International Trade Committee on Oct. 27th, 2010

[David Hutton]

Well, I'll ask Martha Harrison to help me with the labour question, which is certainly a legitimate one.

Again, I don't want to fall back on a platitude, but I firmly believe that something is better than nothing. It gives you an entree, it gives you an opportunity to ask the question, have the meetings, and review the actual on-the-ground situation in the context of your standards, because they are party to this joint agreement.

There's no doubt that there is an exploitation of labour in that and other parts of the world. Hopefully, by raising the level—and I know this doesn't always work—all will benefit from the incoming tide, and I firmly believe that a trade agreement like this is part of an incoming tide.

Maybe I'll answer your second question, but I'll allow Martha to respond on this.

[Martha Harrison]

I can only echo what Mr. Hutton said. In the context of the labour agreements, this provides Canada with the opportunity to address the very concerns you've just mentioned. Canada would be in a position to point to specific articles of the agreement and express whatever concerns we have with Jordan. I would have the expectation, and I'm sure Canada would as well, that Jordan would abide by its obligations in the agreement.

So as Mr. Hutton said--and I agree--an agreement in labour is better than no agreement at all, and this provides us with the platform we need to express those concerns.

[The Chair, Conservative, Lee Richardson]

Thank you.

We're going to have to move on this round to Mr. Trost.

[David Hutton]

I apologize. I wanted to touch base on this U.A.E. Camp Mirage, but I'll do that in another context. I'm sorry.

[The Chair, Conservative, Lee Richardson]

Mr. Trost.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair.

Just so you know, we probably won't be flying business class when we do our next trip. We're a very frugal committee here.

Before I get into my questions, I'll get a quick clarification here. Do we have a trade commissioner based in Jordan, or is it serviced out of Damascus for Jordan? I missed it; maybe it was my fault.

[David Hutton]

The trade commissioner and his colleagues are based in Damascus, and his territory is responsible for Syria, Jordan, Iraq, and Lebanon--four countries.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

That leads nicely to one of the things I'm trying to grasp here. One of the witnesses at another committee meeting told us that business in the Middle East is incredibly family oriented. In North American culture we can rotate people in and out of organizations, but in that part of the world--and I've been to Syria a couple of times, and Kuwait, and Yemen, and so forth--they take a little bit more time. I get that.

How important, then, is it to get into one country so that you can then begin to network slowly back and forth? Is this a long, evolutionary process to get a major foothold into the Arab world? Why would Jordan be the first place we'd start if we would do that?

[David Hutton]

Thank you.

I'll let Martha expand on my comments, but very briefly, I think one has to acknowledge that the business model is very much a different one. As you say, it's a family oriented one in the Arab world, as it is in much of the Middle East. That actually has very significant impacts, particularly when the government may be part of that family business. The conflict of interest rules and regulations are quite different in that part of the world. That has policy implications, as we've recently seen, quite frankly.

How do you manage that? I think, successfully, you start in one zone. You build up a relationship, and Jordan, because of its open culture, because of its role--and I'll perhaps steal a word from Martha here--as a Switzerland in the Middle East, in a way, is a very good place to start. I think that could serve Canadian exporters quite well. As well as a gateway into very difficult countries, such as Syria and Iraq, Jordan is probably a very good place to use as a business platform as well.

Martha.

[Martha Harrison]

Thank you.

One of the things that has struck me in doing business with Jordanian and Canadian companies is the fact that Jordanian businesses are willing to travel as well. In fact, I've been very pleased to host the vice-president of the Abdali project in Amman, which I mentioned, which is a $5 billion infrastructure project that is designed to regenerate the entire urban area of the capital.

It's very nice for Canadian businesses that are looking to begin developing their goods and services offering in the region to start with Jordan, which, as Mr. Hutton said, is a stable region. It's relatively open in terms of cultural issues. Besides that, Canadian businesses can expect a return on investment from Jordanians as well, in the sense that Jordanian business people are quite willing to also get on a plane and come to meetings in Canada. That's very useful, and it has been very useful for several organizations that are starting to do business there.

Once a Canadian firm has a foothold in the Jordanian business world, it becomes that much easier to expand in the surrounding regions. Jordan is a relatively friendly place to start your business in the Middle East.

We heard Mr. Hutton's comments in terms of the value and the volume of trade we do in the entire MENA region. Jordan is a good place to start because the staff there will facilitate it, and it is economically and socially viable.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Ms. Harrison, you've mentioned infrastructure a couple of times. It looks like that part of the world, from what I see on TV, has a good supply of concrete on its own. They seem to know what they're doing. I didn't see too many wooden houses when I've been there.

Since this agreement deals mostly with products, I suspect our infrastructure trade would be more service-oriented, engineering, things like that. How does this trade agreement affect the infrastructure services portion and other elements of infrastructure? I'm not making as tight a connection there as I am with, say, agriculture products.

[Martha Harrison]

Certainly.

Of course, agricultural products in Canada stand to gain significant exports in that area. In terms of infrastructure, you're quite right, Canadian firms have a lot to gain in Jordan on the service end. Of course, this is a free trade agreement for goods. That said, it stands to reason that increased trade flows and goods would necessarily increase the service offering as well. In particular, on some of these infrastructure projects I've been involved with in Jordan, they've been very interested in Canadian technologies for environmental building. Those Canadian technologies for environmental building will also provide goods and services and training. As Jordan expands into a modernized urban atmosphere, it will require increased goods on a technological level, which Canada has.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

It's not always direct. Some of it is just opening the door and the follow-up.

[Martha Harrison]

Absolutely.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

This then raises another question. We tend to talk in this committee about what Canada can export. But every export needs an import to balance it off, unless you're going to do like the U.S. and just borrow and wait for a day to pay off the bill.

What are the Jordanians targeting to export back to us? What are Canadian businessmen going down and saying is a widget they can bring back to Canada to sell so that Canadian consumers will be better off? What are they targeting to move in this direction?

[Martha Harrison]

I know that apparel is important for Canadian businesses, woven apparel in particular. That has, historically, been one of Jordan's most important exports to Canada. Also, the jewelry sector, believe it or not, is also....

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I'm not a big purchaser of that.

[Martha Harrison]

I understand that jewelry exports have increased, actually, over the last several years as well.

You're quite right. Jordan needs to develop its needs in terms of goods from Canada. Sorry, it is vice versa. We see that the trade in those particular areas, apparel in particular, is important.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I take it that I've used my time, Mr. Chair.

[The Chair, Conservative, Lee Richardson]

That would be your time.

Thank you, Mr. Trost.

We're going to begin round two. These are five-minute rounds. I think we'll be able to get through this round.

We'll begin with Ms. Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you very much, Mr. Chair. Thank you very much, both of you, for being here.

If we could do this relatively quickly, I'd love to share my time with my colleague, Mr. Silva.

By the way, Ms. Harrison, there aren't very many of us, but nice name.

[Martha Harrison]

That's right.

[Martha Hall Findlay, Liberal, Willowdale, ON]

This is an issue that has been touched on a little bit. My colleague, Mr. Julian, has talked about trade numbers. One of the things that I think gets missed is all of the numbers associated with the invisibles. We're dealing with a whole lot more than just goods or the clear services where we can actually deal with trade numbers.

I know, Mr. Hutton, that you talked a little bit about education, and, Ms. Harrison, you spoke a little bit in answer to my colleagues' other questions. Can you just very quickly highlight some of the areas that you see will benefit both economies, in terms of the invisibles and the enhancement of those invisibles, through increased trade with Jordan?

[David Hutton]

I don't know a great deal about the details of our economic relationship with Jordan, I'll be honest. But in the reading I've done, I've been struck by the role SNC-Lavalin, for example, is playing in the development of the Jordanian nuclear industry. There's an example of an agreement automatically leading to a very considerable Canadian export.

Certainly, during the time I served in the United Arab Emirates, our trade in services was equal to our trade in products and manufactured goods, which, at that time, was in the order of $450 million. It doubled on my watch. It's doubled again on my successor's watch, and it'll double again on her successor's watch. These are exponential increases. There's no doubt that this part of the Canadian economy is absolutely enormous, and it isn't being focused on.

Thank you.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I'll just add that one of the concerns we have is that even though they're so-called invisible from an economic calculation perspective, they are hugely important from an economic prosperity perspective.

Thanks very much.