US Trade Commission hears testimony on CETA's impact on US lobster exports

Steve Bittenbender October 1, 2020  SeafoodSource News

The U.S. International Trade Commission heard testimony Thursday, 1 October, on the effect the trade agreement between Canada and the European Union has had on America’s lobster industry.

The Canada-E.U. pact, known as the Comprehensive Economic and Trade Agreement (CETA), has had a detrimental effect on U.S. lobstermen and exporters since it took effect three years ago, according to Robert DeHaan, the vice president for government affairs for the National Fisheries Institute. DeHaan said the deal meant U.S. exporters faced 8 percent tariffs on live lobsters and up to 20 percent on value-added products while their Canadian counterparts paid no levies on the same products, providing them with a significant competitive advantage.

That is expected to change as the E.U. and U.S. reached a deal on 21 August to remove the tariffs from lobster products. The five-year deal, retroactive to 1 August, awaits some final changes, but DeHaan said it is welcome news for lobstermen and businesses that have endured other hardships this year with the COVID-19 crisis.

Both DeHaan and U.S. Senator Susan Collins (R-Maine) said in prepared remarks that the USITC also needs to be looking into other trade deals to help the lobster industry. Their top recommendation is a targeting of China for a deal, where again Canada has been able to overtake the U.S. because of friendlier tariff rates, while the Sino-U.S. trade war initiated by U.S. President Donald Trump has resulted in lobster and many other U.S. seafood products facing higher tariff rates than four years ago.

“It is vital that our government support the efforts of the U.S. lobster industry to access new consumers and markets overseas,” Collins said in her statement. “I will continue to advocate for a level playing field for Maine’s lobster industry.”

DeHaan also added that the U.S. Trade Representative should pursue a free-trade agreement with Great Britain that mirrors the E.U. pact and also include other seafood products, such as whitefish, salmon, and shellfish. However, he cautioned that British officials seem intent on maintaining some of the old E.U. policies.

“Here, nevertheless, is the perfect opportunity for the administration to secure fair and reciprocal trade for those exporters, in an agreement with a developed nation whose consumers need no introduction to premium American finfish and shellfish products,” DeHaan said.

In addition to Thursday’s hearing, the USITC is still taking written submissions through 16 October. Those documents must be filed through the commission’s electronic system.

Photo courtesy of Maine Lobster Marketing Council

 

U.S. wheat growers hit sales jackpot in China

By Sean Pratt

Published: September 24, 2020
Markets

Canada could sell wheat to the United States if that country drained supplies while meeting Chinese demand, but large carryout and a good quality crop south of the border makes that unlikely. | File photo

Increased exports are attributed to the trade agreement signed by the two countries, but Canada is unlikely to benefit from that development

The United States has been selling wheat to China like gangbusters in early 2020-21.

There is already 1.47 million tonnes on the books as of Sept. 10, a 2,357 percent increase over year-ago levels.

“China is definitely in the market,” said U.S. Wheat Associates (USW) spokesperson Steve Mercer.

“We have to chalk that up to Phase 1, there’s no doubt.”

In the Phase 1 trade deal with the U.S., China committed to buy an additional US$32 billion of U.S. agricultural products over 2017 baseline levels in 2020 and 2021.

It appears wheat will be one of the beneficiaries of that deal.

This year’s purchases between June 1 and Sept. 10 are already approaching full-year levels in the pre-trade war era when China bought 1.6 million tonnes of U.S. wheat in 2016-17.

China has rapidly become the second biggest buyer of U.S. wheat so far this marketing year after barely buying any last year.

Sales include 921,000 tonnes of hard red winter wheat and 380,000 tonnes of hard red spring wheat.

Mercer said there is no doubt that Chinese millers are in need of high quality wheat. If it was up to them imports would be even higher but the government is in control of the wheat trade.

Bruce Burnett, analyst with MarketsFarm, said Canadian growers are unlikely to benefit from the re-emergence of China as a big buyer of U.S. wheat.

If the U.S. had tight supplies of spring wheat Canada could fill the void left by U.S. wheat flowing to China, but the U.S. Department of Agriculture estimates 7.6 million tonnes of U.S. hard red spring wheat was carried out from 2019-20, which is well above the previous five-year average.

And this year’s crop was of good quality, so U.S. millers have plenty of supply.

Canadian wheat sales to the U.S. have been down in recent years. Exports that were as high as four million tonnes per year in the last decade fell to two million tonnes last year.

That could change if China buys copious amounts of high quality U.S. wheat, but Burnett said China doesn’t need wheat as badly as it needs U.S. corn and soybeans.

China is expected to end 2020-21 with 164 million tonnes or 51 percent of world wheat stocks.

He believes the only reason China is buying wheat is to help meet its Phase 1 commitments and to refresh its stockpile.

“If you’re carrying those massive stocks, you do have to rotate them,” said Burnett.

The newly imported wheat will likely replace supplies that were imported a few years ago and that older grain will be injected into the Chinese market.

Burnett is reticent to guess how much U.S. wheat China will import by the end of the year because the purchases are tied to the Phase 1 agreement, which has been a volatile pact.

“A lot of it will depend on the whims of politics,” he said.

The U.S. recently won two World Trade Organization disputes regarding China’s wheat import policies.

China has agreed to work toward filling its 9.6 million tonne tariff rate quota (TRQ) for wheat imports.

USW believes Chinese millers would fill most of that TRQ if they were allowed to properly respond to market signals.

 

War of trade giants precarious for Canada

By WP editorial

Published: August 20, 2020
Opinion

The United States and China are not about to enter a shooting war any time soon, but their war of tit-for-tat is still damaging for those on the periphery.

Countries including Canada are poised to be winners and losers in this fight between economic behemoths depending on how these giants throw their punches.

Just when they seem to getting along better, something sets them off again. Mostly, it seems to be the result of U.S. President Donald Trump positioning things ahead of the American elections in November.

However, the war is not entirely one-sided.

Whatever the cause, the relationship appears to be as bad as it has been since the Vietnam War era, some veteran political watchers say.

The more desperate to win re-election that Trump and the Republican Party become, the more likely a serious mistake in dealing with China also becomes.

Last month, the Americans called out the Chinese for spying and kicked them out of the Houston, Texas, consulate. China responded a week later by kicking the Americans out of the consulate in Chengdu.

But is what happened in Houston new? The purpose of consular officials is to gather intelligence. The Americans were merely posturing for the business community and domestic voters. China had no choice but to play its side of the game and shutter U.S. operations in Chengdu.

If China had really been insulted, it would have closed a more important location. Instead it just moved some pieces on the board, irritating though it was for the U.S.

Adding to those mutual irritants are American complaints about the way China is treating Hong Kong, which is a property of China whether anyone likes it or not.

In the same month, the U.S. chose to describe Chinese expansionism in the South China Sea as illegal under international law. It appears American interests also put enough pressure on the newly independent Britain to cause that country to shut out Huawei, the Chinese tech company intent on moving into other markets.

And let’s not forget the diplomatic vexations caused by COVID-19 or, as Trump likes to call it, the China virus. His approach to it, from blaming China for intentionally developing and spreading the disease to covering it up and distorting the World Health Organization’s reporting, must aggravate Chinese officials. These are the same officials on which the Americans are placing financial sanctions.

The combination makes the Trump administration look tough, but at some point this jabbing might go too far and prompt China to punch back hard. Maybe that is what the U.S. president wants.

Canada needs the U.S. far more than it needs China as a trading partner and investor. However, Chinese influence and potential should not be overlooked. That influence is growing relative to the U.S. and offers plenty of future opportunity.

China is buying an increasing amount of agricultural products from the U.S. Corn, pork and beans are all attractive to China. America is awash in the first two and has the ability to supply the third.

All of this scrapping is taking place without a referee. China has failed to respect the World Trade Organization ruling against its domestic wheat production subsidies, an accusation levelled by the U.S. (See our front page story for details.)

For Canada, it is important to maintain good relations with both the U.S. and China to ensure that opportunities for short- and long-term trade remain open to us.

Our own history with the detention, on behalf of the Americans, of Huawei’s Meng Wanzhou isn’t helping but letting her go is not likely to help either, even if it did spark the release of two prominent Canadians detained in China.

Our country and government continues to face a precarious balancing act with respect to these two giants. Choices will eventually have to be made. Government is going to need every guidance, and heed that guidance, to choose correctly.

Karen Briere, Bruce Dyck, Barb Glen and Mike Raine collaborate in the writing of Western Producer editorials.

CANADIAN

Farmers fume over CETA failings

FALSE PROMISE OF FREE TRADE

By Ed White WESTERN PRODUCER

Published: October 1, 2020

Exporters say a combination of unreasonable EU regulations, obstruction by EU officials and rogue behaviour by EU member states such as Italy have stopped expected gains for Canadian farmers. 

Agricultural exporters are fuming over the failings of the Canada-European Union trade deal, which has achieved virtually little for Canadian farmers.

Yet EU ag exporters have seen their food sales to Canada soar, unaffected by the vexatious measures Canadian exporters believe the EU imposes to prevent reciprocal access. The situation has a wide swath of trade interests demanding the federal government act.

“Something more has to be done. Their efforts to date have not been sufficient, clearly,” said Erin Gowriluk, the executive director of the Grain Growers of Canada, which represents most of Canada’s farmers of free market crops and livestock.

“Canada is going to have to begin to assert itself in the global marketplace. It’s going to have to do that through example.”

The third anniversary of the signing of the CETA (the Canada-EU deal born in 2017) brought positive and celebratory statements from both European and Canadian government officials, but agricultural exporters and those championing their cause saw the anniversary as a key moment to denounce the reality of the deal.

In the past three years every significant agricultural export from Canada — pork, beef, grains, oilseeds — has faced continued non-tariff barriers, and some have even been increased.

“It’s been three years. It’s been long enough,” said an exasperated Claire Citeau, the executive director of the Canadian Agri-Food Trade Alliance, which brings together most of Canada’s agriculture and food exporters, including the GGC.

“It’s time to now really do something about it because it’s an agreement that continues to hold so much promise for Canadian agri-food exporters, yet continues to fall short.”


Exporters say a combination of unreasonable EU regulations, obstruction by EU officials and rogue behaviour by EU member states such as Italy have stopped expected gains for Canadian farmers.

While there is annoyance with the EU over the perception of bad-faith trade relations with Canada from the exporters, their bone to pick today is with the federal government’s seeming disengagement from the situation.

“It lacks a sense of urgency,” said Gowriluk.

“This needs to be seen as an urgent issue that needs to be resolved.”

The exporters received a high-level vote of support from a non-partisan group of five premiers, who issued a strongly worded letter to federal ministers involved with trade and agriculture, and to the prime minister himself.


“We have held up our part of the bargain. The EU must do the same and be held accountable to its trade commitments,” says the letter, signed by former conservative premiers Jean Charest, Brad Wall and Ed Stelmach, former Liberal premier Kathleen Wynne and former NDP premier Gary Doer.

“We believe you should raise these issues directly with EU leaders including the leaders of relevant EU member states…. Now more than ever, the EU needs to show its relevance in the global economy by championing the core issues that will help ensure the global economy recovers from one of the gravest economic threats the world has ever known.

“If the EU cannot implement and enforce agreements it has negotiated, its authority and credibility as a negotiating partner will be severely undermined. This is also true for Canada.”

Canada’s premiers were important players in the discussions leading up to the CETA. Charest, in particular, has played a key role in broadening trade ties between Canada and many places, including Europe and the eastern U.S. states below his home province of Quebec.

There is little proof that the EU is deliberately frustrating attempts of Canadian agricultural goods.

Yet in commodity after commodity, export hopes have been frustrated by various challenges.

Canola producers have been faced with nebulous “sustainability” standards that have practically stymied most food grade exports.

Beef and pork exports, expected to make major gains once CETA was approved, have stagnated, wrestling with an array of EU regulations that affect both on-farm production and slaughter plant operations in Canada.

Canadian crops face numerous challenges with almost-impossible-to-meet tolerances on some pesticides and other products, so that most trade is strangled.

Subsidized EU sugar makes Canadian foods including non-subsidized sugar prohibitively expensive.

And Italy has imposed country-of-origin labelling on Canadian durum, in defiance of the EU’s own laws, strangling access to its markets.

While each situation is unique, when put together they create among the exporters a perception that the EU has a goal of restricting market access in contravention of the CETA.

“The problem is not with the CETA itself but (with) the European Union’s refusal to solve the issues that will enable our trade and more trade for Canadian agri-food exporters,” said Citeau.

“The content (of CETA) is good… but today the EU is not abiding by commitments to remove technical barriers.”

The exporters said they were impressed by the Trudeau government’s resolute action in renegotiating a new NAFTA deal and sticking up for Canada’s exporters, despite heated words and actions from the U.S. administration. That’s the sort of approach it is demanding Canada take with the EU.

The premiers’ letter also praises the work done in renewing NAFTA, and calls upon the government to ensure CETA is respected, or risk jeopardizing Canada’s ability to trade even withnations with which it has deals. They want the issue raised at a high-profile gathering: the next G7 summit.

“The past few years have shown us just how harmful it is when trade agreements and rules are ignored or disavowed,” they said.

“We urge you to continue to stand up for Canada’s agri-food exporters by making sure these issues are at the top of the agenda when you meet with your EU counterparts and with the leaders of EU member states."

Federal government stays positive about EU trade

By Ed White
Published: October 1, 2020




On the EU Delegation to Canada’s website are stories and videos such as “Spotlight on CETA success stories – Vancouver.” | Screencap via eeas.europa.eu


Canada’s government leaders are maintaining a cautiously optimistic tone in describing the Canada-European Union trade deal, despite frustrations from vexed Canadian exporters.

But while remaining positive and constructive in tone, federal cabinet ministers have repeatedly encouraged European leaders and officials to fix the chronic problems that have stymied Canadian hopes for improved agricultural trade.

“CETA (Comprehensive and Economic Trade Agreement) marked a new chapter in the relationship between the European Union and Canada and is delivering unparalleled opportunities for Canadians and our businesses,” said Ryan Nearing, the press secretary to International Trade Minister Mary Ng, on Sept. 25, a few days after the third anniversary of the deal.

The frustrations of agri-food exporters are well known and “our government is actively working to resolve challenges such as the non-tariff barriers posed by EU regulations in agriculture and food. Minister Ng has raised this issue with her EU counterparts numerous times, including in many discussions with former EU Trade Commissioner Phil Hogan.”

The problems have also been regularly acknowledged by federal Agriculture Minister Marie-Claude Bibeau, as recently as a Sept. 25 appearance at an online agriculture summit.

Canadian farmers should be benefitting from CETA, “which is not the case yet.”

The CETA was a hallmark achievement of both the Stephen Harper Conservative government, which negotiated the deal, and the Justin Trudeau Liberal government, which saw it finalized, approved in Canada and shepherded through the EU’s byzantine political, bureaucratic and national governments system.

One of the chief gains hoped for was increased exports of pork and beef, as well as better protection for crops and foods that had regularly faced political challenges. The CETA created resolution systems designed to keep politics out of regulatory issue.

However, Canada’s agri-food exports to the EU have stagnated since the agreement came into force. EU exports to Canada, however, have surged.

Exporters have not accused the government of ignoring the issue, since it has been often raised.

Indeed, on May 15 Global Affairs Canada issued a news release detailing Ng’s meeting with the EU’s Hogan in which it explicitly referred to Canadian frustrations.

“Minister Ng impressed the need for Canada and the EU to work together to ensure Canadian businesses and workers, specifically our farmers, producers and manufacturers, benefit from the agreement,” reads the release.

“She underscored the importance of improving EU market access for Canadian agricultural products through the removal of technical barriers to trade. She also emphasized the need to accelerate the accreditation of Canadian conformity assessment bodies responsible for the certification of Canadian goods to EU requirements.”

The EU faced a number of challenges from groups within member states when CETA was negotiated, and the approval process was tortuous.

Since it has come into force, the EU has pointed to the deal as evidence of its desire to be a global free-trader.

It has also, similar to the Canadian government, celebrated the deal’s successes.

On the EU Delegation to Canada’s website are stories and videos such as “Spotlight on CETA success stories – Vancouver.”

That positive tone is typical in its approach.

Canada and the EU work closely on numerous issues of international trade, including trying to protect and bolster the World Trade Organization and the rules-based trading order.

Canada’s agri-food exporters and a group of former premiers believe the federal government needs to make a bigger issue out of the current challenges because the situation is not an improvement on the pre-CETA situation. They have suggested an upcoming G7 meeting at which this could be discussed.

 

CETA trade deal: Three years later, Canadian agriculture still dissatisfied

Prime Minister Justin Trudeau and European Council President Donald Tusk signed the Comprehensive Economic and Trade Agreement in Brussels in 2016. Most of its measures were provisionally applied in 2017 as the 28 member states of the EU.began to ratify the deal. Canada's agriculture sector says it hasn't lived up to expectations and blames the EU (Francois Lenoir/Reuters)

By Marc Montgomery | 
english@rcinet.ca
Posted: Wednesday, September 30, 2020 15:15
Last Updated: Wednesday, September 30, 2020 16:57

In 2017 the Comprehensive Economic Trade Agreement was negotiated and signed into force with great satisfaction by Canada’s Trudeau government to improve trade between Canada nad the European Union, notably in the agricultural sector.

It was supposed to be advantageous for both Canada and the European Union.  A year later there were already rumblings in Canadian agriculture and by 2019 the Canadian Agri-food Trade Alliance (CAFTA) was saying the deal had not only not increased Canadian exports but in fact had hurt the sector.

The group said since CETA. the agriculture sector had lost about 10 per cent of its exports to Europe while imports from Europe had increased by the same amount meaning about a $3.5 billion trade imbalance.

• RCI- Oct 21/19: CETA trade deal – advantage Europe

Now one year later CAFTA wrote a letter to the EU Directorate of Trade staing its concerns about the deal writing “to express our serious concern over the lack of commitment the European Union (EU) is demonstrating to adhere to the spirit of the Comprehensive Economic and Trade Agreement (CETA)”.

The letter goes on to criticise the EU saying  the deal has harmed Canada, ” because of a wide range of technical barriers and trade distorting measures that were to be lowered or eliminated altogether through CETA continue to block access to the EU market for Canadian products. The reluctance from the EU Commission and EU member states to abide by the spirit of the CETA and remove these barriers has been disappointing and surprising given the EU’s own focus on ensuring its trade agreements are put into practice and enforced properly”.

In addtion this week no less than five former Premiers have written a joint letter to Prime Minister Trudeau. The five former Premiers include those of Alberta, Saskatchewan, Manitoba, Ontario, and Quebec,

The say the deal was to “increase Canada’s exports by nearly $1.5 billion annually. The pact also included commitments to resolve issues related to technical barriers to trade, sanitary and phytosanitary provisions and other non-tariff barriers”

It goes on to say, “CETA has now been in force for three years and it has failed to deliver on its promises for Canada’s agri-food exporters. This outcomes results from the EU Commission and EU member states continuing to impose a wide range of trade barriers for pork, beef, canola, sugar and grains, or failing to reduce those that were to be lowered or eliminated altogether through CETA

The letter goes on to urge the Prime Minister to raise concerns about what are seen as ongoing barriers and restrictions hurting Canadian agricultural exports concluding with “. In the weeks ahead, we urge you to take up these issues with your counterparts as one of your top foreign policy priorities.

additional information – sources

• CAFTA: Sep 20/20: Open letter to EU Directorate of Trade
• Sep 21/20: Open letter from former Premiers to the Prime Minister
• Alberta Farmer: D Fraser: Sep 25/20:  Canada not benefitting from CETA Barbeau says

Controlled burns planned for Suffield

By Barb Glen

Published: October 1, 2020
Farm Living, News

Area residents are likely to be particularly sensitive to fires on the base because a fire spread from CFB Suffield in September 2017 and burned about 90,000 acres of grassland, killed 160 cattle and forced some residents in its path to flee their homes. | File photo

Planned grass fires will occur Oct. 3-17 on Canadian Forces Base Suffield, north of Medicine Hat, in efforts to reduce grassy overgrowth in the northern part of the base.

The Department of National Defence issued a notice Oct. 1 warning area residents about controlled burn plans in case they observe the smoke and see emergency vehicles in the area.

The fires will occur “intermittently as weather conditions permit,” the department said.

There is currently a fire ban in Cypress County, where the base is located, due to dry conditions. The ban prohibits any use of incinerators, burning barrels, solid fuel barbecues and recreational campfires.

Fire bans are also in effect for all Special Areas adjacent to the base, which applies to all outdoor fires. However, area fire departments have been informed of the army base’s plans.

“CFB Suffield thanks Special Areas Fire Services for their participation in this operation, which enables us to confirm radio communication protocols and joint fire fighting procedures,” the department said in its notice.

“Fire suppression assets will be on scene and a number of mitigation measures will be in place throughout the duration of the operation. The decision to conduct or postpone any prescribed fire will be based on weather-related conditions.”

Area residents are likely to be particularly sensitive to fires on the base because a fire spread from CFB Suffield in September 2017 and burned about 90,000 acres of grassland, killed 160 cattle and forced some residents in its path to flee their homes.

The source of that fire was not a controlled burn, however, but was started when soldiers destroyed a previously unexploded artillery shell. The resulting fire got out of control, burning part of the base and extending into adjacent private property.

Anyone with concerns about the fires is advised to contact CFB Suffield Range Control at 403-544-4310. Only authorized personnel are allowed to enter the base,

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