Dropping tariffs leads to more work for fish plant under free trade agreement
One plant is processing more shrimp thanks to the elimination of tariffs under European free trade deal
The new free trade deal with Europe has only been in effect for a few days but one seafood processor in Newfoundland and Labrador says it's already meant more work.
Ocean Choice International has extended work at the Port au Choix plant.
"We'll produce more industrial shrimp because if that was sold into the (European Union) it would draw a 12 per cent duty," said Martin Sullivan, Ocean Choice's chief executive officer.
"A lot got produced in other countries because they had a more favourable tariff regime."
On Sept. 21 the Comprehensive Economic and Trade Agreement, or CETA, came into effect.
It dropped tariffs on 96 per cent of the Canadian seafood sold into Europe.
For example snow crab will no longer get an additional 7.5 per cent tacked on.
"There are some species where we can only sell competitively in North America and Asia, for example, because of the tariff regime in Europe, and now with the elimination or gradual removal of those tariffs we will be more competitive on a number of items," said Sullivan.
Europe is a lucrative market because people eat a lot more seafood than they do in North America.
Not all of the tariffs will be eliminated right away.
While salt cod can now be sold tariff-free, it will be seven years before frozen cod won't face additional costs.
But it's something processors are already planning for.
"The elimination of tariffs on cod will provide us a really good market opportunity to be able to sell more cod in Europe at good prices," said Sullivan.
The fishing industry has been preparing for the comeback of cod stocks, but current levels don't yet support large-scale fishing.
Tradeoff for tariff drop
As part of the tradeoff for the elimination of tariffs, Newfoundland and Labrador agreed to drop minimum processing requirements.
They required fish caught off the province to be processed there.
Now European companies will be able to ship fish out unprocessed.
Sullivan said he has no plans to do that and doesn't think European processors will be eager to buy unprocessed fish.
"I think that our processing industry is competitive with the European processing industry, generally speaking. And you know that's not a huge concern of ours."