Canadian pig industry eyes up EU trade opportunities

The Canadian pig sector is eyeing up the EU market as a potential opportunity for growth, as agreement on the EU-Canada Free Trade Agreement (CETA) draws nearer.

Final approval on the deal is currently expected in the three months of next year, although the UK Brexit vote is casting further uncertainty over the timing of the already protracted deal.

Under CETA, pork has been classified as a sensitive product, meaning zero duty will apply to Canadian pork imports up to a maximum volume limited by tariff rate quotas (TRQs).

According to AHDB Pork, the total duty-free access granted to Canada amounts to 75,000 tonnes carcase weight equivalent (62,500 tonnes product weight). This will be phased in over six years in steps of 12,500t. The tariff lines include fresh pork and cured hams and shoulders.

This will come on top of the existing TRQ of 4,625t (product weight), which will be consolidated into CETA.

While Canada currently has no access to the EU market, the European Commission has stated that the quotas equate to 0.4 per cent of total EU consumption of pork.

AHDB Pork’s market specialist manager Stephen Howarth said: “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.”

'Best opportunity'

In recent years, efforts to sell Canadian pork to the UK have been stifled by the EU’s refusal to accept the use Ractopamine in pig production, allowed in Canada from 2005 but banned in the EU.

The Canadian Pork Council (CPC) hopes to overcome this hurdle and recently reported that the number of slaughterhouses requiring ractopamine-free pigs is increasing, with all major plants set to be ractopamine-free by the end of 2016.

William Wymenga of the CPC has described the CETA agreement offers ‘by far the best opportunity Canada will have for many years to acquire new access to this important pork market’.

There are more than 7,000 pig producers in Canada producing more than 25 million head per year. Canada is the third largest global exporter of pork after the EU and the United States, with the US and Japan currently accounting for 60 per cent of the 900,000t of Canadian pork exports.  

The EU is the only major pork consuming region that Canada has had little market access to and the introduction of these larger quotas should encourage the industry to invest in the measures necessary in order to obtain access to the EU market, Mr Howarth predicted.

What does it mean for the UK and Brexit?

What it all means for the UK in light of the Brexit vote remains unclear, given all the variables surrounding future trading arrangements between the UK and the EU, let alone potential partners like Canada.

However, this deal might give some sort of insight into what future post-Brexit trading arrangements might eventually look like.

Farming Minister George Eustice has flagged up the likelihood of future deals that would permit some tariff-free access for pork under deals with the likes of the US and Canada, but volumes limited by TRQs to protect the UK industry.

The NPA is calling for pork to be granted protected status, if needed, to protect the UK industry from cheap imports. It is also calling for equivalent standards to be negotiated into any new post-Brexit trading arrangements.