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.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
Thank you, Mr. Chair, and to our witnesses, thank you very much for being out today.
Mr. Pomerleau, I have just a couple of quick questions, and then I'll pass it over to my friend, Mr. Holder.
You did talk about the fact that a lot of your issues have been well documented. This is the Government of Canada, so just in terms of this round, I'm assuming you've been consulted and you're feeling like the negotiators have a good understanding of what the pork industry wants.
Executive Director, Canada Pork International
They do. We have already submitted our position. Keep in mind that Mr. Verheul has been very present in all the negotiations in the past so he's very well informed and very well briefed on our industry.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
And what's your feeling? You mentioned some of the things. You talk about EU export subsidies. What exactly do those look like? You said that obviously it would be great if they would give them up for products coming into Canada.
Conservative
Executive Director, Canada Pork International
It's a direct subsidy. They call it restitution, so it's a subsidy. What they do is this. If you're a European exporter to a certain country, you export and then you get some money back, or you have the private storage aid, which also applies. But in our case, the Europeans have never applied it to products going to Canada, and we just want to make sure that they'll never do it.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
You'll make sure it's stipulated in the agreement.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
My last question. This has been the talk about standards, about whether our standards come up, just how that all meshes. You did talk about the challenge of our plants being specifically certified, and about the cost and how difficult it is with protocols. Could you elaborate a bit more on that? Is that something you think we can overcome easily? Or is that going to be an expensive process? Is that part of what you're going to request of our negotiators, to try to make that process more simplified? Just talk a bit about that, and then I'll turn it over to Mr. Holder.
Executive Director, Canada Pork International
Yes, the idea is that at the end of the day you want to achieve the same result, which is that the product would be safe. It doesn't matter if you need a fence that is blue or white, or whatever, and that has been in all the discussions between Canada and the EU over the years. We have different means of achieving the same results. So what we want in this treaty is to ensure that it is the result that matters and not the means to achieve it.
Conservative
Dean Allison Conservative Niagara West—Glanbrook, ON
Okay.
And once again, you hear that the negotiators are listening and you think that could be achieved.
Executive Director, Canada Pork International
We hope so, although it's not very current that you will have technical regulations in a free trade agreement. So what we're asking for, besides the free trade agreement, is that there are discussions or there is a commitment by both sides to engage in those discussions as a result of a free trade agreement. We hope we can do that on the side, not needing one, but if we have to, at least it would be taken care of.
Conservative
Conservative
Ed Holder Conservative London West, ON
I hope to have two minutes.
Mr. Grenier, you indicated in your comments that you don't like bilaterals. I got a sense from your comments that you recognize that Canada has no choice to participate in this program, as others are involved.
You also made some reference that you felt, from your projections, that our GDP might show modest gains, both in the European Union and in Canada. But I was a bit confused because shortly after that you indicated that you anticipate exports to the EU from Canada would increase by 24%, and conversely, exports to Canada from the EU would increase by 20%. Then you went on to suggest that it explains Europe's reluctance to be involved.
I was a little confused by those choices of different statements. Could you clarify a little bit just to help my understanding, please?
As an Individual
Of course. Thank you for that question.
I gave two series of statistics, and they are really projections according to a general equilibrium model. And I am not qualified to go into the details of this, but the study that was tabled, done jointly by Canada and the European Union in 2008, said that if there was a free trade agreement between Canada and the EU, by the year 2014—that's quite close, four years from now—the annual real income gained by that year would be 0.08% of the EU gross domestic product. That's very small. And it would be much larger for Canada, at 0.77%, but still rather small.
Yet these gains would also translate into an increase of about 24% of Canadian exports to the EU, which means about €17 billion, and about a 20% increase of EU exports to Canada, or about €8.6 billion by 2014. Now these are billions, but recognize that in terms of our overall exports, our world exports, that's still very small. We export more than $1 billion a day to the U.S. So these are relatively small gains. They're not insignificant, but they're not very, very large.
Conservative
Ed Holder Conservative London West, ON
Okay, and I appreciate the fact that you recognize that they're not insignificant. I appreciate your candour with respect to that.
I might ask, though, if you have the reference point for that study. Could you send that along for us as a reference point?
In the last one minute that I have, I'd like to ask Monsieur Pomerleau une question, s'il vous plaît.
You indicated in your testimony to us that right now Canada holds about 20% of the world's pork trade, and that's without really meaningful access to the European Union. I have two questions of you, if I can.
Are you confident that once this agreement is in place you are going to be able to effectively promote your pork products—which I sense you do around the world, since Canada is the third largest pork exporter in the world—without subsidy? In other words, would you imagine that's a responsibility of your organization, and how effective would you be?
And the second question is just a clarification. You indicated you had lost markets in Poland, Hungary, and Romania when they joined the EU. You indicated that you had lost those markets. Explain that to us, please. Does that mean you totally lose them or it goes to a different rules-based or non-rules-based system? How exactly...? Do you go to zero or is it just a different set of rules? Could you please clarify those points?
Executive Director, Canada Pork International
Okay. Talking about effectively promoting our product, I hinted that the quality of our products is already well known in Europe. We could tell you that at times we are competitive in spite of the very high tariffs, because they vary between €400 and €800 per tonne. If you lower those tariffs, there's no doubt in our mind that we could be very competitive in that market price-wise and quality-wise, because we have a different quality from what they have in Europe for further processing, and that's a request we've had already from processors in Italy, Spain, and France.
Conservative
Ed Holder Conservative London West, ON
Are you able to promote your own product? Are you confident you can do that?
Executive Director, Canada Pork International
Oh yes, because guess what? The Europeans just came up today with a proposal to have a country-of-origin labelling requirement for products that are used in further processing. So it will have to be identified as of Canadian origin if they go through with this. It's likely to be prosciutto processed in Italy from Canadian pork, or something along those lines.
We did that in Japan. That's how we were able to be so successful in Japan when they started to insist on the country-of-origin labelling, because we have a very good name. So it is to our advantage. That's one thing.
When Romania, Poland, Hungary, and the Czech Republic joined the EU, we completely lost them because they were then subject to the same rules for the recognized plants or EU-approved plants. Our two plants were only approved last year, so we've been literally shut out of the European Union since 1986.
Conservative
Liberal
John Cannis Liberal Scarborough Centre, ON
I just want to pick up on that, if I may.
Knowing very well that these countries were applicants for membership in the European community, and knowing the European community has certain prerequisites, part of what you just described...it's a process--it's not in one month, in three months, etc. We had a market, as you outlined. Did we have the opportunity to make these changes leading to standardization, to meet approval? The conditions the EU set weren't set all of a sudden and caught us by surprise, I presume. Can you elaborate for us why we missed and how we get back now?
