The devil is in the details, but for now Alberta dairy farmers are glad to have Trans-Pacific Partnership negotiations wrapped up.
And a package worth more than $4 billion of compensation and programs from the federal government doesn’t hurt either.
Tom Kootstra, chairman of Alberta Milk and a dairy farmer near Ponoka, said the dairy industry is experiencing a sense of relief that a decision has finally been made.
Representatives of 12 countries reached a trade agreement on Monday. The countries represent about 40 per cent of the world’s gross domestic product
In the agreement, about 3.25 per cent of Canada’s dairy market will be opened up to imports.
But the details of how that market access will look is still unclear.
“What makes up the 3.25 per cent is unclear and we’re working on understanding that,” said Kootstra.
“It needs to be defined for us. Will it be butter, will it displace milk in the store, does it mean it will go into cheese topping on pizza or the processing industry? We don’t know.”
But, Kootstra does suggest the opening up of 3.25 per cent of the country’s dairy industry will impact revenue for Canadian producers.
Gerry Ritz, Lloydminster-Battlefords Conservative candidate and federal agriculture minister before the election call, said the agreement does protect the three pillars of supply management, which includes price, production and import controls.
“We kept our promise, we said we would keep them whole and we’ve done exactly that,” said Ritz.
“It’s a combination of limiting the amount of products coming in and transitionatory money to maintain their strong bottom line. As well as investing on the production side so they can take advantage of the export opportunities that go along with this.”
$4.3 billion over 15 years in compensation and programs from the federal government will be made available to supply managed producers, including dairy.
Also included in the deal is reduced tariffs for exported Canadian beef to countries including Japan and Vietnam.
Though the trade deal has been negotiated, it has yet to be ratified by the member nations. Ritz was hopeful it would be approved in short order, however the federal election does cloud the trade deals future.
“I think the response from producers is we have time to understand the rules and once we understand the rules we’ll adjust our strategy to accommodate the change,” said Kootstra.
“If you were not confident in the dairy industry and wavering on staying in or exiting, this TPP announcement might be just one more criteria or impetus to exit. It’s not going to be the cause of your exit, it just might be another indication to confirm a decision you were heading out of the industry.”
Outside of the agricultural implications, Ritz touted the new market access for energy exports in the partner countries which include Japan, New Zealand, the U.S., Australia, Mexico, Peru, Vietnam, Brunei, Singapore, Chile and Malaysia.
“It’s going to take pipelines to get it to the west coast to serve these markets,” said Ritz, adding more countries may enter the partnership going forward including South Korea, Taiwan, Indonesia, India and China.
“There’s going to be a bigger demand for our energy. The gauntlet is down, we have some pipelines to build.”