Fisheries Committee on June 10th, 2008

[The Chair, Conservative, Fabian Manning]

Thank you, Minister. Thank you, Mr. Blais.

Mr. Stoffer.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you, Mr. Chairman.

Minister, I'd like to thank you and your staff for coming today.

Mr. O'Neill, you said earlier that you have over 300 names of associations, etc., that were consulted on this negotiation on fisheries. I'm wondering if you could supply that list to this committee at your convenience, when you get a chance.

[John O'Neill, Chief, Trade Rules, International Trade Policy Division, Department of Finance]

We can supply the names, but the consultation letter didn't deal specifically with fisheries; it dealt with all of the rules issues. But we can give you the mailing list of the associations that it went out to. On review, there were only a handful of fisheries-related organizations, but we can certainly provide the list, yes.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

The reason I say that, Mr. O'Neill, is that members of Parliament won't be affected by this, our constituents will be. If Canada is going to negotiate agreements, in the WTO Doha discussions, on fisheries issues as well as a myriad of other issues, such as agriculture, we would like to know who you consulted with. I personally contacted a whole whack of people myself, and not one of them had been called on this issue; in fact, they're quite surprised by it.

So if you have 300 names and associations where discussions were ongoing, I'd sure love to know who they were. That's the first thing.

Mr. Emerson, on the chair of the WTO who drafted this, you have to go back and ask why he did this. If the rationale is that there are too many boats chasing too few fish--which really means too many fishermen chasing too few fish--then how do you rationalize the industry to protect the ecosystems of our oceans around the world? If you're starting on that premise, that's not a bad argument, but the question is this: who gets hurt when you do this?

In our own country, as you know, we have many people suffering, from the west coast to the east coast, in terms of price for their products and availability of the resource itself. Salmon on the west coast has been in trouble, as have the lobster prices on the east coast. We continuously hear that there are too many fishermen and not enough fish. Yet when we ask for particular programs to exit fishermen out of the industry with dignity--buyout packages for their enterprises or whatever--we always get a bit of a reluctance. But when I look at this, I think, “Hmm, WTO can do that for you.”

I know that agriculture is a very important issue in this country and around the world, as are other issues. But my feeling--and I get the sentiment from my colleagues here as well--is that fisheries is a sidebar, not the main issue at the forefront of all of this.

I remember when John Solomon, a former MP, met the French agriculture minister in 1988 over a glass of wine in Vienna. He was told that if he thought, for one second, that the French were going to ignore their farmers, he was out of his fricking mind. So I know you're in a tough battle when it comes to agriculture and these other discussions.

Can you tell us for sure that fisheries will not be a sidebar issue and that, if you get an agreement on agriculture and other areas, fisheries won't just get lumped into that vacuum? My fear is that this may happen, and I want your assurances that it won't.

[David Emerson, Conservative, Vancouver Kingsway, BC]

Well, you have my assurances that it won't, but remember that the whole Doha Round was set up in order to provide maximum opportunity for developing countries, and agriculture got drawn into that as a central feature of the negotiations or a central component of the negotiations because agriculture is so central to improving economic well-being in developing countries.

Agriculture is not a centrepiece of the negotiation because somebody doesn't want to deal with fisheries; it's there because agriculture is the fundamental sector that will drive wealth creation in the developing world. So then it becomes a centrepiece, along with the unfinished business on non-agricultural market access. So that's a bigger geopolitical reason for the focus on those elements.

As I said to the question that came up earlier, the reason the rules issue and the fisheries subsidies issue are not proceeding on the same timeframe as the agriculture and NAMA discussion is that the whole exercise is pointless if we don't come to a closure on agriculture and NAMA. We're not there yet. I don't know if we're going to get there, but I can tell you that in the work we're doing on rules and on the fisheries issue, we're going to drive it very hard, and I am very confident that we will prevail.

At the end of the day, if there is a successful Doha Round, it is going to be very good for our fishing industry. I can assure you that we are pulling out all stops to deal with the issues that you and other members have raised.

[The Chair, Conservative, Fabian Manning]

Thank you.

Mr. Kamp.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you, Mr. Chair.

Thank you, Minister and officials, for coming.

Clearly, none of us has experience in international negotiations, so we appreciate your coming and helping us understand a little bit better how things are going there and the process.

Let me begin, and then if there's time left, my colleagues might have some questions as well.

You kind of referred to it in your most recent comments, but let me make some general comment and question. What's surprising to me is that the WTO is talking about fisheries subsidies at all. One could argue that it's primarily an environmental issue rather than a trade issue. Although all of us have some serious concerns about elements in the chairman's draft text and we rightly raise those as major concerns, I think it's possible that we can lose sight of the fact that fisheries subsidies are part of the problem leading toward overfishing and eventually perhaps to some very serious problems with fisheries resources around the world.

Do you have any comments on either of those?

[David Emerson, Conservative, Vancouver Kingsway, BC]

Those are good observations, colleague.

On the issue of fishery as an environmental issue, we all know that a fishery is a common property resource that does not respect national boundaries, and if you do not have a multilateral approach to fisheries management, you will fail. You can do a certain amount locally to the degree that you're not exposed to international fishing fleets and that the fish are not migrating across international boundaries, etc., but fundamentally, if you're going to deal with the common property resource in the fishery, it has to be a multilateral agreement.

You and your minister are doing a lot of work, as you already know, on other multilateral mechanisms for improved fishery management regimes in the world, but there are also trade-related issues that can reinforce the environmental and fishery objectives that you, your minister, and fisheries ministers in other countries are attempting to pursue.

On the broad issue of environment not being part of trade negotiations, I can tell this committee that the days when we can cleanly separate environmental issues from trade issues are gone. There is an increasing momentum and impetus--albeit not very prominent in the Doha Round--beginning to creep into trade discussions. Countries are having to face up to the fact that you cannot have a level playing field in terms of international trade when some countries have very rigorous and possibly costly environmental protection regimes and others do not.

For example, we've had lots of discussions about China and the degree to which they are or are not managing their environmental issues in the same way as Canada is. Yet Chinese companies are competing with Canadian companies, so the environmental issues begin to creep in, and they will creep in increasingly in the future.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Yes, and obviously these things are important to us given that we export 85% of our fisheries catch.

On a more technical element, I understand that the Government of Canada is opposed to the proposal from the chair of the practice of zeroing. Can you tell us a bit more about that and whether it affects our fishery trade practices?

[David Emerson, Conservative, Vancouver Kingsway, BC]

I'm not sure if the members know very much about zeroing.

Zeroing is a practice that received egregious prominence during the softwood lumber dispute. It's a practice whereby countries—in Canada's case, it's usually code for the United states—calculate alleged dumping margins by looking at a company's exports. It calculates whether you're losing money selling, let's say, lumber or fish products into the United States. If you're losing money, they will add that in as part of the dumping margin, and if you get enough of these negative dumping margins, you'll get a very high anti-dumping duty trying to sell your product into the United States market.

The nasty piece in zeroing is that if you're making money on exporting some of your other product lines into the United States, what they will do is apply a zero to the cases where you're actually making money in the U.S. market and they will apply positive numbers where you're losing money, so the effect is to greatly increase the dumping duties.

Canada has gone to the WTO and we've won cases at the WTO that have ruled that zeroing is not an appropriate practice. What they ought to be doing is taking the negative and positive margins and balancing them off against each other. The U.S. has been successful in bringing the zeroing concept back into the rules text, even though we have won under dispute resolution proceedings at the WTO.

I think there are only two countries in all of the World Trade Organization that are supporting the United States' bringing zeroing back, so that's another fight we have on our hands. It's not specific to fisheries, but it could come up in a fisheries context.

[Randy Kamp, Conservative, Pitt Meadows—Maple Ridge—Mission, BC]

Thank you, Minister.

If there's time, I think Mr. Calkins--

[The Chair, Conservative, Fabian Manning]

You have three minutes.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you very much for being here today.

I'd like to congratulate you on the fine work you've done. I believe we've concluded trade agreements with seven countries now. While I certainly love being on the fisheries committee, I represent an agricultural rural riding in Alberta. I know that some really positive things are going to come out of the fine work you're doing. I wish you continued success throughout the multilateral negotiations at the WTO, and certainly with any bilateral, trilateral, or nation-to-nation agreements you're pursuing at this time.

In some of your comments today, you've basically given us assurances that with some of the positions the original chairman's draft has taken, we have several strong allies that will stand with us to get more clarity or improve Canada's position with that text. Given that you were very optimistic in your statement that Canada's positions will likely be reflected in a final text if one is approved, could you elaborate on some of the positives that would have for the Canadian fishing industry sector overall?

[David Emerson, Conservative, Vancouver Kingsway, BC]

As we have discussed this morning, on the fishery subsidies issues it is extremely important that we pull out all stops across the different parts of government and government activities that are leading to what I think is an emerging crisis in the fishery internationally. We've certainly seen it manifest itself on the east coast of Canada, and we've seen issues arising on the west coast of Canada.

All of the work we're doing around rules will be one more arrow in the quiver of fisheries ministers who are trying to bring an international solution to the overharvesting problem in the international fishery. That will be extremely important for the protection of people who earn their livelihoods from the fishery. But as Randy Kamp has said, 85% of the fishery product in Canada is exported. The opportunities to open some very major markets in Europe, Japan, Korea, and China if we can get an agreement on non-agricultural market access will be extremely important.

We all like to look at the WTO and any trade agreement, because we see some little sector there where we're concerned that there's going to be a negative impact. But the World Trade Organization and the impact of a new trade agreement will be very positive across many sectors, and many of them are going to be related to agriculture and agrifood.

Historically in Canada we've acted as though the agriculture and resource industries are somehow not sophisticated, and we should be going up the value chain into high-tech everything. But the reality is that the fishery, agrifood, agriculture, mining sectors, and resource sectors have become high-tech sectors. They're going to be an extremely important part of Canada's economic future.

If we had a successful Doha round it would be, on balance, extremely beneficial. I think our negotiators have been doing God's work in performing miracles in the negotiating backrooms to ensure that potential negative effects are eliminated or strongly mitigated.

[Blaine Calkins, Conservative, Wetaskiwin, AB]

Thank you, Mr. Minister.

[The Chair, Conservative, Fabian Manning]

Thank you, Minister Emerson.

I have a quick question, because we're almost out of time. I don't do this very often.

You mentioned earlier that decisions are made by consensus. I thought you said there would be a ministers meeting that would reach that consensus. Can you briefly explain the process there so we're all clear on how the final decisions are made?

[David Emerson, Conservative, Vancouver Kingsway, BC]

What essentially would happen, hypothetically speaking, is that a ministerial meeting would be called. It hasn't yet been called, and it may never be called. But if you play out a hypothetical critical path, there would be a ministerial meeting called in late June or early July, and that meeting would focus largely, but not entirely, on trying to achieve an agreement on modalities in agriculture and non-agricultural market access.

“Modalities” refers to identifying the fundamental formulae that will be applied to tariff cuts, giving definition to special and differential treatment for certain countries for certain types of products, and that sort of thing. So you're creating a fairly well-defined framework, which then negotiators will take away for some months and go through line by line to identify how that framework would actually apply to specific products and product classifications and that sort of thing. At the same time, in that meeting, there would probably be sidebar meetings on rules and services and some of the other issues that are in play so that we could make sure those issues were brought along in a timeframe that was compatible with agriculture and NAMA. And then, over the balance of the year, these other issues, like the rules and fisheries subsidies, would be subject to intense negotiation.

At the end of it all, there would then have to be further ministerial meetings to agree on a complete final package. It's what's called a single undertaking. As you know, a single undertaking means nothing is agreed to until everything is agreed to. So the agreement on agriculture and NAMA wouldn't stand up if there's were not an agreement at the end of the day on rules, and it would be similar for other elements of the negotiations.

Any one country, any one member, can essentially torpedo the WTO agreement. The practical reality is that a country that acted somewhat intransigently in doing that would become an international pariah, and the more practical option for a country that wanted to dissent would be withdrawal from the World Trade Organization, which would be probably one of the world's stupidest decisions, but it's available to you.

[The Chair, Conservative, Fabian Manning]

Thank you, Minister Emerson.

We have a couple of minutes if you want to make a closing remark.

Thank you for your presence here. Certainly somewhere down the road, as these negotiations keep on moving, we may reserve the right to invite you and your officials back again for an opportunity to clue up there.

[David Emerson, Conservative, Vancouver Kingsway, BC]

Thank you very much.

[The Chair, Conservative, Fabian Manning]

Thank you.

We're suspending for five minutes to get ready for the next session.

[Proceedings continue in camera]