Agriculture Committee on Feb. 21st, 2017

[Frédéric Seppey]

To begin with, the international activities and projections of Agriculture and Agri-Food Canada go beyond the market access secretariat. For instance, my team, which is separate from the secretariat, contributes to the negotiation of free trade agreements through its work on international standards, also helping to address these problems.

As far as Agriculture and Agri-Food Canada's budget for international activities is concerned, funding has been slightly on the rise in recent years. In my humble opinion, we have the resources we need to make progress, achieve our objectives, and address the needs of our exporters.

[Pierre Breton, Liberal, Shefford, QC]

How much time do I have left, Mr. Chair?

[The Chair, Liberal, Pat Finnigan]

About a minute and a half.

[Pierre Breton, Liberal, Shefford, QC]

I have time for another question, then.

A few weeks ago, a witness told the committee that the secretariat had a list of approximately 300 barriers to international markets, probably non-tariff barriers. I imagine your trade commissioners, diplomats, and strategists in Ottawa are working on those as well.

How do you identify which obstacles to tackle first? Which obstacles do you prioritize further to your various studies?

[Frédéric Seppey]

It's a pretty complex job. Truth be told, it's more of a database than a list. We work on it very closely with our partners on the federal interdepartmental team on market access, which includes Agriculture and Agri-Food Canada, CFIA, Global Affairs Canada, and the Canadian Grain Commission.

The team maintains the database, which changes every day, but has just under 300 measures. At last count, there were 287, not all of which are non-tariff barriers necessarily. They represent a variety of market access issues that the industry considers important to address.

With such a large number of concerns, it is indeed necessary to rank and prioritize them. In co-operation with industry, we have set up a prioritization system based on a certain number of criteria. We consider, for instance, whether it would be possible to resolve the issue relatively easily.

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Seppey.

[Pierre Breton, Liberal, Shefford, QC]

It was getting interesting.

[The Chair, Liberal, Pat Finnigan]

He can finish during the next round of questions.

Go ahead, Madam Jolibois, for six minutes.

[Georgina Jolibois, NDP, Desnethé—Missinippi—Churchill River, SK]

Thank you very much. Thank you to the witnesses.

Free trade agreements have considerably reduced tariff barriers. However, a growing number of increasingly complex non-tariff barriers are emerging. What non-tariff barriers are currently in place between Canada and its trading partners?

[Frédéric Seppey]

In my opening remarks I provided a number of examples of such measures that exist, but in all markets we have a number of issues that we're trying to address. Let me add to the list that I provided in my opening remarks.

In China, we are concerned by the regulatory approval process for genetically modified products. It is very complex. The timelines seem to continually increase. Currently it can take up to 40 months to get a new GM product approved in China. Of course, as I mentioned in my opening remarks, such delays in the regulatory approval of genetically modified products are an impediment on our farmers being able to use the latest innovations in GM products. That's one illustration.

Another illustration is Korea. Our sentiment and the sentiment of the industry is that often pressures from consumer groups or industry seem to have an influence on the decision-making processes in terms of regulations. As a result, the approval process for new products or new techniques—sanitary or phytosanitary measures—lacks predictability. If we don't have predictability in trade, it can interfere very effectively with the ability of our exporters to export.

These are two illustrations of the types of measures that exist and that we are monitoring. We're working with the industry, using our advocacy efforts, and using trade discussions when they're available. We'll try to make progress and address these issues as much as possible.

[Georgina Jolibois, NDP, Desnethé—Missinippi—Churchill River, SK]

Thank you.

Do I have time for another question?

[The Chair, Liberal, Pat Finnigan]

Yes. You have three minutes.

[Georgina Jolibois, NDP, Desnethé—Missinippi—Churchill River, SK]

Okay.

What approaches to reducing these barriers could be used with respect to Canada's existing trade barriers? Can you elaborate, please?

[Frédéric Seppey]

We have a number of available tools at our disposal. The most obvious one is to use the disciplines and the rights and obligations we've negotiated under the World Trade Organization. If we face a market access problem or non-tariff barriers, often the Canadian delegation, through....

There are regular meetings, several per year, of committees at the World Trade Organization with regard to sanitary and phytosanitary measures or technical barriers to trade. At the margins of those meetings, or at the meetings per se, our delegation will raise questions. We'll have meetings with foreign countries to better understand the measures but also to try to see if we can discuss with the foreign country other ways for them to achieve something that is often based on a legitimate policy objective or whether they can find a way to apply their measures in the least trade-restrictive fashion as possible.

If the problem is not resolved, we always have the recourse of the dispute settlement mechanism, the tribunal that exists under the World Trade Organization. This is what we did, for example, when we had concerns and problems with respect to the United States' mandatory country-of-origin labelling that was introduced under the United States farm bill of 2008. When we use such dispute settlements, however, it's really as a last resort. Unfortunately, it takes years to get a satisfactory resolution. In the case of COOL, the measure was introduced in 2008 and the issue found a resolution only in December of 2015. It took a number of years.

As well, if we have trade negotiations or we are negotiating a free trade agreement, as was the case recently with the European Union, we can try to address these measures by having either disciplines or political commitments attached to the trade agreement.

These illustrate the types of vehicles we can use. In addition, of course, there are the advocacy bilateral contacts that the industry would either use on their own or jointly with the government to make representations to foreign governments.

[Georgina Jolibois, NDP, Desnethé—Missinippi—Churchill River, SK]

Can you elaborate on what you said about the tools available for the tribunal disputes? I'm curious about the current status of the United States of America. Do we have any updates on where they're going, where they're heading?

[Frédéric Seppey]

Thank you for this question.

This is, of course, a very new administration. I think yesterday marked the first month of the arrival of the new president. It therefore is still too early to have a sense of a clear direction on trade policy for the new administration.

A number of key secretaries are nominated, but they have yet to be confirmed by the Senate. First among those is the Secretary of Commerce, but there's also the United States Trade Representative, the equivalent to our Minister of International Trade. As well, all the top senior officials in the U.S. government when it comes to trade are subject to confirmation by the Senate. We'll have to wait for these confirmations, for these people to be formally appointed, to get a greater sense of clarity with respect to the U.S. trade policy.

However, as you know—

[The Chair, Liberal, Pat Finnigan]

Thank you, Mr. Seppey. We have to move on.

Thank you, Madam Jolibois.

Mrs. Lockhart, you have six minutes.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Thank you.

We talk a lot about the 300 barriers that we've identified and continue to work on, but I would assume that Canada has also set some non-tariff barriers. Could you talk to us a little bit about how we are effectively protecting our agriculture sector through these measures?

[Frédéric Seppey]

First of all, as I pointed out in the opening remarks, many non-tariff measures, although we often use the concept of “barriers”, are in place for very legitimate reasons, such as those aimed at protecting human, animal, and plant health. Often what we see as a legitimate policy measure may be seen by trading partners as excessively restrictive. That's why these committees we have at the World Trade Organization are important to maintain a very close dialogue. However, the primary purpose of these measures should not be to protect our agricultural interests. It should be to protect human, animal, and plant health.

In terms of defending our agricultural interests, we have a number of policies in place, including, where it's appropriate, tariff measures. Canada, like other countries, maintains these. While the vast majority of agricultural products can be imported into Canada duty free, without any tariffs, we still have some tariffs in place, as do the United States, the European Union, and other countries. This is a more predictable, transparent tool to address issues that enter more into the nature of protecting our agricultural interests.

In terms of tariff measures, their primary purpose is legitimate policy objectives, or it should in theory be that way.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Let me rephrase that, then. Which measures do we get the most complaints about? Which ones are irritants?

[Frédéric Seppey]

I'll use one example that is currently under dispute at the World Trade Organization.

Just before the change of administration in the United States, the United States filed a complaint against Canada with respect to the policies of British Columbia on wine. That was the right of the United States. They obviously had concerns about the impact of a regulatory measure that exists in Canada, and has existed for a long period of time in several provinces, on the sale of alcoholic beverages.

The United States, over time, has had discussions involving the Government of British Columbia on those measures to explain the purpose of those measures. Ultimately, the United States has exercised their right to bring these concerns to a more formal process under the World Trade Organization. This is a process that has just started. We are in the initial phase of consultations and are trying to resolve this issue informally.

This is an illustration of the types of concerns other countries may have with respect to certain non-tariff measures existing in Canada, whether it's at the federal or, in this case, the provincial level.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

You mentioned international standards bodies as well. Is Canada currently playing a leadership role on these international boards?

[Paul Mayers, Vice President, Policy and Programs Branch, Canadian Food Inspection Agency]

Thank you very much for the question.

In the case of what we call the “three sisters”—Codex Alimentarius for food safety, the International Plant Protection Convention for phytosanitary risks, and the World Organisation for Animal Health—in all three cases, Canada is very active. In terms of participation, we lead a number of subsidiary bodies in support of the development of standards of relevance to Canada. We participate in all of the relevant subordinate bodies that develop standards that touch on issues relevant to Canadian agriculture.

Indeed, as my colleague noted in his opening remarks, we provide direct support to the work of the standard-setting organizations in terms of extra budgetary funding in order to advance the pace of international standards development, recognizing that it's important to our agricultural sector. Within these organizations, it can sometimes take a long time to develop international standards that we believe to have great relevance in creating greater predictability in terms of trade, and greater protection through those standards as well.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Canada plays a leadership role. Why is that? Why is the world looking to Canada on these issues?

[Paul Mayers]

There are a number of reasons. We have very mature and well-developed regulatory systems. Colleagues in other jurisdictions believe there are lessons they can learn from Canada in terms of how we approach regulating. We have a very strong commitment—and this committee has expressed it on a number of occasions—to a science-based approach to regulating in this space, and that is well respected internationally.

As we've seen in some situations, such as in the food safety area, Canada compares extremely favourably with any other jurisdiction in terms of its system. Indeed, the Conference Board's most recent report recognizes Canada and Ireland as the strongest food safety systems internationally.