Trade

As much as some might see fruit and vegetable production as something which takes place in a field or orchard, it is a business. And with over $6 billion dollars of farm cash receipts in 2016, it is big business. In order to make sure that Canadian horticulture is profitable and competitive globally, the Canadian Horticultural Council (CHC) works with industry and government stakeholders to increase market access and facilitate trade.

Trade agreements

North American Free Trade Agreement (NAFTA)

The Government of Canada is listening to Canadians from across the country and from all sectors and backgrounds about trade, as it recognizes that trade policies need to respond and contribute meaningfully to Canadians’ economic, social, and environmental priorities.

The North American Free Trade Agreement (NAFTA)‘s track record is one of economic growth and middle-class job creation in Canada and across North America. Any changes to NAFTA would need to support Canada’s goals of providing stable, rewarding, and well-paying jobs for Canadians and helping grow the middle class.

Current activities

  • CHC is closely monitoring the NAFTA renegotiations and advocating on behalf of its members, and will watch and respond to negotiation talks as they take place.
  • CHC continues to consult with trade representatives from Global Affairs Canada and other influencers on behalf of the horticultural sector.

Previous activities

  • In November 2017, CHC and the Canadian Produce Marketing Association (CPMA) lobbied the federal government during meetings with Members of Parliament and Senators. The meetings were held as part of the two organizations’ annual Fall Harvest advocacy event.
  • In July 2017, based on meetings with members, like-minded associations, trade negotiators, and trade analysts both in Canada and the U.S., CHC submitted comments to the U.S. Trade Representative, as well as to Global Affairs Canada, ensuring Canada’s horticultural sector is represented in the NAFTA discussions.

Canada-European Union Comprehensive Economic and Trade Agreement (CETA)

The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) will create jobs, strengthen economic relations and boost Canada’s trade with the world’s second-largest market. CETA is a progressive free trade agreement which covers virtually all sectors and aspects of Canada-EU trade in order to eliminate or reduce barriers and will help Canadian exporters access EU agri-food markets. For example, prior to CETA’s entry into force, only 25 percent of EU tariff lines on Canadian goods were duty-free. Upon CETA’s entry into force, the EU will remove tariffs on 98 percent of its tariff lines. Once CETA is fully implemented, the EU will have eliminated tariffs on 99 percent of its tariff lines. CETA received Royal Assent on May 16, 2017 and will be provisionally applied on September 21, 2017.

Current activities

  • The Canadian Horticultural Council (CHC) continues to monitor CETA and its potential impacts on Canada’s horticultural sector.

Previous activities

  • In April 2017, CHC presented on the implementation of CETA to the Standing Senate Committee on Foreign Affairs and International Trade. Testimony focused on harmonization of non-tariff trade barriers and unionized labour provisions.

On December 10, 2013, CHC presented on CETA at the House of Commons Standing Committee on Agriculture and Agri-Food. Testimony focused on market potential, harmonization of non-tariff barriers, and ensuring food safety and traceability. Read the full text of the presentation.

China Free Trade Agreement

Expanding Canada’s trade with large, fast-growing markets is a priority. As the world’s second-largest economy, China presents many new opportunities for increased trade in goods and services, and investment. To this end, the Government of Canada has started exploratory discussions on the potential of launching negotiations toward a China Free Trade Agreement. While still in early stages, a free trade agreement with China is possible and preliminary discussions continue between the two countries.

Current activities

  • CHC continues to monitor Canada’s discussions with China as an interested stakeholder, and is being consulted throughout the negotiation process.

Previous activities

  • CHC submitted comments to Global Affairs Canada, on behalf of its members, outlining potential benefits and cautions of a China free trade agreement.
  • In addition to a potential free trade agreement with China, CHC is actively lobbying the Government of Canada to request that China reduce their tariffs for key horticultural commodities.

MERCOSUR Free Trade Agreement

Promoting trade and investment with emerging markets is a priority for the Government of Canada. The government’s approach is one that puts the interests of Canadians and opportunities for the middle class, women, youth and Indigenous people, front and centre.

MERCOSUR, also known as the Southern Cone Common Market, is a customs union established by Argentina, Brazil, Paraguay and Uruguay in 1991. This regional bloc represents a significant economic presence in Latin America, and a considerable market for Canada.

In 2016, the four members of MERCOSUR had a combined GDP of US$2.4 trillion (CAD$3.2 trillion) and a population of 260 million. Bilateral merchandise trade between Canada and MERCOSUR totaled nearly $8.1 billion in 2016.

The Government of Canada is in very preliminary stages of a possible free trade agreement with South American countries as part of MERCOSUR. At this point, the federal government continues to consult stakeholders to see if such free trade agreement would be beneficial to Canadians.

Current activities

  • The Canadian Horticultural Council (CHC) continues to monitor Canada’s discussions with MERCOSUR as an interested stakeholder, and is being consulted throughout the negotiation process. CHC will reach out to members for further comments when the opportunity presents itself.

Previous activities

CHC sent Global Affairs Canada a high-level submission regarding a possible Canada-MERCOSUR free trade agreement as such an agreement may impact CHC members.

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a trade agreement between Canada, Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States (until 23 January 2017), and Vietnam.

Since the U.S. announced it was pulling out of the partnership, the other 11 participating countries have continued to explore how to move forward on their own.

Among the CPTPP’s central benefits to Canada is a guarantee of preferential market access to seven new countries as part of the partnership. These new partner countries jointly represent new trade opportunities for Canadian exporters, as the agreement puts Canada in an advantaged position relative to countries that do not have free trade agreements with these trading partners, and ensures a level playing field with respect to other CPTPP competitors in these markets.

Current activities

  • The Canadian Horticultural Council (CHC) is waiting for a Government of Canada consultation period so that it may address how a multi-lateral agreement would affect CHC members.
  • CHC is monitoring discussions between the remaining countries and will consult with members on any potential impacts.

Trade Barriers

Anti-Dumping

Fruit and vegetables are perishable crops that are stored under costly, highly managed conditions from harvest until consumption. In the case of many crops (such as apples and potatoes), growers and packers manage the available supply through the winter, spring and summer to provide high quality produce until the next crop is harvested. The predictability of the market ensures that, for example, Canadian potato producers are able to provide a consistent, high quality supply of fresh potatoes throughout the year.

The orderly import and interprovincial trade of potatoes is facilitated by the Canada Agricultural Products Act, through the Ministerial Exemption provision of its Fresh Fruit & Vegetable Regulations. Whereas the regulations restrict provinces from importing large quantities of produce from another province or country, wholesalers can apply for ministerial exemptions that allow interprovincial or international imports when there is a needThe combination of regulations and ministerial exemptions eliminate the risk that a large quantity of produce will suddenly be sent to across a border (i.e. “dumped”), which would seriously destabilize the local market. If the risk of dumping existed, Canadian producers might choose to not incur the high costs associated with storing produce during the off-season, meaning Canadian consumers and processors would have fewer options and pay higher costs for their fruits and vegetables throughout the year.

CHC’s position

  • The Canadian Horticultural Council (CHC) urges government to keep ministerial exemptions as part of the Canada Agricultural Products Act.

Current advocacy activities

  • With renegotiations of free trade agreements, such as NAFTA, underway, CHC is aware of the important role of ministerial exemptions, and continues to advocate for the exemptions to remain in place.

Previous advocacy activities

  • In June 2017, CHC appeared before the House of Commons Standing Committee on Agriculture and Agri-Food and spoke about non-tariff barriers to trade, such as the need for anti-dumping regulations, including ministerial exemptions.
  • CHC has advocated for ministerial exemptions, on several occasions, during one-on-one meetings with Members of Parliament and other industry stakeholders.

Cost of Competition

Because Canadian growers adhere to strict food quality standards and labour laws, as well as environmental policies like carbon pricing, their costs of production are often higher than in other countries. Due to these advantageous production costs, other countries are often able to enter our market at lower prices, forcing Canadian growers to absorb the costs on increasingly lower margins for their produce. While our sector promotes competition and free trade, we value the opportunity to provide fresh, safe produce to Canadians without having to depend on imports.

CHC’s position

  • The Canadian Horticultural Council (CHC) urges the government to consider rising costs of production that Canadian fruit and vegetable growers must absorb themselves. Because of unfair competition from other countries, producers cannot offset these increased costs to consumers.

Current advocacy activities

  • CHC continues to represent the interests of fruit and vegetable growers and to look for ways to help growers manage increasing costs due to new regulations and policies.

Previous advocacy activities

  • In July 2017, CHC identified the high relative costs for Canadian growers, in such areas as labour and the environment, in its submissions to government on the North American Free Trade Agreement (NAFTA) and the potential China Free Trade Agreement.
  • In January 2017, CHC met with key advisors to the Minister of the Environment to discuss carbon pricing policy and unfair competition from growers in other countries.

Maximum Residue Limits

Canada’s maximum residue limits (MRLs) are set by Health Canada through the Pest Management Regulatory Agency (PMRA). Health Canada sets science-based MRLs to ensure the food Canadians eat is safe and are set at levels well below the amount that could pose health concerns.

When Canada and another trading country do not agree on MRLs, it means the risk assessments conducted in each country differ in the amount of pesticide determined to be acceptable to remain on certain produce when it enters the market. This poses a huge technical barrier for imports and exports.

Without harmonised MRLs, the risk is often too high for growers to venture into new markets. A producer in full compliance of the Canadian pesticide product label can have their crop rejected by the destination country due to residue violation resulting from an MRL set below the Canadian MRL.

The priority to enhance trade in agricultural commodities may not be successful without the work of the PMRA to create MRLs for new registrations, and see they are harmonized around the world. The roles played by the PMRA at Codex are essential. However, the PMRA has been forced to back away from this work at this critical juncture due to severe budget restraints.

CHC’s position

  • Canada’s trade negotiators should continue to lobby for science-based MRLs to be harmonized between trading countries to ease this trade barrier on both sides of the border.
  • Canadian horticultural producers support adequate funding of the PMRA so that the agency can continue, not only to do registration and re-evaluation work, but also to provide its expertise in support of science-based harmonization of MRLs.

Current advocacy activities

At every opportunity, the Canadian Horticultural Council (CHC) has raised MRLs as a potential trade barrier and has called on the Government of Canada through the PMRA to work with other countries to harmonize MRLs. Most recently, CHC raised the issue to both Members of Parliament and Senators House of Commons and Senate Committees.

Previous advocacy activities

  • In July 2017, CHC submitted comments to Global Affairs Canada for a China Free Trade Agreement and for the renegotiation of the North American Free Trade Agreement (NAFTA). The comments included a request for the harmonization of science-based MRLs.
  • In June 2017, CHC appeared before the House of Commons Standing Committee on Agriculture and Agri-Food and spoke about non-tariff barriers to trade and the need for harmonized MRLs between countries.

Phytosanitary requirements

hytosanitary import requirements can become significant non-tariff deterrents to market access for Canadian fresh produce, as other countries may impose restrictions that are not always supported by a science-based assessment of risk. These include: unreasonable laboratory testing requirements, costly pre-clearance inspections, lack of acceptance of CFIA accredited Canadian laboratory tests, and inconsistent and non-transparent regulations that change without fair notice.

CHC’s position

  • The Canadian Horticultural Council (CHC) urges the government to include harmonized and technically justified phytosanitary requirements in international free trade agreements. This harmonization would strengthen the need for countries to conduct science-based risk assessments and allow fair market access opportunities based on valid phytosanitary conditions.

Previous advocacy activities

  • In July 2017, CHC submitted comments to Global Affairs Canada for a China Free Trade Agreement and for the renegotiation of the North American Free Trade Agreement (NAFTA). The comments included a request for harmonized phytosanitary requirements based on sound science, as CHC members see inconsistent restrictions as one of the largest barriers to entering global markets.
  • In June 2017, CHC appeared before the House of Commons Standing Committee on Agriculture and Agri-Food and spoke about non-tariff barriers to trade and the need for harmonized phytosanitary import requirements between countries.
  • In December 2013, CHC identified phytosanitary concerns as a problematic non-tariff trade barrier during a presentation to the House of Commons Standing Committee on Agriculture and Agri-Food regarding the Canada and European Union Comprehensive Economic and Trade Agreement (CETA).

For more information

please contact Robyn McKee, Manager Policy and Development.