Mr. Speaker, today I would like to talk about free trade in general and Bill C-13 in particular.
Our caucus is of one mind on this bill. We agree on the importance of free trade in general, and we believe that these agreements benefit Canada in many ways.
This bill ratifies the multilateral agreement on trade facilitation. The agreement on trade facilitation breaks down non-tariff trade barriers and informal barriers. This is of vital importance. If all countries ratify the agreement, it could generate an estimated $1 trillion in new economic activity.
It is a pleasure for me to rise today to speak to Bill C-13. I always have to double-check when I find myself agreeing with what members of the government are doing just to ensure I have not missed anything. However, it is a pleasure for me to speak in favour of the bill. I do not know if the government will like everything I have to say in my speech today, because I will be somewhat critical of some of the things the government is doing with respect to trade. However, when it continues with good work that was started under the previous government, it is always worth recognizing that it is not all bad.
Broadly speaking, I want to do two things in my speech today. First, I want to speak specifically to some of the technical issues around the trade facilitation agreement, Bill C-13, and trade more generally. I also want to comment on our strategic situation in terms of trade, such as where it seems the government is going and where we should be going when it comes to our approach to trade.
Let me first speak to the technical side. By way of background, Bill C-13 would implement the trade facilitation agreement. Negotiations on the trade facilitation agreement started back in 2001. The agreement was completed at the WTO ministerial conference in December 2013.
This is the first multilateral agreement since the creation of the World Trade Organization. We deal at times with bilateral trade agreements, which are trade agreements between Canada and one other country, or we deal with multilateral trade agreements that involve regional or perhaps like-minded blocs of nations. This, however, is a truly multilateral agreement that could include the full membership of the WTO if all of the nations involved choose to ratify the agreement. It is an important step forward.
This trade agreement deals with the issue of trade facilitation. We are all familiar with what a formal barrier would look like to trade, for preventing countries from trading, or a tariff barrier, which is a tax on imports that a country might impose. The trade facilitation agreement seeks to deal with non-tariff barriers, or more informal barriers to trade, its regulatory misalignments, perhaps differences in regulations or administrative rules that have the effect of being a trade barrier. Perhaps they are not intended to be trade barriers and certainly are not advertised as such, but they end up preventing international commerce. This is a major issue for many businesses. If a company is seeking to trade with another country and it has to go through a detailed process of learning completely different regulations on relabelling then it becomes much more difficult for that company to do business.
What the committee heard when it studied this issue was something we had heard before. These non-tariff barriers in particular impose an additional and a unique burden on small and medium-sized businesses. A large corporation would have the capacity, the relationships in place, to understand what different regulatory regimes are and the effects of them and would have an easier time navigating these things. I do not want to suggest there is no impact on larger businesses, which employ many Canadians and many people around the world as well, but small and medium-sized businesses often have a much harder time responding to these non-tariff barriers. We know the importance of small business. It is the primary engine of growth and job creation in our country. Therefore, with respect to the impact on small business in particular, it is important we be concerned with non-tariff as well as tariff barriers on trade.
We have some information in terms of estimates from the World Trade Organization about what the impacts of this trade facilitation would be. If all countries ratify, global merchandise exports would be up by $1 trillion, and trade costs for World Trade Organization members would go down about 14%, and 17% for least developed countries. Therefore, we see significant benefits from the trade facilitation agreement. Of course if not every country ratifies, the agreements will be less, so we hope all countries ratify. However, the benefits will still be in place even if the two-thirds threshold that is required to bring this deal into force is met but not all countries involved signed.
I have a couple of other notes on trade facilitation. It provides business with predictability. One of the issues with non-tariff barriers to trade is that even if trade is possible, if trade can occur, non-tariff barriers, or arbitrary different regulatory structures can create uncertainty, which makes it much harder for importers or exporters to manage in the context of international trade. Therefore, it smooths out and aligns these regulations, and also establishes a consistency in place, a predictability for businesses to rely on to facilitate that trade to its full potential.
I also want to identify for members of the House that the requirement is that two-thirds of World Trade Organization members sign on in order for this deal to take effect. That requirement would be 110 members of the World Trade Organization. Currently, we are at 92. Some of our major trading partners, the U.S., China, the EU, Japan, have all ratified the agreement already. Therefore, we are very close to that 110 mark. With Canada taking this important step forward, a step that began in 2001 with negotiations, in 2013 with the signing of the agreement, and now moving forward for ratification, it is a step that will pay substantial dividends for all businesses but especially for our small and medium-sized businesses.
The good news is that most of our laws already comply with the trade facilitation agreement. However, Bill C-13 completes those legislative changes that are required to facilitate the full implementation of it. In particular, it makes two amendments that accord with different provisions of the trade facilitation agreement. One of those provisions is article 10.8.1 of the trade facilitation agreement. The amendment in Bill C-13 would give Canada the authority that we need to deal with goods that are brought into Canada that are non-compliant. This gives us the ability to respond to problems that come up, and opens the door for us to implement this agreement.
The other one is from article 11.8 of the agreement, which gives Health Canada and Environment and Climate Change Canada the legislative authority to exempt certain goods from certain Canadian requirements if those goods are not destined to end up in Canada, but would transit through Canada. Therefore, if Canada is a transit point for certain goods and the requirements we have in Canada for those goods are not exactly met, perhaps from an environmental or health perspective, they can still transit through Canada, but only on the basis of regulations and exceptions made through those departments. At least there is a provision for those carve-outs to be made, but also there are protections in place to ensure that those goods do not end up in Canada.
This provides a good mechanism for complying with the requirements of the trade facilitation agreement for getting the benefits of it for our economy and for our job creators, especially for small business. Also, it does not negatively affect the health and safety of Canadians or the environment. Therefore, the legislation is good, it strikes a good balance, and it is one that I and my colleagues will support.
I want to talk as well about the importance of international trade. This is a positive step as a new international multilateral trade deal. Our support for it underlines our belief on this part of this side of the House that Canada is a trading nation, that we benefit from international trade, and further that there is solid economic science behind the idea of international trade. This is something that most economists agree has clear benefits.
It is not a commitment to trade, it is not a government agreement that governments will trade, but it opens up the freedom for individuals within different countries to freely exchange, to make mutually beneficial exchanges, with people in other countries. We know that the common effect of that is greater degrees of specialization and it allows partnerships to be forged between countries, which can lead to more efficient production, the realization of new markets, and the creation of new wealth.
Our country clearly has seen the benefit of international trade. Of course at the time when it was a Conservative government that pursued free trade with the United States, trade was opposed by both the Liberals and the NDP at that time. However, at least the Liberals have come to recognize the wisdom of that approach. Under the previous Conservative government we were very bullish in recognizing the benefits of international trade and moving forward with trade agreements.
We understood this basic economic science of trade, that giving people the freedom to make mutually beneficial exchanges was good for everyone. It would not make much sense to say that I cannot shop at certain restaurants because of what side of town I live on. Exactly the same principle applies for international trade.
There is that technical basis for international trade that we can prosper together as a global community and that we can draw on the wisdom of economics in terms of understanding those benefits.
On the other hand, there is a strategic dimension of trade. We do not just unilaterally open ourselves up to international trade, but we do proceed in a methodical way with negotiation with other countries to try and open up markets in a reciprocal way, but also to align ourselves as much as possible when it comes to human rights, protection of the environment, and labour. It is worth underlining why we do this. It is because we know trade allows us to prosper nationally and together with other countries, but trade also is an opportunity to build strategic partnerships with specific nations to deepen our friendship, to deepen the sharing of ideas and of commerce between those nations. As such, it is important that we approach trade in a way that reflects our values.
With regard to the trade facilitation agreement, it is very positive from a strategic perspective that we are able to move together as a relatively united global community on this, that this reflects a consensus of different countries. In our other trade dealings, it is important for us to move with this thought out strategic lens on the point of trade as well, and I say this with respect to the trans-Pacific partnership.
To its credit, however, the government has moved this particular issue fairly quickly through the committee. This was an issue that there was an ability to move forward in a thoughtful but time-sensitive way on it.
On the other hand, the trans-Pacific partnership has been sitting on the government's desk for a full year tomorrow, since the election. The government has not even taken a position on that issue. I and other members have spoken before about the economic benefits, we could perhaps say about the technical side in terms of the benefits of the trans-Pacific partnership, but it also has great strategic significance. This was a key part of President Obama's foreign policy in terms of aligning with other democratic nations throughout the Pacific region, nations which share our values, by and large, and establishing a trade agreement that would set the terms of trade in a way that was aligned with our values.
It is Canada, the U.S., Mexico, Japan, Australia, New Zealand, among other nations, coming together with an agreement that provides those robust protections that reflect our Canadian values. It is a mechanism, yes, for pursuing economic prosperity, but also for achieving a strategic advantage that reflects our values.
It is no secret, of course, that the kinds of values that are reflected in the trans-Pacific partnership are different from the approach taken by a country like China, which is also seeking dominance in the Asia-Pacific region with a different approach when it comes to human rights, the environment, labour rights. I would passionately say that our approach is more in line with an understanding of universal human values and an appreciation of universal human dignity. It is not a particularly western or exclusive approach. It is not an approach in terms of the human values that we emphasize as particular to one community or one culture. It is a set of values that we have that are worth using the mechanism of trade deals to strategically advance in that region.
I will just say, perhaps pre-empting a question from my friends in the NDP caucus, that they have been right to raise human rights issues in Brunei, which is part of the trans-Pacific partnership. There are human rights issues in some of the countries involved; there is no doubt about it. I think the situation in Brunei very well deserves the attention of members of the House. However, being a relatively small player in the scheme of the overall agreement, the agreement still very much reflects the values that we have here in Canada, the values that nations within our community of partners and allies of like-minded nations share together.
Yes, for economic technical reasons, but also for strategic reasons, it is important that we prioritize the trans-Pacific partnership. It is important that we move forward with that in order to set the terms of trade in the Asia-Pacific region in a way that reflects our values. Of course, we know that the government has a different approach when it comes to this strategic approach to trade. In the last year, it has not stated any kind of position on the trans-Pacific partnership, but it has talked in a very bullish way about moving forward with free trade with China on a bilateral basis.
My view is that we can be stronger in terms of our strategic interests when we work with our allies. When we do not, instead, we put ourselves in a position where we could very well be at a real disadvantage in terms of negotiations with China. It gives China an opportunity to try to set the terms of trade when it comes to human rights, when it comes to the environment, when it comes to labour rights and other kinds of issues.
We can benefit economically from trade at every level; there is no doubt about it. However, from a strategic perspective, would we not be wise to first move forward with the trans-Pacific partnership and continue to pursue trade arrangements with Europe? Hopefully, we will soon see the full ratification of the Canada-EU free trade deal, successfully negotiated as well under the previous government but continued with by the current government, to its credit. We should start by nailing down those trade deals with like-minded nations and then proceed collaboratively with those like-minded nations when we approach countries like China that do not share our fundamental values. We need to approach trade in a strategic way.
I think the trade facilitation agreement reflects our values. It is a positive step that the world is able to come together on, but we need to prioritize the advancement of our values and be strategic. That is why I really hope that at some point at least we will hear an answer from the government on TPP, and hopefully in the not too distant future, recognizing as well the technical benefits of trade, the economic benefits that I have spoken about, specifically for the trade facilitation agreement, but also the strategic benefits.
I am pleased to be supporting the bill. Hopefully, we will see its passage very soon and be able to move forward on some of these other trade issues that I have raised as well.