Prior to CETA, both Canada and the EU applied higher customs duties in the agricultural sector than in any other. The significant drop in tariff barriers instituted by the CETA will thus have the greatest effect on the agricultural sector, with zero-duties now applying to most forms of production
Canada has secured a Quota to export 55,000 ton of beef to the EU, and a Quota of 75,000 tons of pork. The case of beef imports to the EU has a particular resonance for Ireland; there is every reason to believe that the additional volumes allocated to Canada will be almost entirely served with high-quality hind cuts, especially rib and sirloin. The gap between hind and front quarter cuts is far wider in the EU than it is in Canada. European carcass valuation is thus far more dependent on sirloin valuation: it is estimated that these account for nearly one-third of the value for meat breed cattle, when they provide only 20% of the volumes.
The 55,000-ton quota could equate to the high value cuts of approximately 800,000 head of cattle, to put this in context Irelands weekly kill runs about 30,000 head. Imports of this magnitude will decimate our beef industry.
Regarding what are called “non-tariff barriers to trade” the text of the deal states, CETA must “ensure that the sanitary and phytosanitary measures taken by the Parties do not create undue obstacles to trade”. The risk of seeing these European standards weakened have already been raised in a report commissioned in 2013 by the European Parliament. Two types of regulatory mechanisms could make it possible, once the agreement is implemented, the investment court system and the regulatory cooperation forum.
The main European standards potentially targeted under the CETA, considered by Canada's government and/or businesses as significant obstacles to their trade, are as follows:
- The ban on treating animals with ractopamine,
- The ban on the use of hormonal growth stimulators in beef cattle,
- The ban on certain decontaminating substances on products of animal origin intended for human consumption.
Other standards are potentially affected as they differ significantly between Canada and the EU and currently form obstacles to exports for either party.
Finally and perhaps, most damaging of all is the implicit threat to farm supports, as the percentage of agricultural producers’ income derived from direct subsidies is larger in the European Union than in Canada. While CETA does not contain any obligations regarding these subsidies. However, one Party may request that consultations be opened if it deems that its interests are being adversely affected or are likely to be so, further to aids granted by the other party.