Hello.

My name is Claire Citeau, and I am the executive director of the Canadian Agri-Food Trade Alliance. I am here today with two directors of the Canadian Agri-Food Trade Alliance: Martin Rice, who is also the executive director of the Canadian Pork Council, and Phil de Kemp, who is the president of the Malting Industry Association of Canada.

Thank you for inviting me today to speak on behalf of the Canadian Agri-Food Trade Alliance on the Canada-Korea free trade agreement.

The Canadian Agri-Food Trade Alliance, CAFTA, is a coalition of national and regional organizations that support a more open and fair international trading environment for agriculture and agrifood. CAFTA's members include farmers, producers, processors, and exporters from the major trade-dependent sectors, including the beef, pork, grains, oilseed, sugar, and malt sectors. Together, CAFTA members account for 80% of Canada's agriculture and agrifood exports, realize $50 billion in exports, and directly employ half a million Canadians.

The Canada-Korea free trade agreement will be extremely beneficial for Canada’s agriculture and agrifood exporters and will help the sector regain competitive access to South Korea.

It is essential that the Canada-Korea free trade agreement be ratified and implemented by January 1, 2015. South Korea is a lucrative market of 50 million consumers, and a key hub of Asian supply chains. South Korea imports over 70% of its food, and until a few years ago, Canada was a preferred supplier for many agrifood products. In 2011, South Korea was Canada’s fifth largest export market, with Canada exporting over $1 billion in agricultural and food products to that country. Since then, our agrifood products to Korea have plunged by more than 50%. This massive loss in exports is directly attributed to free trade agreements that South Korea has concluded with Canada’s key competitors, namely the European Union in 2011, and the United States in 2012.

Without a free trade agreement, Canada’s agrifood exports face tariffs as high as 50%, and in some cases 400%, while our main competitors have had their tariffs eliminated or phased out. Losing the South Korean market is a major blow to Canada’s agrifood industries, including beef, pork, canola, and grains. In fact, before KORUS, Canadian pork exports to South Korea were $233 million a year. They have now fallen to under $80 million. Grain exports were $479 million a year. Today, they are less than $100 million.

Through the elimination of tariffs on 86.8% of agricultural tariff lines, the Canada-Korea free trade agreement will provide the level playing field that simply does not exist today.

I would like now to share with you a sample of CAFTA members’ projections of the opportunities that are foreseen in an agreement with Korea, keeping us on par with Australia, Europe, and the U.S.

The Canola Council of Canada estimates that exports for canola seed and canola oil, respectively $60 and $90 million currently, could double.

The Canadian Cattlemen’s Association expects to maintain meaningful trade with Korea during a transition period and expects to return to the annual $50-million range once tariffs are fully eliminated.

The Grain Growers of Canada has identified duty-free wheat sales, on top of the grain utilized in feed for livestock, to meet the increased demand for Canadian meat.

The Malting Industry Association of Canada points out that South Korea is the number four market for malting barley, yet current tariffs for malting barley are 30% within quota, and 513% over quota. A new trade deal with Korea for this sector will mean significant new marketing opportunities for the malt industry and for farmers.

The Canadian Meat Council, representing meat processors, points out that Korea is one of the most important meat importers in the world, with import demand exceeding $2 billion for beef and pork products annually. Once Canada’s meat exporters and processors regain competitive access, it is projected that annual beef and pork exports will rebound and surpass their previous peaks.

The sugar industry, through the Canadian Sugar Institute, expects the Canada-Korea free trade agreement to provide significant opportunities for most sugar-containing products through tariff phase-outs over three to five years.

The Canadian Pork Council, representing Canada’s hog producers, hopes that this deal could help fully restore, in a few short years, annual pork exports to South Korea of $400 million.

Taken together, we believe the Canada-Korea free trade agreement, if fully implemented by January 1, 2015, could result in over $800 million of incremental Canadian agrifood exports. It is really critical to have a level playing field as quickly as possible. On January 1, 2015 the next round of tariff cuts in South Korea’s agreement with the U.S. will be phased in, putting further competitive pressure on Canada’s agrifood interests. Canadian exporters are already suffering from the impact of Korea’s deals with the U.S. and Europe. There is also a very real probability that the Korea-Australia deal will come into force on January 1, 2015.

While we have already lost ground in South Korea, we are running out of time. Every month that the implementation of the Canada-Korea free trade agreement is delayed, the greater the negative impact will be for Canadian farmers, producers, and exporters.

In closing, the Canadian agrifood industry depends on exports. Canadian agrifood exporters need a level playing field in order to access the Korean market. CAFTA members hope for and expect quick ratification of implementing legislation of the Canada-Korea free trade agreement in both countries.

Thank you.

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