Trade in agriculture and agri-food products has nearly quadrupled in North America over the past 25 years. Trade between Canada and the U.S. alone in agriculture and agri-food products reached USD$48.5 billion in 2017.
The Canada-United States-Mexico Agreement (CUSMA) will preserve existing agriculture commitments between Canada, the U.S. and Mexico, and help bring together an already highly integrated industry. Within the agreement, Canada has preserved the supply management system for another generation of hardworking Canadian dairy farmers. Canada will now only have one definition for “specially defined mixtures”, which will be governed in its WTO schedule. This removes uncertainty and unpredictability for the poultry sector.
The agriculture and agri-food sector is a key driver of Canada’s economy, and CUSMA will help Canada reach the Government’s goal of increasing agri-food exports to $75 billion annually by 2025.
Technical summary of negotiated outcomes: Agriculture chapter
- Canada secured a number of beneficial outcomes for agriculture, including:
- New market access in the form of tariff rate quotas for refined sugar and sugar-containing products, as well as certain dairy products (including cheese, cream, milk beverages, butter);
- Tariff elimination for whey and margarine, including liberalized rules of origin for margarine;
- The ability to apply the definition of “specially defined mixtures” in Canada’s WTO schedule on a multilateral basis to ensure tariff rate quotas for chicken and turkey are not circumvented. This removes uncertainty and unpredictability for the chicken and turkey sectors;
- A consultation mechanism for Parties to address domestic support that may be trade distorting;
- A modernized Committee on Agricultural Trade which will provide a forum for Parties to address issues and trade barriers;
- Maintains commitments that reflect the unique character of the sale of wine and spirits in Canada; and
- Builds on commitments from the original agreement’s chapter on sanitary and phytosanitary (SPS) measures, while maintaining a CUSMA Party’s ability to protect human, animal and plant life or health.
- The agriculture Chapter also includes ambitious obligations for agricultural biotechnology, including provisions that:
- Recognize and support the fundamental principles that encourage innovation and facilitate trade in products of agricultural biotechnology;
- Provide further transparency and predictability among CUSMA partners in trade of products derived from current and future technologies, as well as provisions aimed at managing low level presence occurrences based on their risk and in a timely and pragmatic way; and
- Establish a platform for deepened cooperation by CUSMA partners in areas of mutual interest and benefit related to agricultural biotechnology.
- As part of the overall agreement, Canada has agreed to:
- Provide new market access to the U.S. in the form of tariff rate quotas for dairy, poultry, and egg products;
- Tariff elimination for whey powder and margarine;
- Ensure the elimination of current milk classes 6 and 7; component prices for these products will be calculated based on an agreed U.S. reference price;
- Establish a mechanism to monitor exports of skim milk powder, milk protein concentrate, and infant formula; above an agreed threshold these products will be subject to surcharges; and
- Allow U.S. grown wheat of varieties registered in Canada to receive an official Canadian grain grade.
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