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CPTPP and Canada’s agriculture and agri-food sector

Summary/overview

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Agreement will give Canadian agriculture and agri-food products preferential market access to all CPTPP countries. It will provide new market access opportunities for Canadian pork, beef, pulses, fruits and vegetables, malt, grains, cereals, animal feeds, maple syrup, wines and spirits, baked goods, processed grain and pulse products, sugar and chocolate confectionery, and processed foods and beverages.

Tariff elimination

• Japan will eliminate tariffs on close to 32 % of tariff lines on agriculture and agri-food products upon entry into force.
• A further 9 p% of tariff lines will be provided preferential tariff treatment through permanent quotas and country-specific quotas for Canada. The remaining tariff lines will be provided tariff elimination or reductions over a period of up to 20 years, or reductions of the in-quota or out-of-quota tariff.
• Vietnam will eliminate tariffs on close to 31 % of its tariff lines upon entry into force. A further 67 % of tariff lines will become duty-free within 15 years, with the remaining being provided preferential treatment through other means (tariff elimination only on in-quota tariff lines).
• Malaysia will eliminate tariffs on nearly 92 % of its tariff lines upon entry into force. A further 7 % of tariff lines will become duty-free within 15 years, with the remaining being provided preferential treatment through permanent TRQs.
• Australia will eliminate all of its tariffs on agriculture and agri-food products upon entry into force, except for one tariff line which will be eliminated within 4 years.
• New Zealand will eliminate tariffs on almost 99 % of its agriculture and agri-food tariff lines upon entry into force, with the remaining being eliminated within 5 years.

How the CPTPP benefits exporters

• Will open up new markets not only for agricultural commodities. It will also open up new markets for the food processing and beverage industry. 
• Provide Canadian producers and processors with new opportunities to expand their sourcing options when exporting to Mexico, Peru and Chile, countries with which Canada already has a free trade agreement (FTA) in place. Canada’s participation in the CPTPP will ensure that Canada remains a supplier of choice with our established FTA partners.
• Gains from tariff elimination and improved market access for Canadian agriculture in the CPTPP are especially significant in the markets of Japan, Malaysia and Vietnam. In these markets, Canada faces high tariffs and has no preferential access. The average agricultural tariffs that Canada faces in these countries are 17.3 % in Japan, 17 % in Vietnam and 10.9 % in Malaysia.

Trade snapshot

• From 2014 to 2016, Canada’s agricultural and agri-food exports to CPTPP countries were worth, on average, $6.9 billion annually.
• Top exports were canola, wheat, pork, soybeans, malt, durum, beef, canola oil, lentils, and frozen french fries.

Annual Canadian Agricultural and Agri-food Exports to CPTPP Countries (2014-16 average, $CAD)

Market access highlights

• Pork
• In Japan, tariffs of up to 21.3 % on pork products, including sausages, which are not subject to the gate price system will be eliminated within 15 years.
• Tariffs of up to 27 % in Vietnam on fresh/chilled and frozen pork will be eliminated within nine years.
• Beef
• In Japan, tariffs of 38.5 % on fresh/chilled and frozen beef, as well as tariffs of 50 % on certain offal will be reduced to 9 % within 15 years.
• In Vietnam, tariffs of up to 31 % on fresh/chilled and frozen beef will be eliminated within two years, and tariffs of up to 34 % on all other beef products will be eliminated within seven years.
• Wheat and barley
• In Japan, Canada will have access to a Canada-specific quota for food wheat which starts at 40,000 tonnes and grows to 53,000 tonnes within six years. Mark-ups within this country-specific quota will be reduced by 45 or 50 %.
• Canada will have access to a CPTPP-wide quota for food barley which starts at 25,000 tonnes and grows to 65,000 tonnes within eight years. Mark-ups applied to the price of food barley by Japan will be reduced by 45 % within eight years.
• Processed food and beverages
• Canadian exports of processed food products and non-alcoholic beverages face high tariffs from CPTPP countries such as Japan and Vietnam.
• For example, Vietnamese tariffs for frozen french fries are 24 %.
• The CPTPP will eliminate or reduce many of the existing tariffs or create tariff rate quotas on processed foods and non-alcoholic beverages, including maple syrup, baked goods, processed grain and pulse products, and sugar and chocolate confectionery.
• Dairy, poultry and egg sectors
• Canada will provide new market access for supply-managed products. This access will be through volume-limited CPTPP-wide quotas phased in over five years with additional slower growth until year 13.
• There will be immediate elimination of World Trade Organization (WTO) and CPTPP within-access tariffs for dairy, poultry and egg products.
• There will be no reductions to WTO over-access tariffs except for whey powder; margarine, and milk protein substances.