International Trade Committee on Feb. 6th, 2007

[Svein Hansen]

I just want to say, as my colleague here said, that I have very little or no knowledge of the shipbuilding industry in Canada, so what it takes to do this in Canada I can't say, and I know nothing about this deal in Quebec either.

In the United States, I understand we have one successful takeover, if you can call it that, from a Norwegian company. It was in Philadelphia. As I understand it, this shipbuilding yard is now doing pretty well after Mr. Røkke came in and took over the shipbuilding business.

So there is at least one example of a Norwegian takeover that has been successful--the shipbuilding yard in the United States--but I know nothing about this thing in Quebec, so I can't comment on it.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Hansen.

Monsieur Cardin.

[Serge Cardin, Bloc, Sherbrooke, QC]

I am glad for the company that met with success in the United States, but in the Teco case, in Quebec, it did not work out. Contracts that were guaranteed did not materialize.

You mentioned earlier that member states of the EFTA are not part of the European Union, which is a large market for you. You trade and have agreements with the UE. What is the main reason why none of the EFTA members is part of the UE?

[Gudlaugur Thordarson]

That's an interesting question. First of all, I would like to emphasize that we have very good relations with the European Union, and as I mentioned, we look at them as being among our closest friends. We have three out of four nations that are members of the EEA, European Economic Area, which means that we are part of the internal market in all other areas except agriculture. But it's a political question whether these countries should join or not, and I could go through those things in detail because of course, like most politicians in these countries, I have an opinion.

Of course we differ in each country, but at least the view in those countries has been that it is not in the interest of the country to join in this political union because it's more than a free trade union. The European Union is also a political one at the moment, and I cannot foresee, at least in the near future, the members of EFTA wanting to join. But of course one never knows.

[The Chair, Conservative, Leon Benoit]

Mr. Fehr, would you like to make a comment as well?

[Mario Fehr]

I have just a short comment on that.

The question of joining the European Union is very controversial in all of our countries. A lot of us are also in favour of joining the European Union, for instance myself, but there is simply no majority within our population. So we have something in common. All four countries don't have a majority for joining the European Union, but still we always have the goal to have a very close relationship with the European Union, especially on economic questions. The other three countries, without Switzerland, are part of the European Economic Area and we have a lot of bilateral agreements. We have 18 bilateral agreements and we also have free trade agreements with the European Union, because we have to join this huge market. At least two-thirds or even more of our exports, 80% of our exports, go into the European Union and about 60% of our imports come from there. We have all the time the common sense of having a free trade agreement with the European Union, because otherwise we wouldn't survive.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Cardin, your time is up, but Mr. Hansen would like to answer as well.

Go ahead, Mr. Hansen.

[Svein Hansen]

[Inaudible--Editor]...internal market, except for two areas: fishery policies, fisheries, and agriculture. In all other things we're part of the internal market, as we have been a member. We're playing by the same rules. So for our industry we are a member, so to say, and we also participate in a lot of other programs in the union. In research programs, for example, we participate as a member.

I used to say we are a member without voting rights, but my colleague would disagree on that.

[The Chair, Conservative, Leon Benoit]

Monsieur Cardin, you wanted to make a short comment.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chair.

I just wanted to conclude by saying that I understand very well your will to keep your independence. Some people also try to become sovereign.

[The Chair, Conservative, Leon Benoit]

We'll go to the government side, to Mr. Menzies, now.

[Ted Menzies, Conservative, Macleod, AB]

Thank you, Mr. Chair.

Thank you once again. As I stated earlier, I had the privilege of meeting with your entire delegation for what was too short a time this morning. It was a most fascinating discussion, and I'm looking forward to joining you for a short time this evening at your dinner. I'm tied up for a lot of the evening, but I would like to join you again for perhaps a sip of aquavit afterwards, if it's available.

I want to clarify what may have been left as a misconception. The Canadian government has been in constant discussion with our shipbuilding industry to make sure that their concerns are heard and looked after. I think that's nothing different from what you, as members of your parliaments, would do.

We don't want to leave you with any misconception that we're not representing our industries here in Canada, but with the overriding principle that a free trade agreement with EFTA would be beneficial for your countries and for ours. That's the most important thing. It would be, as I mentioned this morning, our first transatlantic free trade agreement. I think it would be momentous. I think it's incumbent on all of us here to do whatever we can to push it forward.

I want to follow up on a discussion we had this morning. It fascinated me, and I would like to elaborate on it. The thought processes of you folks on the benefits of free trade seem so similar to ours. In fact, I think we couldn't find much that we disagreed on as to the benefits of free trade: how it can help your economies, how it will help our economies.

Yet I look at the parties you represent—social democrats, radical democrats, vocational unions—and find it fascinating. We have a New Democratic Party in this country that thinks free trade is a bad thing. I guess they want to live in a bubble; I'm not sure. I don't understand this way of thinking; it's far beyond me.

I would like you to elaborate on how you come to this conclusion. I absolutely agree with it, but please explain it to me. I'm having a struggle with it here in Canada.

[The Chair, Conservative, Leon Benoit]

Go ahead, please.

[Gudlaugur Thordarson]

Yes, thank you, and thank you for a wonderful meeting this morning. It was a very good meeting and a great start of our visit.

I am an Icelander. We have a small population. I find it strange when you talk about Canada as being small or medium-sized. You have 32 million people, and we have 300,000 people. A good friend of mine, the former prime minister, told me, when a foreigner asked me how many people live in Iceland, to always say fewer than a million; otherwise, you will be in trouble.

[Some hon. members]

Oh, oh!

[Gudlaugur Thordarson]

It's quite simple: we would never survive without free trade. It's just that simple. If I look at the history of our nation, the darkest years were when we didn't have free trade. Then the Icelanders were the poorest nation in Europe, the same as Albania now. Now we are one of the richest, and one of the main reasons is that we can participate in free trade areas and trade freely.

Another thing that I think is important—I think it's not only about trade—is that we have always looked at the Canadians as our friends. In the years from 1874 to 1914, one-fifth of the Icelandic population moved to Canada. So we have always had strong links with Canada. We would like to have stronger links.

There's no question about it: the more free trade and the more cooperation between these nations, between EFTA and Canada, the better, in our view. It's not only about getting our population and your population wealthier; it's also about good connections between nations that are friends.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Hansen, did you want to respond as well?

[Svein Hansen]

I'll just add a couple of things. I agree with my colleague about the small countries. We have a lot of oil and gas, and fish also, that we have to sell to others. If you think of it, China some years ago decided they also had to enter into world trade to develop further. It's difficult for any nation to think they could behave on their own.

I think free trade would add something to it, because if you think of the WTO and the FTA agreement, it's also fair trade; it's playing by the rules. I think that's a very important part of it that we shouldn't forget.

[The Chair, Conservative, Leon Benoit]

Mr. David, would you like to give a response as well? Go ahead.

[Eugen David]

I had a point about our Swiss view to this question. In our country, it's very important for us to have free trade because of the international investment in our country. If we didn't have this free trade agreement, we wouldn't have this investment that we have from big international companies in our country. That's very important for our labour force, because we are a country that has educated people. If you have those people, you need jobs. That goes over the frontier, and not only in a small population such as we have, at seven million.

You don't find the jobs for all those people if you don't go to the world. Therefore, we need this trade policy that is open to the world. Therefore, we also think we'll have, with modern technologies, a better chance in the future to get this international investment in Switzerland, especially in the health care sector and offices. That's our point of view on this policy.

[The Chair, Conservative, Leon Benoit]

Thank you.

Mr. Allison, you'd like to take the last couple of minutes of Mr. Menzies' time, so go ahead.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Thank you, Mr. Chair.

According to the OECD stats, NAFTA has ranked at the top in productivity, competitiveness, and innovation. I know that's one of the things we've fallen behind on as a country in the last ten to thirteen years. What kinds of things have your countries been doing in terms of productivity? What would some of the policies be in order to get you to the top in terms of productivity and competiveness?

[Gudlaugur Thordarson]

Speaking for Iceland, we have changed a lot toward the better in the last fifteen years. There are a few things that we have done.

We have privatized a lot of companies, especially the financials, the banks, and so on and so forth. They used to be subsidized not that many years ago. Now they are at least medium-sized companies in international competition. There are two Icelandic banks now investing and opening up branches in Canada as we speak.

We also have lowered taxes, both on companies and individuals.

Of course, we emphasize a lot, through EFTA, on free trade.

We also invest in education and the health sector. We opened up to competition in the education system without breaking any rules.

We are paying most of the bills from the government because we think it's very important that everyone has a chance to establish themselves in our country.

In brief, this is how we did it.

[The Chair, Conservative, Leon Benoit]

Thank you, Mr. Allison. Your time is up.

We now go to Mr. Julian, from the New Democratic Party, for roughly eight minutes.

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

Thank you, Mr. Chair.

We appreciate it very much that you have all come before us. I particularly appreciate Mr. Hansen's presence, because he represents the area that my family originally came from when they came to Canada.

I'm tempted to start by rebutting Mr. Menzies. However, he has complimented you on how you've developed your trade agenda. You have very strong protection for your agricultural sectors and have incorporated social, environmental, and labour standards into your trade, your trade processes and your trade direction. You also have strong consumer protection. If Mr. Menzies admires your approach, maybe he's becoming a social democrat. Who knows?

I would like to start off my questions by asking about your consultation. In each of your countries, in Switzerland, Norway, Iceland, and Liechtenstein, how do you keep your legislators in the loop as these negotiations are going on? How do you keep sensitive industries in the loop? How do you keep the public in the loop? As Mr. Bains and Mr. Cardin mentioned, there are some real concerns around these negotiations with regard to the shipbuilding industry and industrial marine products.

We are not being consulted on the issue of the development of this trade agreement. I would be interested in knowing how, in each of your four countries, you keep legislators, sensitive industries, and the public in the loop on these negotiations.