Canada Markets

Canada is in the Crosshairs in Australia's CPTPP Text

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Australia's government has recently released a report highlighting outcomes expected from the implementation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), with increased access to Canada and Mexico markets indicated among the benefits. This was noted in this week's USDA Australia attache report, as well as by world-grain.com in a piece titled "Australia's Grain Industry Benefits from New CPTPP Deal."

The text states "The TPP-11 will eliminate 98% of tariffs in the TPP-11 region," while going on to say "The TPP-11 also opens up valuable new market access opportunities for Australian exporters in the two TPP-11 Parties where Australia does not have a FTA (free-trade agreement), namely, Canada and Mexico."

In 2016/17, Australia reports that 23.6% of total goods and services exports valued at $87.9 billion was transacted with TPP-11 countries. Of this total, close to 50% was conducted with Japan while exports to Canada were valued at $2.7 billion, the sixth largest dollar volume reported of the 10 trading partners. Of the total exports, $12 billion is reported as trade in agricultural goods, or 23% of their total agricultural trade.

The reports summarizes outcomes that include activity with Mexico and Canada as follows:

-- Elimination of Canadian beef tariffs (currently at 26.5%) within five years of entry. This was reported at $101 million in 2016/17.

-- Elimination of Mexico's tariffs on beef carcasses and cuts within 10 years and elimination of Mexico's 20% tariff on "other offal", used for taco meat, upon entry.

-- Elimination of Mexico's 20% pork tariff upon entry.

-- Elimination of Mexico's 67% tariff on wheat within 10 years.

-- Elimination of Mexico's 115% tariff on barley within five years.

-- Elimination of all Canadian tariffs on cereals and grains upon entry.

-- Preferential access into Canada's market with new quotas for dairy products including cheese, milk powders and butter, while tariffs on milk protein concentrates will be eliminated.

-- New quotas will be created by Mexico for butter, cheese and milk powders, while tariffs will be eliminated on yogurt.

-- Canada to eliminate tariffs in refined sugar within five years, now at $30.86 CAD/metric ton.

-- Mexico will allow special access to quotas on sugar to Australia

-- Canada to eliminate import tariffs on wine immediately, while Mexico will remove tariffs on wine over three years.

-- Canada to eliminate tariffs on horticulture products immediately, while Mexico will remove most horticulture tariffs immediately and the balance within 15 years.

Canadian text on the Agriculture and Agri-Food Canada also points to increased opportunity with Australia, with "noticeable gains" forecast in the export of machinery and equipment and transportation equipment. Under the heading Trade by Sector, it is noted that increases in imports would be dominated in the sectors of apparels, leather products, chemical products and machinery and equipment.

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Cliff Jamieson can be reached at cliff.jamieson@dtn.com

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