International Trade Committee on April 2nd, 2009

[The Chair, Conservative, Lee Richardson]

We have until 11 o'clock.

You just take a couple of minutes, and then I think we're going to wrap it up. This will be the last question.

It's nice to see you here, Mr. Benoit.

A round of applause for Mr. Benoit....

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Yes. You know, back in the old days, when we had a really good chair at this committee, there was a lot more....

[The Chair, Conservative, Lee Richardson]

That's it: time!

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

No, no, I'm kidding.

[Voices]

Oh, oh!

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Oh, boy; I had about three different directions to go in. I think I'll go to the free trade deals.

You're talking about EFTA's not providing a market for beef. I think Mr. Laycraft talked about institutionalizing disadvantages in trade agreements. I'd like to hear a couple of examples of where these disadvantages have been institutionalized in the past, so we can stay away from that in the future.

In terms of EFTA, it certainly is opening up markets in other areas. What harm is it doing to the agricultural sector, if any? I'd like to hear specifically what harm has been done, because it is certainly advantageous to many parts of our economy.

[Ted Haney]

Just to speak briefly to the institutionalization of discrimination, there have been advantages. It's a balanced issue when we talk about FTAs. For example, one positive is that in Colombia, our basic deal has basically matched the U.S. trade liberalization agreements within their FTA.

For Peru, though, far fewer products from the Canadian beef carcass are included within the trade normalization commitment. Pre-FTA, Canada and the United States had equal and fair access to Peru. Once the two FTAs are ratified, the United States will have duty-free, tariff-free access for all cuts from carcasses...grading high-quality grades in the U.S. We'll have only part of the carcass from Canada.

That's an institutionalized discrimination against a wide range of cuts from our industry, which will not be fixed until at least 15 years out into the future.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Of course the United States hasn't ratified that deal with Colombia, as you know. Canada is moving along, at least.

[Ted Haney]

You can assume that they're going to be or they're not going to be; it's hard to say. Well, we're going to be, but for a year, and then the U.S. will. The framework agreements have been completed.

If we assume for a moment that both will eventually be ratified, that is institutionalized discrimination. The structure of the agreements, as they exist today, puts Canada at a trade disadvantage against the United States in that particular market.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

In terms of EFTA, tariffs have been lowered under that agreement. How are things not better than they were before the deal was ratified?

[John Masswohl]

I guess it's hard to come to the beef industry and say to us, “Well, things didn't get any worse for you in that agreement; will you support it?”

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

But the tariffs have been lowered.

[John Masswohl]

Not for beef.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Yes, they have.

[John Masswohl]

No, not for beef. Beef has been excluded from the EFTA agreement.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

I'll check that out. You say it's entirely excluded. That's not the information I had on that.

In terms of the European Union negotiations, which have started, you talked about the importance of that deal. Can you give a bit of advice on how to proceed? You talked about it very generally.

[John Masswohl]

In Europe right now, the access we have into the European Union is a small quota of 11,500 tonnes, which we share with the United States, at a 20% duty. Beyond that 11,500 tonnes, the tariff is prohibitively high. It's so many euros per tonne, and it works out to about 140%.

Basically we would like to see unlimited, quota-free, duty-free access into Europe. That means getting rid of the quota, in-quota tariff, and the over-quota tariff.

Traditionally Canada starts free trade negotiations, or any kind of trade negotiations, by saying we will not expand quotas or eliminate over-quota tariffs. For Canada, those circumstances generally apply to supply-managed products. If Canada starts with a position that they will not even discuss or push for those sorts of things, Canada will have de facto eliminated getting access for beef into Europe.

We want to make sure that Canada does not start the negotiations with the mandate to keep over-quota tariffs in place. That's essentially where we're going. I think there are better ways to ensure that the needs of the supply-managed sectors are dealt with rather than cutting the access for beef off at the knees before we even start.

[Leon Benoit, Conservative, Vegreville—Wainwright, AB]

Gentlemen, thank you all for being here today.

I know that getting deals in your commodity has been extremely difficult for Canada, and agriculture commodities generally. It's the toughest area there is to negotiate. If you look at the problems we have with NAFTA, most of them are in the agriculture sector, and that's really too bad. Of course the Americans care about what's good for their people. You have to be tough. You've talked about that.

I think your talking points are perfect. You have to focus on how it's hurting Americans, how it's hurting their voters. I am sure that is the way the committee will go when they go to Washington.

[The Chair, Conservative, Lee Richardson]

Agreed.

Is that enough?

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

No, I have one more question.

[The Chair, Conservative, Lee Richardson]

No, I think Mr. Benoit asked enough questions for you.

Gentlemen, it's been very good today. Thank you very much; it's been very informative.

I want to just repeat, on behalf of the committee—I think three or four of the members asked you specifically—about possible suggestions of representatives we might meet with in Washington, and not just Congress, but also in the industry down there, or other suggestions you might have.

Please submit them to the clerk, the people you think it might be helpful for us to talk to, as much on your behalf as on our own.

Mr. Rice.

[Martin Rice]

Mr. Chair, do you have a tentative date yet for when the committee will go to Washington?

[The Chair, Conservative, Lee Richardson]

Yes. We're going April 26 and 27, in two weeks.

Thank you again.

With that, we are adjourned.