Soy Canada Outlines TPP Benefits to Parliamentary Standing Committee on Agriculture & Agri-Food
On April 18, 2016, Soy Canada Executive Director Jim Everson spoke to the Parliamentary Standing Committee on Agriculture and Agri-Food about the benefits of the Trans-Pacific Partnership to the Canadian soybean sector.
Here’s the text of his presentation:
Good afternoon Members. It is a pleasure to be here with you today to introduce Soy Canada and the soybean industry’s perspective on the Trans-Pacific Partnership.
First, let me begin by saying who we are and what Soy Canada represents.
Soy Canada is the national association representing the full soybean value chain. Our members include producer associations representing soybean farmers across Canada, seed development companies, soybean exporters and soybean processors. Soy Canada facilitates industry cooperation and represents the industry on domestic and international issues affecting the growth and development of soybeans.
The soybean sector in Canada is growing significantly.
We are now in our 8th consecutive year of soybean production growth:
- Between 2005 and 2015, seeded area of soybeans in Canada increased by 87 percent to 5.1 million acres.
- Since 2005, production levels have nearly doubled to 6.2 million metric tonnes in 2016.
- Farm cash receipts for soybeans are $2.3 billion.
- Finally, since 2005, soybean exports have increased by roughly 250 percent to 4.4 million metric tonnes in 2015. Canada exports about 65 percent of its domestic soybean production.
We are the world’s 5th largest exporter of soybeans and the 7th largest producer.
The industry’s contribution to the Canadian economy is also substantial.
Domestic use, processing, and export of Canadian soybeans contribute over $5.6 billion to Canada’s annual GDP and are linked to over 54,000 direct and indirect full-time jobs. We are a growing segment of the agriculture industry with more expansion forecast for the coming years and more reliance on export markets. This is why international trade is critical to our industry.
Now, moving to the Trans-Pacific Partnership.
The TPP represents a huge opportunity for Canada. We know that TPP countries represent nearly 800 million potential customers, account for 40 percent of the world’s GDP, and account for over 65 percent of Canada’s $56 billion in agriculture and food trade. So what does this mean for Canadian soybeans?
The total value of soybean exports to TTP countries reached very close to $1 billion in 2015 (exact number is $996,372,124). The Asia-Pacific region encompasses a large segment of key soybean export markets with roughly 40 percent of total Canadian soybean exports shipped to TPP nations. Soybean trade with this region of the world is significant; the TPP provides a platform for our industry to access these growing markets and build on existing trade relationships with major soybean importers.
All members of the soybean value chain – producers, processors, exporters, seed companies, and related affiliations – directly or indirectly stand to benefit from the TPP. The agreement provides a more secure and equal trade environment free from tariffs and administrative quotas on all soybeans and soy products. Canada’s participation in the agreement ensures that other oilseed exporting nations do not have preferential access to TPP markets. Our industry will be better positioned to compete against other major soybean-producing nations – a major advantage for Canada when combined with the increase in demand throughout the Pacific Rim for high-quality Canadian soybeans.
The TPP also includes important provisions relating to biotechnology. As you know, innovation through the application of biotechnology to seed development has provided tremendous benefits to crop production. It is also a frequent contributor to trade disruption. The application of zero-tolerance regulatory frameworks and increasingly acute testing technologies in a world of increasing deployment of biotechnology is a recipe for trade challenges. Recognizing this, policy makers are looking for ways of better coordinating regulation internationally.
The TPP establishes a Working Group to facilitate cooperation and information exchange on biotechnology issues including regulation of the Low Level Presence of GM materials and regulation of New Plant Breeding Technologies.
It also establishes a process for collectively managing cases of low-level presence, should they occur. Low level presence refers to the very low, unintentional presence of GM materials, that have been deemed safe by a full safety assessment, in commodity grain shipments internationally. It is a very topical issue in the international grain trade as a result of the growing acreage and number of agriculture products being assisted by biotechnology methods. Canada has taken a leadership position in developing new regulatory approaches to managing LLP, and the inclusion of commitments to cooperation in the TPP is welcome.
These are positive steps towards reducing disruption to trade in the grains and oilseeds industry and establishing predictable trading rules with TPP members.
The TransPacific Partnership is a modern and comprehensive agreement and an important milestone in reforming international agricultural trade.
Canada is a trading nation; and our grains and oilseeds sector is heavily reliant on international markets. But in many commodities, while access to export markets is very important, we do not have the size and export might of competitive nations. Soybeans are an illustration of this. Despite the rapid growth of our sector, Canada represents only about 2-3 percent of production internationally. Our industry competes with the US which produces about 39 percent of the world’s soybeans and Brazil, at about 37 percent. They are responsible for the vast majority of world trade, which gives them considerable leverage in commercial negotiations.
In order to compete, Canada relies on predictable, rules-based trade. We need a predictable environment where all participants play by the same rules. The TPP and other trade agreements seek to establish these rules and support existing trade rules such as existing WTO agreements.
In conclusion, I thank the Agriculture and Agri-Food committee for providing Soy Canada with the opportunity to highlight the importance of the TPP to our industry and to participate in the committee study on this topic. We support the implementation of the TPP and we urge the Committee to recommend its ratification at the earliest opportunity.
Thank you and I welcome your questions.