International Trade Committee on Feb. 13th, 2008

[Dr. Teresa Healy]

I find that the dialogue between the writers of these studies has been very informative and very important. I hope the members of the committee have a chance to look at the debate between not just the documents themselves but the dialogue that's been happening, because what the CAW argues is that they have been using real-world assumptions and historical experiences, based on the history of free trade and bilateral trading relationships that Canada has already entered into. So one would have to say it's quite ideological to assume that basically the lowering of tariffs and entering into a free trade agreement with a country like South Korea is automatically going to create the conditions for a resurgence of industry in Canada. That doesn't make any sense. If the members think about their own ridings and the economic circumstances of their own manufacturing bases, I don't think their real-world experience in their own ridings could actually concur with the ideological argument.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

So you would agree that there cannot be a possible assessment.

[Dr. Teresa Healy]

No. I think what's in this model is entrenching Canada's relationship to the world economy as a resource producer. It's increasing the extent to which Canada will be involved in the globalized economy not on the basis of generating a long-term benefit for the workers and for the actual economy in Canada, but it will be developing a very uneven kind of growth in which the manufacturing sector is going to be harmed substantially and structurally, not just in a temporary way.

I haven't heard any argument that you could say the Canadian industry is actually going to be able to withstand the incredible imbalances that exist between our two economies.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

Then if we look at it on a larger scale, I'm sure you will agree that when you're operating in ten different countries you will have some surplus and some deficits in some countries, but we must look at the entire revenue or income structure of the ten countries, as opposed to one. One may be a losing proposition initially, but you're hoping to develop it in the future. Would you agree with such an assessment?

[Dr. Teresa Healy]

I think what we have to do is look at the global situation, and we have to look outwards. It's very important that Canada has a progressive internationalist position so that the gains from trade can be equitably distributed across the country and also in the international system. There is a progressive alternative for an international position that could develop fair trade policies that bring about justice in the international system and do not entrench increasing income inequality within Canada, regional disparities, and also an unequal kind of world order in which we find ourselves very, very closely approximating the policies that come out of the United States' administration at the moment and acting de facto in terms of a customs union without actually ever announcing the fact. We seem to be increasingly acting as if we have already created a customs union in North America.

[Lui Temelkovski, Liberal, Oak Ridges—Markham, ON]

Thank you.

Maybe my colleague can ask a couple of questions.

[The Chair, Conservative, Lee Richardson]

Not this round.

Monsieur André.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Good afternoon. I welcome everyone to this committee on international trade.

I have heard you express concerns. They are legitimate and I encourage you to stick to your position. As you know, we have had many job losses in the manufacturing sector here. Ms. Lamoureux mentioned the losses in Quebec. Others of you indicated that across Canada, job losses reach 300,000. In Quebec alone, almost half the jobs in the sector have been lost. The government could have intervened and put in place a safety net in Quebec to protect our industries like textiles, furniture, bicycles. It did not intervene. Bills were tabled in the House, Bill C-411, for example, to establish international trade standards for dumping, standards like the ones in Europe and the United States. The bill was voted down.

So your concerns are justified because we see the jobs being lost only when these agreements are signed, sealed and delivered. Then the government just lets things take their course. I think it is very important that the members of the committee are able to receive the information that you are providing today. It is essential because if we sign an agreement, jobs are lost—as you say—and then the manufacturing sector disappears.

On December 4, 2007, the Minister of International Trade appeared here. He told us that there would be no signed agreement because he did not have the economic evidence and analysis confirming that a Canada-Korea agreement would have any benefits. We held hearings—we have done so for almost three or four months—we met the automobile industry, and everyone told us that we have a significant trade deficit with Korea, as Mr. Moynahan pointed out. It seems to have been $2 billion or $2.5 billion for years.

Should we just close the books? If we want a fair and equitable agreement that upholds workers' rights, their quality of life and so on, I think it will be very difficult. What do you feel are the issues in this Canada-Korea agreement? Is it possible to have a fair and equitable agreement that reflects our realities and lets us achieve a trade balance?

[Dr. Teresa Healy]

I think the conditions of the moment are indicating it is not possible for us to have a trade agreement based on these principles of freer trade and increasing corporate rights, increasing investors' rights, that would give sufficient benefit for the Canadian economy and for the Canadian workers.

I think what we're doing is entering into a situation that is highly ideological. It's based on ideology. It's not based on historical experience or on real-world experiences. I think it's a very dangerous time for the Canadian economy to be entering into this kind of agreement.

I do believe there are international possibilities for a global trading system that has at its heart justice and fairness. I think that's a possibility. I think Canada should be looking for that and should be in fact bringing it to the international community and leading the debate in the international community to make sure our global trading system would be fair and respectful of development policies and strategies of member countries. I think that would be fantastic.

I really look forward to this committee's report in which these positions you've referred to that you've been hearing all these months will be reflected. I look forward to that, and I'm really happy for the role that legislators play in this kind of policy discussion.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Have you other...

[Dan Moynahan]

I want to clarify a couple of things. During my presentation I did say I would support any agreement that promotes fair trade for all Canadians. I did not say I was in support of a free trade agreement.

What I am saying, though, is that if the playing field is level, I'm confident we will win the battle.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Do you believe Minister Emerson when he says that an agreement with Korea will not be signed unless we get clear benefits from it? Do you think that the government could sign agreements that would not provide clear benefits? Do you have any concerns in that regard?

[Dan Moynahan]

I haven't necessarily. I don't think any trade agreement we have should be based totally on the numbers. It has to be on the quality of life and all other issues that have to be compared. If it's a fair opportunity for Canadians....

Look at our biggest trading partner, the United States. We work very well together in our industry, with 86% of our exports going to them and 80% of their mould exports coming to us. There is a case where trade works. Right now it doesn't work in Asia.

[The Chair, Conservative, Lee Richardson]

Thank you. That's your time.

We're going to proceed with Mr. Cannan.

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

Thank you, Mr. Chair.

Thank you to our witnesses coming from British Columbia.

I'm going to split my time with my colleague, Mr. Fast.

This is to the folks from Spirits Canada. We just had the Canadian Vintners Association, and they see great opportunities for the icewine coming from the Okanagan Valley. We have some product we'd like to allow the Koreans to partake of.

Mr. Khan, I want to go directly to you. You have just returned from South Korea and have signed this exciting deal with the Korea Electric Power Corporation. Small business being the backbone of Canada, do you see other opportunities in Korea for businesses such as yours and of a similar size, and in what areas?

[Steve Khan]

We're actually the second Canadian company to sign a deal with Korea Electric Power Corporation. Another Canadian company signed a similar deal a few months prior, and I believe others will come as a result of the doors that are opening.

One of the attractions is to bring back some capital into the country from foreign sources that are benefiting from selling their goods and services to us. Getting that capital back and reinvesting it in our Canadian business is a significant benefit for us. I think we are just the first wave of mining companies that are going to benefit from this.

Some of the major companies, not just in Korea but also in Japan and China, as I mentioned earlier, are looking at opportunities in Canada in a bigger way. As we know, right now we have a bit of a dichotomy in the industry in Canada. We have the manufacturing sector and we have the resource sector, and while we're losing on the manufacturing sector, we've been picking up on the resource sector.

That's where the balance is coming from right now. In the oil and gas, energy, and related fields, certainly the opportunity is for us to take advantage of additional deals with Korea.

Some of the consortium members, as part of the group that came in on this investment, have expressed a keen interest in expanding their role in Canada by opening offices, spending money, and developing other projects in Canada on top of what we've already initiated. I think this is an opportunity we will see expanding as we move forward.

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

I have one quick supplemental question.

We were talking about trade promotion for industry. Do you see a need for additional dollars, or is there a level playing field and a competitive infrastructure? If we have the economic framework in place, is that as good or better from a trade promotion perspective?

[Steve Khan]

I'm always of the belief that the less government the better, but the fact is that there is always an advantage to have promotability of your products and services into a country such as South Korea. They very much respect the Canadian business community.

When we were there, we had the fortunate circumstance of having the Canadian ambassador join us for our signing ceremony. We talked briefly with them about continuing to promote the goods and services of Canada in Korea, and certainly that's their agenda. I would see that continuing from here.

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

Thanks, Mr. Khan.

I'll pass the floor to Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

Ms. Healy, are you aware that our government has committed to tabling any international agreements in the House of Commons and to allowing full debate on them? Are you aware of this?

[Dr. Teresa Healy]

Yes, I am aware of that. I think the government has backtracked on its commitment to make those agreements fully debatable and has not gone as far as bringing them to a vote in Parliament. I think it would be a wonderful thing if the government actually had more debate and more voting within Parliament.

[Ed Fast, Conservative, Abbotsford, BC]

Would you agree that this is a step beyond what used to happen under previous governments: that an international agreement is tabled in the House of Commons and actually receives debate?

[Dr. Teresa Healy]

I was interested in what the Conservatives had said earlier about what their commitment was in terms of voting on and debating the agreement.

[Ed Fast, Conservative, Abbotsford, BC]

So this is a step forward that we've taken. Is that correct?

[Dr. Teresa Healy]

I thought it was a step back in terms of Conservative policy.