International Trade Committee on Dec. 4th, 2007

[Ted Menzies, Conservative, Macleod, AB]

My thanks to you and your officials for attending, Minister.

I have two questions. One is to you, Minister, and my next question goes to Mr. Gero after that, because you piqued my interest with one comment you made, and I'd hate to see him sitting there and not have a chance to talk. That's not like John.

We have heard great applause from all across this country about the Asia–Pacific gateway and corridor initiative. There are some concerns in my mind that we won't be able to realize the potential that this initiative could bring to this country if we don't push forward on some of these agreements, and I'm referring specifically to the Korean agreement. In your statements you've been very firm that we will not pursue this unless it's good for all of Canada. We're pleased that you're saying that, but having said that, we know the U.S. is throwing up continual roadblocks. We saw more again this week with the SPS issues that they're throwing up.

We can't continue to be just dependent on the U.S. Could you just talk very quickly about the fact that we need other markets if the U.S. gets this open door to Asia, if you will? I believe it's a market of four billion. Just talk about some of those advantages.

And to you, Mr. Gero, the minister mentioned something about the agriculture text. If you could, just enlighten us on what's happening with that too.

[David Emerson, Conservative, Vancouver Kingsway, BC]

Let me just give you the context in which we have to develop trade going forward.

The global marketplace is affected by tariffs remaining after the Uruguay Round—there's no doubt about that. But if you really look at the barriers to competitiveness and export success today, you have to go far beyond tariffs to get at the real drivers of competitive success. You have to look at transportation and logistics. Probably more than tariffs, more than any other single initiative that you can pursue is a transportation and logistics system that allows you to get engaged in just-in-time rapid-cycle turnaround flow of goods and services into the global marketplace.

That's what the Asia-Pacific gateway initiative is all about. It's not just about ports or rail or truck, it's about a total system. It's about a regulatory framework. It's about tackling the kinks and discontinuities at the border, of which you've mentioned some, and when I was in Miami yesterday, I spoke quite bluntly to the Americans. I pleaded with them to recognize that when you create those bumps and impediments at the border—and we're seeing far too many of them lately—it's hurting North America. It's hurting Canada. It's hurting the United States; it's hurting their competitiveness. It will hurt Mexico's competitiveness.

So we're going to have to drive very, very hard to make sure that the gateways we talk about in Canada really do allow us to take advantage of what we call “the North American platform”. So we're going to have to drive some of those border issues extremely hard, and then, as you look out into the marketplace, recognize that there's not just the Asia-Pacific gateway, but also the potential Arctic bridge, as they're referring to it, through Churchill and the port of Murmansk. There's the Atlantic gateway. There are the north-south trade corridors in Ontario and Quebec. Those are all going to be critical, and the markets that we will be dealing with won't just be China and Korea. Those will be important markets, but it will also be other markets around the Pacific rim that will take advantage of those gateways.

On the other coast, we're going to be creating a competitive position—pan-Atlantic, and all the markets around the Atlantic rim.

[The Vice-Chair, Liberal, John Maloney]

Thank you, Mr. Menzies.

Mr. Julian.

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

Thank you, Mr. Chair.

I have to say, Mr. Minister, Mr. Pallister tossed you a softball question and I was very disappointed that you dropped the ball on the answer.

When we talk about Canada and Colombia, we're not talking about human rights violations from 10 or 15 years ago; we're talking about human rights violations that are being condemned this year. Dozens of trade unionists have been killed. The Colombian military have been guilty of hundreds of summary executions this year.

Human Rights Watch, Amnesty International, and the UN Commission on Human Rights have all condemned human rights violations, widespread human rights violations, in Colombia this year, and the ties of the government to the paramilitaries have been condemned this year. What we have, from far and wide, from the experts, those who actually monitor human rights conditions in Colombia, is condemnation of the government this year. This is a current problem. If the government is moving forward to sign a trade agreement that contains a few paragraphs on human rights, essentially what we're doing is rubber-stamping those gross violations of human rights that are occurring right now.

I didn't see anything in the estimates that talked about monitoring of human rights. So you've used the phrase rather loosely, I believe, talking about protecting human rights. You used it again, I believe, in response to Mr. Pallister's question.

What is your ministry doing to actually monitor the human rights situation in Colombia to ascertain whether or not this would actually be, in a very real sense, condoning what are widespread violations of human rights in Colombia?

[David Emerson, Conservative, Vancouver Kingsway, BC]

I think I indicated earlier that it's not just in the trade agreement that we're dealing with human rights. There are a variety of initiatives going on in Colombia. We're putting funding in through the Global Peace and Security Fund. We're putting funding in through CIDA, which focuses on democratic governance, on peace-building and human rights, with emphasis on protection and promotion of the rights of vulnerable populations that are affected by the armed conflict, and I can say that CIDA has played a critical role in assisting the Colombian government in developing a children's rights and protection framework.

We all recognize that there have been some terrible violations of the rights of people and union leaders in Colombia over the years, but I think you would have to admit, Mr. Julian, that the level of those incidents has been declining. It is our view that the president is making very strong efforts to control the paramilitary groups that could be involved here. We recognize that it's a long way from perfect, but being a long way from perfect doesn't mean that we should walk away and leave them even more economically vulnerable to a takeover by lawlessness and paramilitary groups.

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

I gather from your comments that there's no monitoring going on, from this government, into human rights violations. That's very disappointing.

I'm going to turn to another subject. Last year we had a softwood lumber sellout that a number of us believed would be disastrous for the country. We gave away $1 billion despite the fact that we won in the Supreme Court, and we would have won in that final appeal last spring in the Court of Appeals for the Federal Circuit. We've had 10,000 jobs evaporate, eviscerated from the softwood lumber industry over the year. The U.S. lumber lobby is now coming back seeking another $125 million in penalties, and I see in the estimates that you're seeking another $13 million for implementation of the softwood lumber sellout.

How do you justify the continued giveaway of our softwood industry, given the fact that we have given away $1 billion, 10,000 jobs, and potentially another $125 million in penalties? How do you justify us continuing to invest in an agreement that clearly does not work?

[David Emerson, Conservative, Vancouver Kingsway, BC]

Mr. Julian, I've never been able to understand how you manage to practise such ridiculous economics.

I have to say that in the market we are in today, we have injected over $5 billion in cash into the coffers of Canadian companies so that they can survive a very difficult market. Why is the market difficult, Mr. Julian? It's difficult because the U.S. housing market has crashed. It has crashed probably worse than it has crashed in fifteen or twenty years. Lumber prices are lower than they have been for fifteen or twenty years. That has absolutely nothing to do with the softwood lumber agreement. In fact, if we did not have the softwood lumber agreement, we would be facing anti-dumping duties and more countervailing subsidy allegations that would be taking duties up to 20% or 30%. Very recently, we have had briefings from the very best American lawyers in the business who have told us exactly that: that if we lose the softwood lumber agreement, we're going to have a very big problem, and I'd like you to wear it if that happens.

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

Well, Mr. Minister, as you know—

[The Vice-Chair, Liberal, John Maloney]

Gentlemen, could we just lower the temper of the conversations here? I don't think it's quite helpful.

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

Mr. Chair, with that response, I can understand why the minister's name is mud in so many softwood communities from coast to coast to coast.

I'll go to my final set of questions.

Looking through the estimates again, there is nothing around public consultations on the SPP, the so-called security and prosperity partnership. I understand—and I will put this to the minister—that it is not because, as the Canadian Council of Chief Executives has said, the Canadian population is simply not ready for what is in the SPP. As well, there is nothing in the estimates that deals with the fact that under NAFTA and the Canada–U.S. Free Trade Agreement, two-thirds of Canadian families are earning less in real terms than they were in 1989, while the average level of household debt has doubled over that same period. So much for prosperity.

There's nothing in the estimates to reflect either the fact that the scant estimates that we've had of net job gains or net job losses under the Canada–Korea trade agreement have been discounted by many industrial sectors, including the auto industry. In fact, the only credible study shows a net loss of 33,000 jobs since Canada and Korea signed.

I'm wondering why there is no reflection of those three issues in the supplementary estimates.

[David Emerson, Conservative, Vancouver Kingsway, BC]

The credible study that you're talking about was completely fraudulent, and you probably know that—or you should know that.

The SPP is not part of DFAIT's mandate. There would be nothing in our estimates to deal with the security and prosperity initiative, because it's really not part of our ministerial mandate.

What more can I tell you?

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

NAFTA, and the loss of income in real terms.

[The Vice-Chair, Liberal, John Maloney]

A quick response, Minister.

[David Emerson, Conservative, Vancouver Kingsway, BC]

Mr. Chairman, on the loss of jobs, there have been losses of jobs in manufacturing in Canada over the last ten or fifteen years. There have been losses of jobs in the United States. There have been losses of jobs in Europe. There have been losses of jobs in manufacturing in most of the major industrial countries of the world. Is that because of free trade agreements? No, it is not. It is because the competitive landscape has changed fundamentally in the world, particularly because of the impact of China and India and other hyper-competitive economies. They've changed the competitive cost structure in the world economy in a fundamental way, and that has been causing manufacturing to go through a tremendous series of adjustments. Those adjustments have been exacerbated by exchange rate movements that have been very difficult and have added to things.

In my opinion, the job losses have nothing to do with free trade agreements with the United States and Mexico.

[The Vice-Chair, Liberal, John Maloney]

Thank you, Mr. Minister.

Mr. Temelkovski, a five-minute round, please.

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

Thank you very much, Mr. Chair.

Thank you, Mr. Minister and officials.

You mentioned, Mr. Minister, that border issues exist between our neighbours and ourselves. You also mentioned we'd like to assist people and goods to move rapidly or more easily. Would you say a permanent resident card helps move people and goods across the border, or would you say not?

[David Emerson, Conservative, Vancouver Kingsway, BC]

I'm not sure what you're referring to.

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

We'll move to the next question, and maybe it will be apparent. Do you think passport requirements between the two countries help move goods and people, or do they hinder?

[David Emerson, Conservative, Vancouver Kingsway, BC]

I would come at it from this point of view: if Homeland Security and the Government of the United States are going to require passports, then we'd better get passports in Canadians' hands and we'd better get them up to a high technological standard and look for other kinds of secure documents that will accomplish the same thing and be acceptable to the U.S.

So we're going to go through a period of difficult adjustment as people get hold of acceptable identification documents. That will be an adjustment, but we will get through it. In the end, it will probably not be a back-breaker in terms of our trade and economic relationships. It will create a difficult period because most Canadians don't have passports and it will take some time for them to get either a passport or a technologically sophisticated driver's licence.

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

I'm reading you're saying it doesn't help.

[David Emerson, Conservative, Vancouver Kingsway, BC]

It's happening now. Increasingly, people are getting their passports, and several provinces are looking at enhanced drivers' licences as a substitute form of identification.

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

PR cards are permanent resident cards for people who are not Canadian citizens, so they can move across. That would be similar.

[David Emerson, Conservative, Vancouver Kingsway, BC]

Yes.

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

How about guns for guards at the borders? Do you think they would help move people and/or goods faster?

[David Emerson, Conservative, Vancouver Kingsway, BC]

I don't think the arming of border guards is the driving factor here. I think that may be a security issue that will have an impact in isolated circumstances, but I don't think it's going to affect the overall efficiency of the flow of people.