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EU-Canada Trade Deal Comes into Force but Barriers Remain for Dairy

The EU-Canada trade deal comes into force but potential barriers remain for dairy. The landmark EU-Canada trade deal (CETA) provisionally entered into force on 21st September.

The agreement eliminates duties on 91.7% of tariff lines in the agri-food sector and includes a new Tariff Rate Quota (TRQ) of 18,500 tonnes for EU cheese (16,800 t for high quality cheeses and 1,700 t for industrial cheese).

However concerns remain regarding how this TRQ will be managed. While 50% will be controlled by distributors and retailers, the other 50% will be managed by domestic manufacturers, and therefore it will be up to them to decide if and when to import EU cheese – thus limiting access to the Canadian market.

In addition, there are a number of technical barriers which could still limit EU exports, such as the implementation of the so-called “Class 7 pricing system”. This sells Canadian SMP at the lowest world market price, enabling it to undercut imports and replace them, and contributing to the depression in SMP prices worldwide.

CETA will fully enter into force once it has been ratified by all EU Member State Parliaments as well as a number of regional parliaments. The EU will need to keep a close eye on these issues to ensure that they do not go against the spirit of the agreement and that EU exporters are able to make the most out of this new opportunity.

By Alison Graham

European Affairs Executive

Tags: EU-Canada Trade Deal