EU-Canada agreement has “important implications” for pork sector

The conclusion of the EU-Canada Free Trade Agreement (CETA), which is scheduled for final approval in the first quarter of next year, looks set to have some important implications for the pork sector on both sides of the Atlantic, according to AHDB Pork.

Commenting in a detailed review of the agreement, AHDB Pork notes that Canada has had no success, to date, in penetrating the EU pigmeat market but that this could now change, as a result of CETA.

“The Canadian pork industry has welcomed CETA,” said AHDB Pork, adding that the country’s industry leaders see the deal as offering by far the best opportunity Canada will have for many years to acquire new access into the EU.

Under CETA, pork has been classified as a sensitive product. As such, Canadian pork exports into the EU will be given a zero duty, but will be subject to tariff rate quotas (TRQs). The total duty-free access granted to Canada therefore amounts to 75,000 tonnes carcase weight equivalent, to which the existing TRQ of 4,625 tonnes is added.

“The European Commission has stated that the quotas equate to 0.4% of total EU consumption of pork,” said AHDB Pork. “In reality, however, Canadian exporters will target cuts, especially hams and, to a lesser extent, shoulders that offer the best returns, so the impact on some EU-produced cuts would inevitably be greater.

“The quota of 75,000 tonnes will be phased in, however, with 12,500 tonnes allowed in year one, increasing by the same amount each year until the full amount is reached in year six.”

AHDB Pork also points out that while CETA is expected to be finalised in the first quarter of 2017, the recent outcome of the referendum in the UK could “slow” this progress.

“What comes next for the EU, the UK and Canada on this deal is somewhat uncertain,” it added. “The full implications of the UK’s exit from the EU will take time to become clear.

“Whether this will affect the timetable for the ratification of the CETA deal or even mean it will require some renegotiation remains to be seen. Nevertheless, when it does come into force, the deal looks set to have some important implications for the pork sector on both sides of the Atlantic.

“In addition, for the EU, it may also provide some indication of the possible impact of the larger trade deal with the US.”

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