International Trade Committee on Nov. 20th, 2012

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

It's crap.

[Wayne Easter, Liberal, Malpeque, PE]

And you know it. You know it, Gerald.

[The Chair, Conservative, Rob Merrifield]

Just ask the question.

[Wayne Easter, Liberal, Malpeque, PE]

The Prime Minister's attitude towards Asia has now turned a 180, and that's a good thing. I congratulate the Prime Minister for turning a 180 in his attitude towards Asia, but in the beginning it was a very negative attitude. We've lost four years, guys. You can laugh, but we've lost four years in China and India because that original attitude that Foreign Affairs—

[The Chair, Conservative, Rob Merrifield]

Do you have a question for the witnesses?

[Wayne Easter, Liberal, Malpeque, PE]

Yes.

I have the floor, Mr. Chair.

[The Chair, Conservative, Rob Merrifield]

You go ahead with a question or you won't have the floor.

[Wayne Easter, Liberal, Malpeque, PE]

And I do have the floor.

So we've lost four years. Now the Prime Minister is seeing that Foreign Affairs is important, and that's a good thing, but I'm saying that we've lost four years, and some day you guys will have to realize that.

[The Chair, Conservative, Rob Merrifield]

Do you have something for the witnesses?

[Wayne Easter, Liberal, Malpeque, PE]

Yes. I will have a question here in a minute, Mr. Chair.

[The Chair, Conservative, Rob Merrifield]

Well, yes indeed, or you won't—

[Wayne Easter, Liberal, Malpeque, PE]

I have the floor.

You raised some concerns, Mr. Shastri, on non-tariff barriers. What are those areas? Could you expand on that and give us some examples of non-tariff barriers that we should be looking at?

[Rahul Shastri]

Sure. I'd be happy to, Mr. Easter.

Examples would include customs procedures. Indian customs clearance often involves huge quantities of paperwork, which hinders trade by absorbing limited business resources. It's particularly constraining for small and medium-sized exporters.

Also, India's customs valuation system is often insufficiently transparent. There are anecdotal cases of excessive tariffs being applied on imports due to overmeasuring of their real transactional values, for instance.

There are export subsidies—direct and indirect financial support, including tax holidays—provided to Indian export industries located in special economic zones that are not necessarily available for Canadian businesses.

In relation to government procurement, Indian suppliers are afforded a price preference in applying for government contracts vis-à-vis foreign suppliers.

Anti-dumping is an issue. The number of cases examined under India's anti-dumping legislation has spiralled up in recent years. It's a concern and should be a concern for Canadian business—

[Wayne Easter, Liberal, Malpeque, PE]

I'm sorry to interrupt you, but in terms of some of these forums that you've held, have you held one on non-tariff trade barriers?

[Rahul Shastri]

We haven't held a forum on trade per se. Obviously, for the most part, our members are people with substantial business interests, both here and in India. With our brother and sister organizations, such as the Indo-Canada Chamber of Commerce or the Toronto Indus Entrepreneurs or the Canada-India Business Council, we will discuss these amongst ourselves during round tables. These are some of the issues that come up in the context of those discussions.

[Wayne Easter, Liberal, Malpeque, PE]

I think those are very valid points that I expect our negotiators are aware of, but we certainly should be aware of them as well. There's another that I'll come back to in a minute. In terms of the whole labour professionals...you're really talking about equivalent labour mobility under the FTA, is that right?

[Rahul Shastri]

Yes.

[Wayne Easter, Liberal, Malpeque, PE]

So that professionals can go in there and in here, with streamlined visas, etc.?

[Rahul Shastri]

Correct. You heard from Mr. Sierra, whose company of course is involved in India and Canada and is looking to bring engineers back and forth. It's a very cumbersome process as it is now. It's getting better with the existence of additional visa programs, but that's still something that can be streamlined further.

[Wayne Easter, Liberal, Malpeque, PE]

I think, Mr. Woo, that you talked about a problem with public support. I agree with you on that. It's the same when it comes to China. I really think part of the reason for that is.... You mentioned the FIPA that was signed with China, which wasn't debated. We did have a briefing at this committee, but it wasn't debated in the House of Commons, and I do think that's a mistake by the government.

Government members will disagree, I'm sure, but the fact of the matter is that if we were to be transparent on those agreements and have the proper debate, the extraordinary claims that are made out there I think would show up in the light of day as not as serious as was once perceived. I do have a very sincere problem with the Canada-China agreement on the unlimited liability for the federal taxpayer for provincial decisions, but I think we would move some distance in gaining more public favour for these types of agreements if the government would be more transparent. I'd like your thoughts on that.

My last question is about the IP protection. What are the concerns? What needs to be done to ensure that our folks who have intellectual property to protect are indeed protected in the Indian market and that we don't have cyber espionage or whatever?

[Yuen Pau Woo]

Thank you, Mr. Easter.

In the Canada-Asia relationship today, we are at a point where Canadians and our political and business leaders have all come to an understanding of the economic importance of Asia for us. I think that's quite unanimous now. We've seen how, as our colleague mentioned, after 2008, Asia essentially saved Canada from a more severe recession. That is in part why the Prime Minister, business leaders, and civil society leaders are all talking about the need for diversification and more trade with Asia. That's why we are entering into an FTA and so on and so forth.

But, ladies and gentlemen, I think all of that is bringing us to what I call the hard part in the Canada-Asia relationship, because as we pursue this path that we know we have to take—deeper integration with Asia—we are going to have to do things that are going to be troubling for the Canadian public. So we have to think very hard. You have to think very hard, because you have constituents and so on, about how the public view catches up with the intellectual acceptance of the need to do this.

I'm referring to investment from Asia. I'm referring to state-owned enterprise. I'm referring to FIPAs. I'm referring to FTAs. It's not just India. It's not just China. It's going to get more and more difficult. This is the hard part, but if we want to do it, we have to make sure the public is with us.

[The Chair, Conservative, Rob Merrifield]

I was just encouraged that the opposition is encouraging us to go down this road faster.

Mr. Shipley, go ahead.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much, Chair.

Today has been very interesting, with all of our witnesses.

Mr. Woo, I'm interested to hear you talk about having a domestic understanding—I think those were the words you used—in terms of how we can continue to grow our exports, recognizing that there isn't much credit given from the opposition for what has happened. It seems to me that if you move from $2.6 billion to $5.1 billion, that's an almost 50% increase over a few years. Though they're small numbers, the percentage is large.

You said the target is to then move to $15 billion by 2015, but you think objectively that there's an opportunity to move that target to somewhere around $30 billion. That's an extraordinary increase. Maybe it was Mr. Shastri who mentioned that. Whoever it was, it was intriguing.

I'm wondering if you can help us understand how that might happen, because it seems that we have an identity concern. How do we brand Canada in India? Can you help me a bit with that? I'll go back to the branding question a little later maybe.

[Rahul Shastri]

My colleague, Mr. Woo, made a very clear point when he asked, how do we get India engaged in CEPA? What is it that Canada has that India wants? It's food and it's energy.

It's not going to take very much in the context of technology transfer through uranium or some sort of nuclear reactor deal to increase that trade number substantially. It's not going to take very much if we're able to come forward with a framework—through the National Energy Board, obviously—to allow natural gas to exported into India directly. Those are significant dollars that are at play here.

We're not only talking about the actual raw material itself. We're talking about refineries. We're talking about pipelines. We're talking about delivery mechanisms. That can substantially increase the trade.

If India is looking to Canada to assist with its energy security and its food security—through companies such as PotashCorp, Agrium, or Mosaic—which are going to be in substantial demand given what's happening to India's population, then I think we're going to be well on our way to establishing substantial trade figures, but frankly, we have to push those two issues.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you.

I think those two key things—energy and food—are something we need, whatever the country is, and we know that Canada is recognized around the world, in so many of the agreements that we have, not only as a producer of quality but as one that is reputable in terms of being able to come forward with products that are of a standard often not met by many other countries.

For example, when we're talking about Japan, quality is everything. Is there the same sort of a sense with India that Canada would be looked at as a trading partner that has a reputation for quality?