Evidence of meeting #3 for Canada-China Relations in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was chinese.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Marta Morgan  Deputy Minister, Foreign Affairs, Department of Foreign Affairs, Trade and Development
Paul Thoppil  Assistant Deputy Minister, Asia Pacific, Department of Foreign Affairs, Trade and Development
Steve Verheul  Assistant Deputy Minister, Trade Policy and Negotiations, Department of Foreign Affairs, Trade and Development
Fred Gorrell  Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food
François Rivest  Executive Director, Greater China, Department of Foreign Affairs, Trade and Development
Duane McMullen  Director General, Trade Commissioner Service - Operations, Department of Foreign Affairs, Trade and Development

11 a.m.

Liberal

The Chair Liberal Geoff Regan

Mr. Harris.

11 a.m.

NDP

Jack Harris NDP St. John's East, NL

Thank you to the witnesses for your presentations. I have a question regarding the canola situation. You outlined some of the steps that were taken and the timelines that are involved. Are you confident that the pace of these developments is in keeping with the normal process of trying to resolve questions of this nature? It seems to me that....

Are we going through the motions here or is there a genuine effort to resolve this?

11 a.m.

Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food

Fred Gorrell

Thank you for the question.

No, we're not satisfied with the pace. To make it clear, when the suspensions of our two largest trading companies came into effect in March, we asked for face-to-face meetings right away. For a period over the summer, we had been asking for face-to-face meetings to have the technical dialogue and exchange so that we could get the science-based evidence base to refute it. After we had WTO consultations—and I'll defer to my colleagues if you have questions on that—in October they did agree to have a face-to-face meeting, and we did have one with a rather large sizeable group in Beijing in December. We've had progress. They have been, I would say, positive but difficult conversations. We agreed to meet in February or March of this year to further the discussions.

Under normal circumstances we would have preferred a much more proactive approach from the Chinese, but they have been engaging and we do feel there is room for conversations with a scientific, evidence-based approach so that we can understand whether their position can be considered legitimate—or not.

11:05 a.m.

NDP

Jack Harris NDP St. John's East, NL

It seems to me there's some evidence that this action, even based on the objective pace of the discussion, goes beyond the actual concern for the product itself.

11:05 a.m.

Assistant Deputy Minister, International Affairs Branch, Department of Agriculture and Agri-Food

Fred Gorrell

Deputy Morgan said it very well that the relationship between Canada and China is very complex. There may be other factors involved when decisions are made, but we're very much sticking in our swim lane relative to the technical aspects and the merits of it. I would leave that for others to decide.

11:05 a.m.

NDP

Jack Harris NDP St. John's East, NL

It will soon be year since these measures were taken. At what point would you want to go forward with the WTO next step in seeking a resolution?

11:05 a.m.

Assistant Deputy Minister, Trade Policy and Negotiations, Department of Foreign Affairs, Trade and Development

Steve Verheul

It is an ongoing analysis that we do as to when is the right time to take that further step. Part of the issue is that there are some ongoing technical discussions happening, and if we feel there is some forward movement in those discussions, then that could be a quicker way to resolve the problem than going through a lengthy WTO dispute settlement panel process.

At some point, we will have to make the judgment as to whether those technical discussions are productive enough that we continue down that track, or whether we feel that it is now time to move on to a WTO panel request. It's an ongoing assessment and we'll continue to assess that as time goes on, but we also want to make sure that through these technical discussions we're collecting all of the evidence we need to put forward a very strong case at the WTO.

11:05 a.m.

NDP

Jack Harris NDP St. John's East, NL

On another matter, Professor Wendy Dobson, a former senior public servant in Canada, from the Rotman School of Management has suggested that some of our relationship with China could be increased or improved in terms of business interaction by developing multilateral rules of conduct in telecommunications, and also internationally accepted boundaries for cyberwarfare. I know you're not into the cyberwarfare business, but it is part of the relationship between technology and exchange, and of course we do have concerns about the issue of Chinese companies doing business in these fields. Certainly Huawei is the number one consideration on this list.

Is any consideration being given to working on this issue, from your perspective or from Canada's perspective, to try to improve that situation?

11:05 a.m.

Assistant Deputy Minister, Trade Policy and Negotiations, Department of Foreign Affairs, Trade and Development

Steve Verheul

There are a number of aspects to that issue. There are negotiations ongoing at the WTO now that involve electronic commerce. We are trying to advance those negotiations and so far we are making some progress on that front. If you're getting into some of the other issues that have more to do with security of information and issues that aren't related to trade, those are outside of our field, of course, and would have to be pursued elsewhere. I don't know if anybody else on the panel has further information on anything outside of the trade sphere.

11:05 a.m.

Executive Director, Greater China, Department of Foreign Affairs, Trade and Development

François Rivest

I would just add that we are mindful of the issues at stake and of the risks and we are constantly assessing how Canada can mitigate the risks that are inherent to those sectors.

11:05 a.m.

Liberal

The Chair Liberal Geoff Regan

You have 25 seconds.

11:05 a.m.

NDP

Jack Harris NDP St. John's East, NL

I'll pass.

11:05 a.m.

Liberal

The Chair Liberal Geoff Regan

Thank you very much, Mr. Harris.

Ms. Kusie.

11:05 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Thank you, Mr. Chair.

Thank you very much to all of our guests for being here today. Of course, in the chamber right now we are debating the ratification of the new NAFTA. I'm interested in having your perspective on the U.S.-China relationship and whether it harmed or hampered the United States as it negotiated the new NAFTA with Canada and Mexico. Could we have your thoughts on that, please? Did the trade relationship between China and the U.S. help or harm the U.S. as it came to Canada and Mexico to negotiate this new NAFTA?

11:10 a.m.

Assistant Deputy Minister, Trade Policy and Negotiations, Department of Foreign Affairs, Trade and Development

Steve Verheul

I don't think we could say that it harmed U.S. efforts to negotiate the new NAFTA other than through the fact that they were occupied with a number of different negotiations taking place at the same time. In terms of their level of attention and focus on different negotiations, there may have been some issues regarding working capacity. Beyond that, I don't think so, but I would point out that in certain chapters that we negotiated with the U.S. and Mexico—and I'll mention state-owned enterprises as one of those—much of the discussion within the negotiations of that chapter related to how we could best set an example for the world on how we have discipline on state-owned enterprises, which could perhaps be taken as a precedent for other free trade agreements. I think the U.S. was thinking of countries like China when we were negotiating some of those elements.

11:10 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

You've spoken about the value of trade between China and Canada in tangible commodities. That's really what we've focused on here today, things like canola and pork, as well as services. Can you quantify the value of the new intangible commodities like IP, R and D, data, and others? How are we beginning to regulate and protect those valuable assets with respect to China?

11:10 a.m.

Duane McMullen Director General, Trade Commissioner Service - Operations, Department of Foreign Affairs, Trade and Development

Thank you, Mr. Chair.

Outside of the tangible trade between Canada and China, as the honourable member has observed, there is considerable intangible trade. For example, in the education sector there are over 140,000 Chinese students studying in Canada in communities all across our country. Not only are those students bringing economic benefits to Canada, but they're also learning about Canada and how our democracy and society operate. There is intangible trade and tourism by Chinese tourists. We have a science and technology collaboration agreement with China that supports science and technology collaboration in areas we think meet the interests of both Canada and China.

11:10 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Perhaps you could expand upon it. How are we protecting ourselves in the new digital economy, please?

11:10 a.m.

Director General, Trade Commissioner Service - Operations, Department of Foreign Affairs, Trade and Development

Duane McMullen

Mr. Chair, as the previous question indicated, work is under way in the WTO multilaterally with all countries to figure out the ways to operate in this new environment and, specifically with Canada, we have a number of mechanisms.

In particular, with Canadian companies looking to do business in China, we give them extensive advice, not only about the benefits of that business in China should it work, but also about some of the risks they need to be taking into account—for example, with respect to their intellectual property and other competitive aspects—and ways they can deal with those risks to protect their business, to be successful in China and not have that trade work out badly for them.

11:10 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Mr. Rivest, do you think that export decreases are retaliation for Kovrig and Spavor?

11:10 a.m.

Executive Director, Greater China, Department of Foreign Affairs, Trade and Development

François Rivest

We've talked about canola and pork, and there has been talk about other sectors that have weakened a little bit. There is no clear link between those downtrends and the arrest of Meng Wanzhou, Mr. Chairman. There have been other sectors, as Mr. Verheul has mentioned, where exports have gone up. Not all sectors have experienced a downturn; there are only a few of them.

11:10 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Then how do you account for these decreases?

11:10 a.m.

Liberal

The Chair Liberal Geoff Regan

Thank you, Ms. Kusie.

11:10 a.m.

Conservative

Stephanie Kusie Conservative Calgary Midnapore, AB

Thank you, Mr. Chair.

11:10 a.m.

Liberal

The Chair Liberal Geoff Regan

Mr. Oliphant.