International Trade Committee on Feb. 22nd, 2007

[Peter Clark]

There's potential for two-way trade in food and agriculture. We've had discussions. We've had round tables, talking to people from ASEAN about what we can do to help them in terms of improving food quality and food cleanliness, and in meeting standards. There's a good potential for two-way trade in auto parts, high technology, and white goods. These are things for which there is already trade, and it can be further developed. We have clients dealing in those areas with ASEAN countries already who are interested in doing more, and there's the potential for complementary trade. It's not all textiles. It's not all clothing. There are other things.

[John Maloney, Liberal, Welland, ON]

Mr. Woo, do you have a comment?

[Yuen Pau Woo]

There are two things. I fully agree with the point about agricultural products. The beauty of promoting agrifood two-way trade is that Canada has something that is of genuine world-class calibre to offer to ASEAN to improve the quality of their food products, which we can then take in for the benefit of our consumers. So there really is a win-win to it.

We sell expertise in food safety, processing, food production technology, distribution networks, branding, marketing, and management. They have some very unique food products that will benefit from these improvements, which can sell back here.

My only other comment is that we have to look at imports from ASEAN in the same way as many people increasingly look at imports from China, which is that they can be a way of enhancing the competitiveness of Canadian companies at a time when globalization is making it more and more difficult to remain competitive. And so if a company is currently producing one of the inputs at a very high cost, but can source this product more cheaply from Thailand or Philippines or Indonesia or China, for that matter, they should consciously look at this strategy as part of a corporate plan, because it has to do with the survival of Canadian business.

[John Maloney, Liberal, Welland, ON]

Ms. Tapia, do you have any comments? I don't mean to put you on the spot.

[Carmelita Tapia]

No, it's fine, thanks.

[John Maloney, Liberal, Welland, ON]

Thank you, Mr. Chair.

[The Vice-Chair, Liberal, Lui Temelkovski]

Monsieur Laframboise.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Thank you, Mr. Chair.

As you know, I do not regularly attend this committee's meetings, but I went over Mr. Woo's report.

Mr. Clark, one of the suggested solutions is to sign a bilateral investment treaty with ASEAN countries in order to protect foreign investments.

Do you think this could be a solution? If you do, why are we not signing more bilateral investment treaties?

[Peter Clark]

Mostly, sir, because it takes time to negotiate them. I think Canada has negotiated, on a pretty ambitious scale, FIPAs around the world. There are a number of others currently under negotiation. The United States and Canada have models of these agreements, which they use, but notwithstanding the fact that they take this modular approach, it takes time to negotiate and to understand both sides, and to get input from industries and investors on both sides. So I don't think there are major stumbling blocks to negotiating FIPAs; it just takes time.

You have to remember that some of the smaller countries have limited resources and they may be negotiating with both Canada and the United States, and then with Australia, and then with some European countries, or the EU. So it's a question of resources, more than ability.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

We are talking about protection of foreign investments but I want to know whether costs and budgets are being considered in this regard.

[Peter Clark]

The FIPAs tend to provide investor protections. What they are is an insurance policy to ensure that the investor is treated fairly, and also as if they were an investor of the domestic country. So they tend not to have permanent secretariats on these agreements, because it's a framework within which your investor can bring a claim against another country if they're not treated in accordance with the agreement.

Now, most of these disputes are settled in the context of organizations like ICSID in Washington, which is a World Bank forum. There is a small secretariat there, and it's paid for by the fees that are levied against the parties to the disputes.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Woo, do you have anything to add?

[Yuen Pau Woo]

I want to add just one thing. If we believe that two-way investment is a very important part of our economic relations with Southeast Asia, I think we need to do a bit more research into the extent to which we have investments in Southeast Asia, the kinds of benefits that we generate for the Canadian economy, and the opportunity for those investments to expand. Our data on two-way investment are very poor. Statistics Canada does the best it can, but it doesn't capture nearly the full picture of Canadian investment in Southeast Asia.

I think it would be a very worthwhile activity for the Department of International Trade, for example, or for Industry Canada to do a study of the extent to which there is a Canadian investment presence in Southeast Asia, to scope the types of industries, to try to assess the benefits for Canada, and to use that as material for thinking about how we can expand it even more.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Than you.

[The Vice-Chair, Liberal, Lui Temelkovski]

Mr. Cannan, and maybe you would like to share your time with Mr. Epp.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair. I have one quick question, and then I'll be happy to pass the floor to my colleague Mr. Epp.

I am the member for Kelowna--Lake Country in the interior of British Columbia. As we know, the Pacific gateway is something that all British Columbians and Canadians are very, very cognizant of. Premier Campbell and Minister Emerson have worked very closely and the government put in close to $600 million in the last budget to move this forward.

What are your sentiments on the Pacific gateway project? Do you see it benefiting China, India, and your countries as well? Do you want to expand on that, either Mr. Woo or Mr. Clark, or both?

[Peter Clark]

I think the Pacific gateway project is extremely important, starting with China, going through Hong Kong, and right down to India. The more effort and resources we put behind that initiative the better it will be for Canada, because it's generating goodwill.

You've heard that Canada has declined in importance in ASEAN. For many years Canada didn't really pay attention to the Asia-Pacific Economic Cooperation group, and treated it like a talk shop instead of a serious organization. I was in Chiang Rai about four years ago for the senior officials meeting. Canada had five people there and the United States had 58. That sends a message. The Pacific gateway initiative is going to help us regain some of that lost image in the area.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Excellent.

Mr. Woo.

[Yuen Pau Woo]

I agree 100%. The Pacific gateway is extremely important, and not just for British Columbia because of the infrastructure investments. We think “gateway” is a metaphor for how Canada as a whole needs to think about the Pacific as part of our economic future. If we can help Canadians in Ontario, Nova Scotia, Quebec, and throughout the prairie provinces and the Maritimes understand that they also have a stake in the gateway, we'll be able to make this a viable and long-term project.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Excellent. Thank you very much. That's very exciting.

[The Vice-Chair, Liberal, Lui Temelkovski]

Mr. Epp.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Thank you.

I would like to go back to the question of negotiating these agreements. Several of you have mentioned that it takes a lot of time. We're talking about decades sometimes before an agreement can be reached. I heard an undercurrent about making agreements with more than one of these countries at a time. How does that work? Do two of the ASEAN countries agree that whatever the negotiator makes for one country they'll just take lock, stock, and barrel, without any input? Do they work together? Does it really increase the efficiency of negotiating?

[Peter Clark]

Well, it can, sir. We've been trying to negotiate with three Caribbean countries, Latin American countries, at the same time. They coordinate and work together. You try to provide the same type of agreement for all three. With ASEAN, they can work as a group and coordinate. It's really not much different, except that hopefully it will be less complicated than trying to negotiate with the 27 countries in the European Union that have to coordinate.

The problem is that it takes us a long time to negotiate agreements, but it doesn't take the United States as long. The Mexicans don't take long because they reach agreement on the 85% or 90% they can agree upon, and leave the rest aside for joint ministerial committees to deal with over a number of years. As they get to know each other and trust each other, these issues become less important.

That's not the approach we've taken. That's why it takes us so long and why we get hung up on issues like shipbuilding. That's been a stumbling block in a number of areas.

At the same time, Korea has not been as forthcoming as we would like on things like pork, beef, and a few other issues. There's a lot of potential for us to do these things if we're more pragmatic about them.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Do you have anything to add to that, Mr. Woo?

[Yuen Pau Woo]

No.