Thanks, Dan.

As it stands today without CETA, the European Union's most favoured nation tariff on beef imports varies, depending on the form of the beef, but it's in the neighbourhood of 3,000 euros per tonne, plus 12.5%. It is a prohibitively high tariff now without the agreement.

There are two existing quotas that give us access today below that really high MFN rate. The first is the so-called Hilton quota, which Canada and the U.S. share access to for just under 15,000 tonnes of carcass weight. That's at a 20% duty, so 20% is the current preferential rate. The second is a quota that was created in 2009 as compensation for the WTO dispute over the EU hormone ban. Currently, that allows 48,200 tonnes from all countries at a 0% duty. Both of those two existing quotas require the beef to meet a certain high-quality standard.

Our performance under these quotas really has been very minimal. Because they're open to competition from other countries, it's very difficult for Canadian producers to invest in EU production when the quota might just be used up by other countries and we don't get the chance to ship that beef. That's why we were so pleased that CETA will provide 50,000 tonnes of duty-free access exclusively for Canadian beef. That's split into a 35,000-tonne quota for fresh beef and a 15,000-tonne portion for frozen. Under the new CETA quotas, the beef may be of any quality standard, so there's more flexibility, and there's no competition from other countries.

Furthermore, on day one of CETA, that 15,000 tonnes of the Hilton quota that we share between Canada and the United States will become duty free for Canadian beef, while United States beef continues to pay the 20% rate, at least until the U.S. also gets its own free trade agreement with Europe.

With the new CETA quotas and the tariff elimination for Canada on the Hilton quota, that's nearly 65,000 tonnes of new duty-free access that we don't currently have. If we could actually ship these quantities, we feel CETA would be worth approximately $600 million per year for the Canadian beef sector. To put those quantities in perspective, over the last few years we've shipped in the neighbourhood of 600 to 1,000 tonnes of beef per year to the EU, for a value of about $7 million to $10 million per year. Really, what we're talking about is a sixtyfold to hundredfold increase if the access is real.

Dan.

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