It was a roller-coaster ride for Canadian agriculture this week when it came to press releases surrounding the country's trade relations. On Thursday, we woke up to reports of "a deal in principal" among the 11 remaining partners in the Trans-Pacific Partnership as indicated by a Japanese government representative.
Media reported that only moments later that Canadian representatives declared that no such deal had been reached. "We're not going to sign a deal because we feel pressured into signing a deal -- we're going to make sure it's right for Canada and it's right for the world," stated Prime Minister Justin Trudeau while in Vietnam.
Brian Innes, president of the Canadian Agriculture and Agri-Food Trade Alliance (CAFTA), stated in a press release Thursday, "We are disturbed by news that the Canadian government is looking to make significant changes to a deal that's already been negotiated. We have a small window of opportunity. Demanding changes to the market access provisions could jeopardize the entire agreement." He went on to say, "It's crucial that we get back on track with this one -- and do it quickly. Not doing so will be extremely costly --losing opportunity overseas and economic growth and jobs here at home."
Friday's early reports suggested that Canada had sabotaged all hope of a deal by failing to attend a meeting along with the other 10 trading partners. The Liberal government's approach has brought condemnation from media both at home and abroad. Canada's Trade Minister Chrystia Freeland is in the media spreading the blame, saying other countries also have problems with the proposed deal.
Global media is now reporting that the TPP11 countries have come to "a substantial conclusion" on a deal, which involves searching for resolution on a number of issues at a later date. The Canadian Broadcasting Corporation reported that labor and environment standards promoted by Canada have been adopted in the deal.
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Time will tell, but the drama involved with these negotiations may be far from over.
In other trade-related news, we look at the fall-out from the 50% tariff imposed by India on dry pea imports on Wednesday. While it is difficult to know how far-reaching the effects of this tariff will be, the market reaction since the announcement has been unfavorable, as expected. As seen on the right side of the attached chart, prices have corrected sharply lower. Green peas delivered to Saskatchewan plants (green line) have fallen by $.40/bu., yellow peas by $1.10/bu. (yellow line) and feed peas (grey line) have fallen by $.80/bu. Yellow peas have seen the largest impact, now trading at the lowest level seen in three years according to a combination of data from Saskatchewan Agriculture and Statpub.com.
One trade estimate suggested that 100,000 metric tons of product could also be in transit, which could leave sellers in a difficult position to negotiate or absorb unexpected tariffs.
Week 14 Canadian Grain Commission Statistics shows 850,500 metric tons of bulk peas exported through licensed facilities in the first 14 weeks of the crop year, down 41.9% from the same period in 2016/17.
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