Fisheries Committee on June 10th, 2008

[The Chair, Conservative, Fabian Manning]

I call the meeting to order.

We're waiting on a couple of colleagues. We have to start, because the minister has an hour with us and I don't want to waste any time waiting.

I'd like to welcome Minister Emerson here, and his staff. Certainly we've been waiting for the opportunity for him to appear before us. So I'm going ask Mr. Emerson for opening remarks, and then we'll go through the process of having some questions and hopefully some answers.

Minister Emerson, the floor is yours.

[David Emerson, Conservative, Minister of International Trade]

Thank you very much, Mr. Chairman and colleagues. It's good to be here.

I'm going to just read a statement that will give you a bit of update on where the Doha Round is and where the fisheries issues are at this time.

Let me begin by reminding members that these Doha WTO negotiations began in 2001, so they've been going on for seven years now, which is actually not that unusual. The Uruguay Round took seven years to come to an agreement.

The Doha Round, as you know, is a development-focused round, intended to provide maximum opportunities to developing countries. It includes a very substantial emphasis on agriculture, but also non-agricultural market access, trade in services, rules, and trade facilitation.

Canada, as we have always been, is an active and committed participant in all of the negotiating groups. When you look at our objectives at the Doha Round, the first is to achieve an ambitious outcome that creates a level playing field for our agrifood sector, which, as you know, is an economic engine in countless communities across Canada; second, to increase market access for goods and services more generally; third, to provide improved and clarified rules on trade remedies and strong binding rules on trade facilitation; and finally, to provide real benefits, of course, to developing countries, which is what the round is primarily about.

In terms of the process that is going on, over the past year the chairs of various negotiating groups have issued draft texts to advance discussions. Proposals with sufficient levels of support will eventually become part of the final package to put to trade ministers for a final decision. It's important to note that the decisions at the WTO are consensus based among the members of the WTO, which means that the ministerial conference will ultimately decide on the final outcome of the Doha Round. As you know, the WTO has what's called a single undertaking, which means that nothing is agreed to until everything is agreed to.

At the present time, the focus is on agriculture and non-agricultural market access, otherwise known as NAMA, with discussions taking place at the senior officials' level, with a view to bridging gaps in these two key negotiating areas. If sufficient progress is made on agriculture and NAMA, this would lead to a meeting of ministers, but at the present time there are no indications from the secretary-general of the WTO as to when indeed, or if, he will call a ministerial meeting.

At this stage, ministers wouldn't be meeting to agree on a final package, but rather, to agree or attempt to agree on what are called “modalities” in agriculture and non-agricultural market access, the purpose being to give further guidance to officials to move the negotiations forward to the final stage. No decision is envisaged in areas of the agenda other than agriculture and NAMA, and that would include the issue of rules and fishery subsidies. So there's no imminent decision to be made there, but there is a process that we are actively involved in, and I'll tell you a bit about that in my remarks.

There is still some hope that the Doha Round can be concluded this year. My own personal judgment is that it's no better than 50% likely at the moment, but that's just my judgment. But a successful conclusion of the Doha Round is a priority of the government.

With respect to the rules negotiations, Canada’s overall objectives are to improve the disciplines on anti-dumping and countervailing measures in order to achieve greater international convergence and predictability in their application, and as a means of preventing unnecessary disruptions to trade such as we've seen in the past--for example, around issues like softwood lumber.

Canada has also supported improved disciplines on fisheries subsidies for trade and environmental reasons. As you know, the chair of the rules negotiations issued his draft text on November 30, 2007. That text reflects the chair’s proposals on how WTO members might wish to address issues in areas of anti-dumping, general subsidies, and--of particular interest to us today--fisheries subsidies.

While Canada supported a number of the chair’s proposals in a number of areas, we have major concerns regarding certain proposals by the chair, including the area of fisheries subsidies. We are not alone in those concerns; there are a significant number of strong players that are as concerned as Canada is.

On the specific issue of subsidies to the fisheries sector, trade ministers called for special attention to address subsidies that lead to overcapacity and overfishing when they launched the Doha negotiations in 2001, the view generally being that there are too many boats chasing too few fish. During the negotiations since that time, extensive consultations were held with provinces, territories, and the fisheries industry, all of which have been supportive of the concept of disciplining subsidies in the fisheries sector. These consultations have allowed Canada to develop its position on the issue, which, as I have already said, can be summed up as there being too many boats chasing too few fish.

We do believe that increased disciplines for fisheries subsides are beneficial to Canada, as they support our efforts to improve the global governance of the fishery resource. So right from the beginning Canada has been saying that the focus has to be on the most damaging practices. This means that the proposed disciplines have to address those subsidies that contribute to overcapacity and overfishing--for example, subsidies for vessel construction.

We also maintain that any disciplines need to be enforceable, workable, and transparent. As I noted earlier, the draft text proposal circulated on November 30 proposes certain restrictions that are unacceptable to Canada.

As the committee has discussed before, the key concerns for Canada are the inclusion of the prohibition on income support and port infrastructure. We are also concerned with the fact that the chair has not provided an exclusion for small programs. In discussions in Geneva on these issues with the chair and other WTO members since November, Canada has expressed its concerns regarding these proposals by the chair.

With respect to income support, we believe there is no link between employment insurance benefits and overcapacity and overfishing. These programs do not contribute to overcapacity and should not be disciplined. We also made clear to the chair and other WTO members that social safety nets fall outside the scope of these negotiations--i.e., they shouldn't be on the table at all.

Turning to infrastructure, we also believe that governments must be free to provide essential infrastructure and services to their citizens. This principle is well recognized in the WTO agreements.

We've also made the point that it would be difficult to distinguish between general infrastructure and fisheries infrastructure, particularly in smaller fishing communities. Since the chair's draft text does not include a carve-out for programs in support of small-scale fisheries in developed countries, in April Canada proposed a de minimis provision that would allow all members, including developed countries like Canada, to provide a limited amount of support for small-scale fisheries. While there is opposition from many developing countries to this type of exemption, Canada will continue to actively pursue this provision as well as strongly pursue changes in the chair's draft text to address our concerns on income support and port infrastructure.

So we are well aware of the issues of concern regarding income support, infrastructure, and small programs, and we are pushing back strongly to have these concerns addressed.

On May 28, the chair issued a 282-page working document that includes three annexes relating to anti-dumping, general or horizontal subsidy issues, and fisheries subsidies. The document is a compendium of text proposals put forward during the negotiation, including the chair's November 2007 consolidated text proposals, as well as the positions and reactions expressed by members.

These annexes are not new draft texts, as the chair currently feels that he does not yet have a sufficient basis to issue revised consolidated text proposals. The chair refers to the three annexes as an interim step forward that seeks to convey in detail the full spectrum and intensity of the reactions to the first draft text and to identify, to the extent possible, the many suggested changes put forward by members.

The annex concerning fisheries subsidies reflects the interventions that Canada and other members have made regarding their strong concerns over the proposed disciplines on income support and port infrastructure programs. It also contains the de minimis proposal made by Canada in April of this year. This document clearly shows that there is no convergence of views on these proposals, and all of these issues are still very much the subject of ongoing negotiations. Indeed, the chairman indicated that there are very serious concerns on the part of many, if not all, delegations about the first drafts and that revision of those will be necessary.

While Canada appreciates the chair's efforts to reflect the concerns and positions of WTO members, including those of Canada, we would have preferred a new revised text. It is clear that further discussions will be necessary to address our concerns, and we will continue to pursue our objectives.

I will conclude by reiterating that we have made our concerns with the chair’s draft text known to the chair and to the negotiating group in the area of fisheries subsidies, and we have pushed for a revised text. In the meantime, we are continuing to work with like-minded members to address our concerns; and as I just mentioned, we proposed some new text on small programs.

These negotiations are one way that Canada is working to ensure prosperity in this sector, by disciplining the most damaging subsidies. The negotiations are a long way from over, and we will continue working to ensure that any eventual agreement does indeed reflect the interests of Canada’s fisheries sector. I am extremely optimistic that we will be successful in that regard.

I look forward to your comments and questions on this issue.

Thank you very much.

[The Chair, Conservative, Fabian Manning]

Thank you, Minister.

We'll open up the floor for questions. I believe Mr. MacAulay is going to begin.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Thank you very much, Mr. Chair; and welcome, Mr. Minister.

What does this proposed de minimis provision that you've spoken about include? You say that was proposed in April. Was that April of this year?

[David Emerson, Conservative, Vancouver Kingsway, BC]

Yes.

[Lawrence MacAulay, Liberal, Cardigan, PE]

What I would like to know is, with all these negotiations going on, which are so desperately important for the inshore fishery—in fact, it's the death of the inshore fishery if what is proposed happens—why did the government wait until April to put this proposal forward? These proposed WTO rules will destroy the inshore fishery in this country. If the government does not oppose this and make sure it doesn't happen, it means the rural areas of Prince Edward Island are not in difficulty, they're gone.

So it's a very serious situation, Mr. Minister.

[David Emerson, Conservative, Vancouver Kingsway, BC]

Thank you for that editorial comment.

I can assure you that the Government of Canada has been actively involved in the rules negotiations. We have been making our views known. We will continue to make our views known. We will ensure that the inshore fishery, and indeed the Canadian fishing industry, is not harmed but actually benefits strongly from any WTO outcome.

The de minimis proposal came because we had to wait for a chair's text. We had to work our way through the various issues, identify the problem areas, which we have done, and develop a strategy for responding to deficiencies in the text. That was the timeframe in which the process was operating.

[Lawrence MacAulay, Liberal, Cardigan, PE]

We have had experts come before and tell us that representatives from certain countries have indicated that Canada has not been very opposed to these measures, which would be so destructive to the inshore fishery. How would you respond to that?

[David Emerson, Conservative, Vancouver Kingsway, BC]

I don't know who your anonymous commentators are, but I can tell you we have been very actively opposed to the critical elements I've already alluded to—the income support issues, the port infrastructure issues, and the need to have some provision for small-fishery-related programs. I guess people with particular interests will say certain things, but I can assure you that at these negotiations, which are going on largely behind closed doors, our people have been extremely active and extremely effective.

[Lawrence MacAulay, Liberal, Cardigan, PE]

Will you sign an agreement if these provisions are in there? If any of these provisions are in there, will this text be ratified by this country?

[David Emerson, Conservative, Vancouver Kingsway, BC]

I think the reality of this or the probability that something of concern to us will be in a final text is remote in the extreme. Even if there were something in the text that we had concerns about, that's not the end of the game; there are always opportunities to look at the fine print and the detail of programs.

We will not be signing any agreement that brings harm to the Canadian fishing industry.

[The Chair, Conservative, Fabian Manning]

Mr. Byrne.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

Thank you very much, Minister.

I want to jump right into the process that's been established post the issuance of the draft text by the chairman.

All WTO members received the draft text on fishery subsidies back in late November 2007, yet Canada did not put forward a position until late April, and it was not actually circulated to WTO members until the very beginning of May. That's almost five months later. Then, 26 calendar days later, the chairman put forward the 282-page working document based on all of the information he had received. So 26 days later, the chairman put out a working document. The changes that Canada had put forward were really not very well highlighted in that document. In fact, based on your statement, there's really not too much in the chairman's statement or working document indicating we're having much success in changing the way that draft text is going to read at the end of the day.

My concern is that somebody is dropping the ball here. Why did it take five months for a request for a de minimis exemption to be put forward by Canada? Why did it take that long? Is part of the reason that there's an issue of accountability here?

The Minister of Fisheries and Oceans of Canada is not directly involved in these negotiations; he's consulted, but he's not directly involved. You as the international trade minister are the lead minister, yet it's the Department of Finance that is actually the lead of the negotiations team. There seems to be a disconnect between the views and the priorities here in Ottawa versus what's happening over at the WTO.

Why wouldn't the Minister of Fisheries and Oceans and an official of the Department of Fisheries and Oceans head up the fishery subsidies negotiations, as they do in agriculture? I understand that for the agricultural committee, it is a senior official from the Department of Agriculture and Agri-Food who's in charge of those discussions, and they answer directly to the Minister of Agriculture, who works with you. On the fisheries file, it's completely different.

That, it seems to me—if you want an editorial comment—is one of the chief reasons why we are not succeeding when it comes to fisheries in the WTO file.

[David Emerson, Conservative, Vancouver Kingsway, BC]

Yes, I accept your somewhat partisan editorial comment, for what it's worth.

The reality is that the—

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

So do my constituents.

[David Emerson, Conservative, Vancouver Kingsway, BC]

These negotiations have been going on for seven years. This particular negotiating group and this particular text have only recently reached the intense developmental stage. It is not the primary focus of the WTO negotiations at this time anyway. The primary focus right now is on agriculture and NAMA, non-agricultural market access.

When we handle the negotiations, International Trade has overall responsibility, as you have noted, but we bring other departments in to provide special advice and to ensure, as we've done in agriculture, that where there is a very substantial negotiating group dealing with issues of concern to Canada, we have agriculture essentially driving that negotiation. We do little more than facilitate what agriculture is doing there.

The fisheries issue is not under a separate negotiating group; it's part of the rules negotiating group. There are issues well beyond those of the fisheries. There are a host of issues relating to trade rules, dumping, and zeroing, which, as you know, has been one of the issues we've been fighting hard against. So it's a broader process in which the Department of Finance has significant capability. They have responsibility for trade remedies in Canada. The Canadian International Trade Tribunal is under the jurisdiction of the Minister of Finance.

Remember that there are, I think, 153 WTO members here. When you talk glibly, as you do, about how long it takes and about people dropping the ball, remember there are 153 countries, all with their different issues and concerns, and we work very hard and aggressively. Our negotiators are on the road all the time, putting together coalitions to ensure that Canada's issues and concerns are in fact supported by other countries, because at the end of the day, as I said, this is going to be a consensus process.

We now have garnered a substantial number of significant WTO members and players in support of our position relating to fishery subsidies, infrastructure, and small programs. I think our negotiators have done a hell of a job, and I think you should tell them that.

[Gerry Byrne, Liberal, Humber—St. Barbe—Baie Verte, NL]

What I'm hearing is that fisheries seem to be relatively low on the priorities list. You've articulated that agriculture seems to loom large, that you're very concerned about that, and that's probably the message that I'll be giving our negotiators, if you don't mind.

Thank you very much for the advice, though.

[David Emerson, Conservative, Vancouver Kingsway, BC]

I think you should look at the WTO round. If you think that Canada alone is going to determine that fisheries will not be part of rules but will be part of a separate negotiating group, good luck to you. I think you're being pretty unrealistic, frankly. It's part of a large negotiation with over 100 countries involved, and to say Canada can just grab fisheries and separate it out and put it in a separate negotiating group is a little naive.

[The Chair, Conservative, Fabian Manning]

Thank you, Mr. Byrne and Minister.

Mr. Blais.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Thank you, Mr. Chair.

Good morning, Mr. Emerson.

I am going to move in the same direction as you, but I am dealing with the background.

Is it possible to send us the text of 280 pages or so that the chair tabled? Could you also send us what you call the de minimis proposal?

[David Emerson, Conservative, Vancouver Kingsway, BC]

Oui, oui. The answer is yes to both.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Correct me if I am wrong, but this is like we were in a funnel. When we entered the funnel, both agriculture and fisheries were part of the negotiations, but the more the process moves forward, the more the gap between them narrows. You know this very well because you have already been part of international negotiations. My feeling is that that fisheries will not be in the picture. As my colleagues have already mentioned, it looks like fisheries are going to be overwhelmed by agriculture.

If that is the case, subsidies for infrastructure, for boat construction and for job support will be deemed prohibited in the text; it looks more and more like they will be tossed overboard. Those of us who represent communities that make their living from the fishery—I represent la Gaspésie et les Îles-de-la-Madeleine—we are very worried.

Other issues are considered more important internationally and are given more consideration. What are you going to do to prevent the fishery from being ignored?

What efforts have you made to convince New Zealand or Australia to change their minds? Have you got the support of the United States? Are there other countries helping you? Are we forming a united front for these current negotiations?

[David Emerson, Conservative, Vancouver Kingsway, BC]

Thank you, colleague, for your question.

The reason it appears that the rules and the fisheries issues are a secondary issue right now is that the Doha Round of discussions is still not assured of success in the bigger sense of the word. If there is not an agreement on what we call the modalities in agriculture and non-agricultural market access, then this round of negotiations will fail.

So the emphasis at the WTO, under the direction of the director general, has been to drive very hard to see if that fundamental logjam around agriculture and non-agricultural market access can be broken in order for the balance of the negotiations then to proceed to completion. We have been very strong in insisting that we want to see the rules issues and the fisheries issues dealt with simultaneously for agriculture and NAMA. But the reality is that if there is not a breakthrough on NAMA and agriculture, the rest is academic, because there simply will not be an agreement or a negotiation.

So if there is a breakthrough on the modalities for agriculture and NAMA, then we will get into a number of other areas, not just rules and fisheries subsidies, but services and sectoral agreements, which Canada is pushing very hard for certain sectors. So there will be a whole second wave of high-intensity negotiation, but it will occur only if it's a non-academic exercise, and it will be a non-academic exercise only once we know if there's a deal on agriculture and NAMA.

On your questions about what we are doing and how we are doing it, we've been working very closely with like-minded countries, and they're non-trivial countries. We have the European Union, Japan, and Korea. We'll be talking with the Americans on this very issue in the next few days. So we have a significant number of allies on the fisheries issues, and we think we will prevail.

[Raynald Blais, Bloc, Gaspésie—Îles-de-la-Madeleine, QC]

Do you feel that it is too late to protect the fishery and that, if Doha fails, it could actually be to our advantage? After all, that would give us two or three more years to become better prepared and to secure more broad-based support.

As I understand it, the fact is that the fishery is going to be sacrificed and negotiations will chiefly be about agriculture, agri-food and the environment. At best, the fishery will be a bargaining chip.

[David Emerson, Conservative, Vancouver Kingsway, BC]

No, that's not correct, colleague. Fisheries is not going to be sacrificed. We will prevail. We will ensure that there's a positive outcome for the fishing industry.

Remember, there's an awful lot of export interest as well in the fishery sector. We're pursuing aggressively the export opportunities. We are effectively dealing with the areas of concern that have been alluded to, and we're doing it in the timeframe we have to do it in.

To suggest that we should walk away from the negotiations or hope that they fail, just so that we can have three more years to fiddle around with a problem that actually isn't going to occur, is to me a little bit not strategically optimum.