EU and Canada gear up for seafood trade rush
The newly signed free trade agreement between the European Union and Canada will see ties between Canadian seafood producers and exporters and European consumers become even stronger, with the tariffs on most products reduced to zero, a move that will facilitate lower prices and more choice in EU markets.
Following years of protracted negotiations, the long-awaited Comprehensive Economic and Trade Agreement (CETA) is now in place, having been officially signed off by Jean-Claude Juncker, president of the European Commission, Donald Tusk, president of the European Council, Robert Fico, prime minister of Slovakia, and Justin Trudeau, Canada’s prime minister. It brings the elimination of around 99 percent of import duties – saving hundreds of millions of dollars annually. Indeed, a joint EU-Canada study has projected the agreement will boost the two-way trade in goods and services by around CAD 29 billion (USD 21.7 billion, EU 19.5 billion) annually within seven years of implementation.
While many industries are expected to profit from CETA, the seafood sector is likely to be one of the standout beneficiaries with almost 96 percent of the tariffs on Canadian seafood imports into the EU immediately eliminated.
Among those species to have seen duties go to zero are live lobster (from 8 percent), fresh crab and frozen snow crab (7.5 percent), frozen and fresh scallops (8 percent), frozen shrimp (12 percent), prepared or preserved shrimp and prawns in retail packages (20 percent) and salmon (15 percent).
As for the other key Canadian products, tariff lines will be phased out for frozen lobster (currently 6 percent and 16 percent) and frozen crab other than snow crab (7.5 percent) over three years; processed lobster (20 percent) will be removed over five years; and cooked and peeled shrimp in wholesale packages or in airtight containers (20 percent) and frozen cod fillets (7.5 percent) over seven years. There will also be duty-free transitional tariff-rate quotas with no end-use requirements during the seven-year phase out period of 23,000 metric tons (MT) of cooked and peeled shrimp and 1,000 MT of frozen cod fillets.
Through its part of the agreement, Canada has eliminated all tariffs on fish and seafood imports from the EU. Until now, the country had imposed duties on approximately 25 percent of tariff lines, ranging from 5 to11 percent.
With a total export value of CAD 6 billion (USD 4.5 billion, EUR 4 billion) last year, fish and seafood is Canada's second-largest food export (behind wheat), with 75 percent of its total production going to overseas markets. The EU currently accounts for 10 percent of these exports, making it Canada’s third-largest market. But as Canada’s overall contribution to the bloc’s total seafood imports is a modest 2 percent, the preferential arrangements within CETA offers the Canadian seafood industry plenty of scope to expand the trade.
Within the EU28, the United Kingdom has long been Canada’s top seafood market, with exports now in excess of CAD 140 million (USD 104.6 million, EUR 94.2 million) annually, led by coldwater shrimp, live lobster, canned salmon (pink and sockeye) and scallops. And while concerns have been raised about what the Brexit decision will mean for CETA, many stakeholders anticipate both parties will get around to the negotiation of a similar bilateral agreement outside of CETA in due course.
Looking in the opposite direction, Canada imports CAD 3.5 billion (USD 2.6 billion, EUR 2.4 billion) worth of seafood. While approximately one-fifth of this comes from the EU and though CETA offers the opportunity to boost this trade, for the time being most of the buzz surrounding the new agreement focuses on increasing the supply to the 500 million-plus European consumers.