Building and Expanding Opportunities for Agriculture WTO Public

Building and Expanding Opportunities for Agriculture WTO Public Forum – October 4, 2007

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.

For More Information Canadian Agri-Food Trade Alliance Suite 308 – 151 Slater Street Ottawa, ON Canada K 1 P 5 H 3 Phone – (613) 560 -0500 www. cafta. org Thank you, merci