International Trade Committee on Oct. 20th, 2010

[The Chair, Conservative, Lee Richardson]

We will come to order with meeting number 29 of the Standing Committee on International Trade in this session of Parliament.

Today we are going to continue our discussion of the free trade agreement between Canada and the Kingdom of Jordan. This is a referral from the House of Bill C-8, plus an agreement on the environment between Canada and the Hashemite Kingdom of Jordan and the agreement on the labour co-operation between Canada and the Hashemite Kingdom of Jordan.

We have had witnesses for one or two meetings and we are going to continue this. I would like to just bring to the attention of the committee the difficulty I'm having confirming witnesses. I have received a list from all the parties concerned, and we have contacted everyone on the list that you have submitted and those that have been submitted by the government as well.

We're having trouble with having the people here when we happen to meet and when they're available and that sort of thing. So today I'm grateful that we have our old friend, John Masswohl, director of government and international relations with the Canadian Cattlemen's Association with us, but he will be the only witness appearing today.

I'd like to try to avoid that in future—not just having you here, John, although it's always a pleasure. We want to hear a number of witnesses. So if I could ask some of you maybe to touch base with those on the list that you submitted and ask if they can't free up a Monday or a Wednesday to appear at the committee, then we can get this done.

How are we doing for the next meeting?

[The Clerk of the Committee, Mr. Paul Cardegna]

I put calls out and I'm waiting for answers. Nothing yet, no.

[The Chair, Conservative, Lee Richardson]

So we don't have anything confirmed for Monday?

[The Clerk]

Not yet. I'm waiting.

[The Chair, Conservative, Lee Richardson]

Again, I'm stuck for Monday; I don't have anything confirmed.

Yes, Mr. Julian.

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

Mr. Chair, my office will help the clerk—

[The Chair, Conservative, Lee Richardson]

Well, that's what I'm asking you to do, yes, to just touch base. Because we've phoned them all and they're not getting back or they're not able to come when I—

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

Perhaps we could sit down briefly at 5:30 and I'd be pleased to do a follow-up.

[The Chair, Conservative, Lee Richardson]

All right. It's just a little reminder. It's not the most efficient for anybody to go through meetings without witnesses.

Mr. Holder.

[Ed Holder, Conservative, London West, ON]

Thank you very much.

Depending on the success we may or may not have with guests—I think we're very cognizant of the issues here, and I don't want to subvert the chance to get a fulsome discussion on things—I'd be prepared to suggest, if in fact we ultimately have further challenges regarding our guests, knowing that we've had a number of meetings already on this, that we move to clause-by-clause at some point, sooner versus later, just to expedite the process. I say that after fulsome hearings or to the extent that we can get our witnesses to testify. If we cannot, that might be a reasonable suggestion.

[The Chair, Conservative, Lee Richardson]

I think that's practical. But at the same time, we're not in a mad rush and we'd like to hear from as many who'd like to be heard. I don't sense there are strong, contentious issues regarding the bill, but there are people who want to get their views on the record--and that's fine, too--and establish their résumés for future consideration as expert witnesses at a committee.

I'm sure you still have constituents you need to bring in; I'm not looking at anyone in particular.

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

Mr. Chair, I'd like to wade in to defend Mr. Holder. I don't think you looking at him and making those accusations were fair to him.

[Some hon. members]

Oh, oh!

[An hon. member]

[Inaudible--Editor]

[The Chair, Conservative, Lee Richardson]

All right. Sorry, gentlemen, we're getting off topic here.

We will make sure that's not on the record, Mr. Cannis.

[John Cannis, Liberal, Scarborough Centre, ON]

I wasn't referring to the exchange. It was something totally different, Mr. Chairman.

[The Chair, Conservative, Lee Richardson]

All right.

As I say, we've kept Mr. Masswohl long enough and we will get into his testimony. We'll probably do an opening statement of 10 minutes--if that works for you, Mr. Masswohl--and then do a round of questions.

I'd like to complete the meeting with another brief in camera session on the European Union. I have some suggestions for a change of date there, so we'll discuss that.

Okay, with that update, again, thank you, Mr. Masswohl, for coming.

John Masswohl, again, is the director of government and international relations for the Canadian Cattlemen's Association, here today to offer a position on Bill C-8, an act to implement the Free Trade Agreement between Canada and the Hashemite Kingdom of Jordan.

Mr. Masswohl has been in front of the committee before and has proven very helpful to us. I should say at the outset that we welcome your statement and views today.

I will remind members, as in the past, that if there are further questions after the meeting today, we have always found the Canadian Cattlemen's Association to be very useful in providing additional information if asked for.

With that, thank you again for coming. Mr. Masswohl, would you open with an opening statement?

[John Masswohl, Director, Government and International Relations, Canadian Cattlemen's Association]

Thank you, Mr. Chairman. Thank you for the opportunity to appear before the committee again and to reconfirm the support of the Canadian Cattlemen's Association for the Canada-Jordan free trade agreement.

As acknowledged during our previous discussion on this, Jordan has not traditionally been a significant market for Canadian beef exports, and in all likelihood is not likely to crack the top 10 or 15 markets in the near future. Nevertheless, this agreement will enable us to regain equivalent terms of access that the U.S. beef industry has already enjoyed in that market due to the U.S.-Jordan free trade agreement. As Canadian beef exporters direct their primary efforts in the Middle East toward markets like Saudi Arabia, it's beneficial to them to have access to a neighbouring country, Jordan being right next to Saudi Arabia. Once they're in Saudi Arabia, it's beneficial to see what the potential is in Jordan and other markets in the region.

We place a high degree of importance on all countries around the world removing any lingering BSE restrictions on Canadian beef. Jordan has done that. We understand that the potential of establishing a free trade agreement with Canada was a factor in their lifting those restrictions.

We saw that happen in Panama. We saw that happen in Colombia. And our hope is that Korea is paying attention and that we can soon look forward to progress on beef access in Korea and finalization of a Canada-Korea free trade agreement as well.

Regarding the terms of a Canada-Jordan free trade agreement, Jordan will immediately eliminate its current 5% tariff on beef cuts. Those are things like steaks and roasts. They have a 10% tariff on genetics that they will eliminate immediately, and 21% to 28% tariffs on things like sausages, cured meat products. All of those will be eliminated immediately without any product exclusions or quota limits, as sometimes appear in some agreements.

This is really the result we want to see be the outcome in all of our free trade negotiations with other countries as well.

I think those comments are fairly familiar to you. With the chair's permission, while I'm here and there aren't a lot of other witnesses, I wonder if it would be valuable to take the opportunity to share with you that we've prioritized what some of our top market access priorities are in international trade generally, simply to have that on record with the committee. I can briefly run through those.

The top one obviously, as we've talked about before, is resolving the U.S. country-of-origin labelling issue and the impact on live cattle markets. We have nine points; that's the first one.

The second one is under-30-month access for beef and tallow into China. We did have an agreement with China that was signed between the Chinese president and Prime Minister Harper in June. That was to be a staged agreement. Work has been continuing at the technical level. A few conditions are still to be worked out, but we're looking forward to getting that operational and starting to send commercial quantities of beef into China.

The third one is getting commercially viable access to Korea. We've mentioned that. That has really stalled the free trade negotiations. We have a WTO case; that's proceeding. We have remained open to the possibility of a negotiated settlement. If we can come up with a negotiated settlement, potentially suspending our WTO case...we remain optimistic and our fingers are crossed that something will happen with Korea soon. There certainly is a lot of effort going in there.

The fourth priority would be getting full under-30-month access into Japan. Right now we're limited to beef from cattle under 21 months. It really is problematic to ship full container loads year-round. About five months a year you simply can't get enough beef in Canada from cattle under 21 months to be able to send full-sized container loads into Japan.

The fifth one would be getting full over-30-month access into Mexico. Right now we have everything under 30 months, and we need to get that expanded. The over-30-month market in Mexico was quite important prior to 2003, and we remain hopeful that something is going to happen there soon.

In Taiwan as well we have boneless under 30 months. We want to get the bone-in product.

Our seventh priority is getting access to the European Union's 20,000-tonne hormone-free quota that the United States negotiated about a year and a half ago. We have some technical issues to get in there, but that should be achievable in the near future.

The eighth point is Russia. Right now we have everything under 30 months and we have some boneless over-30-month product. We are in the process of getting full access into Russia, and we need a little bit of a push there to get that to happen.

The ninth point, which is not necessarily the least important but in the long term could be extremely important, is the negotiation of a new Canada-EU free trade agreement, and certainly those negotiations are ongoing.

So a quick layout of the top priorities. We welcome all access. All market openings for Canadian beef contribute to the bottom line of ranchers in terms of being able to sell all the products that come out of an animal, but we understand that resources are not unlimited, and that's why we've identified these nine items as the top priorities for our industry. We certainly support results like those achieved in the Jordan free trade agreement when they come along, but let's keep building on those results and try to take them into other areas.

That's the statement I have. I would be glad to take questions.

[The Chair, Conservative, Lee Richardson]

Thank you.

I think we certainly can open up the meeting in this particular circumstance to a discussion on any of the items you raised, because I think they are of interest to the committee on an ongoing basis, but we may begin with questions on Canada-Jordan free trade.

We're going to begin with Mr. Cannis.

[John Cannis, Liberal, Scarborough Centre, ON]

I'll be sharing my time with my colleague, Ms. Hall Findlay.

Briefly, I know you didn't really cover a lot of Bill C-8, and I understand why, and I appreciate just a short brief in terms of the elimination of the tariffs and that it will take effect immediately. I think that's a plus for our cattlemen here in Canada, and thank you for putting that on the record. So I really don't have a lot to ask you on Bill C-8, as you haven't a lot to offer us.

Because we're moving toward the Canada-Europe FTA, I just want you to take a couple of moments and maybe give us some of the obstacles or some of the things we should be looking forward to or anticipating from your industry's perspective. Then I'll turn it over to my colleague.

[John Masswohl]

Sure.

Yes, I think Canada-Europe for us is the real big fish that's out there. We think that Europe could be as big and important a market for Canadian beef as the United States. It could certainly rival that potential.

We look at Europe as a market of nearly 500 million people. They consume over eight million tonnes of beef per year, and right now we have virtually no access to that market. They do have a ban on using growth promotants--some people call them hormones; they're not necessarily all hormones, but that's the commonly used term. We're not opposed to producing beef without using growth promotants. The reality is it takes longer to produce those cattle and costs about 20% more, and you want to know that if you're going to make that investment of money and time, there's a market to compensate you for that.

Right now, the tariff into Europe, even if it is hormone-free beef, is 3,000 euros per tonne plus 12%. That works out to about 140% to 150%, and it's prohibitive, so there's no incentive to produce for that market right now.

[John Cannis, Liberal, Scarborough Centre, ON]

Where are they importing from now, John?

[John Masswohl]

They import some from South America and a little bit from Mexico. We have a small quota as well, 11,500 tonnes that we share with the United States at a 20% duty. As I say, this new quota of 20,000 tonnes, which we're trying to get approved to use, is duty free, and maybe that will happen soon.

But typically what happens is the officials in Brussels make a determination each year of how much beef they need to import. They set a quota and they assign it to a country, and sometimes it gets assigned to the importing company. So who's going to get to ship that product is all worked out in advance. We want to get real, free access into that market.

[John Cannis, Liberal, Scarborough Centre, ON]

Thank you.

My colleague will continue.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I wanted to clarify something on Jordan, but I want to follow up on that. What criteria do they use to decide which country they'll choose to allocate a larger quota to, and as you said, even to companies?