Thank you, Mr. Chair.
I'm probably going to repeat some of the same sentiments that my colleague here has expressed, but I do appreciate the opportunity to appear and talk about this bill and the free trade deal with the European Free Trade Association.
I know that a lot of people are going to ask if the years of negotiations we've spent getting to this deal are worth the trouble. I suspect that a lot of Canadians would be hard-pressed just to name the four members of the EFTA, but I do want to make the point this morning that this deal matters, and it matters for three reasons, one of which my colleague here has touched on and I'm going to come back to.
Let me deal first with the significance of this agreement in itself. Canada's commercial relationship with the EFTA is actually more significant than a lot of people realize. We're talking about two-way trade worth $12.9 billion in 2007. It's our fifth-largest export market. Canadian companies sell more to these four countries than to all of South America. I think we ought to keep that in mind.
Even though this agreement is limited to trade in goods, it's remarkably complete. It's eliminating all tariffs on industrial goods immediately, with the single and important exception, of course, of Canadian imports of ships, where duties are going to be phased out over an extraordinarily long 15 years.
We've also been able to negotiate deals on agriculture with the individual members of EFTA. I think that's important, given the problems we've had over the years in trying to do that at the multilateral level.
The signs of progress in this deal are important. It's going to save Canadian exporters in the agricultural sector $5 million a year.
The second reason that I think this matters to Canadians comes back to what my colleague touched on here: it represents our first bilateral trade deal with European countries. Given the EFTA's close relationship with the European Union, that in itself is going to help Canadian companies plug into supply chains with the broader European Union.
It also, I think, offers huge symbolic value at a time when Canada is finally engaged in serious discussions with the European Union. The 27 member states of the EU represent the world's largest market, of course, if you measure it by GDP, and also the world's largest exporter, largest importer, and largest investor.
At the October 2008 summit in Quebec City between Prime Minister Stephen Harper, European Commission president José Manuel Barosso, and French president Nicolas Sarkozy, in his role as president of the EU at the time, the leaders agreed to launch discussions that could lead to a truly groundbreaking agreement.
We've been working with our colleagues in the European business community. We've been calling for a wide-ranging accord with the European Union, one that could include, for instance, the elimination of all remaining tariff and non-tariff trade barriers; the opening of financial and other services markets; broader reciprocal access to public procurement; mobility of skilled people; stronger intellectual property protection; a sustainable energy and environment agreement; an ambitious regulatory cooperation agreement; convergence in competition policy and tax administration; and a binding dispute resolution mechanism. In other words, we're calling for an agreement that will go well beyond the traditional notion of just a free trade deal.
Government officials from Canada and the EU are currently working out what will and will not be included in the negotiations. We are hoping to see a report back from officials on that scoping exercise very soon and a formal launch of negotiations later this spring. We've already had one important step forward with the groundbreaking open skies agreement that was signed in December. It's going to increase labour mobility, lower barriers to investment, promote more competition in that industry, and also stimulate tourism in both directions.
Obviously, a broad Canada-EU agreement could have significant benefits to Canadian enterprises across a lot of sectors, especially, I think, if the recession in the United States proves deeper and longer than we're currently expecting. In this context, failure to ratify the Canada-EFTA agreement now would send a profoundly negative signal about Canada's interest in pursuing closer ties with Europe as a whole and about our ability to follow through in ratifying a successful negotiation with the European Union.
That leads me to the third and final point I want to make this morning. We are now in the throes of what is clearly a severe global recession. There is an understandable temptation in any recession to turn inward, to react to a downturn by shutting out competition from abroad in an effort to save jobs at home. The world learned the hard way during the 1930s that putting up walls offers only false hope. I think that lesson is even more important today, because countries around the world are more dependent than we were in the 1930s on the smooth flow of goods and services across borders.
We've seen a clear example recently of protectionism in action in the United States Congress, which insisted on including a “buy American” clause in its economic stimulus package. Obviously Canadians were greatly concerned about the potential impact of that protectionist measure on our companies, on our exporters, and both we as Canadian business leaders and our government were working hard to dilute, even if we didn't succeed in eliminating, that provision.
I want to point out that the strongest opposition to the “buy American” clause in the American stimulus package came from the American business community itself. To cite one example, 50 business associations and 50 individual companies signed a letter to the Senate leaders while this debate was going on. It stated bluntly that, if enacted, these provisions would backfire and harm American workers and American companies across their economy. I quote:
The resulting damage to our export markets and the millions of high-paying American jobs they support would be enormous.
The business community in the United States recognizes that the “buy American” protectionism is counterproductive. United States President Barack Obama made that clear during his visit to Ottawa last week. He acknowledged the universal tendency to push what he termed beggar-thy-neighbour policies, but he stated unequivocally that trade ultimately is beneficial to all countries and assured Canadians that he wants to grow trade, not contract it.
As a trade-dependent economy, Canada has every reason to work with our partners in Europe, in the United States, and around the world to keep trade flowing as smoothly as possible. I can think of no better way right now to do that than by moving ahead quickly with agreements, such as the Canada-EFTA deal, that bring walls down instead of putting new walls up.
Thank you very much, Mr. Chair.