International Trade Committee on Feb. 10th, 2009

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

Point of order.

[The Chair, Conservative, Lee Richardson]

Mr. Julian.

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

I think we should have stayed with the original format. I agree with Mr. Brison that we have one round on general issues and then have a second presentation on EFTA. It's getting very confusing. We're actually dealing with two different subject areas at the same time.

[The Chair, Conservative, Lee Richardson]

That's fair enough, if you want to go that way. I just hope we can get through it. That's the only problem.

[John Cannis, Liberal, Scarborough Centre, ON]

Do I have seven minutes, Mr. Chair?

[The Chair, Conservative, Lee Richardson]

No, you probably have three minutes.

[John Cannis, Liberal, Scarborough Centre, ON]

Thank you, Mr. Chair.

Welcome, everybody, to the committee. I certainly look forward to serving again on this committee, which I enjoyed very much in the past.

I'll go directly to my questions. Can you remember this from some time ago under Minister Peterson, when we did the review on emerging markets? We talked about how we needed to be more competitive out there in order for Canada to be more competitive and to sell its goods, services, and technology. We needed not only to have the right kinds of people in terms of trade commissioners, which we referred to in here, but also to give them the tools and the means and the ways and the time. One of the recommendations at that time concerned their tenure, their period of service in a said country. It was recommended to go beyond the normal. I don't know if that has been implemented, or if there are any efforts leading toward that, or if moneys have been put toward that, because as the saying goes, you have to spend a dollar to make a dollar--and properly equipping these offices or these people requires financial support. Can you just briefly touch upon that for us?

[Ken Sunquist]

I have a very quick comment. Thank you.

That gets to the heart of the “rotationality” of our officers abroad. Generally speaking, we have been focusing on geting people to extend a little bit longer, so that in what I would call the A markets--the U.S., Japan, and western Europe--we're looking at a normal tenure of about four years. It was never really less than four years, but in some hardship postings it was as low as two. The business community told us that was just unreasonable, so now we're in a normal process of extending to at least three years or even longer. It's because we've changed our foreign service directives to financially help the people to look at doing these kinds of things. Our last two officers in Nigeria have both extended, for three years and four years. I don't have the figures in front of me, but I think, anecdotally, I'd say that the average length of postings has been extended greatly on the trade side.

[John Cannis, Liberal, Scarborough Centre, ON]

That's good to hear. I think that's what you refer to when you say that you have also “rebranded the Trade Commissioner Service to better promote...”. Is that part of this rebranding?

[Stewart Beck]

I have spent two years of my life doing human resources. One of the challenges we have is that every year we move 700 people between the trade and the foreign affairs sides. You have to understand how that process works. One of the changes we made, to support what Ken has said, is that it used to be that in difficult posts people would go for two years with an option to opt for the third year. Now we have people who sign up for three years, with the option to opt out after two years. It's a different mindset, and we're now seeing people actually extending for a fourth year, which is what we would like to have.

In a globalized world, the companies we're working with, because of global value chains and the reality of how to do business today, are becoming much more focused on certain specific niches. When we talk about rebranding, the whole idea of what we're trying to achieve is to be able to build that type of competency in our people. We don't necessarily have people who understand a particular sector, but they understand a particular market, so having more competency in that market is to our advantage, and that's how we try to brand that.

[John Cannis, Liberal, Scarborough Centre, ON]

Thank you.

Thank you, Mr. Chairman.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Cannis.

Monsieur Cardin, seven minutes.

[Serge Cardin, Bloc, Sherbrooke, QC]

Good morning, gentlemen.

We are currently experiencing a major crisis when it comes to international trade. Without the capital being invested through special initiatives, the situation would probably be disastrous. Indeed, you referred to protectionist measures that were immediately brought in in similar situations. The fact that most countries are doing this is pretty much a natural reaction. People want to protect themselves, but at the same time, we are talking about increasing our market access and investing more and more abroad.

You seem to be saying that the WTO remains our preferred forum for discussing market access. At the same time, one very much has the sense that Canada is engaged in an almost frantic race to sign bilateral agreements. Mr. Plunkett's comments about maintaining supply management suggest that you would like to see the Doha Round come to a conclusion as quickly as possible.

Would you say that, if supply management were to become an obstacle to concluding the round, you would be prepared to suggest that the government drop that demand?

[Ken Sunquist]

Thank you for your question. I believe everyone here has partly answered it.

First of all, from our perspective, I think, the supply management is not on the table. Instructions from us, from our political level and from a bureaucratic level, are very, very clear. Supply management is something that we, as Canadians and as trade officials, hold dear. We're not discussing that one.

On the WTO, you are correct: that is a preferred means for trade liberalization. We have put all of our focus on the WTO, but when you look at many of our competitors over the last few years, you see that they have signed a number of bilateral or regional agreements. In fact, we're now at a stage of being behind the competition in some ways, so we are in a very aggressive mode on bilateral agreements. It's not just FTAs. It's foreign investment protection, air services, or whatever tool will make the difference in a particular market. In some markets, it might be an FTA. In some, it might be science and technology agreements. In some, it might be air negotiations.

The difference now is that instead of doing a broad brush across the world, we're trying to ask what it is we need to do in Panama or in Mexico or in the EFTA countries and then pick the tool. That might be the best way of replying to that. I'm not sure.

David?

[David Plunkett]

The only thing I would add is that we do not consider it problematic to run both a multilateral and bilateral regional track simultaneously. This is nothing new.

During the previous round of trade negotiations, the so-called Uruguay Round, we were engaged with the negotiation of the original Canada-United States Free Trade Agreement, which ultimately turned into the NAFTA.

We see these as complementary exercises. In the bilateral and the regional context, for example, we will try to go further or faster than you might be able to in a multilateral context, where there are 150 countries of varying degrees of development. We also recognize that there are certain issues--and agricultural subsidies is a good example of this--which are, in all likelihood, only resolvable in a multilateral context, because if you disarm yourself on a bilateral front, in effect, it could play against you in a broader picture.

If you look through our bilateral and regional agreements, the EFTA being one example, you'll see that there are instances where both parties agree that the existing WTO provisions will be the guide in certain areas, because both parties agree, for whatever reason, that it's good enough and we're not going to get any further on a bilateral basis. To us, the fact that we're running both tracks is not an inconsistent approach.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Chairman, I have a number of questions, but I also want to leave some time for my colleague to ask his question. I hope I will get another chance.

[The Chair, Conservative, Lee Richardson]

You have about two minutes.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Good morning, gentlemen.

I live in Rimouski. I am a new member of Parliament and a new member of this Committee. To get to Ottawa, I drove for seven hours yesterday. I had time to listen to a lot of radio. I heard a report about Barack Obama's desire to change the world and to make significant investments in science and technology. Parallels were drawn to Canada. Some people were saying that they are concerned that Canada may not be in a position to follow the lead of the United States with respect to science and technology. They suggested there is a big difference between the two countries.

Earlier, you spent quite a lot of time talking about science and technology. However, the budget tabled a few weeks ago proposed very little in the way of new investments in science and technology.

What is the government's position on investments in this area?

[Stewart Beck]

Thank you very much. That is a very interesting question.

We have been investing in science and technology for a number of years. Quite frankly, if you take a look at how our R and D system is viewed globally, people look at it much as they look at our banking system now and say we've done some things right. We've invested heavily in research and development infrastructure. We've invested in research and development chairs. We've gone from a situation in the 1990s in which we had a brain drain to a situation now in which we're attracting some of the best and the brightest to Canada.

Our base and fundamental position is very strong. What the U.S. will be investing in that type of R and D infrastructure through the Obama administration is really quite remarkable, and it will be hard for almost anybody to match that. So we have to be careful, and we have to use what we've been building and what we have built over the last ten years to our advantage. That's why, in my statement, I was referring to some of the programs that we're putting in place, which will allow us access to other international partners.

From a Canadian perspective, we produce 4% of the global R and D, so 96% of it is residing outside our country. How we can make those connections will be very important. We have those tools, and we're building on those tools. It would always be nice to have more money, but quite frankly the focus now is on the short term, and we will be looking at ways in which we can use our network to build into the future.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Cardin and Mr. Guimond.

Mr. Julian.

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

Thank you, Mr. Chair. Thanks to our witnesses.

I'd like to start with the issue of the “buy American” provisions in the Senate bill. We know the Senate bill will pass today. Closure yesterday was voted on by a majority of over 60 U.S. senators. The House of Representatives bill very clearly has the “buy American” provisions in it. The conference is very clearly going to include the “buy American” provisions. President Obama indicated on Thursday he wants to sign off on it. Very clearly the government strategy has failed to appeal to Bush administration rhetoric.

My question on that--and I'm going to get my four questions out and ask you to answer each of them in turn--is what has the department prepared as a contingency plan? What type of structure has it put in place for a sectoral agreement in iron and steel, a managed trade agreement? We know we purchase more steel from the U.S. than we sell to them. The strategy all along should have been acknowledging why President Obama was elected, and that was to portray massive trade reform, rather than making appeals to old rhetoric, and move forward in a way that's contingent with how the U.S. population spoke. What is plan B on that issue?

The second question is around NAFTA. Unfortunately, Mr. Sunquist, I'll have to disagree and most Canadians will disagree when you talk about prosperity, because most Canadians are earning less now than they were in 1988, prior to the implementation of NAFTA. President Obama was elected on that mandate of trade reform. President Calderon has also said that because of the massive pressure in rural Mexico he is now willing to look at NAFTA renegotiation. What plans have the department put into place for what seems to be a real thrust from our two NAFTA partners to reform NAFTA on more of a fair-trade model, with social, environmental, and labour protections?

The third question is product promotion and publicity worldwide. What budget has Canada allocated to our direct product promotion and direct product publicity?

My fourth question is because you referenced Canada-Colombia. In the last six months I'd like to know if the department has been tracking the number of trade unionists and civil rights and human rights activists who have been murdered by paramilitaries connected to the Colombian regime. Do you track that, and if so, how? Can you tell me how many people have been murdered by paramilitaries connected with the regime we want to sign a trade agreement with?

Those are my four questions. Thank you.

[The Chair, Conservative, Lee Richardson]

I would like to say we have four questions and we have four minutes for all four answers. I'll leave it to you to pick and choose or to try to do one minute a question.

[Ken Sunquist]

Rapid fire and then we can come back.

These are not lobbed questions you ask. Not all in the same sequence but going backwards, yes, we look at human rights violations globally. We do look at them. But do we segregate trade unionists, NGOs? I don't believe I've ever seen it. I will check on that one and get back to you, but I don't think that's one we've tracked.

On the product promotion publicity in terms of dollars, I don't have that. We will get back to you on that one too. I don't think we have a budget item, a line item that really talks about that.

Maybe, Stewart, just on that one quickly....

[Stewart Beck]

To bring some precision to the question, are you talking about in terms of branding money to promote Canada as an investment destination, or are you talking about when you say products promotion publicity?

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

I'm talking specifically about resources that are devoted to our exports abroad--so Canadian export product promotion, product publicity.