International Trade Committee on Oct. 25th, 2010

[The Chair, Conservative, Lee Richardson]

Thank you.

We're going to move to the parliamentary secretary for international trade, Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

I was hoping that our witnesses for agriculture would be able to stay a bit longer. Mr. Holder has a couple of agriculture questions.

Just before I turn it over to him--since our witnesses will have to leave soon--I would make just one comment. I believe it was Mr. Stanford who made the comment about the Doha Round of the WTO. Without question, we would prefer to see the multilateral forum work as well, and have certainly been supporting that as a government. The issue is that when the multilateral forum is bogged down, there's no choice but to go out and look at bilateral agreements. We've been doing that fairly successfully, which is, I think, at the end of the day, good for agriculture. We'd like to see the multilateral forum move forward, but when it's not moving, it's no good to stand still.

Mr. Holder has a couple of agriculture questions he wants to get on the record.

[Ed Holder, Conservative, London West, ON]

Thank you very much.

I'd like to thank all of our guests for attending today. You'll forgive me--I'm presuming that we may have a second round--but I now want to focus most of my questions with respect to our colleagues from agriculture, from the Grain Growers of Canada.

Last week the Canadian Cattlemen's Association spoke to us. Like you, they're very supportive of a free trade agreement. Also like you, our beef producers acknowledged the importance of Jordan in a number of ways. Firstly, for some of this business--and I would acknowledge, as they did, that beef producers are not exactly in the largest market at this point as compared with grain growers in some specific areas--they felt, as did you, that it was going to be a strategic opportunity. With the kind of business that exists within the Middle East, this opens a door beyond where we already are.

It's rather interesting as well, because, like you, the beef producers talked about tariffs anywhere from 10% to 28%; you're talking about 30% tariffs.

As I hear the testimony from all four of our guests today, I know that it's two different perspectives but parts of the same whole, if you will. Certainly issues relating to human rights, as my colleague opposite said earlier, we all care about. That matters to us, as does ensuring that we have agreements that respect labour conditions; it's equally important.

But lest we forget, this is also about doing good things for Canada, and I don't want us to miss that opportunity. As we look to putting this deal together, I don't want us to miss that this is good for Canada, which means it's good for our farmers from coast to coast. Whether they be from Quebec, whether they be from Ontario--from the east to the west to the north--it's important to all of our agricultural community that we put this deal together.

Sometimes I find that gets lost in this whole dialogue. While we should and we do need to show concern for other countries with whom we deal in terms of respecting the various agreements, I would say that what hasn't been mentioned today.... Although we've mentioned the labour agreement, I have not heard any mention of the environmental cooperation agreement, which is also critical. We're putting in place a rules-based system that did not exist before as we try to do trade.

So I want to come back to that point, that it's important for Canada. It's not just the folks on the other side of the negotiating table who we're trying to respect.

I'd like to get a sense from you, Mr. Phillips and Mr. Stanford, as to why, from your perspective, this is so important to the grain growers. You can broaden that out to the agricultural community, if you wish, but why is it so important? It was important enough for you to come here and provide testimony today.

[Gary Stanford]

One thing I'd like to mention is that we're heavily reliant on exports. All of us, whether it's beef or grain or pulses or oilseeds, are very reliant on exports. If we can keep working on a way to get more access to more countries, then that will be good for the continuation of farmer growth and for not having to worry about subsidies on the farm.

As an actual producer, that's my point of view: I want to continue to grow and not have to worry about us getting internal subsidies.

[Ed Holder, Conservative, London West, ON]

Mr. Stanford, are you saying that this deal will save the family farm?

[Gary Stanford]

No, it won't.

[Ed Holder, Conservative, London West, ON]

You could have said yes.

[Gary Stanford]

Well, yes, it will help.

[Ed Holder, Conservative, London West, ON]

What I certainly heard you say is that this is of a fair amount of importance to the grain farmers.

[Gary Stanford]

Oh, absolutely.

[Ed Holder, Conservative, London West, ON]

Mr. Phillips.

[Richard Phillips]

I think one key piece--and in response to Mr. Julian's question--is that in the Middle East culture a lot of business is done because of relationships. You hear the anecdotal stories of when you go to buy a carpet you sit down and drink three cups of tea and have a long negotiation. A lot of business is about those relationships, and it's about trust.

The other piece of the business is that it's about extended family in the Middle East. We've certainly seen with Sask Pulse--it's a big company in Saskatchewan and it exports pulse crops--that once you have your foot in the market and you're dealing with someone, then that person will say, “You know, my brother-in-law lives across the border in Syria”, or “My cousin is in Iraq”, or “My wife's family is from Egypt”. It opens all those doors internally, which is where the opportunities for trade come.

They may not always show up in the direct bilateral numbers, but our anecdotal experience from our exporters is that it opens doors in the whole region. I think that's really key in getting our foot in the door before other countries do, to start building those relationships that will lead to expanded business.

[Ed Holder, Conservative, London West, ON]

That's rather interesting.

I know you were looking at my colleague opposite to make sure that the point you were making was very clear.

[Richard Phillips]

I have great respect for Mr. Julian.

[Ed Holder, Conservative, London West, ON]

It's great regard that we all have for him, I'm sure.

In fact, he made some reference that some people say we have a dysfunctional trade policy. I would suggest it is only those who have never supported a free trade agreement, in my experience thus far, who have made those kinds of comments.

It's rather interesting. I also heard him make some references to Mexico, with our NAFTA deal. It's still not clear to me--and this is not a question for him--how our free trade agreement with Mexico has somehow exacerbated the challenges of drugs in Mexico. However, that will be a dialogue for another time.

I have a final comment to the two of you gentlemen. When you were asked about Canada's support in promoting products, you indicated that the Government of Canada has been very active in helping promote canola and pulse. Can you explain to us a bit more about how that promotion works?

[Richard Phillips]

I can't think of the exact name of the program, but there is a federal program--in fact it was available under the Liberal government, as well--where the industry, not just one company, can get together.

They put together a marketing plan, for example, how can we expand canola by another three million tonnes in the next five years?--I just put that number out there. They plan what markets we are going to go to, where we can sell, where the growth is. Where's the middle-income population in the world growing? Is it China, India? How do we then get in there to market our products and provide a fair return to the exporters, the crushers, and the farmers here?

That's the approach we've seen.

[Ed Holder, Conservative, London West, ON]

My question then would be that as we move to open up Jordan and then expand other opportunities throughout the Middle East, are you concerned you're going to run out of canola or pulse to sell? Would you imagine you'll have sufficient product with the capabilities of our Canadian agricultural community?

[Richard Phillips]

I think with having more market opportunities the canola will then flow to the higher-priced markets. That's where we would see ourselves marketing into. Jordan will probably never be a big market for canola, for example, because they have cheap access to olive oil. It will be a market for the pulse crops they consume locally in their diet.

It depends on the market, I guess, as to where we go. We have a lot of room to increase production in canola. I think we're a few years away from hitting the wall, so to speak, on that.

[Ed Holder, Conservative, London West, ON]

So we may yet save the family farm, Mr. Chair.

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you.

[Richard Phillips]

Mr. Chair, can we just make a closing remark? We have to go to the finance committee.

[The Chair, Conservative, Lee Richardson]

All right.

Mr. Phillips would like to conclude.

[Richard Phillips]

We'd like to thank everyone for the opportunity to be here today and for the good questions you've asked.

In general, I think our philosophy would be that you could probably effect more change from being inside the tent than outside. I think that's the point some people were trying to make earlier today.

I did smile at some of the earlier comments from the other witnesses. At one time in my life I was the vice-president of a 17,000-person trade union, so I'm well aware of labour rights and the ILO and some of the work there. They were talking about the excessive overtime hours being worked, and I had to smile, because several Hill staff have told me about that here on Parliament Hill.

[A voice]

And certain farmers I know.

[Richard Phillips]

And certain farmers too, yes.

So I leave you with that as a final remark. Thanks.