Thank you, Mr. Chairman.
Maybe I'll start by reminding members of the committee who the Conference Board is. We're an independent not-for-profit business research organization that tries to facilitate dialogue between governments, private sector, labour in Canada, and the not-for-profit sector. We're not here to advocate for any particular cause but to talk about research and our perspective on how the world could be better organized.
I want to make four brief points of principle to start, and then address Colombia.
First, we believe that reductions in trade barriers everywhere and anywhere are a good thing. International trade is a creator of wealth because it creates competition at home, markets abroad, and increasingly it is allowing our businesses to become more efficient through traded inputs. The ideal way to have more open trade is multilateral, but with Doha stalled, we have to look to regional and bilateral agreements. Canada, to a great degree, has been left behind in this movement towards bilateral free trade. We should not be left idle on this particular front.
Second, we're now in an era that I call “integrative trade”, where more and more we're seeing a linkage between all parts of trade, foreign investment, and exports and imports as a means to make firms more efficient. Clearly Canadian firms have the desire to become as competitive as possible in a very competitive global marketplace. Therefore, to be effective, we think trade agreements should be as comprehensive as possible. They should take into account trade, investment, goods and services, and the fact that imports matter for Canadian companies as much as exports, and are now a key part of our national economy.
Third, Canadians clearly place a high value on respect for human rights. However, we must be very careful about choosing the right instrument for the job when it comes to influencing human rights, and be careful about adding excessive political conditions onto trade negotiations. This approach can quickly become one of a slippery slope, and really forms a creeping protectionism. I only have to point to the comments in the U.S. political campaign of political intervention in free trade to show how we're really at a point where the global economy is very subject to protectionist forces right now. Whenever economic growth slows down, protectionism rises up; you can see this on a global basis right now. So be very careful if you start to add extra conditions onto trade agreements.
Fourth, I think that if political factors like human rights are important in a given country's case, as much as possible we should make evidence of improved respect for human rights part of a bigger dialogue, not simply a condition within a trade agreement.
As for Colombia, I have to confess a certain degree of agnosticism, or very mixed feelings. For me, Colombia is clearly not a black and white case. Frankly it's not even that important a case. Colombia is not a top-tier market for Canada. I did some simple calculations: only 0.15% of our Canadian exports actually go to Colombia. Our annual trade with Colombia is about the same level as with South Dakota, and it is actually smaller than with Delaware or Rhode Island. Compared to some other markets that are much closer, Colombia is not really a major player. Of course as Mr. d'Aquino mentioned, 80% of Colombia's imports to Canada are actually duty-free already, so the gains from free trade are probably not as great as they would be in other cases.
While clearly there are sectors--you heard from one of those sectors just now--where expanded market access would be a good thing and would increase the prospect of greater Canadian sales, in general I think there's very little evidence that Canadian companies are going to boost their international competitiveness through increased trade with Colombia. There will not be huge degrees of improvement in an integration between Canada and the Colombian economy. We should be careful not to use Colombia to set precedent for other agreements, because it's a small case.
Indeed, I would think that absent multilateral deals, whether it's Doha or something like free trade of the Americas, we would probably see greater gains in terms of wealth creation in Canada from a sub-regional deal that included other countries in the region rather than through a series of bilateral negotiations. We're already talking about bilaterals with Peru. Adding Colombia to the list doesn't necessarily make it better; it actually makes it more complicated for the limited pool of talent we have to do free trade negotiations in Canada.
On balance we would certainly be in favour of free trade with Colombia, but it's really a question of setting national priorities. Is Colombia really the next country on our list, or should we be thinking, for example, about free trade with the EU on the heels of our free trade agreement with the EFTA countries? There, of course, it's important that I say that Premier Charest has shown very important leadership nationally by putting freer trade with Europe at the top of the agenda.
Perhaps I'll close by suggesting that if you want to debate the issue of human rights and trade, I think China would be a far more interesting case than Colombia, because China is clearly now at the centre of globalization. It is the driving force of the global economy. So there are benefits with respect to China that simply do not exist from freer trade with Colombia. That is, of course, why China has signed a whole series of bilateral free trade agreements, including agreements with countries like Australia and New Zealand, which also respect human rights and are also advanced democracies.
So really, the issue comes down to this: if you start pursuing free trade with a country that has a history of human rights abuses, is that tacit approval or support or endorsement of those policies, or is free trade really a means of getting into a deeper engagement with that country? We have argued in our research that, in fact, pursuing free trade with countries that are not as democratic as open societies like Canada is probably a necessary condition for expanding the dialogue. But that's really the issue for this committee to debate.
Thank you, Mr. Chairman.