Financial Reports & Markets
Trade with Europe: Back to the Future
December 1, 2013 By Pulp & Paper Canada
The news about an agreement in principle for a Comprehensive European Trade Agreement (CETA) reminded me about the historic roots of the Canadian forest sector as an export-driven industry. Back in 1806, the emperor of France, Napoleon…
The news about an agreement in principle for a Comprehensive European Trade Agreement (CETA) reminded me about the historic roots of the Canadian forest sector as an export-driven industry.
Back in 1806, the emperor of France, Napoleon Bonaparte, brought in the Continental Blockade to punish his arch enemy Great Britain. This cut Britain off from its traditional lumber supply from northern Europe and forced Britain to turn to its North American colonies to supply its naval shipyards. The square lumber trade across the Atlantic was born.
Fast forward to the 21st century and there is now another historic opportunity to send increasing numbers of shiploads full of Canadian forest products to Europe, thanks to the new trade agreement. It will eliminate tariffs of up to 10% on Canadian plywood, veneered panels, fibre board, particle board and prefabricated buildings.
Last year, Canada exported just over $1 billion of wood, pulp and paper products to member states of the European Union (EU). Europe accounts for only 4% of total exports of Canadian forest products, lagging well behind the United States, China and Japan.
However, the full elimination of tariffs could help grow the modest trade between Canada and Europe. And the comprehensive nature of the trade deal could help the Canadian industry in other ways. For example, there could be enhanced environmental acceptance of Canadian forest products because the EU has agreed to a bilateral dialogue to identify areas of cooperation on sustainability standards for green government procurement policies specifically related to forest products. Canada and the EU have agreed to try to improve their co-ordination of regulatory codes and standards – something that could be valuable as the industry rolls out new bio-based products. And a new joint committee is aimed at ensuring that sanitary and phytosanitary measures to protect human, animal and plant life do not unnecessarily harm trade.
Canada’s forest products industry originally grew on exports to Europe and the sector continues to rely on global exports. Under Vision2020, FPAC is aiming to generate an additional $20 billion dollars in economic activity through new markets and new products by the end of the decade. FPAC welcomes this new trade deal with Europe and will continue to push for more open markets elsewhere in the world.
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