Once implemented, an ambitious free trade agreement will see ties between the seafood industries of the EU and Canada become much stronger.
Following months of technical work, the EU and Canada announced in August that the technical discussions for a Comprehensive Economic and Trade Agreement (CETA) were complete and that officials had reached a final negotiated text. Both sides of the Atlantic “are now working expeditiously” to conclude the legal review and translation of the CETA text in advance of ratification — a process that is expected to last about two years, said Emma Finn of the Canadian High Commission in London.
In 2013, the EU was Canada's second most important trading partner, after the United States, with around 9.8 percent of Canada's total external trade. For the same period, Canada was the EU's 12th most important trading partner, accounting for 1.7 percent of the bloc's total external trade. Upon implementation, CETA will remove 99 percent of the tariffs between the two economies and create sizeable new market access opportunities in services and investment. The Canadian government and the European Commission have projected the agreement will boost the two-way trade in goods and services by around 23 percent or EUR 26 billion (USD 33.1 billion).
Many sectors are expected to profit from CETA, but the seafood trade is set to be one of the biggest beneficiaries. Upon entry into force, almost 96 percent of the tariffs on Canadian seafood imports into the EU will be immediately eliminated. Among those species that will see duties go to zero are live lobster (currently 8 percent), fresh crab and frozen snow crab (7.5 percent), frozen and fresh scallops (8 percent), frozen shrimp (12 percent), prepared or preserved shrimps and prawns in retail packages (20 percent) and salmon (15 percent).
As for the other key Canadian products, remaining 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 (TRQs) 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. Those are addable quotas during the phasing out period, said Finn.
For its part, Canada will eliminate all tariffs on fish and seafood imports from the EU on the first day CETA enters into force. The country currently imposes duties on approximately 25 percent of tariff lines ranging from 5–11 percent.
The agreement has already outlined some rules of origin to aid compliance. Essentially, these require that products must be wholly obtained: either caught by Canadians or Europeans fishing in Canadian or European waters; or caught by registered Canadian/European vessels that are entitled to fly the Canadian/member state flag when fishing in the Canadian/European Exclusive Economic Zone (EEZ), in the high seas or in the EEZs of other countries.
There are also certain “alternate” rules of origin for certain fish and seafood products processed in Canada using imported materials. These origin quotas are applicable to products such as cooked and frozen lobster, processed shrimp, salmon and sardines.
With a total export value of CAD 4.4 billion (EUR 3 billion/USD 3.9 billion), fish and seafood was Canada's second largest food export in 2013, second only to wheat. Approximately 85 percent of the fish and seafood landed by Canadian harvesters is exported. The country’s most valuable seafood export is lobster, which achieved a value of CAD 1.17 billion (EUR 809.3 million/USD 1 billion) last year. Its other main exports were snow/queen crab, Atlantic salmon, shrimp and scallops.
The Canadian seafood sector has made no secret of the fact that it views Europe, and the United Kingdom in particular, as a very important growth region for its products once the trade barriers come down and a large delegation of Canadian seafood companies has already visited the important seafood hub of Grimsby this year.
The United Kingdom was Canada’s No. 1 seafood market within the EU 28 last year with exports well in excess of CAD 90 million (EUR 62.3 million/USD 79.4 million), led by products like coldwater shrimp, live lobster, canned salmon (pink and sockeye) and scallops, said Finn, who added that the two provinces of Newfoundland and Nova Scotia, together accounted for 80 percent of the exports to the U.K. market in 2013.
“We believe that CETA marks the first time that the EU has agreed to completely eliminate its tariffs from fish and seafood from a prominent exporting country like Canada and the agreement will significantly expand the scope for the Canada-UK trade relationship, opening up a wealth of opportunities for the fish and seafood sector,” said Finn.
Canada imported EUR 48.5 million (USD 61.8 million) worth of fish and seafood from the EU in 2013. From the United Kingdom specifically, Canada imported CAD 9.3 million (EUR 6.5 million/USD 8.3 million) worth of seafood during this period, up from CAD 4.7 million (EUR 3.3 million/USD 4.2 million) in 2011 and CAD 8.6 million (EUR 6 million/USD 7.6 million) in 2012. U.K. exports to Canada mainly comprise fresh and frozen fish and fish fillets as well as processed fish, including mackerel and sardines.
