House of Commons Hansard #73 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was trade.

Topics

Questions on the Order Paper
Routine Proceedings

3:20 p.m.

Liberal

The Speaker Peter Milliken

Is that agreed?

Questions on the Order Paper
Routine Proceedings

3:20 p.m.

Some hon. members

Agreed.

Motions for Papers
Routine Proceedings

3:20 p.m.

Regina—Lumsden—Lake Centre
Saskatchewan

Conservative

Tom Lukiwski Parliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, I ask that all motions for production of papers be allowed to stand.

Motions for Papers
Routine Proceedings

3:20 p.m.

Liberal

The Speaker Peter Milliken

Is that agreed?

Motions for Papers
Routine Proceedings

3:20 p.m.

Some hon. members

Agreed.

Canada-Panama Free Trade Act
Government Orders

September 29th, 2010 / 3:25 p.m.

York—Simcoe
Ontario

Conservative

Peter Van Loan Minister of International Trade

moved that Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama, be read the second time and referred to a committee.

Mr. Speaker, I am pleased to speak in the House today to the Canada-Panama free trade act.

Pursuing trade agreements is essential to bringing continued prosperity to Canadians. And this is why the implementation of free trade agreements is a priority for the Government of Canada and demonstrates our commitment to helping Canadian businesses compete in markets abroad.

As the world economies recover, expanding trade and investment relationships to improve market access is more important than ever. By opening our markets and pursuing greater market access abroad, we are sending a clear message that protectionism is not the way to achieve global stability and prosperity. By improving access to foreign markets for Canadian businesses, we are supporting domestic economic growth and creating new opportunities for Canadian workers.

Our government knows that Canada's long-term prosperity is driven by the ingenuity and creativity of hard-working families, small business owners and entrepreneurs across the country.

Canada’s exporters, investors and service providers are calling for these opportunities. Business owners and entrepreneurs want access to global markets, and this government is listening.

Canada made the big jump into free trade with our free trade agreement with the United States. Many in the House will remember the 1988 election and how that very much gripped the country. It was perhaps the only election in my lifetime thoroughly dominated by policy, not personalities, not advertising campaigns, but by substance, and one policy in particular, that of free trade.

As a result of that great debate and the subsequent results, the success of free trade with the United States, that debate is very much a settled question in Canada now. Canadians embrace free trade. Our trade with the United States has doubled since that time and our trade with Mexico, as part of the North American Free Trade Agreement, has increased almost five times.

There are true Conservative roots in the commitment to free trade. After we ceased to be government, for the next 13 years our predecessors were somewhat reluctant to embrace free trade, notwithstanding its apparent success. Three new free trade agreements were negotiated, however, in that time with Chile, Costa Rica and Israel.

Since we formed the government again in 2006, we have pursued an aggressive and ambitious free trade agenda, including commencing renegotiation of our free trade agreements with Chile and Costa Rica to make them much more comprehensive and ambitious.

We have also concluded, in just a little more than four years, new free trade agreements with Peru, Colombia, Jordan and the European Free Trade Association countries of Iceland, Norway, Switzerland and Lichtenstein. We also have seen, through these agreements, in a very short period of time significant victories for Canadian workers and Canadian entrepreneurs.

We are continuing to look ahead to other key global partners, including, for example, the European Union. Our free trade agreement with the European Union would represent the most significant Canadian trade initiative since the North American free trade agreement.

The study that was done before we began our European Union negotiations indicated an annual benefit to the Canadian economy of some $12 billion a year from such an agreement. That is a boost that our Canadian workers and our Canadian economy really need to see. That is why we are excited that that negotiation is proceeding very positively. A fifth round of negotiations will take place next month right here in Ottawa. We are optimistic that we will have an agreement in place by the end of 2011.

What will be notable about that agreement is that it will be the very first free trade agreement the European Union will have negotiated with a developed economy, putting Canada in the very enviable position of being the only major developed economy in the world with a free trade agreement with both the United States and the European Union, the two biggest economies in the world, a tremendous platform on which our businesses and our workers can succeed.

However, we are also committed to advancing our ongoing free trade negotiations with other partners, including Ukraine; the Central American four of Honduras, Nicaragua, Guatemala and El Salvador; the Caribbean community countries; and the Dominican Republic.

Last Friday, I had the pleasure of hosting here in Ottawa my counterpart, Anand Sharma, the minister of commerce and industry from India. At that time, we released publicly a study into the possibilities of a comprehensive economic partnership agreement, a free trade agreement between Canada and India. That study showed that if we were successful in achieving such an agreement, the annual boost to the Canadian economy would be between $6 billion and $15 billion a year with similar annual benefits to the Indian economy. We are in the process now of putting together the negotiating mandate we need to be able to undertake those kinds of discussions.

As members can see, our government is firmly committed to free trade. However, the United States will remain, certainly for my lifetime, the major priority of Canada in free trade as 70% of our trade is with the United States and it is a relationship we must constantly tend to. We did that when we became the only country in the world to achieve a waiver from the buy American provisions of the U.S. stimulus program, and we continue to stand up for Canadian businesses and protect our access to that critical market. That will remain our number one priority.

However, we have three major initiatives underway: first, the European Union free trade talks, as I addressed; second, our initiative with regard to India, which looks very positive at this point in time; and third, an effort to carve out for Canada a role in the Americas, not dissimilar to the one Australia already has with regard to the Asian marketplace.

We can see that falling into place. We have our existing free trade agreements with Chile and Costa Rica, which are being improved and enhanced by this government. We have the free trade agreement implemented with Peru and the recently passed free trade agreement with Colombia. We have had negotiations with the Dominican Republic, the countries of the Caribbean community, and the Central American four. Altogether, we can see that Canada is working very hard to achieve that special, privileged position of having a dominant free trading position within the Americas.

Indeed, it is as part of that overall strategy of being a key trading country in our hemisphere, on which the Prime Minister has spoken, that we also now add the concept of a free trade agreement with Panama.

I was very proud and pleased to sign that agreement in May with Roberto Henríquez, my counterpart, and now I am pleased that we are commencing debate on it in the House of Commons.

The government is dedicated to pursuing trade relationships that work for Canadians. In addition to these markets, Canadian businesses have long been asking for closer ties to Panama—an innovative, dynamic economy, and a gateway to Latin America and the Caribbean.

That is why we have negotiated, concluded and signed last May a free trade agreement with Panama.

Panama has had one of the fastest growing economies in the Americas. Its real gross domestic product growth in 2008 was 10.7%. Even during the economic downturn it posted positive growth in 2009. Panama's real gross domestic product is expected to rise even further in 2010.

Panama is also a strategic hub for the region. It is also an important logistical platform for commercial activity. As a link between two great oceans, Panama, and of course the historic and well-understood Panama Canal, is vital to global trade.

We know that Canadian businesses and workers across a number of sectors can compete and win in the Panamanian marketplace. And the Canada-Panama free trade agreement will help them do that. This agreement is a good deal for Canadian companies, in particular for goods exporters.

Our exporters have been active in the Panamanian market. In 2009, Canada's two-way merchandise trade with Panama was $132.1 million, and our trade has been largely complementary. Upon implementation of the free trade agreement, things will improve significantly. Panama will immediately lift tariffs on some 99.9% of all non-agricultural imports from Canada, with the remaining tariffs to be phased out over five to 15 years. Tariffs will also be lifted immediately on 94% of Canada's agricultural exports to Panama.

These outcomes directly benefit a number of sectors that already have established business ties in Panama, including agriculture and agri-food products, pharmaceuticals, pulp and paper, vehicles, machinery, and information and communications technology products, among others.

We are also pleased that Panama has recognized Canada's inspection systems for beef and pork and has removed its previous ban on Canadian beef.

Canadian service providers will also benefit from the Canada-Panama free trade agreement. Panama is a service-oriented economy. Canada has expertise in sectors such as financial, engineering, mining and petroleum extractive services, construction and environmental services—areas where there are opportunities for growth into the Panamanian market. And the agreement ensures the secure, predictable and equitable treatment of service providers from both countries.

With the Canada-Panama free trade agreement, we are helping Canadian service providers thrive.

Panama is also an established destination for Canadian direct investment abroad. At the end of 2008, the stock of Canadian direct investment in Panama totalled $93 million.

Canadian companies are choosing to invest in this market in areas such as banking and financial services, construction and mining. And they will benefit from the Canada-Panama free trade agreement. This deal will provide greater stability, transparency and protection for Canadian investments in Panama.

Government procurement has also been a key priority in our deepening trade relationship with Panama. One of the key drivers is the ongoing Panama Canal expansion and its associated projects. The Panama Canal makes Panama a natural centre for global trade. In fact, Panama handles 5% of global trade and has some of the world's largest export processing zones. The planned Panama Canal expansion, which is actually under construction, is only reinforcing its position as a nexus for international importers and exporters.

The canal expansion is a $5.3 billion project. It provides numerous opportunities to Canadian businesses through subcontracts and satellite projects, which will be further consolidated by this free trade agreement. We are calling on the opposition to consider and approve this free trade agreement very quickly so that our workers and our businesses can profit from the opportunities that exist right now.

The government procurement provisions in the Canada-Panama free trade agreement guarantee that Canadian suppliers will have non-discriminatory access to a broad range of procurement opportunities, including those under the Panama Canal Authority. Projects, including those associated with the canal expansion, may also lead to increased goods exports from Canadian manufacturers that have expertise in infrastructure.

We are also proud of the work done to protect labour rights and environmental responsibilities. Of course, in general, freer trade and increased prosperity have been shown to aid in improving human development indices. Of course, we have with this agreement, as we have had with others, parallel accords dealing with labour and the environment.

For all these reasons, the Panama agreement is a good deal for Canada, but it is also a good deal because it ensures that Canada remains competitive in the Panamanian marketplace. Panama has an active trade agenda with many partners, including the United States and the European Union. For this reason, time is, as I said, of the essence. Any delay of this bill would hurt Canadian businesses that are eager to compete and capitalize on the opportunities in Panama.

If Canada can establish access to the Panamanian market before our competitors take hold, it will give our companies an advantage, a real foothold, in doing business there.

Panama is also negotiating a trade agreement with Colombia and is exploring trade deals with the European Free Trade Association, the Caribbean community, Peru, Korea, and others.

Clearly other countries are noticing Panama’s potential, and they are looking to take advantage of this strong and growing market. That is why it is important for this government to take action now. And it is why I ask for the support of all honourable members for the Canada-Panama free trade agreement, and the parallel labour co-operation and environment agreements.

I am a great believer that free trade is one of the reasons Canada has been performing better than many other major competing economies. We have been leading the major developed economies of the G7 in economic growth. We are unique among those economies in having replaced or restored, through our job growth, all of the jobs that were lost at the start of the economic downturn. We are again in the distinct position of having the lowest debt and the lowest deficit, as a proportion of our economy, of any of those major economies.

We have, of course, as we all know, the soundest banking system in the world, as has been confirmed repeatedly by the World Economic Forum.

The reason for this success is not just the sound policies adopted by the government on fiscal responsibility and appropriate stimulus when required. It is also because of our approach to opening marketplaces and opportunities for our workers and our businesses.

Free trade is a reason for Canada's prosperity and Canada's success. It is the reason we are working so ambitiously to put in place opportunities for Canadian workers all around the world. Our free trade agreement with Panama is part of that plan. It is part of our strategic approach to the region of the Americas and to this hemisphere, and it is one reason Canadian workers and businesses can expect to succeed more in the future and enjoy greater prosperity in the future.

Those are all good reasons why this should be supported in the House of Commons.

Canada-Panama Free Trade Act
Government Orders

3:40 p.m.

NDP

Jim Maloway Elmwood—Transcona, MB

Madam Speaker, I would like to make some observations regarding this free trade agreement.

Panama, as the minister likely knows, is regarded as a tax haven by OECD countries, including the United States. In fact, in 2008, Panama was one of 11 countries that did not have tax information exchange agreements signed or in force. It is one of three states, with Guatemala and Nauru, that will not share bank information or any tax information for exchange purposes. In fact, there are over 350,000 foreign-registered companies registered in Panama.

Fifty-four democratic congresspeople in the United States have called on President Obama not to ratify the agreement until Panama signs an agreement to forward information on these tax evaders. I would like to ask the minister why the government is proceeding when 54 congresspeople in the United States have said that unless Panama signs on and allows the Americans to get information on these tax evaders, they will not sign this agreement.

The minister wants to basically reward Panama. I would like to know what efforts he is making to get Panama to sign on so that we can find out who is hiding out in tax havens such as Panama.

Canada-Panama Free Trade Act
Government Orders

3:40 p.m.

Conservative

Peter Van Loan York—Simcoe, ON

Madam Speaker, I am always impressed by the creativity and the ingenuity of the New Democratic Party in finding new reasons to oppose any free trade agreement that comes along. It is part of its ideological commitment, and I understand that, but I did not think it would be reaching for the argument that we should do what the Americans say they would like us to do. We actually let our trade policies be made here in this country. We are pursuing this trade agreement because it represents opportunities for Canada.

However, with regard to the issue he raises, the issue of tax-sharing informing for tax purposes, it was addressed by G20 leaders, under Prime Minister Harper's leadership, in June, here in Toronto. It is something on which they are working together and to which we are firmly committed. I will note that Panama has committed to implementing the standard developed by the Organisation for Economic Co-operation and Development for the exchange of tax information to combat international tax evasion. We will continue to work with them to make sure that it happens.

I can tell the member that I actually wrote to my Panamanian counterpart in July of this year to express our interest in pursuing such a tax information exchange agreement with Panama, and I look forward to that happening very soon.

Canada-Panama Free Trade Act
Government Orders

3:40 p.m.

NDP

The Acting Speaker Denise Savoie

I know that the minister did not intend to name the Prime Minister.

Questions and comments, the hon. member for York South--Weston.

Canada-Panama Free Trade Act
Government Orders

3:40 p.m.

Liberal

Alan Tonks York South—Weston, ON

Madam Speaker, I am sure that the House agrees that the dependence on our American trading partner over the next decade, or several decades, has to have a counterbalancing strategy with respect to our trade relationships with the world, in particular in relation to capital flow, investment, and so on. We need to look at a new regime.

The minister tangentially touched upon the issues of the environment and fair labour practices. That was of great concern to members of this House during the debate on the Canada-Colombia Free Trade Agreement. I wonder if the minister could elaborate a little more on how the trade agreement will encompass fair labour practices and positive environmental strategies, given that these have been concerns and in fact would be concerns to Panamanians.

We have a private member's bill that is looking at fair labour practices in the mining industry where there is Canadian investment in mining.

I wonder if the minister would just make a comment on that.

Canada-Panama Free Trade Act
Government Orders

3:45 p.m.

Conservative

Peter Van Loan York—Simcoe, ON

Madam Speaker, I am pleased to elaborate a bit further on the parallel agreements on labour and the environment.

The parallel agreement we have with Panama on labour principally requires that both countries respect the International Labour Organization's 1998 declaration on fundamental principles and rights at work.

To further protect the rights of workers, both countries commit to providing acceptable protection for occupational health and safety, including compensation in the case of injuries and illnesses, as well as acceptable minimum employment standards regarding hours of work, minimum wage, and overtime pay.

They also agree to ensure that migrant workers are accorded the same legal protections.

I could go on, but essentially both countries have agreed to significant consequences for infractions and a dispute settlement process.

On the environment front, we have a commitment to respect each other's environmental laws, to ensure that, in an effort to attract investment, trade, or jobs, there will be no reduction of environmental standards. Both sides have agreed to respect their commitments under the United Nations convention on the diversity of species.

These examples represent the basics contained in both of those agreements. They ensure that the things we value in Canada, like protecting our environment and the basic rights of our workers, will be respected by both countries under this agreement.

Canada-Panama Free Trade Act
Government Orders

3:45 p.m.

Conservative

James Bezan Selkirk—Interlake, MB

Madam Speaker, I want to express my shock at hearing that the NDP is taking its foreign policy leadership from the U.S. Congress and allowing American politicians to influence their decision-making process.

We are going to make decisions based on what is best for Canada. I have to thank the Minister of International Trade and Minister of Agriculture and Agri-Food for negotiating this free trade agreement with Panama.

I have had the opportunity to travel to Panama on a number of occasions. Every time I go down there I see the country moving ahead. It is still going through some major development. I can see that the middle class continues to grow and expand, to become more wealthy.

It is this type of opportunity that presents the greatest chance for recovery of our agriculture sector here in Canada, especially on the prairies.

Panama is a major trading nation. At the Panama Canal, which I have visited a couple of times, one sees volumes of trade going through the canal, from sea to sea, day in and day out, night and day. That presents us with an opportunity to make use of its connections in addition to feeding its market.

They are huge users of pulse crops and red meats. I know that cattle producers, hog producers, and grain and pulse growers in Selkirk—Interlake and throughout the province are pleased with this government and its efforts. For this I want to thank the Minister of International Trade publicly.

Canada-Panama Free Trade Act
Government Orders

3:45 p.m.

Conservative

Peter Van Loan York—Simcoe, ON

Madam Speaker, I note the ongoing interest in agriculture of the hon. member for Selkirk—Interlake.

As I said, 94% of Canada's existing agricultural exports to Panama will immediately become duty free. That includes pulses: peas, lentils, and the like. Also, there are high-quality beef cuts, live animals, animal genetics, a wide variety of pork and pork products, malt, linseed, canola, sunflower seeds, maple syrup, Christmas trees, and frozen French fry products, which are important for some from Atlantic Canada.

I could go on. All this is good news for farmers, producers, and agricultural workers across Canada.

Canada-Panama Free Trade Act
Government Orders

3:45 p.m.

Liberal

Joe Volpe Eglinton—Lawrence, ON

Madam Speaker, I wanted to ask the minister a question, since he has focused on which industries are going to benefit from this. He talked about 90% of all the agricultural goods becoming immediately excise free.

I am wondering whether he would quantify that percentage. How many thousands of dollars are we talking about? Are we talking about millions, and if so, how many millions? If this is good for agriculture, is there a strategy in place for the manufacturing sector in southern Ontario, or is the minister just hoping?

Canada-Panama Free Trade Act
Government Orders

3:50 p.m.

Conservative

Peter Van Loan York—Simcoe, ON

Madam Speaker, there were about 17 questions there.

The hon. member will be interested to know that we already export $23.4 million of agricultural products annually to Panama. We expect this to grow significantly once this agreement gives Canada an advantageous position vis-à-vis our competitors such as the United States.

As to manufacturing, 99.9% of the existing manufacturing goods and other goods that we export to Panama will immediately become tariff-free upon the implementation of this agreement. That includes equipment, machinery, and other common exports to Panama.

Overall, our exports are in the range of $80 million to $90 million a year. It varies somewhat, but we expect to see significant growth once we secure an advantageous trade position.