A worker at North Nova Seafoods in Caribou weighs in as other workers process crabmeat Friday. General manager Mike Duffy said that the elimination of the tariffs between Canada and the European Union on seafood products should allow Nova Scotia exporters to be more competitive in the marketing of their products. JOHN BRANNEN – THE NEWS
UPDATED: Included are comments from Northern Pulp Nova Scotia Corporation, which were not received in time for print in Saturday's (Oct. 26) paper.
On Oct. 18 in Brussels the pair signed, on behalf of Canada and the European Union, an agreement in principle for the Comprehensive Economic and Trade Agreement (CETA) to foster free trade and open markets between the two economies. It’s a deal that Harper has said is broader in scope and deeper in ambition than the historic North American Free Trade Agreement (NAFTA).
The EU, with its 28 member states, 500 million people and annual economic activity of almost $17 trillion, is the largest market in the world.
While the document signed in Brussels hardly means we should expect to see European goods flood Nova Scotia’s markets, how would Canada’s Ocean Playground and Pictou County in particular fare if the deal is ratified?
According to the federal International Trade Department, Nova Scotians stand to benefit significantly from this preferred access to the EU market. It states that CETA will eliminate tariffs on almost all of Nova Scotia’s key exports and provide access to new market opportunities in the EU.
Among the potential winners would be the fish and seafood industry, whose exports to the EU were worth an average of $142.6 million annually between 2010 and 2012, making this sector the largest source of Nova Scotia’s exports to the EU.
This is despite tariffs of up to 25 per cent on fish and seafood. If CETA comes into force, almost 96 per cent of EU tariff lines for fish and seafood will be duty-free.
For Mike Duffy, general manager at North Nova Seafoods Ltd. in Caribou, this is good news though it may be too early to tell.
“It is still very early in the process to fully comprehend the impact on the fishery in Nova Scotia,” said Duffy. “On the surface the elimination of the current tariffs on seafood products should allow Nova Scotia exporters to be more competitive in the marketing of their products.”
With the potential to reach new customers in a new market, Duffy believes that Nova Scotia seafood must maintain a high standard.
“We still must ensure that the products that we send to market are of the highest standards, and are produced in the most cost-effective manner as to ensure that we are forefront in the eyes of these consumers as it pertains to seafood,” he said. “Failure to do this is for short-term gain only and not the development of a strong brand for Nova Scotia seafood.”
He noted that in the future, North Nova Seafood would look for partners in the EU to work with the company on brand and market development.
The increased import of European cheeses became a brief stumbling block to CETA, as the government’s protective tariffs will not apply to 16,000 tonnes of imported European cheese.
That’s given greater resolve to artisan cheese maker Frazer Hunter of Knoydart Farm in Lismore.
“Will it impact us? It probably will, but it’s still two years down the road,” said Frazer, who owns the farm with his wife and son. “Foreign cheeses are already here so we’ll work to continue to brand the uniqueness of our cheese.”
Knoydart Farm produces certified organic Gloucester and Caerphilly cheeses.
“We are selling a product, not a commodity,” said Frazer. “We have a face-to-face connection with our customers and you can’t put a price tag on that.”
The Dairy Farmers of Canada, a national organization representing Canada's dairy farming industry, was less than enthused. A release criticizing the trade agreement noted that Canada would lose its small, artisan and local cheese makers within a short time frame.
“If this deal proceeds,” a press release read, “the Canadian government will have given the EU an additional exclusive access of 32 per cent of the current fine cheese market in Canada.”
Pictou County’s Scotsburn Dairy, however, said it stands to neither benefit nor lose from CETA.
“Unfortunately, there’s not much in there for us,” said Scotsburn Dairy CEO Doug Ettinger. “We’re not involved in the cheese industry and regulations prohibit us from exporting to the EU.”
The Canadian dairy sector operates under a supply management system based on planned domestic production, administered pricing and dairy product import controls.
Ettinger said easing of these regulations not covered in CETA would allow Scotsburn to look to attractive markets such as the EU.
“We’ve got a premier ice cream product that we’re aggressively marketing throughout Canada and potentially the U.S. and Mexico,” he said. “There’s no doubt the EU is an attractive market for our ice cream, but it won’t happen as long as these rules are in place.”
While CETA opens the door for more European competition in Canada, it also gives Canadian companies a new market to compete in as well.
For Nick MacGregor of MacGregor’s Custom Machining in McLellans Brook, it’s an opportunity to expand.
“Something like CETA would increase our prospects for exporting,” said MacGregor. “A place like Greenland, for example, is interesting to us because we can provide a valuable service to areas that don’t have the capabilities.”
On the day that CETA comes into force, approximately 99 per cent of EU tariff lines will be duty-free for Canadian industrial products. Seven years later, 100 per cent of these tariff lines will be duty-free.
Some of MacGregor’s modular buildings could be suitable for a remote climate like Greenland. He also noted fewer cultural barriers in doing business with Europe.
“European business and standards are similar to those in Canada and the U.S., which makes things much easier when you’re looking to expand,” said MacGregor.
The International Trade Department also notes that CETA will provide Nova Scotia suppliers of goods and services access to EU procurement processes on a preferential basis, providing them with new opportunities to win major government contracts.
EU tariffs will be eliminated on fresh and frozen fruits and vegetables, including frozen blueberries, fresh blueberries and fresh apples and processed goods, including processed fruits and vegetables.
Justice Minister Peter MacKay, will hold a round-table with the business community in Pictou County highlighting the benefits of the recently announced Canada-EU trade agreement today at 1 p.m. at the Museum of Industry in Stellarton.
Market Intelligence Manager, Edwin Wajaja noted:
"We have still yet to see the if there will be any direct impacts to Northern Pulp. So far there have been no tariffs which have been imposed on woodpulp imports into the EU countries. Any impact, if any, will likely be indirect; for instance, tariff removal/elimination for value-added forest products could lead to more forest products activity in NS, and Northern Pulp could then benefit from the greater availability of potentially more affordable residual chips.
"On a side note, Nova Scotia's forest product exports to EU between 2010-2012 is averages at a a value of $95M per year. Unfortunately we do not have any more details on what exactly is exported between the two regions.
"All that we know is that the TOTAL forest products export from NS to the world is dominated by Pulp and Paper products (mainly in newsprint, packaging+board and woodpulp)by about 80 per cent, followed by wood-fabricated materials (Lumber SW, OSB, etc) ~11 per cent and the rest is primary wood products (woodchips)."
On Twitter: @NGNewsJohn
FACTBOX: CETA AND SEAFOOD
In two years, if CETA is ratified, EU tariffs will be eliminated on:
– live lobster, from a rate of 8 per cent;
– frozen lobster, from rates up to 16 per cent;
– processed lobster, from a rate of 20 per cent;
– snow crab, from rates up to 8 per cent;
– frozen scallops, from a rate of 8 per cent;
– frozen shrimp, from a rate of 12 per cent;
– cooked and peeled shrimp, from a rate of 20 per cent;
– fresh or chilled hake, from a rate of 15 per cent;
– dried and salted cod, from a rate of 13 per cent.