International Trade Committee on March 5th, 2009

[The Chair, Conservative, Lee Richardson]

Order.

First, let me welcome the delegation.

Mr. Guardans Cambó, perhaps you could begin by introducing the delegation.

Mr. Guardans Cambó is the vice-chairman of the European Parliament's Committee on International Trade.

Is everyone familiar with the translation, if you need it?

[Ignasi Guardans Cambó, Vice-Chair, International Trade Committee, European Parliament]

No, it's not the translation. I will hear much better with my own device, because....

[The Chair, Conservative, Lee Richardson]

Oh, I see. You're all equipped with those devices in the language of your choice, I'm sure.

We're going to begin. Thank you for coming. I'm going to let you, as I say, introduce your delegation and perhaps give us an outline of the intent and purpose of your visit and a brief background on the activities of your international trade committee. Then perhaps we'll open up to a general discussion informally, until noon, at which time we'll go upstairs to our parliamentary restaurant for an informal lunch with your group.

Monsieur Cambó.

[Ignasi Guardans Cambó]

Thank you very much. It is really an honour for me to be here representing the International Trade Committee of the Parliament.

There were supposed to be two of us, but my colleague had to cancel the trip. Being among parliamentarians, I can explain it very easily. We have elections in June. Sometimes these changes force a meeting with a single representative of Parliament. Indeed the whole purpose is to have meetings like this one, meetings with officials dealing with trade, and meetings with business people.

We are starting here, and we have another meeting today. We are going to Montreal tomorrow, and Toronto afterward, to gather as much information as possible for us to have a better understanding of the situation, both on a bilateral basis, from a trade perspective, of the EU and Canada, and secondly, the position of Canada in a multilateral global panorama, if you will--obviously in the Doha Round in particular.

The European Parliament has had an international trade committee for five years now. Before that it was merged with a larger economics committee--part of it on this, and part of it on foreign affairs. It was decided to have this very specific international trade committee, which deals with agreements that the EU has with other parts of the world. And it monitors what the European Commission does when it negotiates on behalf of the European Union in any international institution, obviously in the context of WTO mostly.

I don't know how familiar you are with European politics and sophisticated European architecture, but you probably are aware that the commission has the full negotiating power in international trade. It's one of the areas where it would be “federal” in European terms, even if we don't use that word. The commission has full power. In terms of international trade, there's nothing left to member states. The economic interests that are at stake are very much linked to the economic reality of different member states and their own import and export. .

The Parliament has the role of monitoring the commission's priorities and how the commission carries out these different negotiations--and we can talk more about that, with Canada, for example--or what the commission says on behalf of this complex reality that the EU has in the Doha Round, for example.

On the other side, when the Lisbon treaty has been approved, if the Irish referendum, probably in October, so allows, the Parliament will not only have this political power that it already has in international trade, but full legal power regarding any international commitment from the EU on international trade. Nothing will be adopted in Europe in terms of international trade without a vote of the European Parliament, which will, first of all, be a vote of the International Trade Committee, and afterwards a vote in plenary.

I think that is extremely important politically. That is already forcing my colleagues and me, and the committee of course, to follow the negotiation closely and for the commission to listen more to the Parliament, because otherwise whatever they negotiate could have some sort of democratic problem.

On the other side, through this enhanced power that the International Trade Committee has, we intend--pretend, let's be more modest here--to be able to bring the public opinion, the civil society, the NGOs--to put it another way, the democratic concerns--to these international negotiations in trade. It is true that sometimes, especially when we negotiate with the third world, for example, when we are dealing with the economic agreements with Africa or with other issues, where besides the purely economic angle there are other concerns on the table, it is important that we bring forward this democratic control of that and these other concerns that society might have. Parliament has a very specific role in putting that on the negotiating table.

That's why the Parliament is becoming stronger all the time in international trade. The purpose of our visit is more or less in that context. We do know that if there is a complete imbalance between how close our two societies are, Canadian society, Canadian public opinion, Canadian political reality, Canadian business, I mean from any angle, and the Europeans.... And we are not as close as we should be, in terms of international trade and economic relationships and direct investment, both ways. So there's a lot of room to manoeuvre there. We could both have a much, much stronger relationship.

We are very much aware of that in the Parliament. That's why we decided to send this delegation here: first, to deliver that message; second, to listen a little bit to what are the most important issues on the table, on this negotiation that is about to start. Once this scoping work has finished and once we know more or less where these should be headed, I think we all look forward to some sort of clear negotiating mandate on the leadership of both EU and Canada to start a real negotiation, leading towards an agreement. It is the role of the Parliament, as I said, to follow that, to follow all the negotiation, with the view of supporting it strongly at the end, of course, and bringing it into real European legislation, as far as it is needed. So that's mostly why we are here.

I will finish with this. On the other side, we also share with Canada, first, our concern about our multilateral approach to trade—I would start with that—and second, our concern about the future of the Doha Round. We, as a committee, have been following very, very closely the Doha Round. Some of us attended the ministerial conference in July, when we saw the failure of it and we were witnesses to its failure. We are supporting the commission, and are indirectly putting pressure also on member states politically, in trying to go ahead with the Doha Round, as far as it is possible. We know we share these with our Canadian counterparts. We know how much energy Canada has spent in the Doha Round. We also know it might be that in certain specific issues we are not exactly in the same position, so that was also something we wanted to take back home after this trip: to listen to which are the main concerns, whether we are in a positive or negative, optimistic or pessimistic mood regarding the Doha Round itself, and what would come out of that.

WIth that, I will stop, Mr. Chair.

[The Chair, Conservative, Lee Richardson]

Well, thank you. I think that's a good opening.

I'm just looking at the clock, in terms of the time, and in fairness to the committee, I think what we'll do is go our normal rounds of questions. I'm going to give seven minutes for questions and answers to each of the parties represented on our sides here, and allow you to decide how you want to use your seven minutes among yourselves.

We'll begin with the vice-chairman and the representative of the Liberal Party, Mr. Cannis.

Mr. Cannis, you have seven minutes for questions and answers.

[John Cannis, Liberal, Scarborough Centre, ON]

Thank you kindly, Mr. Chairman, and I'll split my time with my colleagues here, as well.

First of all, let me again welcome you here to Canada. I think it's always wonderful, for us and I'm sure for you and your member states, when we have an opportunity to sit around the table, put our issues forward, and try to find common ground for the betterment of our societies.

What caught my interest, if I may ask, Mr. Campbell, is when you said that the commission has full power for international trade. As you know, we—as a country and this government—are embarking today on the European free trade agreement with four specific countries. I just want you to place for me how this falls under what you just said. If we go and negotiate with Italy or with Greece or with Spain, for example, can the commission step in and say “Whoa, whoa, I have full power, Mr. Canada and Mr. Croatia, or whoever, and you can't do this”? So who supersedes? Do we then, as Canadians—whichever government is in place, or whoever's negotiating—have to go to the commission, work with the commission? Are we on the right track with EFTA, for example? We just had a vote the other day in the House, and this committee will study it. Can you give me some leverage on that, if you can?

[Ignasi Guardans Cambó]

Yes, indeed.

I will put it very directly. You cannot negotiate anything related to trade with any member state. It is not that you can start the negotiation and the commission will step in afterwards. It's that no member state has negotiating power in trade issues. They cannot even start a negotiation.

Of course, the other issue is that there are borderlines between what is trade and what is education, for example, which could be similar to services in some very specific cases, and then you would be in a sort of grey area. It's the same with environment--which is not exactly the same case--or agriculture. I mean, you might have some cases where you might have grey areas, and indeed there's strong cooperation between the commission and member states on these. But in terms of pure trade, what all of us understand as a trade agreement, there is nothing a member state can do on its own. It's just the commission that has the voice, and whatever a member state turned crazy--if you'll allow me to put it that way--would decide would be void. They don't have the power to negotiate. It's as easy as that.

The commission, of course, is not a completely independent body. The commission receives a negotiating mandate from member states, and that's a political game. We are among politicians here. The whole political game is what is the mandate the commission has received to negotiate, and our internal debate is whether the commission is going ahead of its mandate, beyond its mandate.

That, for example, was the claim of some member states in the Doha Round. That's internal European politics. But I can be transparent with you: some member states at certain moments said “Wait a second. We allowed the commission to go to negotiate with this particular agenda, and it is going beyond that, so it's acting ultra vires.”

If that were the case, of course, we would have a political and legal problem. I think it wasn't, but it was politics.

[John Cannis, Liberal, Scarborough Centre, ON]

When these negotiations commenced some time back with these four countries...although I don't think they were members of the European community at the time. But now that they are following the guidelines as set out by the commission, I'm hopeful that they have a green light from the commission to negotiate. Otherwise, God knows where we'll find ourselves, Mr. Chairman.

I'll pass it on to my colleague, Mr. Silva.

[Mario Silva, Liberal, Davenport, ON]

Thank you, Mr. Chair, and I want to also thank our invited guests for coming here from the European Parliament.

I know a little bit about the European Parliament and the system, not just because of the fact that I'm a European citizen, but also because of the fact that I studied international law. So I have a little bit of understanding and appreciation of what happens in the commission and the politics that happen.

Europe represents our second-largest trading nation. For the European Union, we are fourth, I think. So there's a lot of room there for growth, because it's only about 8% of trade that Canada has with the European Union. I guess our fear, the concern of a lot of sectors in Canada as we go into further negotiations with European member states and free trade, has to do more with the fact that the Europeans tend to have, in some sectors, a very closed shop or very protectionist policies in place.

We are afraid that if we go into further negotiations, even though I'm very much in favour of European free trade with Canada, too many of your sectors will be very protected and will leave Canadian companies at a disadvantage.

Maybe you could explain to us, from the politics around Europe, if there is a protectionist mood in these negotiations on trade.

[Ignasi Guardans Cambó]

No, I don't think we can talk about a protectionist mood on our side, honestly. I think if there's a place in the world where we do believe in international trade and in openness, it's the European Union.

It doesn't mean that in certain specific areas we might not be more open than we are, and I can respect some criticism in certain areas, specifically in the area of agriculture. In certain topics in agriculture I think that's a fact, and it's something we are working on. It is based more on our own history and the way the whole common agricultural policy was shaped. It's not that easy to transform it. If that were to be designed today, it would be completely different, but you don't change that in one night.

But I wouldn't call Europe protectionist, and I wouldn't say at all that we are in a protectionist mood. There's not a “buy European” act; there never would be, and it would be unthinkable to have it approved.

[Mario Silva, Liberal, Davenport, ON]

My time is finished.

[The Chair, Conservative, Lee Richardson]

Mr. Guimond.

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

Good morning and welcome.

You mentioned agriculture and the Doha Round. We are aware of your interest in agriculture, as well as the interest in some member states of the European Union, and in our country. You asked us how realistic we are about the Doha Round. Realistically, the Doha Round has not worked since 2001.

One idea is coming more and more to the forefront in Canada, and particularly in Quebec. There is more and more talk about food sovereignty, about self-sufficient peoples, about food security and about agricultural subsidies. In future negotiations, would there be a way to explore solutions that would benefit both Canadian agricultural producers like me and as our fellow farmers in the European Union?

Agriculture negotiations at the WTO are not working; the Doha Round proves it. Could we not exclude agriculture from WTO negotiations?

[Ignasi Guardans Cambó]

Let me answer your last question first. I feel that it is impossible to exclude agriculture because that would fundamentally change the outlook and the reality. It would no longer be the World Trade Organization, just an accord between some developed countries. You cannot talk about world trade without talking about agriculture. Of course, we can deal with agriculture differently from the rest. We can add the dimension of development to the dimension of trade, and we must. To some extent, that was forgotten during the Doha negotiations.

At the outset, the intent was for it to be a development round. Perhaps that did not come up at the negotiating table enough. Most Parliaments share that view to some extent. But excluding agriculture could not be an option.

I am no more an expert than you; I am speaking on behalf of the International Trade Committee, nothing else. It was not you who created the problems in agriculture that caused the Doha Round to fail, nor was it us. Basically, it was the United States and India.

The WTO has managed to get through some very difficult situations. But in July, the house collapsed. You can read it in two ways; maybe it collapsed, maybe they just stopped building it. I do not know. Whatever the case, everyone shut up shop then, just as they were very close to coming to an agreement that would have had a specific impact on agriculture.

With all the information that we have received, I would not be as pessimistic as you about Canadian interests. The problem was mostly between India and the United States. If they had been able to solve the problem of basic protection for Indian companies, they might have come up against another problem, cotton. I do not know exactly what would have happened with American cotton because they never got the opportunity to discuss it.

But, overall, I do not think that we can be too negative about the agricultural negotiations at the Doha Round. Some agreements have already been reached. If we can get back to negotiating with resolve, as some of us would like, everything that has been negotiated so far should be maintained. They are very positive fundamentals.

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

I do not think we are negative; we are just realistic.

You mentioned developing agriculture, India, peasants. How does your vision of agriculture relate to the vision of Canadian producers, so that everyone can benefit, European producers as well as Canadian producers, the people of Europe as well as the people of Canada?

How do you see the future of agriculture in a climate of globalization?

[Ignasi Guardans Cambó]

The answer to that question is a long lecture that I did not prepare before I came. I will say first of all that agriculture means very different things from country to country. On the one hand, a global approach to agriculture is needed, as we are trying to do in Geneva. On the other hand, policies intrinsic to each country's agricultural situation are quite different.

In large areas of the world, agriculture means feeding oneself. In the context of a spectacular food crisis, this is development. To talk about agriculture in situations like that is to talk about subsistence. Life or death. In some parts of the word, that is what agriculture is: pure development. In those cases, countries must be given tools so that they can protect themselves at the most basic level, the very viability of the country.

In other countries, ours, for example, the situation is different. In the case of Europe—and I am now speaking for myself, not for the European Parliament—I do not believe that Europe should be striving for food self-sufficiency. I do not think that we need agricultural policies based on the idea that we have to one day be able to feed ourselves from what we produce. That is absurd. I do not believe that we should be designing an agricultural policy for a theoretical autocracy. I just do not believe it. Some take that position, but I do not. I am in favour of something very open.

At the same time, inside the European Union, agriculture is primarily a question of land. It has little to do with subsistence, development and poverty and a lot to do with land-use management. For us, agricultural policy is almost environmental policy. In some countries, they are even talking about merging ministries of agriculture and the environment. Agriculture is becoming an environmental matter. In an area like Europe, support for agriculture does not mean support for agricultural production as such, it means support for gardening, if I may put it like that.

Clearly, it is not for me to tell you how you should be dealing with it in your territory. I certainly understand that your emphasis is very different, given the balance that you have between population and land.

This must all be considered when we are sitting around a table. In Geneva, we must try to identify everyone's legitimate interests and needs, especially in democratic countries where everything comes down to voting. We all have to work towards a win-win situation, as you say yourselves.

At the same time, from the European point of view, I defend our right to bring into the discussion considerations of quality that others perhaps cannot bring in, as well as designations of origin. The European Union places enormous importance on geographic designations. Clearly, we cannot compete in quantity, now and even less so in the future, but we can compete in quality. That means strong support for, and strong defence of, geographic designations.

[The Chair, Conservative, Lee Richardson]

Thank you. I'm sorry, that's nine minutes.

We'll go to Mr. Julian.

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

Thank you very much, Mr. Chair.

Your presentation was very interesting, Mr. Cambó. I am sure that you have followed the debate that is presently going on in North America. It was a factor in the elections in Mexico and in the recent elections in the United States. The debate was between free trade as defined and promoted by Mr. Bush and Mr. McCain, and fair trade as supported by Mr. Obama.

The same debate is going on here in Canada, but I notice that the approach in Europe is different. European values speak in terms of balanced trade policies. We often hear about a social market economy, about the protection of the environment and of workers' rights, about the equality of men and women, about the protection of the rights of children, about the fight against social exclusion, about promoting scientific progress, about strengthening public services, about diversified agriculture and—you just mentioned it—cultural diversity. All these elements are part of the discussions on external trade policies.

How are these values factored into your approach to the negotiation of new fair trade agreements with developed countries?

[Ignasi Guardans Cambó]

First of all, the very fact that you asked that question shows how close together we are. The questions people ask say a lot about the kinds of concerns that they have. Your question could have been composed by a member of the European Parliament, whereas politicians in other parts of the world simply would not ask it. I say that to underline the extent to which the Weltanschauung, as the Germans say, the world view, that is, of this Parliament is similar to that of the European Parliament.

How do we try to bring all those elements together? Really, this is the role of the different voices in Parliament. Our multilateralism requires us to make it possible for all the concerns that you mentioned to be on the agenda. Then we follow it. This is the role of Parliament each time that European Union signs an accord.

For example, we are presently right in the middle of a political debate where the language can at times become acrimonious. The European Union has to deal with the list of topics that must be on the table: sustainable development, the role of women, human rights, multiculturalism, and so on, as it works towards an economic partnership agreement, an EPA, with Africa.

Things are at a standstill. There are different visions within our Parliament and even sometimes within the Development Committee and the International Trade Committee. During the negotiations, there are different ways of seeking balance. Clearly, we must not sacrifice our values, but, at the same time, everything cannot come first. It is the different notes in a piece of music that make it sound right. That is what we do; that is part of our goal.

Let me give you a very clear example. Using the texts on the table and the amendments that the European Parliament brings forward, we try to address the question of strengthening multiculturalism. Take South Korea as an example. We are right in the middle of free trade negotiations with South Korea. There is a camp in the European Parliament, led by some highly respected members, that opposes the agreement on the issue of cultural diversity. We believe—and I know that we and Canada think alike on this—that culture is not a factor that has a place in trade in the same way as shoes or steel. So the language is different, even in the treaties of union.

Some of us in Parliament feel that, in the trade negotiations with South Korea, culture and broadcasting are dealt with in exactly the same way as the other items on the agenda. There is a very strong reaction in Parliament, and we will see where it leads us. In the case of Africa, culture is not on the table, but other things are.

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

So the different mechanisms in the European Parliament are not in balance when a new free-trade agreement is being discussed.

My second question deals with regulation. For example, European standards for genetically modified foods are much stricter than those in Canada and North America. When Canada approached the European Union, what kind of discussions took place? Does the European Union tend to want to relax its standards or does it require its partners to maintain or raise their standards to conform with the European ones?

[Ignasi Guardans Cambó]

In general, the pressure from, or the intention of, the European Union is for its trading partners to conform to its standards. The reason is very simple. As a member of the European Parliament elected in Spain, I have seen this problem elsewhere. For example, it makes no sense to establish consumer protection standards for domestic production within the European Union and then allow products with lower standards to enter the European market.

Let me give you a very specific example of the chemicals used in dying clothes. Within the European Union, the standards used to determine which products can be applied to clothes and sold are very high. Our consumer protection standards for chemical products are, generally speaking, very high. But then, we got the impression, and at times even more than the impression, that the European Commission was allowing textile products from China into the European market with lower standards. European industries could neither produce for, nor sell to, European consumers while the Chinese could. That made no sense.

We must not confuse multilateralism, which tries to set these kinds of standards so that they are as broad as possible, with protectionism. In general, we tend—and I think this is what we try to make clear in Parliament as much as possible, even though it may not always seem like it—to make sure that our standards are the same as those applied to products that come into the European market. But, of course, that is not always so clear when other products or other matters are involved.

[The Chair, Conservative, Lee Richardson]

Thank you.

We have to go to Mr. Harris. This will be the final round.

I understand you're going to share your time with Mr. Holder.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Yes, with Mr. Holder. I'll try to be brief.

Thank you, sir. I appreciate your joining us this morning.

I want to go back to Mr. Cannis's line of questioning, just so that I have some clarity. You stated that no member state, of course, can negotiate a trade agreement with another country; it's the European Parliament trade commission.

What would be the procedure, then, if a couple of the member states found that they wished to negotiate a free trade agreement with, let's say, Canada? Could they, as two individual states, go to the European Parliament and say “We want to negotiate a particular trade agreement”, and it wouldn't necessarily apply to all of the other member states? How does that work? Let's say a trade agreement was desired by two member states who went and approached the Parliament about it. Would it have to apply to every other member state or else it wouldn't go?

[Ignasi Guardans Cambó]

Let me try to qualify that. It is the commission that negotiates, not the Parliament. Once the Lisbon treaty is enforced, which is not the case now, we'll vote at the end of the negotiation period to support or not support, whatever finishes that negotiation. It's in the way the U.S. Senate needs to vote, or whatever, on what the U.S. government has negotiated. That's what will happen once the Lisbon treaty is enforced.

The negotiating power is the commission. The commission acts under a mandate of the Council of Ministers. No member state or three or four member states together can ever negotiate an international trade on their own. That's impossible. That's illegal. That would be void.

Of course, what a member state can do, or several member states can do, is put that on the agenda of the Council of Ministers, to promote that negotiation so that the Council of Ministers gives a specific mandate to the commission. Of course, political initiatives need to come from somewhere. It might be that the member state is specifically interested in negotiating within an area where the negotiation has not taken place or to bring in certain issues into that negotiating mandate.

That will be a Council of Ministers' decision. The commission accepts that mandate, if that is voted and agreed to by a qualified majority. It is not a unanimous vote. If the Council of Ministers decides to give that mandate, then the commission will start the mandate with Canada or any other country.

That's not an arguable opinion. No member state nor group of member states can negotiate. To say it the other way around, once this has been negotiated and it has been approved, it applies to the European Union as a whole. By nature, if it's something that the European Union is, it is a single market. In other things we have been improving, we have been evolving, and we are adding new powers.

The thing we are from the very start is a common market, a single market. Once a product enters the European Union, it needs to circulate freely and completely through the whole European Union. That is a basic legal principle in European Union law. A product that has been put on the market in the European Union in a most distant corner needs to be allowed to circulate through the whole without any barrier internally. We do not have any internal trade borders.

I don't know whether you want to add something to this. There is a European Commission representative here.

[Giovanni Di Girolamo, Acting Head, Delegation of the European Commission to Canada]

I am very happy to see the Parliament explaining the competence of the commission so well. I can only confirm that it's not often that we have come to Canada to hear this kind of complete identity of views.

Definitely it's like that. It would be completely opposite to whatever principle, the basis of the European community, and now the European Union.