International Trade Committee on Feb. 22nd, 2007

[Yuen Pau Woo]

Yes, we have two FIPAs--two foreign investment protection agreements--with Philippines and Thailand. I think it's extremely important that we put emphasis on investment promotion and that we accelerate the pace of talks in foreign investment protection agreements with Indonesia and with Vietnam. Indonesia is the largest destination for Canadian investment in all of Asia, because of a number of large mining investments that Canada has in that country. There's an even larger stock of Canadian investment there than there is in Japan or China. So Canada has very great interest in making sure that our investments in those two economies are protected.

I will stress that it's possible to advance investment protection and liberalization outside of a free trade agreement. You can make progress on the investment file without having to go into a full-blown free trade agreement with ASEAN as a whole, or with any individual country. The particular importance of investment, of course, is that because the ASEAN economies are restructuring to move up the value chain, the best way for Canadian companies to participate in those supply chains is to not try to do it from across the ocean, but to be part of the supply chain within the region. We feel very strongly that the future of the Canada-ASEAN relationship, indeed the future of the Canada-Asia economic relationship, will be driven to a very large extent by two-way investment, including, of course, Canadian investment in the region.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

I am thinking of Canada and the Asia-Pacific region but I am also thinking of Canada and Brazil. You will no doubt say that these countries have nothing in common. I mean for the time being, Brazil cannot trade with Canada or receive major Canadian investments because it lacks the infrastructure required for all of these new forms of trade.

Does the Asia-Pacific region have the required infrastructure? Is it actually ready to received massive investments?

On the other hand, did we sign any human rights agreements? Our companies may pollute these places or may want to use local labour. Were any agreements signed in that regard?

[Peter Clark]

As far as Brazil goes, I think it could expand its trade with Canada if it wanted to. It really doesn't want to because it prefers to keep MERCOSUR whole. It doesn't want to see the MERCOSUR countries picked off one by one, by the United States or by Canada. They want to consolidate the bloc, and then the bloc may negotiate.

With respect to human rights, I'll leave it to someone else. I'm only an infrequent visitor there.

[Yuen Pau Woo]

Mr. Clark is absolutely correct in his characterization of Brazil, but it's the distinction between Brazil and ASEAN that is important. Whereas Brazil is still somewhat inward-looking, ASEAN has always been extremely outward-looking and pro-trade. It's been very open to investment from outside and to broadening trade relations with all parts of the world. This is why we have argued that if we are to identify priority emerging markets--and Brazil, everyone agrees, is one of those emerging markets--there's a very strong case to make that ASEAN as a whole deserves to be one of those priority markets, those emerging markets, as much as Brazil does or India does.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you very much.

[The Vice-Chair, Liberal, Lui Temelkovski]

Thank you, Madam.

We will move now to Mr. Cannan.

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

Thank you, Mr. Chair.

Thanks to our guests today. I appreciate your sharing your experience and words of wisdom.

I know, Mr. Clark, we had the opportunity to hear from you in December, and we appreciated the input you provided at that time, with your biography about four decades of experience. You've seen a lot happen in different countries and different governments. You're correct that it has been about six years now, I guess, since the last free trade agreement here in Canada, with Costa Rica, and we need to be more realistic, or as you said, pragmatic, to see if we can get some results and some wins here.

We've had a diverse group of witnesses here presenting to our committee. Our goal is to report to the House and try to provide some direction on where Canada should go with some of the challenges and opportunities and where to focus with the limited resources that we have.

The Conference Board of Canada recently released a report called Mission Possible: Stellar Canadian Performance in the Global Economy. I proposed the same question to them at that time: with the resources we have and focusing on the opportunities, where do you see Canada best expending our time and energies to get the quickest results and the most realistic approach?

The last report that was out, Foreign Affairs and International Trade's report on plans and priorities, lists the United States, Mexico, China, India, Brazil, Russia, Japan, South Korea, and then the ASEAN nations about number eight. Do you think we should be focusing our energies on working with the ASEANs or concentrating on other countries?

[Peter Clark]

I think it would be useful to focus on countries in ASEAN. If it's difficult to do it with all of them—and there are quite divergent abilities to take on free trade agreements within the ASEAN—we could adopt a bit of the American approach, which is to deal with them country by country. My priorities would be Thailand, the Philippines, and Vietnam, and when we get a FIPA with them, Indonesia. A FIPA is by far more important with Indonesia than trade right now. I would agree with that.

We should be trying to look at bigger markets and we should be trying to look at markets where they already have a good range of free trade agreements in place, because we can spin off those in the same way as they can spin off ours.

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

So you mean, rather than a bloc, doing more one-off bilaterals, then.

[Peter Clark]

If there's resistance to doing it in a bloc...the United States hasn't done it in a bloc, which may well have something to do with their relations with Myanmar. But the United States is doing it country by country. They're dealing with Thailand and with others within ASEAN.

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

Thanks.

Mr. Woo, you mentioned Singapore in the past, their unwillingness to give any concessions. Is there some movement now that Minister Emerson has come to the table and opened up those discussions in the last six months or so? Does there seem to be some movement?

Actually, today I believe Singapore Airlines announced an interest in going into Delhi, because Air Canada is pulling out. There's the Open Skies and the opportunities for movement of cargo, services, and people.

[Yuen Pau Woo]

Yes. We've been hearing very positive signals come out of the negotiations with Singapore. There's talk of conclusion of a deal this year, which would be very good news.

I think if we are able to close with Singapore, we can very quickly begin informal soundings on the prospect of an agreement with ASEAN as a whole. I would move to the entire bloc quickly, rather than trying to pick up other individual countries.

You know, negotiating trade agreements is very laborious. We have a limited number of trade negotiators. These things can take years, and ASEAN has already demonstrated its ability to enter into agreements as a group. If and when we've established a track record and credibility with the region, we should then go in for an agreement with the entire region.

Even if we're not moving into a broader free trade agreement, there are so many things that can be done to liberalize trade, and we should not be blinded by free trade agreements as the only alternative. The air services agreement, which you talked about, is an excellent example. It's not simply a question of Singapore Airlines wanting to pick up the Delhi route. They want to increase their frequencies to Vancouver. They're only allowed to fly three times a week now. They like to fly every day because there's a huge demand for it, but they're being blocked by the air services agreement and by the incumbents in this country. We can shake loose that file without a free trade agreement, and we should.

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

Thank you.

I have one supplemental on your negotiations. We're all concerned not only from an economic and social aspect and the environmental perspective. How is that playing into negotiations, from your perspective?

[Yuen Pau Woo]

Typically, the Americans have linked their trade negotiations with labour and environmental agreements. We tend not to do that. I believe it is not a good idea to link agreements, because they distort the trade agreements, but it is entirely possible to advance environmental issues, human rights issues, and issues of good governance through other forums, through bilateral dialogues on human rights, through partnerships with parliamentary committees, and through working with human rights NGOs in different parts of the world.

We have already been doing this, and in ASEAN in particular, Canada has a very good track record and reputation for working both on the environment file and on the human rights file. It is true that these dedicated forums on environment and human rights and so on can make the connection to trade rather than trying to build environment or human rights side agreements directly into trade agreements.

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

Thank you.

Mr. Lemieux had a supplemental. Go ahead.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

I wanted to ask Mr. Clark a question.

You were saying that China is the 800-pound gorilla in that room that people aren't really speaking about even though they know it's there. I was wondering if you could elaborate a bit on that, especially on how it relates to the ASEAN community, if we had a successful negotiation there.

[Peter Clark]

My comment about China was in the context of the Doha Round negotiations, where I indicated that if anybody made a concession on a manufactured product, China would probably benefit more than anybody else because of its positioning. My view is that free trade between Canada and China is probably some way off, and as a good interim step, if we can start to integrate trade and investment with ASEAN, which has excellent geographic and tariff access to the Chinese market because of what they've negotiated, that's a good first step. That's why I put more priority on ASEAN.

I think South America is very important to us as well, but there are political problems related to the free trade area of the Americas that are going to delay that, so ASEAN is the platform for helping us get into China and India, because they're negotiating a free trade agreement with India as well.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Thank you.

[The Vice-Chair, Liberal, Lui Temelkovski]

Mr. Julian.

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

Thank you very much, Mr. Chair, and thank you to our witnesses for coming today.

I'd like to start with the broader issue of facilities. I represent a riding with an important Filipino community and also important communities from Thailand and Vietnam, and so we are in regular interaction when it comes to casework with the various embassies in Southeast Asia. I have a good sense of how good and sometimes how bad the services and the response are as far as individual cases are concerned. I'd be interested in hearing both of your views, Ms. Tapia and Mr. Woo, about embassy facilities' support by the federal government for business development in Southeast Asia.

[Yuen Pau Woo]

I haven't heard many complaints about the lack of adequate service. We've always had compliments about our trade commissioners in the field and we have decent trade commissioner representation in most of the ASEAN markets. Of course, Laos, Cambodia, and Burma are off the map. Cambodia and Laos are represented through Vietnam. There is a small presence in Cambodia, I should say.

The principal complaint we hear with respect to our presence overseas in ASEAN has to do with visas--tourist visas, business visas, and student visas. This problem is generic to all of Asia, and the complaint appears to be that the process takes a long time. The application appears to be inconsistent, and those who appear to be bona fide applicants simply don't get their visas to come to this country. As a result, it would seem we are losing out on the people-to-people connections that are so essential, not just for cultural ties but also for education services and for business linkages.

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

Ms. Tapia.

[Carmelita Tapia]

Thanks for the question.

I concur with what Mr. Pau Woo said. Sometimes it takes time for the embassies to grant visas, even for special permits for business travellers, and for students. There could be some reasons, which I really cannot say right now, because I don't know the reasons.

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

Would it be your impression that the situation has gotten better in the last year or worse in the last year, or has it stayed about the same?

[Carmelita Tapia]

I can only speak about the Philippines. I was made to understand that right now the Philippines is number three when it comes to immigration to Canada, so it's taking more time for the Canadian embassy in the Philippines to process those visas.