Download Canada`s Agriculture Trade with FTAA Countries

Agriculture and
Agri-Food Canada
Agriculture et
Agroalimentaire Canada
Canada’s Agricultural Trade with
FTAA Countries
Organized Symposium at the Meeting of the
American Agricultural Economics
Association
Tampa, Florida
August 1, 2000
José Quiroga
Economic and Policy Analysis Directorate
1
Canada’s total agri-food trade on rising trend
Billions of CAN$
25
20
15
10
5
0
1992
1993
1994
1995
Imports
1996
1997
1998
1999
Exports
Source: AAFC Trade Data Retrieval System.
Economic and Policy Analysis Directorate
2
Canada’s agri-food trade with the United States
increasing significantly
Billions of CAN$
14
12
10
8
6
4
2
0
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Imports
Exports
Source: AAFC Trade Data Retrieval System.
Economic and Policy Analysis Directorate
3
Canada’s agri-food trade with Mexico on the rise
Millions of CAN$
600
500
400
300
200
100
0
1992
1993
1994
1995
Imports
1996
1997
1998
1999
Exports
Source: AAFC Trade Data Retrieval System.
Economic and Policy Analysis Directorate
4
Canada’s agri-food trade with the Caribbean and
Central America (excl. Mexico) in equilibrium
Millions of CAN$
600
500
400
300
200
100
0
1992
1993
1994
1995
Imports
1996
1997
1998
1999
Exports
Source: AAFC Trade Data Retrieval System.
Economic and Policy Analysis Directorate
5
Canada’s agri-food trade with South America
diverging
Millions of CAN$
1400
1200
1000
800
600
400
200
0
1992
1993
1994
1995
Imports
1996
1997
1998
1999
Exports
Source: AAFC Trade Data Retrieval System.
Economic and Policy Analysis Directorate
6
Key data on selected FTAA countries, 1998
Population (millions) per capita GDP (US$)
Canada
30
19,439
United States
271
31,059
Argentina
36
8,257
Brazil
160
4,673
Chile
15
4,921
Colombia
41
2,515
Mexico
96
4,324
Venezuela
23
4,107
Source: UNSD, Monthly Bulletin of Statistics
Economic and Policy Analysis Directorate
7
Western Hemisphere a Strategic Region for Canada
•
FTAA region has a combined population of over 800 million (400 million
in Latin America except Mexico) and a GDP of US$11 trillion
•
FTAA region comprises some of the fastest growing markets in the
world in terms of economic growth and growth in per capita income
•
Bilateral agri-food trade between Canada and its NAFTA partners has
grown significantly under the NAFTA
•
Bilateral agri-food trade between Canada and FTAA countries
(excluding the U.S. and Mexico) has doubled from $1.2 billion in 1988 to
$2.4 billion in 1998
•
As agri-food production is becoming highly interdependent with
international trade, FTAA countries offer Canada significant
opportunities for complementary trade
•
FTAA agreement offers improved and more secure market access and
enhanced rules to facilitate expansion of trade
Economic and Policy Analysis Directorate
8
Barriers faced by Canadian exports in the
hemisphere
•
Variety of market access barriers:
- tariffs
- tariff rate quotas
- price bands
- import licensing (conditions and administrative practices)
- misuse of sanitary and phytosanitary certification
requirements
- technical barriers
•
Non-tariff measures may be linked to domestic support measures
Economic and Policy Analysis Directorate
9
Objectives and Progress of the FTAA Negotiations
Ministerial Declaration of San José (1998)
•
Launch of negotiations at the Second Summit of the Americas in
Santiago, Chile, in April 1998
•
Commitment to complete negotiations no later than 2005, with
concrete progress to be achieved by 2000
•
FTAA Agreement consistent with WTO rules and disciplines
•
Elimination of tariffs on substantially all trade as required by Article
XXIV of the GATT 1994 and its Uruguay Round Undertaking
Economic and Policy Analysis Directorate
10
Progress to date
•
The institutional infrastructure for the negotiations has been put in place
and the meetings of the nine Negotiating Groups and three advisory
bodies have been ongoing since September 1998
•
Progress in the negotiations was achieved with the realization of a
business facilitation package which focuses on customs and
transparency enhancement
•
At the Trade Minister’s meeting in Toronto in November 1999, FTAA
countries agreed to work in the WTO on the elimination of export
subsidies in any form on agricultural products
•
Negotiating Groups are currently developing draft texts of their respective
chapters for consideration by Trade Ministers at a meeting in Argentina in
April 2001
Economic and Policy Analysis Directorate
11
Canada’s FTAA negotiating approach
Canada’s position is based on
- approach followed in other regional and bilateral agreements, and
- considering that certain issues can only be effectively addressed
multilaterally in the WTO (e.g., DS, XS, SPS)
•
Market Access: Elimination of tariffs for substantially all trade within
agreed time frames as required by Article XXIV of GATT 1994
•
Domestic Support: WTO is appropriate forum for negotiating further
disciplines on trade-distorting domestic support
•
Export Subsidies: WTO is appropriate forum for developing further
disciplines on export subsidies but there may be scope for
eliminating their use more quickly within the hemisphere
•
Sanitary and Phytosanitary Measures: Reaffirmation of rights and
obligations under the WTO, including the WTO Agreement on the
Application of SPS Measures
Economic and Policy Analysis Directorate
12
Effects of an FTAA
•
outcome of FTAA negotiations still unclear
•
interplay between WTO agreements and FTAA will be important
factor
•
freer trade among all FTAA countries (e.g., no tariffs on most
imports) will make comparative advantage more important in
determining location of production and trade flows
•
Canada’s factor-determined comparative advantage in grains and
oilseeds is not unique -other FTAA countries have comparative
advantage in similar sectors
Economic and Policy Analysis Directorate
13
Questions for the future
•
predominance of U.S. as export destination for Canadian
agriculture exports
- how much is determined by geographical proximity and how
much by policy factors?
- how will U.S. predominance be affected by FTAA?
•
will freer trade under FTAA stimulate change in agricultural
structure and policy (farm income policy, marketing policy) and in
other sectors (transportation policy, etc.)?
- will such changes be similar across FTAA countries or different?
Economic and Policy Analysis Directorate
14
Prepared by: Jose Quiroga/Michael Swidinsky/Lars Brink
Consulted: Pamela Cooper/Alicja Wielgus
Presentation
July 29, 2000
File location: O/EPAD/Pa/Faa/J_QUIROGA/FTAA.ppt
Output: Deck
Economic and Policy Analysis Directorate
15
T.P. for slide 2
Canada’s agri-food exports have trended upwards overtime, totaling
C$22 billion in 1999, having effectively doubled from the early 1990s
Total agri-food exports exceeded the Canadian Agri-Food Marketing
Council projected growth by 11% in 1996, 14% in 1997, and by 5% in
1998. But, preliminary figures show a 7% shortfall in 1999 due to low
commodity prices
Exports of value-added in agri-food have grown rapidly nearly equaling
bulk goods as a share of total Canadian agri-food exports
Grains and oilseeds followed by red meats and live animals make up the
largest share of total Canadian agri-food exports
Expansion of Canada’s agri-food exports is attributed in part to
increased global demand and the impacts of trade liberalization
Canada’s agri-food imports totaled C$17 billion in 1999 having
increased throughout the 1990s. Valued-added in fruits and vegetables
are Canada’s main imports of agri-food
Economic and Policy Analysis Directorate
16
T.P. for slide 3
The United States is Canada’s largest trading partner in agri-food
accounting for about 60 percent of total Canadian exports and imports
Following the entry into force of CUSTA in 1989 and NAFTA in 1994
Canadian agri-food trade with the United States increased significantly
Economic and Policy Analysis Directorate
17
T.P. for slide 4
After the United States, Mexico is Canada’s largest trading partner in the
Americas for agri-food
Following the entry into force of NAFTA in 1994 Canadian agri-food
trade with Mexico has increased
Economic and Policy Analysis Directorate
18
T.P. for slide 5
Canadian agri-food exports to the Caribbean and Central America (excl.
Mexico) have increased while imports from this region have remain
unchanged
Economic and Policy Analysis Directorate
19
T.P. for slide 6
While Canadian agri-food imports from South America have increased,
exports to this region have declined
Economic and Policy Analysis Directorate
20
T.P. for slide 7
The United States is by far the richest and most populous country in the
Americas
Brazil followed by Mexico also have large populations however their per
capita GDP is low
As per capita GDP increases in the Rest of the Americas, the demand
for value added in agri-food will increase
Economic and Policy Analysis Directorate
21