September 21 marked the five-year anniversary of the provisional application of the Canada–EU Comprehensive Economic and Trade Agreement (CETA). It is no surprise to the National Farmers Union (NFU) that farmers are not happy with the results.
Negotiations on the agricultural chapter were strained to the point that it was one of the last areas to be agreed upon. In the media, the issues were presented as a trade-off between allowing the EU more access to our supply-managed dairy market in return for gaining more access to the EU’s market for Canadian beef.
Some political commentators looked for cheap points by framing this purported stalemate as a conflict between western ranchers and dairy producers in Ontario and Quebec. The NFU had a more sophisticated analysis, which time has proven to be accurate.
Throughout the CETA negotiations (2009–15), the NFU pointed to the EU’s longstanding opposition to the use of hormones in beef production and certain substances used in washing carcasses, and the fact that Canada’s beef sector is tightly integrated with the U.S. market, which does not have these restrictions.
Similarly, the EU bans a growth-enhancing drug for hogs, which is still allowed in Canada though it is no longer widely used. Europe is largely self-sufficient in beef and is a major exporter of pork, so there was really no market space available for Canadian producers to fill even if they were able to meet the EU’s requirements.
The EU abolished its market-stabilizing quota system for dairy production in 2015, before CETA was finalized. This caused a crisis due to overproduction, as farmers tried to sell more milk to make up for rapidly falling prices. Seeking an outlet by getting access to some of Canada’s dairy market was an easy sell for EU politicians, but it did not solve the structural problem created when they de-regulated their system.
On obtaining a leaked CETA text in 2014, then NFU Vice-President of Policy Ann Slater made the following comments:
“While the government claims CETA gives farmers access to [European] markets, CETA changes nothing regarding Europe’s commitment to avoiding food made from genetically modified crops, beef raised with hormones and pork raised with growth promoters. Yet, CETA takes away the equivalent of all of Nova Scotia’s milk production from Canadian dairy producers by allowing increased tariff-free imports of cheese from the heavily subsidized EU. CETA gives Europe a significant part of our market, and Canadian farmers get empty promises in return.”
Today, we can see how empty those promises were. For example:
- Canadian production of cheese stopped growing in 2017, while both Canadians’ total consumption of cheese and our imports from Europe increased. Between 2016 and 2021, Canada’s population grew by three million, yet our dairy cattle numbers did not increase, costs rose, and nearly 1,700 dairy farmers lost their livelihoods. The human cost of these farmers’ stress and losses cannot be quantified.
- CETA did not change the EU's longstanding ban on beef produced with the use of hormones. In spite of CETA increasing Canada’s tariff-free access from 23,200 to 50,000 tonnes, Canada’s (hormone-free) beef exports to the EU were a mere 1,418 tonnes in 2021, while we imported over 16,000 tonnes of EU beef.
- CETA added 80,549 tonnes of pork to Canada’s previous duty-free quota of 7,000 tonnes, which was already available under the WTO. Yet, in 2021, Canada exported only 568 tonnes of pork to the EU, down by nearly 90% from the 5,000 tonnes exported to the EU in 2011.
- When CETA was being negotiated, Europe’s exports of pork were more than double Canada’s total production. Now, the EU exports two-and-a-half times Canada’s total production.
- Prior to CETA, the EU already supplied Canada with 3% of our cheese, or 13,400 tonnes, through a WTO-based tariff exemption. As of 2022, CETA allows the EU to supply an additional 16,000 tonnes tariff free. In 2021, Canada produced 592,370 tonnes of cheese of all kinds, while the EU exported 1,385,135 tonnes of cheese, including 26,070 tonnes to Canada, up significantly from 15,269 in 2016.
The process of negotiating CETA went on behind closed doors, so we will likely never know how these agricultural measures figured in Canada’s overall strategy. Perhaps access to our dairy market was held out as a reward for concessions in a non-agricultural sector and had nothing to do with providing market access for beef and pork.
In any case, the outcome was not difficult to predict. It suggests that, rather than “CETA still not fully delivering,” as a recent Western Producer article said, CETA cannot and will never deliver on the promises made to the beef and pork sectors. It will, however, continue doing serious harm to our dairy farmers.
One small consolation is the federal government’s commitment not to give away any more of our dairy market in post-Brexit negotiations with the United Kingdom. Also, Bill C-216, a private member’s bill introduced by Bloc Québécois MP Louis Plamondon, would outlaw any further give-away of Canada’s dairy products, poultry or egg markets in future trade deals, passed second reading in 2021 with support from all parties except the Conservatives. This bill has been reinstated, and hopefully will become law during the upcoming session of parliament.