International Trade Committee on Oct. 29th, 2009

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Phillips.

Mr. Julian.

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

Thank you, Mr. Chair.

Thank you for coming forward today.

As you know, the NDP is opposed to this bilateral, but I'm quite encouraged by your comments. I think they point to a different way forward.

Mr. Phillips, when you say that essentially we need a multilateral framework, that it's a better way forward, that it's far superior to putting forward bilaterals, that encourages me. I certainly hope the government hears your powerful message.

Mr. Rice, you were speaking about the growth in exports to the Philippines under a multilateral negotiation and an increase in the market in Colombia without this bilateral. I think that's encouraging as well.

Your foremost argument, Mr. Rice, is what is happening, or what could potentially happen, in the U.S. around a trade agreement. That is the argument you brought forward to justify this bilateral that we believe is very problematic.

But I was in Washington this week, actually, meeting with members of the U.S. Congress who actually vote on the deal: the chair of the House trade working group, the ranking Democratic Congresswoman for the House of Representatives, and other members of Congress from across the U.S. from the Democratic majority. Not a single one of those members of Congress believes the U.S.-Colombia trade deal will come to a vote. They feel very strongly that the administration's tentative steps early in the new year to try to get the deal through were met with a very ferocious opposition from members of Congress who fundamentally oppose the deal.

Now Democrats are working on the TRADE Act, a fair trade act that's being presented, and with 125 Democrats signing on, there's very clear opposition to U.S.-Colombia. In fact, two Republicans signed on as well. A similar deal is going to be moved in the Senate soon.

So if we take away that issue of any adoption in the United States from Democratic members of Congress--it's a very clear no--we can get back to the merits of the deal itself.

Obviously there are fundamental concerns about labour rights, about human rights. We had another massacre a few weeks ago. Twelve representatives of the Awa first nation were brutally killed. Human rights groups and eyewitnesses say that the Colombian military killed them. There has been no investigation. There is virtual impugnity for this kind of crime.

I understand that you're not here to testify on human rights issues, but if you would care to comment on how the Canadian government should act when an arm of the Colombian government brutally massacres 12 of its citizens, I would appreciate those comments.

I would like to move on now to the issue--

[Scott Brison, Liberal, Kings—Hants, NS]

On a point of order, Mr. Chair, FARC is not an arm of the Colombian government.

Christian Salazar, with the UN Commission on Human Rights, is working with the Colombian government on this issue. In fact it's been identified that FARC--not the Colombian government, not paramilitaries, not militaries, but FARC--was responsible for this massacre. And it was FARC that was responsible for massacring another aboriginal group in proximity to them.

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

Mr. Chair, this is not a point of order.

[Scott Brison, Liberal, Kings—Hants, NS]

As a point of order, FARC is not an arm of the Colombian government.

[The Chair, Conservative, Lee Richardson]

Perhaps we could stick to the agenda here.

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

Thank you, Mr. Chair.

[The Chair, Conservative, Lee Richardson]

And on the editorializing, if you don't have a question, Mr. Julian--

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

I certainly will make a transcript of Mr. Brison's comments available to the public and they can weigh in on this issue.

Getting back to the issue that was raised on April 2--raised, actually, by a number of intervenors before this committee, including you, Mr. Rice--was the whole issue of that alternative approach, of multilaterals but also much stronger support for marketing of Canadian products abroad.

Mr. Ted Haney came before committee at that time and expressed the fact that in Canada we spend pennies on beef exports compared to the dollars spent in Australia.

We had Canada Pork International referencing the fact that their business plan over five years is $5.5 million. Even though they export in tonnage three times what beef does, the budget is one-third the size.

Mr. Rice, you said at committee at that time, on April 2, “In terms of promotions, yes, we certainly would be far behind our major competitors in terms of overall government resources made available through the technical aspects, through embassy promotions, and through that kind of cooperation.”

You can comment on the human rights aspect if you like, but my question to you is on promotional budgets. Has that situation improved? What is the entire promotional budget provided by the federal government for pork, not just in Colombia but around the world? It would be interesting to see what we allocate to Colombia.

Then for grain growers, what is the overall budget? We are in no way competitive with other countries in terms of the investments we make for product promotion.

As you mentioned, Mr. Phillips, a better way forward includes multilateral negotiations and strong product promotion.

[Martin T. Rice]

I'll just make a quick comment on the promotional support. We did it as part of our three-pronged proposal to the federal government early this year. To deal with the hog sector crisis, we did ask for a reallocation of some unused funds from a program for export market development. We have been fortunate to have $17 million reallocated from that program to the promotion of pork exports over the next four years.

This has given us an opportunity to have a fairly favourable industry-to-government funding ratio. That has changed our situation quite considerably since we met you in April.

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

Further on that, with the $17 million over four years, including the $5.5 million over five years, we would be looking at a total budget envelope of about $5.5 million per year over the next four years. Is that right?

If that's the case, are you aware of what our competitors are doing? For example, for beef exports, where Australia spends $100 million, we spend pennies compared to that. What would our major competitors spend? How much do Australia, the United States, and other competitors spend on product promotion for their pork industry?

[Martin T. Rice]

Our major competitors in pork would be Brazil, the United States, and Denmark. Our situation would be much more comparable to that of the U.S. I don't know what the situation in Brazil or Denmark is. Denmark operates within the EU, and programs tend to have to be EU-wide rather than state-specific. I simply don't know if it's higher or lower, but we've certainly narrowed the gap with the U.S.

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

In terms of beef exports, the U.S. spends $40 million, according to Mr. Haney, which also includes concessions on rental rates of international offices and shared resources that are available out of the agricultural trade offices.

None of the collateral supports exist for Canadian industry at all. That's what he testified in April. When you say comparable, do you mean that you think the U.S., as a basis point, would have about $5.5 million a year if you didn't include all of these other features that the U.S. has put into place to support their pork industry?

[Martin T. Rice]

Certainly if you don't include them, I think the U.S. has many more resources in their embassies abroad, and they may have some support through their international aid programs, although our thinking on those is that they are not likely playing very largely in pork exports. They're probably playing a much larger role for grains, oilseeds, and maybe beef. On a per tonne of exports basis, Canada and the U.S. are likely quite similar now in terms of export market support.

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

Mr. Phillips, could you add anything on promotional support?

[Richard Phillips]

I don't have those numbers off the top of my head, but I'm aware that from time to time, if Pulse Canada wanted to go to a major food and trade show, they would apply and get some money from the Government of Canada to assist them to do overseas missions like that, where they would also tie into trade commissioners in the offices of our embassies and stuff like that.

To a large degree, we have an excellent reputation already for a lot of our pulse crops and our cereal grains. There's been a lot of promotion done over the years. There is one thing we do for which there is some federal government money. There's an organization in Winnipeg called the Canadian International Grains Institute. CIGI is the acronym. We bring in millers from other countries, and we demonstrate how Canadian wheat can be milled and how it will make the exact types of breads they are looking for or the exact types of pastas they make. We do some of that work internally on the grain side as well. We have sample mills set up in Winnipeg where we can bring in and promote our product to show them how, if they buy our product, it will make a quality product back in their countries.

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

Do you think you could make those figures available to the committee, if you don't have them at hand? I think that would be helpful, because part of what we've been doing over the last few months is looking at how other countries have very strong interventions towards their product promotion and their export market, while Canada, quite frankly, doesn't match that in any way.

We're placing our export industries at a disadvantage, even far beyond the issue of whether a bilateral should be signed or not. We simply don't have the supports we should have in place.

[Richard Phillips]

I will undertake to find that information and provide it to the committee.

[The Chair, Conservative, Lee Richardson]

Thank you.

Mr. Holder.

[Ed Holder, Conservative, London West, ON]

Thank you very much, Chair.

I'd like to thank our guests for attending this morning.

This actually has been exceptionally helpful to try to understand better the need to move the Canada-Colombia Free Trade Agreement along on an expeditious basis. I think that's critical. If I've heard anything from your comments and testimony today, it's been the need to proceed--respectfully, but with as much due course as we can--for the advantages that we've discussed.

My colleague from the NDP, whose discourse I quite enjoy from time to time, talked about being against this particular free trade deal. No disrespect to my colleague, but I'm not aware of any free trade deal that he has supported.

I'm trying to look at this from a credible perspective, from your standpoint. As professionals in your area, I think you probably have the best insights of all of us, if I may say, on why this matters for your industries and why it's helpful to Canada.

Mr. Rice, I thought your comments were particularly important.

Just as a brief aside, sir, you made reference to the swine flu and how that has certainly not helped the pork industry at all. I'm so disappointed, because I hear it on the CBC. Even in my own community of London, Ontario--as I love to say, the tenth-largest city in Canada--our local TV and radio talk about the “swine” flu. I have made some strong comments on that.

I would urge all committee members to continue the pressure to get rid of that. It's a huge issue for us.

To me, probably the most compelling you made here was about the Doha Round being weakened, which ultimately will put more emphasis on bilaterals. You have a grave concern about that.

My practical question, and this is for all our guests, is do you agree that there would be an advantage to Canada's pork producers and grain and pulse and lentil producers if we moved this program ahead of the United States? Because that's what I heard you say.

If there's one question that I think becomes the most critical as it relates to the growth of your industry, and frankly, if I might say, the survival of your industry.... If you don't grow in business, there are grave implications. I say that as a business person.

I'd like to ask you this. How critical is it that we move ahead of the United States, which, I would accept from your earlier testimony, is more a question of when and not if?

Perhaps I could ask you to start, Mr. Rice, and then the other two guests.

[Martin T. Rice]

It would be critical, for us to be a player in the Colombian pork market, to see this agreement passed.

I do presume that the U.S. agreement will be implemented certainly within three years, but I wouldn't want to have it understood or thought that our support for the Canada-Colombia deal would be conditional on the U.S. deal eventually being passed. We view it as desirable on its own merits.

It's the case that we would not have much commerce with Chile, for example, if we hadn't had a trade agreement with Chile more than 10 years ago. There is quite a bit of business commerce between the two countries. A lot of other discourse goes on, in my view, with those increased economic linkages.

[Ed Holder, Conservative, London West, ON]

So you're saying stand-alone if need be, and would be, but certainly there's an advantage to being ahead of the United States in this.

[Martin T. Rice]

Yes. The potential for a U.S. agreement would increase the urgency, from our point of view, for passing it.

[Ed Holder, Conservative, London West, ON]

Yes.

Mr. Stanford and then Mr. Phillips, perhaps I could have your thoughts on that same question.

[Gary Stanford]

I'm a Canadian grain farmer, and the way I look at it is this. On my farm, I want to be able to produce a good product that I can sell to the whole world and get a reasonable price for the product I'm growing.

I'm not out here to try to get subsidies. I don't think any cattle producer or grain farmer is looking for any kind of subsidies. That's not what we're here about. We're here to try to sell our product for a reasonable price so that we can make a reasonable living.

If we can help open this up and maybe get ahead of the U.S. on this, maybe this will be a little bit of a perk for us so that we can keep our farms going and not have to look for subsidies.