Get 40% Off
🤑 This hedge fund gained 26.16% in the last month. Get their top stocks with our free stock ideas tool.See stock ideas

Canadian dairies get significant control over imports under TPP

Published 28/11/2018, 06:07 am
Canadian dairies get significant control over imports under TPP
PGR
-
SAP
-

TORONTO, Nov 27 (Reuters) - Canada will give local dairy processors significant control over imports under a new trade deal with Pacific countries that opens the sheltered industry to further competition, according to a notice published by the federal government, which drew criticism from Canadian retailers.

New quotas created by the Comprehensive and Progressive (NYSE:PGR) Agreement for Trans-Pacific Partnership (CPTPP) are similar to those meant to give U.S. dairy and poultry farmers new access to Canada under the new North American trade agreement, USMCA.

The rules, which lay out who can receive quotas to import some agricultural products duty-free from countries that ratify the deal, vary between products, but in some categories nearly all the quotas are earmarked for Canadian processors. One quota covering "cheeses of all types" reserves 85 percent for processors, leaving 15 percent for distributors.

The announcement was praised by Saputo Inc SAP.TO , one of Canada's biggest processors, which noted in a statement on Tuesday that processors will get a "significant portion" of the quotas.

"We are confident this will be favourable for consumers and will assist dairy stakeholders in maintaining value in the dairy sector in Canada," said the company in a statement on Tuesday.

It is not the first time Canada has taken the unusual step of giving local producers special rights to import, easing the pain of new competition.

Karl Littler, spokesman for the Retail Council of Canada, said the allocation looks like a subsidy.

"We find that, obviously, to be less than ideal, given that people buy their cheese from us, not from the producers," he said.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

In 2017, a last-minute dispute over how Canada would allocate cheese import quotas sent the country back into negotiations with the European Union over the Comprehensive Economic and Trade Agreement.

European dairy farmers and cheesemakers were unhappy with a plan to give Canadian cheesemakers 60 percent of the new quota. In a compromise, they received 50 percent instead. In the first full year with the new quotas in force, Canadian imports have been sluggish. the notice, federal officials promised a "broad-based stakeholder engagement exercise" in the new year to review all of Canada's import quotas, as new trade deals expand their use.

"The review exercise will ensure that TRQ (tariff rate quota) allocation and administration continue to be conducted in an efficient and effective manner," said the notice.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.