Evidence of meeting #6 for International Trade in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was deal.
A recording is available from Parliament.
Liberal
Lui Temelkovski Liberal Oak Ridges—Markham, ON
No doubt you've been to Europe in the last few years. Have you had similar encounters in Europe, asking for passports once you enter? Maybe you've seen some guards with guns?
Liberal
Lui Temelkovski Liberal Oak Ridges—Markham, ON
No, you haven't. Do you think they're moving a little faster than we are?
Liberal
Conservative
David Emerson Conservative Vancouver Kingsway, BC
What you're essentially calling for is a common market with the United States where we do away with immigration checkpoints, and that's a debate that even goes beyond free trade agreements. That's a very fundamental change. It may be something that will have to be considered eventually, but we're not close to that right now.
Liberal
Lui Temelkovski Liberal Oak Ridges—Markham, ON
How about nationally: do you think interprovincial barriers exist that hinder our ability to trade with some countries that may require them to negotiate with many provincial or territorial authorities, as opposed to one unit?
Conservative
David Emerson Conservative Vancouver Kingsway, BC
That's a very good comment, because when we look at our World Trade Organization negotiations, when you look at negotiations in terms of bilaterals we're undertaking with various countries, some of the issues of concern to the other nations we're trying to get market access to is that they want to deal with some of the provincially oriented barriers to trade, such as government procurement policies, for example. So it is an issue.
We try to consult with provinces. We try to get them to work with us and to understand there are responsibilities and opportunities for provinces, as well as the federal government, to move these negotiations along.
Bloc
Guy André Bloc Berthier—Maskinongé, QC
Good afternoon, Mr. Emerson, and good afternoon to the officials.
We, the members of the Committee, often have questions. My question is for the Minister.
In your view, what should the criteria be when we are discussing a new bilateral agreement with another country? What criteria does Canada rely on, initially, when signing a new bilateral agreement?
Conservative
David Emerson Conservative Vancouver Kingsway, BC
I would say that you would want to look at the overall creation of export opportunities; you'd want to look at the degree to which there could be offsetting negative consequences; you'd want to balance it out in terms of overall wealth creation, job creation, or job loss. You would also want to do some assessment of the regional implications of certain agreements. That would be, fundamentally, what you would be wanting to do. And you'd want to ensure that the opportunities and the net improvement was a durable, permanent improvement and a permanent opportunity for Canada to do better.
Bloc
Guy André Bloc Berthier—Maskinongé, QC
When a business supports a country, it generates a lot of imports and exports.
In your opinion, should the priority not be to balance the terms of this trade rather than to further liberalize the agreement?
Furthermore, is the respect of human rights a criterion that we should be able to measure? I am obviously alluding here to Columbia.
Conservative
David Emerson Conservative Vancouver Kingsway, BC
You cannot just look at whether you're getting a bigger increase in exports than imports or vice versa. You cannot just look at whether there is more investment coming into Canada or going out.
I'll give you an example, and that's the Canada-Chile free trade agreement. With that agreement we've seen a very substantial increase in trade, but a widening in the trade deficit, and a very substantial amount of Canadian investment has gone into Chile. But when you look beneath that superficial pattern, what you find is that Canadian mining companies in particular invested massively in Chile, brought the resource or semi-processed resource product out of Chile into Canada, where it became an import and made our trade deficit look worse. And yet here we were creating a stronger mining sector and opportunities for value added in the Canadian economy.
If you looked at those superficial numbers, you might think it wasn't a good deal, when in fact it was actually a very good deal for both countries.
Concerning human rights, I come back to say that human rights are absolutely important. The elimination of poverty is absolutely important, and we look for ways that a trade agreement and the responsible behaviour of our investors in the country will create a positive environment in communities, environmentally, and for workers. We look at the various complementary initiatives that can be brought into play in terms of human rights.
Our fundamental approach is that we would be disinclined to negotiate a trade agreement with a government that wasn't committed to enhancement of freedom, democracy, human rights, and rule of law. We look for people who have common, similar values.
Bloc
Guy André Bloc Berthier—Maskinongé, QC
Why, in your opinion, did the United States end their negotiations with Columbia?
Conservative
David Emerson Conservative Vancouver Kingsway, BC
They did not end negotiations with Colombia; they completed negotiations with Colombia. They are having a debate in the United States as to whether they will ratify the agreement. Some are criticizing it for the same reasons that some in Canada would criticize trade with Colombia. My guess is that they will, at the end of the day, ratify the agreement with Colombia.
I heard a senior official from the State Department, when I was in Miami yesterday, speak very positively on the role of the U.S.-Colombia free trade agreement in terms of helping Colombia out of the kind of cycle of violence and crime they have been trapped in for so long. I think you're going to see the Americans eventually ratify that agreement.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
Thank you.
I want to thank the minister and his officials for being here today.
I apologize for asking the three questions up front, but I'm doing that just so you can talk longer.
Mr. Menzies talked a bit about trade and about security always trumping trade in the U.S. I appreciate the tough stand you took in Miami by talking about this, and I believe we need to continue to push back on this.
What other kinds of things can we do to enhance this relationship? Certainly there's a border town where I come from, and the issue is always the issues we deal with around the border. We could probably build another half-dozen bridges, but it still wouldn't deal with some of the issues we have to deal with in terms of trying to get goods and services across. That's the first question.
The second two questions are somewhat related, but maybe not. I know India and China, as emerging markets, are something the department has indicated as a priority. What type of progress is being made?
Is the experience with Research In Motion going in there...? I don't know to what level the government had to help them. I would assume there was a great deal of help from the government. What is it that the government is doing to try to work on that progress and maybe make it easier for other companies to get in there? That would probably relate to any kind of free trade agreement we may look at in the future.
And my third question relates to global supply chains. We hear it all the time. What types of opportunities do you think we can have as Canadians? Is there an area of competitive advantage that we could face for global supply chains? Are there examples of what we're doing right now? Could you just elaborate on them?
Conservative
David Emerson Conservative Vancouver Kingsway, BC
On the security front, there are a host of things we can do if our U.S. counterparts are willing to proactively work with us and look at different ways of achieving the same result in terms of security. That's really what, in some ways, the North American security and prosperity initiative is trying to do. It's trying to identify security-related issues and get ahead of them in terms of the kinds of technologies that we need at the border, the kinds of information bases that we need, and the ways in which we can carry out inspections of cargo or identification of people.
It's a long, arduous, detailed, grubby path, but you have to have somebody on the other end who is willing to say, “Okay, let's try it this way. That sounds like a good idea.” What we're finding is that there is very little responsiveness so far, and that has been a source of great frustration, which is why I expressed myself the way I did in Miami.
So there's a lot we can do, and we are stepping up and doing it. We have to ensure that Canada's security systems are at least as good as those in the U.S. They don't have to be identical, but just as a matter of Canadian security, quite apart from the need to be compatible with our biggest trading partner, we need to continue to step up our own security systems, technologies, approaches, and so on.
On the RIM question, RIM is one company, but it is a global champion now. It is probably the most well-known Canadian brand in the world today. In every market, they go in and they have to find distributors for their product and they have to ensure that there's technical compatibility with the telecommunications technical standards in that country. It therefore becomes a multi-year exercise for RIM, working with us and with the government in a country like China. We're always there to help them, to open doors, to make calls, to make sure any of the impediments they're encountering are not simply protectionist impediments.
We try, government to government, to break down some of the barriers and open doors, and we've done that in a variety of markets with RIM. We also do it with Bombardier in various markets, we do it with SNC-Lavalin, and we're doing something with Methanex in Argentina and Chile. We're constantly listening to the issues that Canadian companies are running into in terms of foreign governments, and we are strategically intervening to try to ensure that Canadian companies are not being disadvantaged.
In terms of global supply chains, there are a number of Canadian success stories, RIM being one of them. Bombardier is another one, and SNC-Lavalin is another one. What it really involves is companies being willing to put investments and a corporate footprint in the different markets in which they want to participate around the world, being prepared to shunt people around their value-creating network, and being able to allocate research around the network and have distribution systems. All of that is driven by ensuring a high-level of customer satisfaction, just-in-time delivery of product, and all of the quality attributes that the global consumer now demands because the competition is there to take it away.
Liberal
Liberal
Judy Sgro Liberal York West, ON
Thank you very much, Mr. Chair.
It's nice to see you, Mr. Emerson.
Before I ask you my question, my colleague Mr. Dhaliwal had left a question, specifically, that he wanted covered off. It had to do with the Asia-Pacific gateway. It's gaining global attention, as well as local attention for a lot of the Delta residents in his area who strongly feel that it will have a negative effect on the community at large.
Given the fact that the government is awash in billions of dollars of surplus as a result of the great work of all of us as the Liberal government, I'd like to know, why will your government not be giving this project the same priority as the St. Lawrence Seaway project?
Conservative
David Emerson Conservative Vancouver Kingsway, BC
I know Gordon Campbell likes to compare the gateway with the St. Lawrence Seaway, but I think Delta's issue is a little more modest. It's really about the negative effects on the community in terms of noise, congestion, and that kind of thing.
We are putting in some very substantial investments, particularly in the Roberts Bank corridor. When you look at the federal contribution plus the local contributions and provincial contributions, there's over $300 million being spent just on that corridor between the Roberts Bank terminal and I guess as far up the valley as Hope, to deal with the interchanges, to make sure we're getting rid of the at-grade interchanges, and that there are noise barriers wherever we can put them, essentially trying to ensure that the gateway is community friendly.
You can always say you can put the whole thing underground and spend $20 billion doing it, but that's not practical. What we have to do is look for the practical solutions that don't destroy the economics of the gateway but do in fact improve and protect the livability of communities, and we're doing that. You'll see, I think, more improvements in terms of the level of pollution, for example, from trucks as we upgrade and encourage some of the trucks hauling containers to use greener fuels, and so on.
Liberal
Judy Sgro Liberal York West, ON
An issue that you and I have been in correspondence on for some time is in regard to the Canada-South Korea free trade agreement. You made one particular comment that I think would be nice to have clarified. You had said that the fact that we haven't sold many, if any, vehicles into Korea has probably more to do with the fact that North American auto producers have really not produced the kind of small, fuel-efficient, high-quality vehicles that are in demand in Korea.
Would you like to elaborate? You know from our correspondence on the issues of the auto industry how strongly I feel about how important it is, and I think that statement needs to be clarified a little bit, because it sounds as though the auto industry in Canada is not up to producing the quality of vehicles that I think they are.
Conservative
David Emerson Conservative Vancouver Kingsway, BC
I did not mean that as a comment that North American producers—let's say the big three, for the sake of argument—are not capable of producing the kinds of vehicles that would be saleable in Korea. I'm simply saying, and I think this is something that auto analysts will say as well, that the big three have not focused on that market historically, which is why 85% of the vehicles produced in Canada are sold in the United States. They produce vehicles for the North American market, and that has been the focus.
Could they produce for the Korean market? You bet they could, and GM is establishing operations in Korea. As the North American auto producers begin to deal with the competitive threat coming from let's say Toyota, Honda, and Hyundai, their products are going to be more and more the product that would sell in Korea or in China or in Japan. It's a matter of the industry going through an adjustment, getting the technology in place, and adapting product design so that it's saleable beyond North America.
North Americans themselves are going to be demanding more of those kinds of vehicles, which would then be more readily marketable in a market like Korea.
Liberal
Judy Sgro Liberal York West, ON
When we talk about free trade and fair trade, I'm sure that all of us as parliamentarians and Canadians want the same thing. But the more I look at that whole issue with South Korea, they're continually putting up roadblocks, from penalizing their own residents if they buy an imported car, to the point of putting up technical obstacles in terms of headlights, and so on—all kinds of excuses to prevent our vehicles from having free access.
I think there are many of us who wouldn't have those concerns if we thought it was a fair deal and if there was free access on both sides.
