China Deal Worth C$20M to Canadian Beef Farmers

CANADA - Alberta beef producers are thrilled at the potential of $20 million in annual growth from a new trade deal with China.
calendar icon 12 December 2017
clock icon 3 minute read

Edmonton Sun reports that the agreement will allow chilled and bone-in Canadian beef and pork to be exported to China for the first time.

It’s a pilot project for now, but Dennis Laycraft, executive vice-president at the Canadian Cattlemen’s Association, is confident it will prove successful and be expanded to all beef processing plants.

Announced as part of a swath of trade changes as Prime Minister Justin Trudeau wrapped up his trade mission to China last week, the development was a long time coming.

It’s the offspring of a 2010 deal, which provided access by the Chinese to Canadian beef for the first time. That agreement was restricted to boneless, frozen products.

Mr Laycraft said in an interview the beef sector expected a rapid, staged opening to the Chinese market. He’s a little disappointed it took so long, but that’s tempered by what the development means for the industry.

Bone-in and chilled beef are higher-value meats. Couple that with the fact a current labour shortage means it takes more time to de-bone cuts, Mr Laycraft said, and the new deal is a definitive win.

"Every time we find a premium market, it adds value to every animal we raise," he said.

The next priority is securing Chinese market access for offal and fancy meats.

"The Chinese market is growing, it’s a high-value market, and it’s often the highest value market for those products," Mr Laycraft said.

Looking to TPP

China is already Alberta’s second-largest trading partner, and its rapidly expanding middle class has a taste for Canadian meat.

With around 70 per cent of Canada’s beef produced in Alberta, the deal is a huge boon for the province.

Alberta Trade Minister Deron Bilous called the development "absolutely significant".

Canada is several years away from any kind of free trade deal with China but, as an interim measure, the latest development is positive, he said in an interview.

Free trade agreements take up to a decade to figure out, Mr Bilous said, but he is encouraging Ottawa to explore those talks with China — even if the two sides aren’t yet at the table for formal talks.

"Trade agreements are absolutely critical to reducing barriers, reducing borders," Mr Bilous said.

Mr Laycraft and Mr Bilous are also crossing their fingers for the new Trans-Pacific Partnership (TPP) agreement. It’s in the midst of being rejigged after President Donald Trump yanked the US out of the deal.

For beef, the revised TPP would see tariffs on exports to Japan drop by more than 10 per cent, further opening up that market.

Mr Bilous said the trade deal would also be a huge positive for Alberta’s forestry sector, which is entering a tough time due to increased tariffs being imposed by the US.

TheCattleSite News Desk

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