November 19th, 2019
International Trade Considerations for Global Frozen Food Players in 2020
By: Brecon Foods
International trade by its very nature, is subject to constant peaks and valleys. As a global player with a vast network all over the world, Brecon faces the responsibility of factoring in local realities everyday. It requires both reactive and proactive action from our sales and logistics teams. But the benefit of conducting intercontinental business is that with so many tariffs, legislation, and agreements at play, sales environments are ripe with opportunity; a single door closing might mean that three new windows are simultaneously opening.
That’s the value of working with Brecon. Our residuum of MAP certified supply chain partners allows us to be better prepared for volatile market fluctuations and unforeseen crop conditions. It puts us in a position where we can have a strong plan B. Honoring our commitments is important to us, that’s why we work hard to find alternative solutions when necessary. In order to do so, it’s critical for our team to remain updated on current market trends and forecasts.
“Meat” the Major Winners of the US-Japan Deal
In 2016, 12 countries bordering the Pacific Ocean (Malaysia, Vietnam, Singapore, Brunei, New Zealand, Canada, Mexico, Chile, Peru and the U.S.A) signed the Trans-Pacific Partnership trade deal with goals to lower tariffs and bolster trade and economic growth. In 2018, the U.S decided it no longer wished to participate in this partnership and pulled out.
Recently, Japanese and American government have found middle ground on trade negotiations and market access with a bilateral trade agreement that will play greatly in the favor of American beef and pork exporters.
Japanese tariffs on beef will see reductions of roughly 29% by 2033, from 38.5% to 9%. Pork tariffs will be eliminated on muscle cuts by the ninth year of the agreement while seasoned pork tariffs will be phased out by year five.
This combined with the announcement on November 14, that China has lifted the ban on U.S chicken/turkey suggests more favorable East-West market conditions for meat and poultry.
CETA’s Duty Free Berries
Closer to home, the Comprehensive Economic and Trade Agreement between the European Union and Canada has the potential to benefit businesses in both regions. The free trade model allows 94% of agricultural tariff lines to be duty-free, and is particularly “fruitful” for blueberries, cranberries, raspberries and blackberries.
Given that Canadian berry exports to Europe accounted for $102.1 M in 2016, and that Canada was the largest exporter of frozen blueberries and prepared cranberries that same year, CETA offers a sizeable advantage for Canadian exporters.
In cases like this summer, where Europe saw unfortunate crop shortages in certain berry sectors,
CETA provided a mutual solution for both Canadian suppliers and European customers.