That's a very important question, which cuts to the centre of why Canada's trade performance has been so disappointing in recent years, even though we have accelerated considerably our extraction and export of our raw resources.
First of all, in terms of the Canadian Manufacturers & Exporters' position that a free trade agreement must offer a net benefit to Canadian manufacturing, it's very hard, again, in manufacturing as a whole—as I indicated for the auto sector—to imagine how that might happen. Our overall trade imbalance with Japan in manufactured goods is about 3:1, so we import $3 for every $1 we export there. That means that for any bilateral liberalization on the two sides, without explicit conditions that they must be buying more from us as a condition of the free trade agreement—which runs against the philosophy of NAFTA-style free trade agreements, anyway—it is virtually impossible to imagine how our exports of manufactured goods to Japan could increase under a free trade agreement faster than our imports from Japan. And I don't expect that any of the computable general equilibrium models and other simulation tools that are used to estimate these things could credibly project a net benefit under any circumstances to Canadian manufacturing. So if that's the test, I can't see how this agreement would pass it.
On your question with regard to what sorts of policies should be implemented, there is no magic bullet to this. If we look at the experience of other successful exporters in the world—as I mentioned, Germany, Japan, Korea, Brazil today, Scandinavia—we'll see they've all involved a range of proactive interventions involving government, business, and other stakeholders, running the gamut between technology and innovation policy, directed flows of capital into particular strategic industries, proactive integration of training efforts with the needs of innovative export-oriented businesses, protection and support and nurturing for domestically based companies to produce high-value products.
My organization, the CAW, has recently released a major strategy document regarding the sort of policy we think would help in the auto sector. It lists ten different specific recommendations that I'd be pleased, again, to forward to your committee.