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Conference Board: Canada should reduce trade barriers on food

Staff writer |
A new Conference Board of Canada report "Liberalization's Last Frontier: Canada's Food Trade" argues that the food industry and Canadian consumers would benefit if import duties on food were significantly lowered.

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"The benefits of freer trade in food are similar to those from trading any other product. The Canadian food industry can become more prosperous by serving fast-growing markets, which benefits all Canadians. And consumers benefit from a greater variety of food products at lower cost - including staples like year-round fruits and vegetables, coffee, sugar and tea. The only thing preventing Canada from gaining these benefits is ourselves," said Michael Burt, Director, Industrial Economic Trends.

"Trade barriers for food have fallen over the past 20 years, but Canada still maintains high tariffs, especially compared to similar countries. Canada is unlikely to gain the full benefits of its current trade negotiations without agreeing to reductions in tariffs on food products. Food imports provide Canadians with products they could not otherwise obtain at affordable prices.

Among the 34 countries in the Organisation for Economic Co-operation and Development, Canada is one of the very few that export considerably more food than they import, along with Australia, New Zealand and Chile. Unlike these countries, however, Canada still maintains very high tariff barriers on all dairy products, chicken, and eggs. And Canada has high barriers on wheat and barley;" said Conference Board in the statement.

Canada is currently negotiating the Trans-Pacific Partnership and the Comprehensive Economic and Trade Agreement between Canada and the European Union. The Trans-Pacific Partnership currently involves 12 countries. If it could be expanded into a 21-member Free Trade Area of the Asia-Pacific (FTAAP) over time, Canadian output and exports from the food sector would be eight and 18 per cent higher by 2025, respectively, compared to a baseline scenario.

In the event that an FTAAP is unrealistic, Canada could form bilateral free trade agreements with key emerging markets, starting with China (New Zealand and Chile already have such agreements).

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