Last week, the Irish Supreme Court found that the Government doesn’t have the authority under current law to ratify the Comprehensive Economic Trade Agreement (CETA). This is an agreement between the EU and Canada that removes many of the tariffs on trade both ways. Having already been ratified by 16 of the 27 EU member states, it has also been operating fully on a provisional basis since September 2017.

The Irish Supreme Court findings were on the validity of Ireland entering into an agreement where the adjudication process would be outside the Irish or EU courts, as CETA disputes are subject to an independent adjudication process that were agreed on as part of the overall agreement.

Agri products and CETA

There has been opposition to CETA at political level in Ireland and elsewhere in the EU, as well as considerable concern in farm organisations about the level of access the agreement gives Canada to EU markets.

This includes an additional 45,838t of tariff-free beef quota for access to the EU market, 30,838t of which is fresh (high value) beef. This is in addition to the 4,146t tariff-free quota that Canada already had as compensation for EU banning imports of hormone-treated beef.

Also, Canadian beef exported to the EU under the 11,500t Hilton quota shared with the US has the tariff reduced to zero compared with 20% previously. The EU also gave Canada a 75,000t tariff-free pork quota in addition to the existing WTO 4,625t (product weight) quota. All other weights are carcase weight equivalent.

There are no limits on EU beef exports to Canada under the deal, but access for dairy remains restricted, with a modest increase in the tariff-free quota. Canada now allows access to 17,700t of cheese, 16,000t of which is high-quality cheese, the remainder being industrial cheese.

This is in addition to 800t added to an existing WTO quota, giving total access of 18,500t. However, this hasn’t been straightforward, as Canada has sought to retain controls on this access by licensing specific importers for this business.

This has also been an issue for New Zealand, which is triggering the disputes mechanism in its trade deal with Canada because this effectively restricts exports of dairy products to Canada.

How it has been so far

With the agreement operational since September 2017, there are five years of data on which to assess impact.

For Irish farmers, the most controversial element was giving Canada access to over 50,000t of beef at zero tariff rate to the EU market.

However, since the deal came into effect provisionally, this fear has not materialised, with the EU importing less than 1,500t from Canada in 2021 while exporting over 16,000t, of which 3,256t was from Ireland (Bord Bia). This compares with just 239t in 2017, the year the agreement came into effect.

EU pigmeat imports from Canada are negligible. Meanwhile, Irish dairy exports to Canada increased from 1,408t in 2017 to 3,136t in 2020, but fell back in 2021 to 1,588t, so the impact has been minimal.

In overall terms, the value of Irish exports to Canada has increased by 46% from €1.320bn in 2016 to €1.930bn in 2021. Pharmaceutical products are the highest value product traded, increasing from €548m in 2016 to €867m in 2021, a 58% increase (EU Commission).

Comment

While the generous beef and pigmeat quotas were a huge concern for Irish farmers, in practice Canadian farmers have been unwilling to give up the use of hormones to trade with the EU. This is a source of great frustration for Canadian farmers and the meat industry, and they have been categoric that a new trade deal with the UK must include beef from hormone-treated cattle.

On the other hand, EU and New Zealand dairy exporters are finding that Canada has retained control mechanisms for dairy imports that frustrate trade. As an exporting country of agrifood products, Ireland has to embrace trade and while CETA had the potential to be negative, this has not materialised so far.

In brief

  • Canada has potential access to the EU for over 50,000t of beef, but sent less than 1,500t in 2021.
  • Irish beef exports to Canada increased from 239t in 2017 to 3,136t in 2021.
  • Irish dairy exports increased from 1,408t in 2017 to 3,136t in 2020, but fell back to 1,588t in 2021.
  • Overall, Irish exports increased by 46% to €1.9bn between 2016 and 2021.