International Trade Committee on March 31st, 2008

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you, Mr. Chairman.

Thank you to the witnesses today. I haven't had the privilege of being in Norway or Iceland, but I'd very much like to go there some day. As I was telling Mr. Bruehl beforehand, I did have the pleasure of being in Switzerland a couple of years ago. It's a very beautiful country. I think it's great that Canada is able to come to a trade agreement that, hopefully, will serve all of our people and industries well.

One of the questions I have is about one component that always means a lot to Canada, which is agriculture. There are a number of commodities and products that I understand your countries are looking for, which are going to come out of here. I'm wondering if each one of could touch on those, or exactly which products go where, whether it be beef or wheat, or whatever.

I'll turn it over to you.

[H.E. Markús Antonsson]

I can make a start, perhaps.

As I said earlier, Iceland has a variety of small businesses. Of course, we are strongest in maritime food production. We are quite capable of producing machinery for the fishing industries in the world, and we have been successful in exporting these machines. We are already doing that to maritime Canada; we have quite strong business relations with Newfoundland and Nova Scotia in particular. I think this will be reinforced even further with the new free trade agreement. I see this basically in fish and fish products and in the machinery and manufactured goods used by the fishing industries.

Then there is a certain potential in outerwear clothing. We have some 18% tariffs on these manufactured goods going to Canada now, and when this is abolished, we will have a stronger position in that field.

On the other hand, for Canada we have actually, over a number of years now, imported twice as much from Canada in dollars as we have exported from Iceland to Canada, so this has been very beneficial trade for you. It has been going up and down a little. We have had years that showed temporary expansion of Canadian exports into Iceland above these normal levels, so to speak. That is when building the machinery for the aluminum smelters that Alcoa and Alcan have been building up in Iceland was going on.

Also, the purchase of two or three Dash 8 aircraft from Canada counts considerably in these figures. It has been the case in the last few years that we have been purchasing aircraft from Canada, and we are actually having one built now, a maritime surveillance aircraft for our coast guard that is being manufactured here in Canada. This has been going up and down a little.

But it has been rather cumbersome to conduct these relations because of the fact that the people have had difficulties in even travelling between our countries. It has been very inhibitive for many of the businessmen to not have easy connections to come over here. Still, I think this is developing in a positive direction.

For Canada, apart from these items that I mentioned, you have been exporting paper to Iceland, exporting prefabricated houses and materials for house building. I'm sure this will increase when the tariffs are abolished. You are getting a much stronger position in the Icelandic market vis-à-vis the EU. We have no tariffs on the EU groups, and now you will be enjoying the same position for your goods, according to the agreement.

As for agricultural products that have been included in the bilateral agreement with Iceland, french fries are quite important for Canada, and now you will have more beneficial situations on the Icelandic market with french fries from New Brunswick or Nova Scotia than the EU will have, since tariffs on the EU french fries are 76%, but the Canadian french fries will carry 46% import duties. These are little protective measures for the Icelandic agriculture.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you.

Mr. Bruehl, what agricultural products or any products do you see moving into Switzerland at the moment?

[Nicolas Bruehl]

Thank you very much for this question.

As you know, this agreement between EFTA and Canada will be a so-called first-generation agreement. That means it includes industrial products and fish as well as processed agricultural products. So for one thing, Swiss chocolate will be cheaper. There'll be a tariff reduction on chocolate and biscuits and these things. That is a good thing, I would say.

From your side, as the ambassador mentioned, there will be an actual agreement between Switzerland and Canada as well, and there Canada will profit on aspects like durum wheat or horsemeat. So, for example, you can export much more of these products to Switzerland than you could before.

There are quite a lot of advantages.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you.

Mr. Vatne.

[Per Øystein Vatne]

Thank you, Mr. Chairman.

I don't want to go into any specific products here, because I think the agreement as such is made in order to create the potential for increased trade. As my colleague has mentioned, there are already several products being imported and exported at this stage, so hopefully this trade will expand, and furthermore, we hope that new products also will be traded.

As far as I remember, Canadian exports to Norway almost doubled from 2006 to 2007. I think in 2006 Canadian exports were approximately 11 billion Norwegian kroner, and there is an exchange rate of approximately 5.5. In 2007, so far the figures have shown that it's approximately 20 billion Norwegian kroner, so it's close to a 100% increase. Of course, we can see a trend that there is certainly an interest in increasing exports from Canada to Norway. There must be also new products besides the already existing products, or there must be interest on both sides here.

Our exports have also increased, but not at all at the same level as the Canadian exports to Norway.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you.

Do you agree that travel will be easier for businessmen, and what have you, between countries, as Mr. Antonsson suggested it would be between Canada and Iceland? Would the same go for Norway?

[Per Øystein Vatne]

I understand. Well, unfortunately, so far when we go from Canada to Norway, we have to go by other European destinations, and so far as I know, we do not know if there will be any direct routes between Norway and Canada. Hopefully, one day we will have some routes, but as it is today, I haven't seen any proposals or anything in this respect.

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Vatne, again, and Mr. Miller.

Mr. Julian.

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

Thank you, Mr. Chair.

I apologize for being late. We're a very large country, as you know, and I just flew in from Vancouver and the plane arrived late. So I apologize for missing your presentation. I'm sure it was very interesting.

I hope, particularly Mr. Antonsson and Mr. Vatne, that you've had the pleasure of coming to British Columbia and going to the Scandinavian cultural centre that's in Burnaby, British Columbia. I was there on the weekend, and it is a centre of Scandinavian culture for British Columbia.

I wanted to start off by asking all three of you what your trade promotion budgets are, first for Canada, and secondly worldwide. In other words, in each of your respective countries, how much money do you put into product and service trade promotion, direct promotion of Icelandic, Norwegian, or Swiss products abroad?

[H.E. Markús Antonsson]

I must admit that I am unable to answer that question about the amounts in the world. We have close cooperation between the individual businesses in Iceland and the Trade Council of Iceland. They arrange for commercial delegations from Iceland to the individual market areas of the world with high potential for the Icelandic businesses.

It must be admitted that Canada, with the lack of this free trade agreement that has been in the works over this extended period of time, has not been considered very attractive for Icelandic businesses. However, I know that business visits are being arranged to the Maritimes, to start with, and to Quebec and Ontario. We will have, probably in cooperation with the Canadian embassy in Iceland and the Trade Council of Iceland, such visits arranged for this coming summer and fall.

This is on the agenda now. I believe there will soon be increasing interest in Canada. The Secretary of State for Foreign Affairs and International Trade has announced that with the ratification of the treaty, she will put a bill before Parliament stipulating the abolition of all import tariffs on Canadian goods according to the free trade agreement.

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

Your Excellency, I'm actually talking about the budget that you had available here in the embassy for Canada, for product promotion of Icelandic products. You're saying there's no budget right now?

[H.E. Markús Antonsson]

No, not here at the embassy. I'm sorry if I misunderstood the question. The Trade Council of Iceland is taking care of this, not the individual embassies.

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

So there is no service promotion budget at all for Canada from the Government of Iceland? It's not a trick question.

[H.E. Markús Antonsson]

No, there have been other priorities—

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

That's fine.

[H.E. Markús Antonsson]

—because of the lack of conclusion of this agreement.

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

Yes, but worldwide the Government of Iceland would have a budget for export promotion. Every country does.

[H.E. Markús Antonsson]

Yes, they do.

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

And what is the figure?

[H.E. Markús Antonsson]

I don't have that exactly.

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

Would you be able to provide that to the committee?

[H.E. Markús Antonsson]

Yes, I can find out.

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

Thank you.

[Per Øystein Vatne]

Maybe we'll go to the embassy first.

We have a project-specific budget. That means that prior to a specific date every year we have to apply to the Minister of Trade and Industry in Norway to get funding for certain projects. It can be anything from fish farming to oil sands, but we have to be project specific. That's the embassy part of it.

As to the promotion in Canada, we have an institution called Innovation Norway. They have an office in Toronto that is responsible for Canada. I don't know their budget, but they are doing a great job with Canada. This is an organization that came more or less from the old Trade Council, but we had a reorganization in Norway some years ago. They give advice and supply market surveys. That's the organization with a budget for promoting Norwegian industry in Canada.