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As the United Kingdom joined the 11 signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in celebrating an agreement in principle to expand the deal early Friday morning, the Canadian Cattle Association threatened to lobby against its ratification unless its longstanding beefs are corralled and fixed.
The member countries of the CPTPP, including Canada, concluded nearly two years of accession talks with the British government earlier this month in Vietnam. Their proposal, which includes side letters to protect sensitive industries, is not yet public and has yet to be legally vetted, officially signed or ratified by all members.
It’s first potential expansion of the Pacific Rim trading deal since it came into force between six original members in late 2018.
But while Trade Minister Mary Ng welcomed the conclusion of these accession talks and expressed the Canadian government’s official support for adding its “longstanding friend and ally” to this club, Canada’s beef industry signalled it was no longer prepared to go along with trade agreements that don’t do what they promised.
“If the government of Canada brings a ratification bill to Parliament without addressing the U.K. barriers to Canadian beef, CCA will approach all Parliamentarians to defeat this bill,” said Nathan Phinney, the president of the Canadian Cattle Association.
The ratification of trade treaties falls to Prime Minister Justin Trudeau’s cabinet. But actually implementing a trade deal requires changes to laws and regulations that must pass through Parliament. And Canada’s ratification process, modified in response to concerns of opposition MPs during the NAFTA talks, gives other parties in the current minority Parliament more opportunities to obstruct and delay agreements when they have concerns.
With the British application to join the CPTPP, the biggest controversy in Canada comes from cows. Both kinds — beef and dairy.
As cattle farmers lose patience, the future of tariff-free British Stilton (or other cheese varieties) hangs in the balance.
CETA’s unfinished business
The current tensions are a legacy of where negotiators landed on the Canada-EU Comprehensive and Economic Trade Agreement (CETA).
Two separate negotiations are now strained — the deliberations to add the first new member to the Pacific Rim bloc and Canada’s bilateral talks on a bespoke trade agreement with the U.K. to replace the terms of the interim agreement Canada struck after the British voted to leave the European Union.
When CETA talks were winding down a decade ago, additional access to Canada’s protected dairy market for European cheese was traded off, at least in part, for additional market access Canadian livestock producers wanted in the European Union — a trade bloc equally and somewhat notoriously defensive of its own politically powerful farmers.
Despite ongoing arguments about the fairness of how tariff-free dairy import licences are administered by the Canadian government (a fight now taken up by the U.S. in its own CUSMA dispute, and by New Zealand in the first dispute initiated under the CPTPP’s new mechanism), Canadians now buy more imported cheese.
Canadian beef, however, hasn’t been shipping out to European consumers in the numbers promised first by the Europeans and then later by British negotiators. Ongoing CETA implementation talks to address the problem with more study and negotiation drag on.
British Prime Minister Rishi Sunak’s statement Friday touts how the U.K.’s agreement in principle to join the CPTPP upholds British “food safety standards.”
For Canadian beef producers already battle-hardened after multiple rounds with Europe, Sunak’s words sound like protectionist code.
Processing methods common in North America remain unapproved by European or British regulators, despite years of talks to reconcile issues Canada believes have nothing to do with science or safety.
If Canadian meat plants, which are already in short supply, can’t be certified for the British export market, Canadian cattle can’t be butchered for export to the U.K. The cost of applying bespoke British rules on processing lines for a market that’s only marginally open to Canadian exports is too high.
It also runs counter to what’s supposed to lie at the heart of the CPTPP: common standards.
British ship double what Canadians can
The CCA says its producers didn’t export any beef at all to the U.K. market last year. Demand for Canadian beef remains strong domestically and around the world, including among other CPTPP partners.
As negotiators continue to bicker, the industry adjusted to what made commercial sense. But that doesn’t mean it’s satisfied everything’s fair — and farmers also worry about longer-term global competitiveness.
In its release Friday, the CCA said it was aware that the U.K. allows other CPTPP members — including countries like New Zealand and Australia that compete with Canadian beef internationally — unlimited access to the British market. Meanwhile, Canada’s been told additional beef access is “off the table.”
In addition to the cheese tradeoff, British beef farmers have their own access to the Canadian market. Canada may have shipped nothing eastward to the U.K., but the British exported 4,414 tonnes of beef westward to Canada in 2022 — nearly double what Canadian farmers are allowed to ship to the U.K. under their current trade agreement.
“Yesterday’s announcement of the U.K.’s accession to the CPTPP further disadvantages Canadian beef producers and is fundamentally unjust,” Phinney said.
To date, cattle producers have supported ongoing talks to rectify what they see as the “lop-sided benefits” of two-way agricultural trade with the U.K. They insist that what they want is a win-win for consumers in both markets.
Beef farmers lobbied hard for the CPTPP because it gave them market access to places like Japan for the first time, and say it has been an “excellent agreement” so far for them.
But “an agreement with the U.K. that leaves a significant barrier in place does not meet the standard of the CPTPP and the UK’s bid to join should be rejected until they can do better to meet the progressive trade principles of the CPTPP,” the CCA said.
If the British do not relent, cattle producers say they’ll delay CPTPP accession by any means possible in Parliament and work to gum up the bilateral negotiations until they’re satisfied.
What will MPs do?
CBC News asked the Conservative and NDP trade critics for comment Thursday but has yet to receive a reply.
If ratification takes too long, the U.K. may lose its access to the Canadian cheese market in the meantime.
The terms of the temporary “rollover” deal — struck quickly in Brexit’s aftermath to ensure trade continued to flow as it had under the CETA — are set to expire at the end of 2023. That sunset provision was intended to focus minds on the potential cost of market disruption and pressure both sides not to let talks drag on too long.
The next bilateral negotiating round is expected in June.
Once it’s a CPTPP member, the U.K. could access a large pot of tariff-free import quota for cheese and a long list of additional dairy products, as well as other commodities that are supply-managed in Canada, like chicken and eggs.
The large volumes were originally negotiated to accommodate American market demands in the original Trans-Pacific Partnership talks that concluded in 2015. When then-U.S. president Donald Trump withdrew from the deal in 2017, competitors like New Zealand and Australia found themselves eligible for even greater market access in Canada, to the point where substantial amounts of available import quota haven’t even been taken up to date — although in its ongoing CPTPP dispute, New Zealand argues this is at least partly because Canada has put administrative barriers in its way.
Once British membership is ratified, the U.K. is eligible to share these CPTPP volumes with existing members. But whether it can keep accessing the former CETA or WTO cheese quota rolled into its interim trade deal with Canada remains in doubt.
Canada has said that additional access to Canada’s dairy market is non-negotiable in their bilateral talks.
“The United Kingdom has now joined the CPTPP. This will provide the U.K. dairy exporters with access to the Canadian market,” the Dairy Farmers of Canada said in a short statement Thursday evening. “We expect the Canadian government will be vigilant to ensure that the dairy products coming into Canada adhere to our domestic standards for food safety and production, and that any volumes allowed into Canada are enforced according to the terms of the agreement.”
Canadian dairy farmers have been compensated already by over $3 billion for their anticipated losses from the implementation of the CETA and CPTPP.
Beef farmers say if their trade issues aren’t resolved and governments fail to deliver what they promised to affected industries, the beef cattle industry deserves compensation as well.