International Trade Committee on Jan. 30th, 2014

[Erin O'Toole, Conservative, Durham, ON]

Thank you, Mr. Chair.

Welcome, Your Excellency. Thank you very much for joining us, as well as to you, Mr. Mecklenburg. We appreciate your appearing today and answering questions, as we are excited about the possibilities that this agreement in principle holds for Canada and the EU.

Interestingly enough, Your Excellency, I notice you come to us after 10 years in Mexico and the U.S., and now to Canada, so it's the NAFTA trifecta.

I'm going to speak to that for a minute because Canada is in the unique position, with CETA, to have access to 800 million-plus of the world's best consumers through NAFTA and through what will be an excellent deal with the European Union.

The U.S., our friend and most important trading partner, is not in that position yet, but discussions are under way. How long do you anticipate those would take? Right now Canada is in a very unique spot in the world, I would say.

[H.E. Marie-Anne Coninsx]

I'm sorry...how long will it take?

[Erin O'Toole, Conservative, Durham, ON]

Do you anticipate an agreement with the United States in the next year or two years? Is there—

[H.E. Marie-Anne Coninsx]

Oh, that's very difficult to say.

I know Commissioner De Gucht personally very well. This year, 2014, will be an important year for the European Union institutions because there will be elections of European parliaments, there will be a new commissioner, and a new president of the European Council. I am saying this because the European Commission has made getting an agreement with the U.S. one of its top priorities.

I don't want to speculate if they will succeed. I know that the negotiations are going onward and as I said, we are fully informed of the stage of the negotiations, but how long it will take is very difficult to say.

Certainly for some of the elements under discussion—for example, the elimination of non-tariff obstacles, which is a very big part of the negotiations with the U.S.—the discussions with Canada will help and will facilitate some of the discussions with the U.S.

But definitely I think that if we succeed, it will be a big advantage to everybody.

[Erin O'Toole, Conservative, Durham, ON]

Thank you.

You mentioned geographic indicators in your remarks. I think it's an indication of how well the EU and Canada worked together to strike a deal. It's certainly our intention, the way it's struck, to have grandfathering provisions and a very good balance. It is our sincere hope that our geographic indicators, like Oka cheese and Okanagan wines, become as popular as some of your historic ones.

All of our provinces were part of these negotiations, over time. Did you have a similar structure with your negotiating team, updating member states to reach this positive conclusion?

[H.E. Marie-Anne Coninsx]

First, on the geographical indicators, I think we also struck a good balance. We have a very high number of geographical indicators, products in the European Union, and some of them could not enter, like Parma and some—

[Karsten Mecklenburg]

They can enter, but there is a certain sensitivity, obviously, of the principle in general on the Canada—

[H.E. Marie-Anne Coninsx]

Yes. In any case, for some it was very difficult, or some entered or were here on the Canadian market with a name that was protected with the European Union. I think there we struck a very, very good deal. I can assure you that it's not only the European Union that has delicious food, but also Canada. Definitely, CETA will help to promote Canadian products.

Regarding the provinces, it's part of my objective here in Canada to visit all the provinces—not only myself, but all the ambassadors who are here in Canada. I think for the first time in history here, we will make a joint visit. We will start with Toronto on February 12. I hope that by the end of my mandate here we will have visited, with all the ambassadors, all the provinces and the territories.

We're extremely pleased with the involvement of the provinces. It was absolutely key. They have played a very, very constructive role. The European set-up is completely different. Trade is an exclusive competence of the European Union. It means concretely that to have a mandate for an agreement, it's worked out by the European Commission. The European Commission then obtains a mandate to, for example, conclude CETA with the member states. The moment that the European Commission has the mandate...and that's Commissioner De Gucht, he does the negotiations alone, on behalf of all the member states.

During the whole process our member states are constantly kept informed—in a confidential way, because you cannot have international negotiations in a public place, particularly one such as CETA. It's kept in a confidential way, not always excluded. There have been leakages, which were also not very helpful. But members have been kept informed all the time, as well as our European Parliament. It's also important, because, when you are negotiating, you will always have at the end maybe some elements which were not foreseen in the mandate, and you have to go back to the stakeholders.

[Erin O'Toole, Conservative, Durham, ON]

How much time do I have, Mr. Chair?

[The Chair, Conservative, Rob Merrifield]

Another minute.

[Erin O'Toole, Conservative, Durham, ON]

I'm also glad you touched on the patent issue and intellectual property. You're right, there is public health care in both European states and Canada, and that's been an important part of not only our negotiating position, but also provincial participation in this. We've heard from the R and D branded side of the pharmaceutical industry, as well as the generics. We have an important generic industry here. When we have witnesses here who both generally agree it's a great agreement and are on opposite sides of that issue, we think we've struck the right balance.

How does the European Union view the balance between your patent link and the important impact that generics can play to keep costs low?

[H.E. Marie-Anne Coninsx]

I think we struck the right balance. As I said, for us intellectual property rights are extremely important. Here, in that sense, we wanted to have high protection. If you compare the situation of Canada with other developing, industrialized countries, they were not on the top of the protection. So we wanted to have this high protection also to enable research. As Canada has a lot of research companies, it will benefit from that.

As I indicated in my presentation, we do not think that it will have this kind of inflation of prices, so health is at the centre of this policy and also the interests of the consumer. So I think that the intellectual property, particularly for the drug market, struck the right balance.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Pacetti, five minutes.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you, Chair.

Thank you, Ambassador, for coming today. It's very helpful that you're here.

Your first comment was that this agreement will immediately boost trade. What will happen in the meantime, if it's delayed? Will trade suffer? Does your experience show that we sort of forget about it, and then all of a sudden there's a boom?

[H.E. Marie-Anne Coninsx]

We are already very strong trade partners. The European Union is the second trade partner of Canada, the second investor of Canada. Canada is the twelfth trade partner of the European Union, the fourth in investor—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I don't mean to interrupt, but I have limited time.

[H.E. Marie-Anne Coninsx]

Yes, please.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

But if I'm a company and I'm going to buy some heavy-duty machinery in Germany all the way to here because I know I'm going to get it a bit cheaper, the Europeans may wait a couple of months or a year or more to buy Bombardier railcars or airplanes. Is that something that—

[H.E. Marie-Anne Coninsx]

I think industry will do what is most favourable for them. Our experience is that when you have even the announcement of a major agreement...particularly at the moment when the text is known. I think as long as the text is not known, nothing will happen. Our experience is that as soon as the legal text is known, industry starts before it is entered into force.

My answer, then, is that, first of all, we are already strong trade and investment partners. That will not diminish in the meantime. Industry will—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I'm not that worried about industry.

What happens in your parliaments or your different countries—or will it just be the European Parliament that will approve it?

[H.E. Marie-Anne Coninsx]

That still has to be decided; it's not decided yet.

Personally, I think it's most likely that the national parliaments will have to ratify the agreement, but that does not include the trade provisions. The moment the European Parliament has given its okay, all the trade aspects of the agreement enter into force provisionally.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Okay.

Do you believe the European countries will actually transfer their savings to the end consumers?

[H.E. Marie-Anne Coninsx]

What do you mean by your question?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Some of your companies will benefit—the importers, or the ones in manufacturing—by importing goods from Canada at a cheaper price. Will they in turn keep the money or in turn trickle it down to the consumer?

[H.E. Marie-Anne Coninsx]

We don't have supply management, fortunately, in the European Union.