China's seafood demand could offset NAFTA losses, province says
If the United States walks away from the North American Free Trade Agreement, booming demand from Asia and Europe would help compensate for any losses in Nova Scotia’s seafood industry, provincial officials claimed Wednesday.
“Demand for seafood products, primarily in Asia and in China, far exceeds what we may lose on the U.S. side,” Nova Scotia Fisheries and Aquaculture deputy minister Frank Dunn told the legislature’s public accounts committee Wednesday.
Dunn and two other top bureaucrats provided a remarkably optimistic briefing to provincial politicians, saying the value of the province’s seafood exports has doubled in the past five years to $1.8 billion in 2016.
“Within the country, we are the seafood powerhouse,” said Scott Hosking, the director of business development with the Fisheries Department.
While a cheaper Canadian dollar helped boost exports, increased sales and volumes largely accounted for the rise, the bureaucrats said. They also predicted annual exports will reach $3 billion in value, although they didn’t provide a timeline for that prediction.
Why so optimistic?
Nova Scotia’s seafood industry is becoming less dependent on the U.S., department officials said.
U.S. sales still account for 52 per cent of exports, but that’s down from over 80 per cent in the early 2000s.
Hosking said there are other opportunities, pointing to the Comprehensive Economic and Trade Agreement with Europe, which went into effect in late September. The deal removes 96 per cent of tariff barriers on Canadian seafood.
“We’re already getting calls from Italy, Spain and even France,” Hosking said.
Chinese seafood demand ‘mind-boggling’
Fisheries Minister Keith Colwell has travelled to China nine times in two years trying to drum up business.
China has surpassed Europe as the province’s second leading market for seafood, accounting for 14 per cent of export value, with Europe at 11 per cent.
Hosking said by 2020, China will have a 16-million-tonne demand for seafood that it will not be able to meet.
To put that in perspective, Nova Scotia’s total annual harvest is about 1.5 per cent of unmet demand.
“The demand in China is absolutely mind-boggling,” Hosking said.
After a September trade mission, the Nova Scotia government is looking into whether there is a market for jellyfish in China.
Chinese officials said they don’t have any jellyfish left and asked if Nova Scotia could supply the market.
“We haven’t done the analysis yet as to the volumes of jellyfish, but it’s a big deal in China. They serve it in so many ways — with gravies, fried up like pork rinds. Maybe it’s an opportunity,” Hosking said.
Impact of higher U.S. tariffs post-NAFTA
Dunn said he was not aware of the tariff regime that would replace NAFTA in the event U.S. President Donald Trump carries out his threat to withdraw.
A recent report by BMO called The Day After NAFTA predicted World Trade Organization tariffs would prevail.
Trade data provided to CBC News by the Nova Scotia Finance Department show some processed seafood at the U.S. border could be hit with WTO tariffs from four to 10 per cent.
“I’m not aware of those numbers,” Dunn said.
Dunn said proximity alone means Nova Scotia seafood will always be sold in the U.S.
Clearwater downplays NAFTA risk
Speaking to CBC News recently at the launch of a new clam harvesting vessel, Clearwater Seafood CEO Ian Smith said there will probably be more losers than winners in Canada if NAFTA is torn up.
“Are we still going to be marketing, selling and distributing seafood in the United States? Of course we will,” Smith said.
Smith said it’s not clear how WTO tariffs would apply to seafood imports.
The U.S. imports about $17 billion worth of seafood each year, Smith said.
“I don’t think that the United States wants the price of dinner meals served in homes or restaurants to go up,” Smith said.