International Trade Committee on Oct. 17th, 2006

[Paul Robertson]

I think the overall responsibility lies with Industry Canada and Minister Bernier; therefore, we feed into that authority. There are many interdepartmental groups that have nominal leads, but into which other departments feed. So we can give you generally the major divisions and the leads within each of those divisions.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Great. Is that something you would be able to make available to us this week?

[Paul Robertson]

I would think so. Yes, we can.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you.

I'd like to come back to the bilateral consultations on agriculture. You mentioned those as well. In those bilateral discussions, was the Canadian Wheat Board discussed?

[Paul Robertson]

No. These are technical discussions to further facilitate trade between the two countries. They are very technical on phytosanitary and other issues that may impact on the flow of agricultural goods across the border.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

But there is discussion on what are considered barriers, right?

[Paul Robertson]

Not in the terms by which you're defining the barriers. These are to increase the efficiency of the technical regulations facilitating trade between the two countries: whether a regulation should have an extra element to consider a seasonal adjustment in the tomato element of a region. These are very highly technical.

I think it proves the depth of the relationship when you have bilateral and trilateral exchanges to that degree to facilitate trade within the North American market. So these are, then, more technical than what you are meaning with respect to your reference to the Canadian Wheat Board.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

So the Canadian Wheat Board has not been part of those discussions at the bilateral consultations on agriculture in any way.

I appreciate, of course, getting the list of who is coordinating those groups and how many there are taking place within the government. I do want to come back to a general question in the minute or so that I have left in this first round, though. It's on the issue of the diversity of our trading.

As we know, currently 85% of our trade goes to the United States. I come from the small business sector, where you're putting yourself at risk if you're just dealing with one particular client. There obviously has to be an intent to diversify markets so that we eliminate the dependence on the American market. As we've certainly seen with softwood, that can be to our detriment. What is the approach of the department, then, on trying to lessen the dependence on one market?

[David Plunkett]

I think Mr. Emerson has recently summed this up. We need more markets, more sectors, and more companies involved with the global value chains. From that perspective, this need for diversification is well recognized.

I've just come back from four years in London, where I was the senior trade commissioner at our largest European post. As government, we can set up and do what we can to indicate that market X is an attractive one to do business with, but ultimately it's a choice of business itself as to whether or not it wants to take advantage of the opportunities that may be there. In effect, we can try to get people to the well, but whether they drink or not is their particular choice.

So we recognize diversification as a general point, but ultimately it's up to each individual business person, when they wake up in the morning, as to where they want to do the trade.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Do I still have time?

[The Chair, Conservative, Leon Benoit]

Enough for one quick question.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Quickly, do you not see a contradiction between the SPP, which would continue, if not deepen, that dependence on one market particularly—the United States—and the objective of trying to provide a broader spectrum of markets for our exports?

[Terry Collins-Williams]

No, I don't think there's a contradiction. I think they're mutually reinforcing. I think we want to consolidate them to the extent that we can expand opportunities for trade in North American markets and also, as Paul Robertson referred to earlier, use the North American market and the interaction of Canadian business in North America as a platform to increase competitiveness to be able to trade in the rest of the world. I think with global supply chains this is a very important component.

At the same time, through bilateral negotiation, both of trade agreements and other forms of trade instruments, and through the multilateral--because we certainly haven't given up on the WTO, it is the largest and most comprehensive market-opening tool we have available to us--we are seeking to open markets for Canadian business in other countries where we see a lot of opportunities and where, to date, we may be underperforming in other areas of the world, especially Asia.

I think we see those as mutually reinforcing and not contradictory. I hope they are.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Julian.

We go now to the second round, starting with the official opposition. Mr. Maloney, you have five minutes.

[John Maloney, Liberal, Welland, ON]

Mr. Plunkett, you indicated that Canadian business has complained about a loss of business opportunities with countries that have preferential free trade agreements with other countries. Do you have any idea of the quantum, the amount?

[David Plunkett]

I don't have a number offhand, but I can give you an illustration of it. Certainly in the southern hemisphere there are concerns on the part of some of our agricultural industries. They feel that the absence of our own preferential agreement with some of the countries that the United States and others have worked out deals with is affecting their ability to compete in these markets.

Some of the products, be they wheat or pulses or whatever, can be very price-sensitive, so if your competitor has a preferential access of x per cent, that might be the difference between getting the deal or not.

I don't have a number for you offhand, and often they won't necessarily tell us; they'll just tell us they're losing business, and sometimes it's an opportunity lost. Some of these things will be difficult to quantify per se; it's just a gut feeling by the business people, who know their trade.

[John Maloney, Liberal, Welland, ON]

Is there any noticeable migration of such businesses to countries that have preferential agreements? Are we losing business to, say, the United States, which does trade with markets offshore?

[David Plunkett]

It's hard to say. Each business has its own characteristics, so they make whatever business decisions are appropriate to their circumstances. Sometimes, in order to meet what the competition is offering, they may price down below what they may have been able to get for that same market in the past. I think each individual case has to be looked at on its own merit.

[John Maloney, Liberal, Welland, ON]

When we look at the United States, they concluded 15 agreements in the same period that we didn't conclude any. Is it a matter of human resources? Do we need more trade negotiators? Is it a lack of interest on the other side, the trading partners we are currently negotiating with? Are they content to have agreements with the U.S. and not with us? Can we target a little more the reasons we're falling behind?

[David Plunkett]

A full-blown trade negotiation is extremely labour-intensive. By way of an example, before going off to Singapore, I chaired an interdepartmental meeting just to let people know what we were doing and to take stock internally as to where things stood on the various individual items within the file. I think 30 people showed up from the various departments.

My own team is expressing concern on a daily basis that they're being run off their feet trying to keep all the balls up in the air. It is tough, and as we engage more of these at the same time, I think it won't be surprising if we go looking for some extra help.

[Terry Collins-Williams]

I think we also have to look at the resource demands and priorities of our trading partners. If we face these resource demands in Canada, a wealthy and developed country, you can imagine a small developing country in Latin America having to put practically the same resources into negotiating a trade agreement. If they're looking at a choice of markets in North America and they see the United States on the one hand and Canada on the other, I guess it's logical that they'll start with the United States.

[John Maloney, Liberal, Welland, ON]

The United States have concluded 15 agreements. Obviously the other side has agreed to the U.S. demands, and vice versa.

Do our values as a trading nation differ that greatly from those of the United States that we couldn't use those agreements as a model in order to expedite this? Where do we differ significantly?

[David Plunkett]

These agreements are public, and I think for the most part it's fairly straightforward to get access to them. We can certainly look at them as models that can give us some guidance, but we will obviously shape what we're looking for to meet our particular needs. So what the Americans or others may be prepared to accept or not accept doesn't necessarily square with what we wish to pursue, or what our bottom line may be. So it's a guide, but only up to a point.

We also have to keep in mind that the U.S., because of its significant economic performance and trade and investment links with some of these same countries, may have leverage that we don't have at a given time, simply because of the scale of the opportunities in play. So use it, but you have to be conscious of its limitations.

[John Maloney, Liberal, Welland, ON]

Is it a real problem for us that we're a smaller player compared to the United States, which can cover more areas and link this sector with that sector?

[David Plunkett]

They have a very advanced economy with huge interests across the board, including agricultural. So when they sit down at the table they bring a very broad agenda, as do we. But as Terry just said, it isn't just what we on our side want. Getting people to show up at a meeting is not always easy, because they're being pulled from all sides; they have a multilateral component.

A lot of these countries, even the small ones, have been busy working on bilateral and regional activities within their particular parts of the world. So when you finally show up at the table there are many variables at play as to how far or fast you can go in any particular negotiation.