Agriculture Committee on Feb. 13th, 2012

[Richard Wansbutter]

I think one of the most important things—I'm saying this from a trade aspect as an industry—and one of the greatest benefits for us was, although I don't want to sound trite, one-stop shopping. For industry to deal with government, sometimes we get a little overwhelmed with which department we should go to. Once we get that figured out, then it's who do we go to in the department.

But with the Market Access Secretariat, with Fred Gorrell heading it up, if we as an industry have a problem, we know exactly where to go. Fred marshalls the forces. That's extremely powerful. We save so much time in being able to go to one person of contact. Now, I'm not saying that Fred does it all; he's able to rely upon the resources of AAFC, Health Canada, CFIA, and the Canadian Grain Commission as required, and he brings those together. That's extremely powerful. I would say that needs to be supported on an ongoing basis.

As I said earlier in my comments—and I think I can speak for my industry colleagues—it needs to be properly resourced going forward. If that means more staff, I know that's a tough one in today's economic climate, but we need to have resources there, both human and financial, to help us work through our market access issues.

[Randy Hoback, Conservative, Prince Albert, SK]

Does the industry pay for any of that Market Access Secretariat at this time?

[Richard Wansbutter]

No, we don't.

[Randy Hoback, Conservative, Prince Albert, SK]

So it's all government funding at this time—

[Richard Wansbutter]

Other than when we accompany.... It would be payment in kind when we accompany the minister or Fred Gorrell on what are not so much trade missions, but...for example, we've been over there with the Canola Council. Senator JoAnne Buth has been over there in the past. That would be picked up by the various councils or associations, so I would say that it's payment in kind.

[Randy Hoback, Conservative, Prince Albert, SK]

You would also provide information and data, whatever is required, in kind.

[Richard Wansbutter]

Absolutely—a significant amount of information. On market intelligence, for example, we had our people on the ground in Shanghai and in Beijing. We were able to work with Mr. Gorrell and pass information back.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay.

To finalize on the market access and the CFIA, I know the process we had in China was a frustrating one at the start, but we did get through it. In that scenario, was there anything we could have done better or quicker, in your opinion?

[Richard Wansbutter]

You know, actually, I've used the blackleg issue as an example of how government-industry cooperation should work. I would definitely use that as a shining example of how we need to go forward.

I think we were caught a little bit as an industry, because it isn't just government.... But we were caught a bit as industry with the whole issue of salmonella in canola meal going into the U.S. It took us a while as an industry, quite frankly, to get our act together. Working with the U.S., with the FDA and the USDA, can be a bit daunting at times. I think there we could have been a little bit more responsive and quicker, but ultimately we got that issue resolved. As I say, it took a lot longer than I hoped it would take.

So those are two examples at either end.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Now I'll move to Mr. Atamanenko.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Thanks to both of you for being here.

Ms. Sullivan, you mentioned that the Canada-European trade agreement, or CETA, is a next-generation agreement, very comprehensive. It's true. It's not just about trade. You mentioned services. The agreement is about the fact that European corporations could theoretically bid on subnational contracts—water, waste water treatment, local procurement. There will be an investors' rights clause similar to the one under NAFTA, where a corporation can sue a certain level of Canadian government if it's refused access. For example, if a community wants to give preference to local companies, it theoretically could be sued by a corporation. This is a pretty comprehensive agreement. We're told that supply management isn't on the table. But there will be tremendous pressure to modify it, if not get rid of it altogether.

I'm just wondering, as a Canadian nationalist, how far do we go before we...? Trade is good, but how far do we go before we lose our ability to control our own destiny? I'm speaking here on that whole subnational contract clause, which has never been in any trade agreement, other than our response to the U.S. “Buy American” campaign. I'm wondering if you have any thoughts on that.

[Kathleen Sullivan]

I don't know that I can speak to the philosophical question of how far you go in trade before you give yourself up.

From an agriculture perspective, we grow twice as much as we can eat, so we need markets to trade to. We have 210,000 farms across this country that depend on exports. Presumably, without trade, you'd see half of those go—and even more, because we wouldn't have the infrastructure to support a lot of what we're doing. From an agriculture standpoint, we are a country that is based on trade. If you look at our canola sector, we ship 85% of it out of the country; and pulses, 75%.

If we want to trade with other countries, we're going to have to let those other countries trade with us as well. From a CAFTA perspective, our view has always been that we support trade deals, and that trade has to be reciprocal.

The investors' rights clauses, I really can't speak to. You'd be hard pressed to find a stakeholder in Canada who has been as involved in the CETA negotiations as I have. I spent a month last year in Brussels. I have seen several bootleg copies of the CETA text, and from an agriculture standpoint, they're not all correct. So I can only surmise that other pieces of information coming out about the negotiations are not correct either.

I have found that our trade negotiators, DFAIT and Agriculture Canada, have been incredibly helpful and forthright in sharing information with us about where the negotiations are going. I would encourage you to talk to them about your specific concerns.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

We are a trading nation. We've been trading back and forth without a lot of these free trade agreements for years and years.

There is some concern in regard to Europe about their protectionist policies. For example, under supply management we allow up to 5% of chickens to come into the country, 5% of our production without our over-quota tariffs. For them, for our pork, it's only 0.5% right now in Europe. They're a lot tighter than we are.

From your experience, do you see us breaking that hold, that protectionist European hold? It seems a phenomenal task dealing with those folks.

[Kathleen Sullivan]

We've spent three years trying to achieve the goals you've just set out. We have very little pork or beef access into Europe. We have a lot of problems on our biotech products. Really, no matter how good CETA is, at the end of the day if it doesn't deal with those three issues, then from our standpoint it will be a failure. That's what we've been spending a lot of our time on over the last three years. But I remain optimistic. One of the reasons we have a good shot of getting market access for our agriculture products is that the deal is so broad. It goes beyond agriculture.

Quite frankly, if you were negotiating a deal while we were trying to get beef and pork access into Europe, because we were going to open up our dairy market, we would be on the losing end. There's no doubt about that. When you have a broad range of issues that you can negotiate, like government procurement, investments, or services, you give us and agriculture a fighting chance. That's really important to us.

Whether it will come to fruition in the context of the CETA, we'll find out in the next three months. So far the Europeans have been ambitious about this trade deal. So we remain hopeful. We have spent three years explaining to the Europeans that agriculture is key to this deal if they want to get it signed.

One of the best things for us about this deal is that the provinces are at the table. It would be hard for Alberta, Saskatchewan, or Manitoba to sign a deal that provided no beef or pork access and didn't deal with biotech issues. And the Europeans know this, because we've been telling them about it for three years.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Is that it, Mr. Chairman?

[The Chair, Conservative, Larry Miller]

Your time's up, Alex.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Okay, thank you.

[The Chair, Conservative, Larry Miller]

Mr. Payne, you have the last five minutes.

[LaVar Payne, Conservative, Medicine Hat, AB]

Thank you, Chair.

And thank you to the witnesses for coming. You just have to pardon my voice. I'm fighting something here. I'm not sure what it is.

I found both of your discussions on trade quite interesting, particularly with regard to the EU.

Kathleen, you said it's really important to get a deal done. Certainly I think that is what we need to do for our agricultural sector in particular. You also talked about this being the next generation of trade deal.

Do you see the next generation of trade deal being similar for the TPP?

[Kathleen Sullivan]

If you believe the TPP members and what they're saying, then yes, absolutely. They are looking at a very comprehensive deal that will cover all of the categories we're seeing in the CETA. They're looking at very aggressive tariff cuts. They're looking at dealing with non-tariff barriers. So, yes, I think a lot of countries are recognizing that they can't achieve what they wanted through the WTO right now, because it is stalled, and that bilateral trade deals are a good way to capture some of those issues but only if they're aggressive.

The interesting thing about the TPP, because it's regional, is that some of the founding members are hoping it will be the genesis for something much bigger. This is why Canada has to be there. I'll tell you right now, if you include Japan and Mexico, 65% of all of our agricultural exports go to TPP countries. If we are not in that deal, then within their little group they're going to start filling the space we're now filling with our exports. We will have a real problem if we're shut out of a trade deal that includes 65% of our exports.

So, yes, I think that will be a 21st century deal. It will be complicated to negotiate, and we will have to be there.

[LaVar Payne, Conservative, Medicine Hat, AB]

Richard, do you have any comments on that?

[Richard Wansbutter]

I don't, other than to say I support Kathleen with regard to the importance of being at the table. I don't know how we can, as you say, have 65% of our exports going to those nations and not be at the table. It is critical.

[LaVar Payne, Conservative, Medicine Hat, AB]

Okay. I believe our Prime Minister has said that he wants to be in there. Of course, we know that our agriculture minister has been running around the world trying to open the doors for us.

Certainly the other things you talked about were the bilateral trade deals and the tariff and non-tariff barriers, and also the science-based trade. Can you comment on which body should look at that? We know the WTO is kind of sitting there. What other body could be used to get the science-based in? Secondly, should we not use that science-based on these either regional or bilateral agreements?

[Kathleen Sullivan]

To the extent you can, you should. For animal health issues, it would be the OIE. Codex can also weigh in. There certainly are a number of different bodies that can take a look at these.

I think some issues are without a home right now, such as low-level presence. Certainly Minister Ritz has shown a lot of leadership in bringing together countries to talk about that and to try to find a home for that one.

Not everything has to go through the WTO. Certainly what the WTO provides or could provide on a multilateral basis is a strong enforcement mechanism. When you're dealing only with bilaterals, you have to build compliance and enforcement into one FTA after another. When you can do these things at a multilateral level, then you have everybody complying to the same standards; the level of compliance is the same, and your enforcement rights end up being the same.

TPP, because it's a regional deal to the extent that obligations go beyond some international commitments, can start to mimic the WTO in a small way. So that becomes an interesting vehicle as well.

But at the root of it has to be some sort of international body that is establishing the standard in the first place.

[LaVar Payne, Conservative, Medicine Hat, AB]

Richard, do you have any comments?

Which other bilateral trade agreements would you see as being the most important for Canada to get involved in? Which would be your top three?