Exporting to the EU
CETA’S SUCCESS IN INCREASING GRAIN TRADE
RECENTLY OBSERVED TRENDS IN ONTARIO EXPORTS TO THE EUROPEAN UNION indicate the success of the 2017 CETA agreement and numerous growing international markets for Ontario crops.
WHAT IS CETA?
The Comprehensive Economic and Trade Agreement (CETA) is a free trade agreement between Canada and the European Union which eliminated the vast majority of duties and tariffs between them. The ratification of this agreement has allowed European buyers easier access to Ontario grain markets and vice versa.
It is important to note that not every EU member state has ratified or signed onto CETA. Italy, Ireland, Belgium, and France are all major export destinations for Ontario wheat, corn, and soy, but those countries have yet to ratify CETA.
Before CETA, market access issues caused by in-quota duties, tariffs, and market competition made it difficult for Ontario wheat to gain a significant foothold in the European market. Therefore, continual progress towards full EU member support of CETA would benefit and help grow Ontario’s commodity crop markets within the EU.
HOW HAS CETA IMPACTED ONTARIO GRAIN EXPORTS?
Since CETA was ratified by the EU and Canada in 2017, Ontario grains have largely increased their market presence in Europe, with Ontario corn and wheat exports rising to higher numbers than pre-pandemic. The Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture projects that Canada will become the world’s third largest wheat exporter in 2023-24, after Russia and the European Union.
The ratification of CETA in 2017 immediately removed tariffs on certain Canadian goods exported to the EU, including corn, and incrementally removed tariffs on other crops, such as wheat, over seven years. This has supported multiple emerging trends across the Ontario grain export sector, with 2024 emerging as one of the most diverse years of recent Ontario wheat exports.
According to Statistics Canada, Spain imported Ontario wheat for the first time in the 2022-2023 crop year, bringing in 48.6 kilotonnes, which doubled in the 2023-2024 crop year to 103.1 kilotonnes. Spain is not the only country in the region diversifying its soft wheat imports with Ontario supply. In February 2024, the U.K., which rolled many CETA terms into the Canada U.K. Trade and Continuity Agreement, purchased Ontario soft wheat for the first time.
Europe and the U.K. continue to lead as Ontario’s largest corn export markets, representing 78 per cent of Ontario’s corn exports on average over the past five years.
This comes alongside first-time imports from Panama, Puerto Rico, Trinidad and Tobago, and Venezuela’s second-ever import of Ontario wheat, which indicates potential for an emerging market in South America and Latin America. The emerging South and Latin American markets are not due to the CETA agreement but rather likely due to supply chain disruptions caused by the Russian-Ukrainian war and the decline of the Argentinian economy. It certainly will be interesting to see if this trend continues, as it represents a new Ontario wheat market.
Grain Farmers of Ontario continues to focus market development work for corn, soybeans and wheat in the EU and UK, with customer and government engagements planned for October 2024.
Jack McMillan is Grain Farmers of Ontario’s market development assistant (co-op). •
