Baker | There are no guarantees with European trade deal
CETA offers terrific opportunities for the local seafood industry, but it's a long way off
Sometimes when you try to be honest, people suggest you're a cynic. And in a province like this one, where cynicism can be an Olympic sport, sometimes that scenario gets a little tougher.
But this much needs to be said about the pending Comprehensive Economic and Trade Agreement between Canada and the European Union: on paper, it has the potential to be a huge benefit for the province's fishery.
But if the full benefits and potential of CETA are to be realized by the industry, it won't be easy and it won't happen overnight.
Still a ways off
The first thing to consider though are the timelines. People seem to think the deal is official. It isn't. Far from it.
Right now, this is just an agreement in principle. It won't be formally signed until likely early 2014 at the earliest. Then the agreement has to be "scrubbed" by the lawyers, translated and officially ratified by both Canada and the European Union. That's expected to take a couple of years, or maybe by 2015 as a best-case scenario.
When the deal does go into force, a portion of Newfoundland and Labrador seafood will be duty-free immediately, namely: sectioned/frozen crab, frozen shell-on shrimp, frozen herring, mackerel, fresh/chilled halibut and flatfish.
It will take up to seven years for some other products like processed shrimp, cod fillets, and crab meat to get to duty-free status. So now you're potentially looking at 2021 or 2022 before the full benefits of the tariff-free regime on seafood can be realized.
Seven years can be an eternity in the fishing industry, especially given the ageing workforce. Will many of the people in the industry right now even be around to taste any of the fruits from this tree?
Marketing, marketing, marketing
The only good part about the schedule is that it allows time to get the proverbial ducks in a row.
One of the big ducks raised in the wake of the CETA announcement was how important marketing and branding will be for products going into Europe under the new rules.
Let's call a spade a spade: Sure, we can catch and process fish at a level that would make Poseidon jittery, but when it comes to branding and marketing, well, not to put too fine a point on it, we kind of suck. We don't often treat fish like food — we treat it as if it was bricks or lumber or something.
If CETA is going to yield any big fishing industry wins, it will be because this province has aggressively marketed and branded its products. Europe has a huge fishing industry, and we will still be competing with them in the EU consumer market.
CETA is not an exclusive, all-access pass; it only removes the tariffs meaning seafood from here will be on a level playing field with European fish products.
Can we brand and market across the board? Or will it be status quo, and get left to the individual processors (as I have heard suggested)?
With all the disconnect in the industry between those who harvest the resource and those who process and sell it, what are the chances they can all come together and properly market and brand our seafood?
I want to be optimistic. But then, this is an industry that turned down free government marketing money a few years back, and an industry that also said "no" to being literally handed the U.S. marketing arm of FPI when that company was broken up and sold off. It was like having a hockey team and saying "no thanks" when you're offered Bobby Orr. For free.
Instead, High Liner picked up the marketing arm and has used it in recent years to increase the company's business and value almost exponentially.
Minimum processing precedent
And the final wrinkle is the removal of minimum processing requirements (MPRs) for seafood destined for Europe. While it could take up to seven years for all tariffs to be eliminated, a few people have expressed concern that the MPRs will be gone within three years of the deal coming into force.
Now the experts say that isn't any loss or concern given that Europe can't process seafood any cheaper or better than we can. But it does raise the old Lays potato chip slogan: "if I give one to you, I have to give one to everybody else."
What happens when the next country or customer comes along asking for the same consideration? And what about local industry? It wasn't that long ago fishermen in 3Ps, frustrated that nobody was buying cod and that they had to leave it in the water, went to the province and asked just for a temporary exemption to ship product to outside buyers.
They were turned down at the time, and the negotiations around CETA were partly blamed.
Now, in the wake of the agreement in principle with the EU, it will undoubtedly be more difficult for government to deny reduction or elimination of MPRs under similar circumstances.
There is no doubt CETA brings an incredible opportunity, but it isn't foolproof. Whether or not the industry can capitalize remains to be seen.