International Trade Committee on Nov. 15th, 2010

[Steve Verheul]

I don't anticipate it would have much impact on the negotiations themselves, because I think my counterparts in the European Commission would recognize that statements that might be made might not necessarily represent the views of Canada in the negotiations. I may get certain questions posed to me, which I would anticipate, but I don't think they'd expect those statements to represent negotiating positions until they saw me endorse them in the negotiations.

[Ed Holder, Conservative, London West, ON]

Then if you'd allow me to be slightly crass, why are we going?

[Steve Verheul]

Well, I think there's a lot of very important work beyond the negotiations themselves. At lot of this, at the end of the day, will be about influencing groups that don't have a direct role in the negotiations, such as the European Parliament, as well as influencing representatives of member states that don't have a direct role in the negotiations and influencing the business community, which also won't have a direct role in the negotiations. All of those will have a direct bearing on whether or not we get this through at the end of the day.

[Ed Holder, Conservative, London West, ON]

I would submit to you that the issue of the importance of relationships does matter, so I was being only slightly facetious by asking the question.

As I look at some of the issues here, it strikes me that some of them are controversial or need some development or some information support, such as the oil sands. The seals issue has been mentioned, and agriculture is another. From my perspective, I'd like to ensure that I'm sufficiently well versed to be able to speak thoughtfully, and I don't feel I'm there yet. I've got Cape Breton opinions, but beyond that I'd like to add something of substance that would be meaningful.

I think you mentioned that we will receive some briefing information. Hopefully it won't be the night before, because I'm a lousy plane reader. It would be useful to have some of that in advance, please.

[Steve Verheul]

Yes, although I'm not sure exactly when we're anticipating that it will be delivered. I know I've signed off on most of the briefings now, so it shouldn't be that far away. I can assure you that it will be a very comprehensive briefing package, so hopefully it will meet all of the demands you have with respect to the information.

[Ed Holder, Conservative, London West, ON]

Thank you for that.

Mr. Chair, those are my primary questions.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Holder.

Mr. Holder, as is the usual practice, we will have extensive briefing books available to the committee. I'm hoping to have them at the committee meeting on Wednesday. At the very latest, you will have them in your offices on Thursday.

Thanks for those questions.

I think I should also remind you that despite the good intentions of the negotiators on both sides, both Parliaments of elected people have to ratify the agreement in any event, so that may be some of the value in having dialogue with our counterparts.

Monsieur Laforest, could you wrap it up in two minutes?

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chair.

Mr. Verheul, I would like to get back to the issue of government procurement. New agreements were concluded among Quebec, Canada and the United States last February, after highly protectionist measures had been adopted by the Obama government.

That was new. Will that be something of a pattern that agreements on government procurement with the European Union will follow?

I would also like to talk about natural resources, about water and energy. There are already exemptions regarding the European Union in other agreements, for instance, in the Agreement on Government Procurement. Have broader principles been established on this issue?

My last question is about postal services. Are postal services on the table? Has a negotiation strategy already been set?

[Steve Verheul]

From a general perspective, in this negotiation with the EU we will be going far beyond what was negotiated with the U.S. in relation to the Buy American act. We'll be covering a lot more ground in the range of areas that will be subject to government procurement obligations, and there won't be as many exemptions as there were in that agreement. So it will be much broader, although that agreement could be seen as a starting point.

The EU has expressed a particular interest in utilities, so they will be interested in water services and energy services. They will be pressing for those kinds of things.

As you point out, they have some exemptions themselves. In the government procurement negotiations we're trying to figure out the EU system the best way we can to determine what flexibilities they have in their system so we replicate them in ours and have similar levels of flexibility on both sides. That exercise has taken us some time, but we're now getting to a fuller understanding of how the flexibilities or exemptions work within the EU.

On the issue of postal services, the EU has expressed a particular interest in courier services in the postal area. They've expressed interest in the issue of outgoing and inbound mail. We have no intention of changing the monopoly Canada Post has to supply mail service across the country, and we don't expect that will be challenged in any way.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you for your brevity, Monsieur LaForest.

Thank you, Mr. Verheul and Mr. Kur. We didn't get a whole lot of questions in there, but it has been very helpful to give us a start. As I say, we have the briefing books almost completed with translation, so they will probably be available to committee members. Thank you for your extensive work in that regard as well--and to the departments. It is very much appreciated--excellent briefings.

Thank you for coming.

Let's suspend for a few minutes while we bring in our next witnesses.

Thank you.

[The Chair, Conservative, Lee Richardson]

We're going to begin.

I'm going to introduce our next guest and witness. I was hoping we might have the European Economic and Social Committee arrive early so we could put them together, at Mr. Julian's suggestion, which I think was a very good one, but we're not able to do that, as they're not here. So as soon as they get here we'll have them sit in and we'll carry on. If Mr. Langrish doesn't mind staying until 5:30, we'll have you join them as well.

Before we start, and maybe to give them another minute to get here, I just want to say to the committee members that in the last round Mr. Holder brought up the question of briefing books. Just for your information, I hope we have them here for you on Wednesday.

I should also say, with regard to the visit to the European Parliament, your tickets will be e-mailed. They're electronic tickets, so they'll all be sent to your offices directly, to your parliamentary accounts. And per diems will be direct-deposited to your accounts if that's the way you get your paycheque. If there are any questions about that, please feel free to give me a call or ask the clerk, but I think it's all been taken care of. I hope to have everything completed by Thursday in that regard. You should have tickets, per diems, and briefing books by Thursday.

Let us proceed with our next witness.

Jason Langrish is the executive director of the Canada Europe Roundtable for Business. I'm going to ask Mr. Langrish to give us a brief opening statement and then we'll get into questions. In the event the representatives of the European Economic and Social Committee arrive, we'll ask them to sit in right away, because we are short of time today.

Mr. Langrish, would you please give us opening background?

Thank you.

[Jason Langrish, Executive Director, Canada Europe Roundtable for Business]

Thank you, Mr. Chair.

Just as a brief overview, the Canada Europe Roundtable for Business was founded about ten years ago. The reason we were created, with the blessing of the President of the European Commission and the Prime Minister of Canada at the time, was mainly because Canadian companies weren't allowed to participate in the U.S.-EU dialogue.

The purpose was to provide recommendations to government to eliminate impediments to trade and investment. We quickly recognized that you couldn't do those types of things in a silo and that we needed something more comprehensive to reflect where the economic relationship was going. Trade and investment were increasing--and in the case of investment, increasing dramatically--and we felt that the rules that were structuring the relationship between Canada and Europe were not sufficient to meet the challenges of the time, nor would they meet the challenges and the opportunities that would be presented in the future.

In 2006 we turned our attention toward a comprehensive free trade agreement and were supported by about 110 chief executive officers. As I said, we are Canadian and European; we represent the interests of both sides. We have Canadian-headquartered companies and European-headquartered companies in our membership, so we try to take as objective a viewpoint on these negotiations as possible, recognizing that we're of course very supportive of the negotiations.

We see the negotiations being of particular importance, considering the need for a degree of trade and investment diversification away from the United States and NAFTA. I think there is a sense that we've become fairly cozy within the NAFTA relationship, and as the world globalizes and becomes multipolar, if you will, Canada needs to move beyond its traditional trade and investment relationships in the continental realm and internationalize them. And Europe presents an excellent partner in that regard. We overlap our institutions, our approach to business, to trade, to investment, and our approach to the rule of law is roughly equivalent.

It's not to say that in the context of these negotiations there won't be difficulties, but if we are unable to conclude a negotiation with the Europeans--speaking as a Canadian citizen, which I am--we're going to have a hard time convincing any subsequent partners that we're serious about negotiating with them. We feel this is an excellent opportunity to attract further investment and trade into the Canadian marketplace, but also to provide opportunities for our exporters, our service providers, and for the pools of capital that have accumulated in Canada and seek returns. Sometimes it's domestic, but sometimes it's not, and trade agreements are vital for a country such as Canada that relies for over two-thirds of its GDP wealth on export markets and international affairs.

That's where we're coming from. And as I said, we look forward to seeing this agreement concluded in 2011.

[The Chair, Conservative, Lee Richardson]

Thank you. That's very helpful.

We're going to begin questions. I think we'll probably do five-minute rounds, considering the time.

I'm going to go first to the Liberal Party. Mr. Murphy, are you going to start, or Mr. Silva?

[Shawn Murphy, Liberal, Charlottetown, PE]

No, we can split it. Go ahead.

[The Chair, Conservative, Lee Richardson]

All right. Go ahead, Mr. Silva.

[Mario Silva, Liberal, Davenport, ON]

Very briefly, your organization includes people from what sectors?

[Jason Langrish]

They are more or less from most sectors. We have manufacturing. We have commercial services, legal services--

[Mario Silva, Liberal, Davenport, ON]

Are there any other sectors?

[Jason Langrish]

Yes. We have capital markets, agriculture, engineering, infrastructure provision, resources, oil and gas, mining, and pharmaceuticals, both research-based and generic.

[Mario Silva, Liberal, Davenport, ON]

Are those sectors excited about, or concerned about, the upcoming negotiations and what the final agreement might be?

[Jason Langrish]

Well, yes. They're excited; otherwise, I don't think they would consider being members in our organization.

There's a difference. They're excited, but they also have their wish lists, the things they'd like to see come out of these negotiations. I think there's a broad recognition that Canada's not going to get everything it wants and Europe isn't going to get everything it wants in these negotiations, but broadly speaking, yes, they're excited. They see real opportunities; they feel that whatever has to be or whatever type of sacrifice needs to be made will be worth it for the greater good that this agreement will bring.

[Mario Silva, Liberal, Davenport, ON]

Thank you.

I have other questions, but I think they might be better answered by the department.

[The Chair, Conservative, Lee Richardson]

Mr. Murphy, would you like to...?

[Shawn Murphy, Liberal, Charlottetown, PE]

I want to ask your opinion on a couple of areas. In any agreement that they negotiate, there will, of course, be winners and losers at the end of the day. One of the issues that concerns me is the dispute settlement mechanism.

I see today that the United States has filed another dispute over our softwood lumber. Really, despite NAFTA and the U.S. free trade agreement, it just goes on and on, and there doesn't seem to be any way to end it. We don't have free trade in softwood lumber, and we never had in 400 years.

Has your organization examined the resolution in terms of how disputes will be resolved? Are you satisfied? Although we're dealing with the European Union, we're still dealing with 27 different countries with their own cultures, their own economies, their own societies, and their own political environments, too, which will be interesting. Have you examined this? Are you satisfied that the proper mechanism is in place to resolve any disputes, which will inevitably occur?