Trends

All eyes are on CETA: high hopes for Italy’s export boom

On September 21st the agreement between EU and Canada comes into effect. Many lights (and some shadow) is what the Italian food & beverage industry is betting on.

September 21st, 2017 will be an important date for the political and economic relations between the European Union and Canada. It marks the coming into effect of CETA, which stands for Comprehensive Economic and Trade Agreement, in other words, the liberalization of trade between the EU and Canada. This is not yet the final step, as this agreement requires the approval of each and every individual EU member state. Should even one single state reject it, the deal would not go through.

Advantages

Aside from provisional trading, what are the advantages for the Italian food industry in Canada? In 2016, Italy exported to Canada food and beverage products for a total of 1.2 billion Canadian dollars (about 830 million euro), an increase of almost 10% compared to 2015. Apart from wine, which is the biggest export (already protected by certification), Italy’s focus is on dairy products. The agreement includes an increase of the import quotas for these products from about 13 to 31 million kilograms. The 245.5% import duties will only be applied for products exceeding such a threshold. This is certainly good news as it will allow an increase in the exports to Canada. Italy, already the largest Canadian exporter of dairy products, is poised to capitalize on the quota increase. If the current proportions are preserved, over the next few years Italy is expected to increase from the current 4.7 million kilos of cheese (exported to Canada) to 10.2 million kilos, said ITA-ICE’s Canada office. However, with the exception of one requirement namely having to state the Canadian origin of the products, the locally-produced Gorgonzola and Asiago cheeses will be allowed to use their Italian names. Also, the use of the term “parmesan” will be allowed. While the complaints of the consortium for the protection of Gorgonzola and Asiago cheeses have not lead to any protective measures, it is worth mentioning that the deal includes the formal recognition of well over 41 Italian PDO and PGI denominations out of the 130 approved products. There wasn’t room for everyone; yet, it must be remembered that we started from zero PDO and PGI recognitions from Canada whatsoever.

Concerns

Italy’s worries concern farming. Large food groups fear the arrival in Europe of large quantities of food commodities, which would drive down prices. While this is certainly a legitimate concern, Italy can fight back by focusing on quality and Italian supply chains. The “Italian” of Italian food must be consistent, from the fields to the dinner table.