers with an advantage over those

competitors…

• For example, current EU tariffs on processed foods are complex and trade restrictive:

- For many processed foods, tariffs are calculated based on dairy, sugar and starches/cereal content.

- EU tariffs can reach 20%, with ad-valorem equivalents that can often be over 50%, and as high as 100%.

• CETA will eliminate all tariffs on processed foods

- With the exception of sweet corn and refined sugar, all processed food tariffs will be eliminated immediately.

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…particularly vis-à-vis competitors who do not have a trade agreement with the EU…

11 Source: European Commission

CETA will eliminate tariffs on many agriculture and agri-food products…

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Upon CETA’s entry into force, almost 94% of EU agriculture lines* will become duty-free:

Many EU lines* will be phased out over …

• Pet Food (up to 948 €/tonne) • Frozen French Fries (14.4-17.6%) • Sweet Dried Cranberries (17.6%) • Processed Pulses (7.7%) • Soybean and Canola oil (3.2-9.6%) • Prepared Vegetables (20%) • Fruit Juices (e.g. cranberry, blueberry) (17.6%) • Condiments/sauces (up to 10.2%) • Maple Syrup (8%) • Fresh Cherries (up to 12%, seasonal) • Fresh Apples (up to 9%, seasonal)

7 years: • Durum Wheat (up to 148 €/tonne) • Rye & Barley Grain (up to 93 €/tonne) • Common Wheat, low-medium quality (up to

95 €/tonne) • Oats (89 €/tonne)

Tariff Rate Quota* (TRQ) established for…

• Common Wheat (100,000 tonnes) Immediate**

• Sweet Corn, processed (8,000 tonnes) 5 year phase-in

• Bison (3,000 tonnes) Immediate • Beef (50,000 tonnes) 5 year phase-in • Pork (80,549 tonnes) 5 year phase-in **Full volume available immediately. Duty-free and quota-free after 7 years.

*Not an exhaustive list/Rules of origin will apply

However, Canadian companies must comply with CETA Rules of Origin for Agri-Food

Products…

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Rules of Origin

• Exporters must ensure their product meets the applicable

rules of origin (RoO) to benefit from the preferential tariff

that CETA provides.

• Products that satisfy these RoO are described as originating

and only originating products receive preferential tariff

treatment under the agreement.

• Products that are “wholly obtained” in Canada, such as grains,

fruits and vegetables are originating.

• Products that are produced in Canada using non-originating

materials (e.g. materials imported from the US), are originating,

providing they satisfy the applicable product-specific rule of origin

(PSRO).

• A binding, written ruling on tariff classification can be obtained in advance of exporting your products to the EU by submitting an application to the EU’s Binding Tariff Information (BTI) system.

As well as CETA Origin Quotas for Agri-Food Products

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Origin Quotas

Origin Quotas • Under the CETA Origin Quotas, certain processed products that

are made in Canada using non-originating materials can qualify for preferential treatment when exported to the EU.

• Origin Quota goods will be subject to annual quotas. Once the quota is filled, products will not be eligible for preferential tariff treatment based on these more liberal rules of origin.

Origin Quota for certain processed agricultural products: • high-sugar containing products; sugar confectionery and

chocolate preparations; processed foods; and dog and cat food.

Requirements will remain the same for shipments to the EU

• CETA does not change on-going EU import requirements and/or sanitary requirements exporters need to meet. For example:

– Federally registered establishment (e.g. meat, fruits, vegetables, maple products) and/or EU approved facility (e.g. pork, beef, pet food)

– CFIA export and/or health certificate (e.g. meat products, plants)

– Hormone free requirement (e.g. beef, veal)

– Ractopamine free requirement (e.g. pork, beef)

– Labelling (e.g. Font size, nutrition information, identification of GM ingredients, etc.)

• Visit www.inspection.gc.ca or contact MAS-SAM@agr.gc.ca for more information.

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AAFC has a number of resources available to you

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Our CETA page includes: • Useful links to GAC and trade commissioner

content as it relates to the EU and CETA • Sector reports explaining how stakeholders

can export to the EU and how to obtain the preferences available under CETA

• Infographics highlighting some of the advantages businesses will derive from CETA, and

• An infographic covering the opportunities that will be shared with you via webinar in January.

Targeted reports for each opportunity are to be expected in the next few months.

Our trade commissioners in market provide us with recent news and hot topics in the EU

Visit www.agr.gc.ca/Europe

Including information meant to help you navigate opportunities in the EU

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Market Information: • Over 150 reports, covering:

• Trade data • Consumer profiles • Market overviews • Distribution channels (foodservices, Retail, e-

commerce) • Sector trends • Trends covering health and wellness • Commodity innovations

• Videos covering opportunities in the EU, with 3 new videos in the pipeline:

• Sector snapshot: pet food in the EU, • sector snapshot: Organic foods in the EU, • Labelling for the EU 101 featuring our TC in Paris

• Webinars will be featured on the website in the few months for companies to register – topics are to be confirmed based on business needs and interests

Customized Market Research: • We can leverage our network to give you information

critical to your international success. • Contact mas-sam@agr.gc.ca with your questions.

Stay tuned for various webinars and information products in 2017

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Over the next year, AAFC will be providing a number of information products to support Canadians companies looking to export to the EU

Webinar The EU’s most promising opportunities

for Canadians post CETA implementation

Webinars Webinar series featuring our trade commissioners in market

Videos Sector snapshot: pet food in the EU Sector snapshot: Organic foods in the EU

Video Labelling for the EU 101 featuring our TC in Paris

Jan 2017 Winter 2017 Spring 2017 Fall 2017

Intelligence reports will be published on the AAFC website throughout the year – We are planning on developing some 20-25 EU reports in 2017, based on extensive analysis of sector opportunities and challenges.

Here’s how you can stay up to date on new releases

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Bookmark our latest market information page

Follow us on twitter @AAFC_Canada

Sign-up to receive newly released reports bi-weekly. Contact mas-sam@agr.gc.ca

Resources

• Canada’s Trade Commissioner Service (www.tradecommissioner.gc.ca) – Connect you to buyers. – Help you navigate the consumer market. – Assist with country-specific regulatory issues.

• “Doing Business in Europe” on AAFC Website (www.agr.gc.ca/europe) – Comprehensive support to industry via our “One-Stop Shop”

approach online where we feature market and sector information related to exporting and doing business in the EU.

• MAS Single Window (MAS-SAM@agr.gc.ca) – Experts available to address EU trade issues and provide custom

market intelligence.

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Annex 1: Existing market information covering identified opportunities

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Country Reports Sector Reports

• 28 Country Factsheets, such as:

• At a Glance: EU 28 (2016)

• At a Glance: France (2016)

• At a Glance: Germany (2016)

• At a Glance: Italy (2016)

• At a Glance: United Kingdom (2016)

• 14 Competitive Trade Analysis, such as:

• Competitive Trade Analysis - Belgium (2015)

• Competitive Trade Analysis - Denmark (2015)

• Competitive Trade Analysis - Italy (2015)

• Competitive Trade Analysis - Spain (2016)

• Competitive Trade Analysis - Sweden (2016)

• 9 Competitive Trade Analysis – Fish and Seafood

• Competitive Trade Analysis - Crustacean Products in

France (2016)

• Competitive Trade Analysis - Fresh, Frozen and

Processed Fish in Germany 2(2016)

• Competitive Trade Analysis - Fresh, Frozen and

Processed Fish in the United Kingdom (2016)

• 5 Health and Wellness:

• Health and Wellness Series – Healthy Snack bars (2016)

• Health and Wellness Series – Omega 3 trends (2016)

• Health and wellness Series – Subsector trends in

Germany (2016)

• 22 Sector Trend Analysis:

• Sector Trends Analysis - Berries, fresh, frozen or

processed in Germany (2016)

• Sector Trends Analysis - Blueberry product trends in the

EU (2016)

• 6 Innovation Trends:

• Innovation Trends – Metro in Germany (2016)

• Innovation Trends – Tesco in the UK (2016)

• Commodity Innovations – Snapshot of Opportunities in

Italy’s Pulse sector