Evidence of meeting #24 for International Trade in the 40th Parliament, 3rd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was pork.
A recording is available from Parliament.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
This does not really answer my question. Given the fact that it is not over, do you think that there is nonetheless some way of limiting the damage, so to speak?
As an Individual
Yes, of course, the negotiations are far from being over. We are expecting the negotiations to end at the end of 2011. I will not use the term that you used, namely "to limit the damage". I think that there are good business opportunities for Canadian suppliers on the European procurement front, but, obviously, the Europeans have integrated their sub-central procurement, which means the purchases of the member states, the purchases made by the German länder, the autonomous regions in Belgium and elsewhere. Competition is already much more lively in Europe than it is here. The proof of this is that prices have gone down by 30% since they opened their internal market. Clearly, competition will be quite fierce. In fact, I think that it will be difficult not to make adjustments.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
The day before yesterday, I put a question to the chief negotiator for Canada, Mr. Verheul, regarding the fact that Canada signed NAFTA. Regarding the issue of the rules of origin that are contained in NAFTA, would the conclusion of a free trade agreement with Canada not present a profitable opportunity for the European Union? By investing in Canada, it could comply with the rules of origin and penetrate the American market.
As an Individual
I do not know what the negotiator said to you in reply, but the issue of the rules of origin is one of the reasons why I think that a large number of bilateral agreements are bad for international trade. It makes things much more complicated than the negotiation of a single set of rules for all the member states of the WTO. Now, we have dozens, even hundreds of different rules. Most of the time, they are similar, but they are not entirely identical in many cases and this fragments the market instead of uniting it.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
Thank you, Mr. Grenier.
Mr. Pomerleau, you said that after the end of the Uruguay Round, there was talk of grouping all of the meats together. I did not understand very well. Could you give us some more details regarding this, please?
Executive Director, Canada Pork International
In fact, during the Uruguay Round, almost everyone agreed on a minimum access of 5% for products. Given that the Europeans were importing massive quantities of horse meat, beef and lamb, they combined all the meats to come up with a minimum 5% access. The difference lies in the 75,000 tonnes for pork. That is what they did. Had we only had a minimum 5% access for pork, it would have amounted to a million tonnes.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
—the quantities of pork.
During these negotiations, what concessions would you like to get from the European Union?
Executive Director, Canada Pork International
We want them to get rid of the very complex red tape surrounding tariff quotas. We want to have a tariff quota specific to Canada and we want a significant volume. That is what we are looking for. We are also negotiating the technical standards that do not allow our slaughterhouses to be present on the European market.
Bloc
Jean-Yves Laforest Bloc Saint-Maurice—Champlain, QC
You have certainly already submitted these requests, have you not?
Bloc
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you, Mr. Chair.
Mr. Grenier, do you understand me well in French? Can you hear my voice?
NDP
Peter Julian NDP Burnaby—New Westminster, BC
I would like to thank you for appearing this afternoon.
You have already appeared before this committee on a number of occasions, in particular as part of its studies on the softwood lumber and Buy America issues. Had the government understood what was at stake, following your presentation on softwood lumber, we could have avoided a significant loss of jobs.
In your presentation today, you said that the Europeans were reluctant to undertake negotiations. I would have four questions.
First, should we be concerned that, during the negotiations, Canada sign on to another "fire sale" agreement, somewhat like was the case with the Buy America provisions or the softwood lumber agreement, where too many concessions were made, all because of that reluctance on the part of the Europeans?
Second, in your view, what would be needed for us to strike a good deal with the European Union, and vice versa?
Third, what should the multilateral priorities be? You did say that could be the government's priority.
Fourth, you talked about bilingual labelling. That issue had not been raised until now. We have only had three briefing sessions on the agreement. Could you give us some more details about that issue? Is this a question of adding other languages, or are you concerned that the Canadian principle of having labels in our two official languages could come under threat during the negotiations?
As an Individual
Thank you for the questions.
With regard to the Europeans' reluctance to undertake these negotiations and Canada's insistence on doing so, I would say that has put us in a position of weakness in relation to Europe. With the help of some statistics, I explained that the European attitude was rather justified given the limited scope of the Canadian market compared to the European market, and given that the barriers that had been negotiated at the GATT and WTO were relatively inconsequential. So there is indeed a risk. Having urged the Europeans to engage in these bilateral negotiations, we could end up paying somewhat more than if there had been multilateral negotiations. I believe that poses a clear risk.
The fact that Quebec's Premier Charest played a very influential role in Canada's decision to go to Brussels in order to convince the Europeans to undertake the negotiations, I think, was a key element. Furthermore, I still do not really understand why Quebec was so insistent that Canadian authorities undertake those negotiations.
How are we to differentiate between a good and a bad agreement? As with any negotiation, I believe that we will have to determine whether the concessions on both sides balance out. Now, this obviously brings me back to your first question. If Canada decides to grant broader, more wide-ranging concessions, because it absolutely wants to reach an agreement, then that balance will be difficult to attain.
Your third question dealt with the priorities of a multilateral agreement. Negotiations have been stalled now for almost two years. Things have not moved since July 2008, almost two years ago. There is a very ambitious program on the table and it is 80% to 85% complete, according to WTO Director General, Pascal Lamy. However, no leadership is being exercised, in particular by the United States, in order to restart the negotiations that broke down in trying to deal with U.S. and European agricultural issues, but also because of the role played by major emerging countries like India, China and Brazil. This leadership really needs to come from the United States, as it has since the system was set up in the 1940s.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Excuse me, Mr. Grenier, but I also have questions for Mr. Pomerleau. Could you answer the fourth question on bilingualism in labelling?
As an Individual
The issue of bilingualism in labelling was raised because of a complaint coming from a certain European federation. I no longer recall the subject of the complaint, but the complaint was made that our bilingualism rule was resulting in supplementary costs. You must realize that the European practice is that only the language of the country manufacturing the product is used. In other words, there is no obligation to use the 23 European languages on the labels, and it is accepted that only the language of the country where the jar comes from is used.
NDP
Peter Julian NDP Burnaby—New Westminster, BC
Thank you very much, Mr. Grenier.
I also have a few questions for Mr. Pomerleau.
First, we have found that there was a decrease in Canadian exports every time we signed a bilateral agreement, with the sole exception of the agreement with Mexico. Was it the same thing for the hog industry, or was there an increase in exports?
Second, do you have any more up-to-date figures on the promotion of pork products, both on Canadian's purchases and on those of other competing countries?
Third, what have you done in Japan to increase your market share?
Fourthly, as far as European export subsidies are concerned, how does that work? How are European export products supported?
NDP
Executive Director, Canada Pork International
Generally speaking, free trade agreements have been positive for the hog industry. It gave us access to Mexico, where we had no presence in the past, and to Chile, where we started from zero. We have more than doubled our exports to the United States. However, in the case of Costa Rica and other countries, it is less obvious. I could give you other figures if you need them.
As far as international promotion is concerned, the figures have not really changed. In light of what the Australians, the Americans, and the Europeans are doing in terms of promotion, we are far behind. On the other hand, we obtained special funding this year. I am referring to the International Pork Marketing Fund. As you know, we are talking about an envelope of $17 million over four years. That provided us with the opportunity to develop a long-term strategy. It will be very beneficial, not because of the amount as such, but because we can develop a strategy without having to come back every year to ask for funding.
As of July 1, we will have an office in Tokyo in order to do promotion in Japan. We are emphasizing demonstrations in stores more and more, in order to show the consumer the excellence of our product directly. This year, we should carry out 2,500 demonstrations in Japanese stores, which is huge.
Moreover, we are working a great deal with our exporters so that they will adopt Japanese specifications and so that they can make consequential changes to their products. Things are working beautifully in that regard. To our great surprise, things are going very well.
The big problem in Europe, currently, is not the issue of subsidies. It is, rather, the fact that the major European exporter now is Germany and not Denmark. Germany has become bigger than the United States on the world markets. However, it does not have access to the same markets because of its much more limited sanitary recognition in comparison with Denmark. In a way, the fact that the industry is moving from Denmark to Germany is not a bad thing for us because it limits the European Union's access to several other markets, including those of Japan, China and a few other countries.
Conservative
