International Trade Committee on June 12th, 2006

[Bob Friesen]

We definitely think that patience should prevail. Rather than making hasty decisions in trying to meet a deadline, they should take their time and make sure it's a good deal that does in fact create fair and equitable trade rules.

[The Chair, Conservative, Leon Benoit]

There is half a minute for another question.

Mr. Menzies.

[Ted Menzies, Conservative, Macleod, AB]

We reached somewhat of an agreement in Hong Kong about an end to export subsidies by 2013. It will be interesting. We've been working at this since 1968 or 1964, and we have finally got an end date that isn't too far away.

In my sense, domestic support that we see in the United States, the European Union, and other countries is far more destructive than export subsidies are. In 2013 we're not going to see the sun rise and see a great change because of the elimination of export subsidies. How do we get rid of the domestic support?

[Bob Friesen]

I couldn't agree with you more. In fact, a while ago, one of our officials said we shouldn't give up too much for someone saying we'll eliminate export subsidies, because they were headed in that direction anyway. You're absolutely right that some of the money the U.S. flowed, at the end of the day, ended up being export subsidies, simply by the amount of money they were flowing, and because our borders were largely open and with integrated industries.

Regarding domestic support, I believe someone made the comment earlier that we seem to focus on certain areas of the negotiation and sometimes tend to forget about domestic support. We believe it's extremely important. We believe it's a market access and lack of competitive policy issue, when it comes to Canada and the U.S.—and anything we can do to make them move....

There again, if we can prevent them from moving money around the way the EU has already done, that would be great. As well, it would create some sort of equity with commodity-specific caps.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Cannan.

Mr. McCreery, do you want to give a response as well?

[Liam McCreery]

It's an easy answer, Ted. The only way to go after subsidies is through the WTO. We tried to launch the round in 1999. We eventually did launch it in 2001. The Uruguay Round was signed 10 years ago. We've been at it a long time. It's time to make some decisions and soldier on.

[The Chair, Conservative, Leon Benoit]

To Mr. Easter, for five minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thanks, Mr. Chair.

I have two questions to start with.

Liam, you indicated that you don't think we can ever give up on the WTO, and I would agree. But while we're going through all these belaboured discussions, which seem to go on forever, do you not think it's time we also start to be more aggressive in terms of bilateral discussions? We are losing markets to the U.S. Because we are putting so much emphasis on the WTO, we're losing ground by way of the bilaterals. That's question number one.

This is question number two. With support from the industry, except for the Canadian Agri-Food Trade Alliance, Liam, we've had a balanced position for a number of years: increasing market access, eliminating export subsidies, and reducing domestic support, while at the same time supporting supply management and state trading enterprises.

I know that you and I disagree on this, and you can tell me if I'm wrong, but I believe that CAFTA's position led the western premiers to the news release they put out last week, which was basically going after the federal government, for what they called an “intransigent stance” that could lead to the failure at the end of 2006. I seriously think that the position the western premiers took puts Canada in a much weaker negotiating position at the WTO, because it makes us look divided when we had to be united. The country was massively united behind the balanced position, and now I think we look weaker at the WTO.

The fact of the matter is we haven't been intransigent on supply management. We have gone to a sensitive products category, we've opened up other areas, and we're willing to remain firm on the other three principles.

So I'd like whoever can give me a comment to answer: what's the impact of the premiers' statement, and where should the government go from here? And come back to the first question as well.

[The Chair, Conservative, Leon Benoit]

Mr. McCreery, then Mr. Shauf.

[Liam McCreery]

Thank you, Mr. Chair. I think it's very interesting that Mr. Easter said he was going to ask two questions, and I think I have seven.

Anyway, on bilateral and regional agreements, I hope Canada aggressively goes after bilaterals and regionals, and I hope this committee recommends that they do and recommends that they have all the support, all the money they need to get it done, that it doesn't take away from WTO negotiations. We would make sure we have the people power to get the job done and the money to get the job done.

Again, bilaterals and regionals--you were out of the room when I said this the first time, Mr. Easter. They have been notoriously weak at, one, going after subsidies, and two, traditionally, Canada has left agriculture off the table when we were trying to enter into bilateral and regional agreements.

So, yes, go after them, try to open up some markets for us, but recognize it's not a tool for going after subsidies, both the domestic and the export.

What is Canada's position at the WTO? In 2001, in the Doha Round, Canada supported the Doha mandate, and we supported the Canadian government in supporting the Doha mandate. In July 2004, Minister Mitchell and Minister Peterson, on behalf of the Government of Canada, supported the July framework in Geneva, and we supported them in that. So when you say that we're absolutely offside, we've supported the government in going after the three pillars in the Doha mandate.

You say the country is massively united. Well, I don't know that it is. I think there are people with different interests, and that's fine in a democracy. Clearly, CAFTA puts forward what it needs for its constituents. Clearly, we're getting bashed by obscene subsidies and tariffs, and I think it's absolutely correct, right, just of us to stand up and say what's happening in the world stage at the WTO is simply unfair to us and we're going to continue to push the Government of Canada to help address it.

What were your other questions?

[Wayne Easter, Liberal, Malpeque, PE]

I have no problem with that, but I think in fact we would agree with what you just said, with the exception I think of what's happening out there, with some of the comments coming from CAFTA and some of the pressure. The premiers' statement gets into commodity disputes and regional disputes when I do believe we can go forward with the balanced position and win. We do not need to compromise, especially in response to the earlier questions I raised. When we are in fact importing, even in our supply management industries, more product than other countries in the world, we do not need to compromise them further in order to achieve our three points at the WTO.

[The Chair, Conservative, Leon Benoit]

Your time was up long ago.

There are two people who want to give short answers: Mr. Shauf and Mr. White.

[Marvin Shauf]

Thank you. It seems to me that domestic support is the basis for a lot of the problems. If you look back to where domestic support was first provided, it was to create food self-sufficiency. Then it over-produced that, and then it put export subsidies in place. Countries that couldn't provide it put in place barriers so that they didn't have to accept subsidized product. That has been the history of it in over-simplified terms.

Going ahead, if we just look at bilaterals, bilaterals tend to exclude dealing with domestic support in any.... So if we just step over the fundamental reason that a lot of these trade problems exist and deal with the market access, we're treating a symptom. Treating a symptom has never worked very well if you ignore the real cause of the problem. And coming back to Ted's question as well, the real issue is whether or not we're capable of rationalizing domestic support.

The grains and oilseeds industry is competing on an international front with all of those domestic subsidies. The fact of the matter is we're dying on our feet doing it. We're dying on our feet as a country because we're allowing the value of our Canadian agriculture to be syphoned off, to be able to expand in other jurisdictions because we haven't dealt with that. To pretend that it's going to be dealt with by just dealing with subsets of it, or by dealing with it on an historic basis and institutionalizing the differences, is to say that we can continue to live in that regime. And we can't do that. We need to be very real in what we're talking about. We need to have real solutions, not just philosophy and optical illusion.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. White.

[Rick White]

Thank you for the questions, Wayne. Liam followed up very nicely on the bilateral focus, and we fully support that. It's not a forum where you can get at the subsidies, but you can maybe do some market access issues.

On the market access issues, I want to quickly respond to Mr. Menzies' previous comment about the domestic support being the biggest distortion out there. Our numbers are showing that market access hurts us just as much. It's $1.3 billion on domestic support, but it's still $1.2 billion on market access that's kicking us here. So let's not forget about that. One is bad and the other is just as bad.

In terms of your second point on the western premiers' comment, it's not only CAFTA. I mean, the western premiers are listening to their constituents out there, and 91% of them are reliant on the export market. They are listening to what we have to say as exporters and they believe there is tremendous opportunity for us exporters. So it's not about CAFTA convincing the provincial premiers. It's not about CCGA convincing the western premiers. They know who their constituents are. They have talked to everybody in their provinces and they've come to the same conclusion, that they as provinces rely heavily on export markets.

[The Chair, Conservative, Leon Benoit]

Thank you very much. We've agreed to bring some motions forward and deal with them now.

I would therefore like to thank you all, gentlemen, for an excellent meeting. There were some really good answers to some extremely important questions. I'm sure we'll be discussing these more in the future. I hope we're seeing a successful...progress, at least, in the WTO talks at that time. Thank you very much.

We'll break for a minute and then go to the motions.

[The Chair, Conservative, Leon Benoit]

Could we have everyone return to their seats, please? We want to get on with the motions.

We have two motions, on one of which 48 hours' notice has been given. For that motion to be brought forth to committee, it has to be brought forth by the mover, who isn't here today. So it will require unanimous consent of the committee to have this motion brought forth by Monsieur Plamondon, who was not the mover of the motion.

Does the member have unanimous consent to move forward, or shall we wait for the--

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Chairman, may I speak on it for a second?

[The Chair, Conservative, Leon Benoit]

Mr. LeBlanc.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Chairman, Mr. Paquette is in the House and it was his motion. You will remember, and colleagues will remember, that we were hoping--and it was your plan, Mr. Chairman--to deal with both at the last meeting, but we ran out of time.

At that point, Mr. Paquette agreed to have it dealt with today, but the intention was to deal with those two in tandem. You had begun to deal with those two last week, together, but some people talked and we ran out of time. That's fine. I would hope that colleagues.... This can't be a surprise, otherwise we'll start with this Wednesday morning. It's not going to make a difference.

Without presuming to vote, I would suspect that this motion from the Bloc Québécois is going to pass. I am thinking of our researchers and others who will want to have time to prepare, if this committee plans to try to do a report in the next 10 days. Rather than delay it until Wednesday morning, I think if the research staff knew that it was the intention of this committee, it might give everybody a bit of time. It can hardly be a surprise.

Since Monsieur Paquette is at the House, and if people refuse consent, then we'll deal with it first thing Wednesday.

[The Chair, Conservative, Leon Benoit]

You have all heard the comment. Again, I'll ask if there is unanimous consent for Monsieur Plamondon to present Mr. Paquette's motion here today, or shall we deal with it on Wednesday? Is there unanimous consent?

No. We will deal with it on Wednesday, then.

[Dominic LeBlanc, Liberal, Beauséjour, NB]

Mr. Chairman, may I ask that it be dealt with as the first item of business on Wednesday?

[Guy André, Bloc, Berthier—Maskinongé, QC]

I think we should deal with it on Wednesday. We wanted to table the motion during the previous session. But as my colleague said, we discussed it, but we did not deal with it because we ran out of time. Today, we are delaying it until Wednesday. I think that we should deal with this motion first thing Wednesday so that we can move the issue ahead.

[The Chair, Conservative, Leon Benoit]

Again, gentlemen, I will assure you that if we deal with it.... We were ready to go today, at 20 after. We adjourned the meeting to go and the mover of the motion wasn't here. If the mover of the motion is here at the meeting on Wednesday, we can deal with it after the witnesses on Wednesday. We have witnesses, again, on Wednesday, and I certainly don't want it to become a habit of this committee to hold up the witnesses to deal with motions.

On the other hand, again, we did allow the time today. The mover wasn't here. That's the issue.

So on Wednesday, at 20 after, I will assure you that we will adjourn the meeting and we'll have ample time to deal with the motions.

Is it agreed?

[Some hon. members]

Agreed.