Pacific Alliance Free Trade Agreement
In September 2017, the Canadian Pork Council participated in the Free Trade Agreement with the Pacific Alliance consultation process in order to voice the opinion of Canadian hog farmers.
The Canadian Pork Council (CPC) and Canadian Pork International (CPI) welcome the opportunity to participate in the Free Trade Agreement (FTA) with the Pacific Alliance consultation process. The CPC serves as the national voice for 7,000 hog producers in Canada. A federation of nine provincial pork industry associations, its purpose is to play a leadership role in achieving and maintaining a dynamic and prosperous Canadian pork sector. CPI membership includes the national and provincial associations of hog producers, as well as, federally registered pork packing and processing establishments, and trading companies. CPI members represent nearly 99% of the Canadian pork exporting industry. This industry has been serving international markets for more than 25 years and currently reaches consumers in more than 100 countries. Canadian producers recognize the importance of trade and welcome the Canadian government’s efforts to expand economic ties with the Pacific Alliance through a free-trade agreement.
A key reason for the growth of Canadian pork exports has been the establishment of free trade agreements with strategic partners. At present, Canada benefits from bilateral trade agreements with each of the members of the Pacific Alliance. The FTA with Mexico as part of the North American Free Trade Agreement (NAFTA) was brought into force on January 1, 1994. The FTA with Chile was implemented July 5, 1997, and the FTAs with Peru and Colombia were brought into force on August 1, 2009, and August 15, 2011, respectively.
Canada has enjoyed success in the Pacific Alliance markets. In 2016, Canada exported: 117,171 tonnes of pork valued at $195 million to Mexico; 11,665 tonnes valued at $31 million to Chile; 5,140 tonnes valued at $10 million to Colombia; and 256 tonnes with a value of $575,434 to Peru. The FTAs with Mexico and Chile have evolved to the point where there are no longer restrictive Tariff Rate Quotas (TRQ) on Canadian pork exports.
To improve exports to Colombia, access for chilled pork meat must be gained. Unfortunately, Columbia does not recognize the Canadian swine herd as being trichina-free. Our largest competitor in the market, the United States, benefits from trichina-free herd recognition. This allows the industry to ship chilled pork products and access the more profitable retail market.
Addressing the TRQ allocation process is also a priority. The current Columbian approval process is extremely unfavourable to Canadian exporters. American pork exporters are privileged with a first-come-first-serve allocation process which is less cumbersome for Columbian importers. Canadian exporters also face increased duty fees during the performance review period, when preferential duty rates are not applicable to Canadian pork products. American competitors are not subject to the same duty and can export to Colombia duty-free year round. The Canadian pork industry requests that the process be streamlined to allow Canadian exporters the opportunity to expand their exports. The Canadian pork industry would also benefit from the addition Pork Fat HS Code 02.09.00.90 Category Z.
To increase exports to Peru, the insufficient TRQ of 600 tonnes must be increased. Applicable duties at 25% will remain in place for one more year before entering year 11 of the FTA when the base rate will be reduced in equal stages over the next seven years. This could be accelerated.
In considering negotiating objectives, the CPC and CPI requests that:
- the allocation process in Colombia for Canadian pork products be simplified;
- the Colombian government recognize the Canadian swine herd as trichina-free permitting exports of chilled pork to these markets;
- the quota for Canadian pork products be drastically increased and the existing tariff rate reduced in Peru.