Thank you, Mr. Chair, for this opportunity to appear before this committee and speak to Bill C-2, an act to implement the Canada-Colombia free trade agreement and the parallel agreements on labour cooperation and the environment.
This Bill implements the legal framework and legislative amendments required to deepen the economic and social relationship between Colombia and Canada.
You've already identified my colleagues who are with me. As you may be aware, Carol Nelder-Corvari is also our chief negotiator for this deal.
Canada and Colombia currently have a significant commercial relationship, with trade in excess of $1.3 billion and hundreds of Canadian companies doing business with Colombia. Key Canadian products such as cereals, including wheat and barley, machinery, pulse crops, paper, and motor vehicles are key exports to Colombia, and ensuring their continued competitiveness was a key reason for pursuing an agreement with Colombia.
Under this free trade agreement, Colombia will eliminate tariffs on nearly all Canadian exports. Their removal is important for Canadian exporters, particularly given that Colombia has concluded other trade agreements with key Canadian competitors such as the United States and Europe. By implementing this agreement, our exporters will have a competitive advantage to continue to grow in this market, particularly if Canada’s agreement is implemented before the United States and Europe implement their own deals.
Before turning to other benefits for Canadian businesses, it is important to highlight a recent market access development. On April 9, 2010, ministers Van Loan and Ritz announced that Colombia had reopened its market to Canadian cattle. This announcement followed Colombia’s January 2010 decision to reopen its market to Canadian beef. Canadian beef and cattle exports had previously been banned from the Colombian market due to BSE. Canadian industry has responded very positively to Colombia's decision to resume trade, and this development will complement the tariff reductions negotiated by Carol and her team in this agreement.
Moving beyond trade in goods, this agreement will lead to new commercial opportunities for our investors and service providers. Over 50 Canadian companies have invested in Colombia, principally in the mining, oil and gas exploration, and manufacturing sectors. In 2009, the stock of Canadian investment in Colombia reached approximately $773 million. These investments are leading the way for exports of Canadian-made machinery such as mining equipment and heavy transportation equipment. Once the FTA is implemented, a stable legal framework will be in place for Canadian investors in Colombia.
Canadian services exports to Colombia are in the area of $40 million to $50 million a year and are concentrated in the financial, mining, engineering, and petroleum extraction sectors. Upon implementation, Canadian service providers will be treated the same as Colombian service providers and will enjoy a secure, predictable, transparent, and rules-based trading system. Moreover, Canada obtained the same level of market access from Colombia as they provided to the United States. As a result, Canadian service suppliers will be on a level playing field with their American counterparts in Colombia.
As a comprehensive free trade agreement, obligations are also contained in the agreement on a wide variety of other subjects including financial services, government procurement, electronic commerce, telecommunications, and temporary entry of business persons. While these subjects may not be in the forefront of discussions regarding the benefits of the trade agreement, they are important components to ensuring that Canadian businesses are able to operate efficiently and competitively in the Colombian market.
As you are aware, in keeping with Canada's approach to free trade agreements, environmental and labour aspects of the economic integration were addressed through agreements on labour and environment. These important agreements contain strong obligations and clearly demonstrate that for Canada and Colombia, trade liberalization does not come at the expense of labour rights and the environment.
To conclude my part, Canadian businesses are not alone in recognizing opportunities in Colombia. In a World Bank study, Doing Business 2010, Colombia ranks as one of the top 10 business environment reformers. It ranked 37th in the category of “ease of doing business”, and it also ranked fifth out of 183 countries with regard to its ability to protect investor rights through the application of the rule of law. Clearly this is a country where opportunities for businesses are only going to increase.
Overall, the free trade agreement will strengthen our bilateral commercial relationship. This agreement has the support of key exporters and investors across Canada, many of whom have appeared before this committee. This is a high-quality and comprehensive trade agreement, and it will allow Canadian businesses to compete and excel in the Colombian market.