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Building and Expanding Opportunities For Agriculture: WTO Public Forum
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Building and Expanding
Opportunities for Agriculture
WTO Public Forum
The Central America Free Trade Agreement
Agenda
• Canada’s Agriculture Industry
• About CAFTA
• The Importance of Trade
• Benefits of Expanded Trade
• The Doha Round – Time for a Deal
• Issues and Challenges
• Influencing Economic Agendas
• CAFTA’s Perspective
Canada’s Industry
• Approximately 7% of Canada’s land is
farmland – 167 million acres / 67.6 million
hectares.
• There are over 229,000 farms across
Canada.
• The average farm size is 728 acres / 295
hectares.
• Canada’s processing industries produce
value-added products across a number of
commodities.
Canada’s Exporters
• Approximately 92% of Canada’s
farms produce commodities that are
exported or sold domestically at
international market prices.
• Sales of export commodities account
for over 80% of annual farm receipts
– over $33 Billion in 2006.
Export Share of Farm Receipts
Key Commodities
• Canada’s major exports include:
– Beef
– Pork
– Grains
– Oilseeds
– Pulses
– Processed sugar products
– Other horticultural products
About CAFTA
• CAFTA’s roots go back to 1998; we
are a consortium of Canadian
agricultural and agri-food exporters.
• CAFTA’s members represent most of
Canada’s agricultural and agri-food
exports – and the entire value chain.
• CAFTA is committed to liberalizing
trade through the systematic
reduction of trade distorting barriers.
The Importance of Trade
• Canada is a trading nation – in agriculture
and in many other industries.
– Canada is the world’s fourth largest agricultural
and agri-food exporter.
• In agriculture, Canada’s overall production
exceeds our level of domestic
consumption.
• Maintaining a viable agriculture industry
requires a healthy international trade
environment.
The Benefits of Expanded Trade
• Countries improve their standard of living –
by obtaining needed goods in exchange for
things they already produce.
• Accessing higher value markets increases
economic activity - leading to economic
diversification and stability.
• Expanded trade increases a country’s
productivity by employing its land, labour
and capital where they are most productive
The Benefits of Expanded Trade
• Increasing export opportunities allows the
agriculture industry to build capacity.
• Expanded capacity allows for process
improvements – resulting in greater yields
and higher quality products.
• Increased trade attracts investment –
allowing for greater degrees of innovation.
• Consumers benefit from greater variety in
the commodities and products available to
them.
Issues and Challenges
• Canada faces challenges both internally and
externally in terms of expanding trade.
– Canada takes a strong defensive position on
dairy, eggs and poultry products.
– Grains, oilseeds and meats are among the
most “sensitive” products in the world – they
are among Canada’s major exports.
• Variations in import specifications from country to
country present challenges for Canadian exports.
• Strong Canadian dollar – currently trading near par
with the U.S. – presents additional challenges.
The Doha Round
• The Doha Work plan outlined three
ambitious outcomes:
– Substantial improvements in market access
– Reductions, leading to a phase out, of export
subsidies
– Substantial reductions in trade-distorting
domestic support
• Outcomes of the round will benefit trading
nations – like Canada – and will help to lift
millions of people around the world from
poverty.
Time for A Deal in Agriculture
• Tariffs levels on agriculture and agri-food
products remain extremely high:
– Average world tariffs are at 60% compared to
4% for industrial goods.
– Some agricultural tariffs exceed 500%
• Current tariffs and subsidies distort the
world agricultural market by upwards of
$50 Billion annually
• According to the World Bank, world income
would increase by $582 billion through
liberalized agricultural trade.
Influencing Economic Agendas
• Overall, the benefits of increased trade can
be significant – however, at times,
adjustment is necessary.
• Failing to respond proactively to necessary
adjustment will delay the benefit.
• Increased trade is a powerful economic
engine; the main driver of development and
growth– and builds lasting capacity.
• Projected increases in world demand for
food – particularly in the developing world –
suggests the time for action is now.
CAFTA’s Perspective
• As one of the world’s largest exporters of
agriculture and agri-food, Canada will
benefit from expanded trade opportunities.
• As one of the more prosperous nations in
the world, Canada has a responsibility to
support other nation’s efforts to build their
own economic capacity – through trade.
