CANADA GIVES U.S. POULTRY INDUSTRY A NEW HEADACHE
The Canadian Food Inspection Agency has recognized the poultry meat inspection system of Brazil, an action with the potential to erode U.S. exports of poultry meat to Canada.
Currently, Canada imports virtually all of its chicken from the United States. Brazil is a major exporter of poultry meat and one of the most competitive producers of poultry meat in the world.
Under NAFTA and the Uruguay Round Agreement, Canada restricts poultry meat imports through the use of a highly protective tariff-rate quota (TRQ). The current NAFTA formula level for chicken is 69,500 metric tons. The tariff on that amount is 5 percent.
Above that amount, the tariff varies from 238-249 percent. Canadian authorities state that, while the U.S. has been virtually the sole supplier of poultry meat to Canada, they consider the NAFTA TRQ to be available on a global basis and they fully intend to count any imports of poultry meat against the 69,500-metric ton TRQ.
Last year, Canada imported $263 million in U.S. poultry meat and was the U.S.' second largest market (after Russian -- $666 million). The Brazilian poultry industry believes it can export up to 25,000 metric tons of chicken to Canada annually. This would use more that one third of Canada's chicken TRQ and represent another serious blow to U.S. poultry meat exports.