International Trade Committee on April 15th, 2010

[Ed Holder, Conservative, London West, ON]

You know, it's rather interesting. The United States ratified a trade deal with Jordan in 2001. The EU ratified one a few years later. In fact, I was looking at all the bilaterals that Jordan has. They deal with five countries in the Middle East--Algeria, Libya, Syria, Kuwait, and Bahrain--but they have also ratified deals with Peru and EFTA and, as I've mentioned, the U.S.A. and the EU.

Here's where I struggle. I struggle with the reality that for nine years now, we've been at a competitive disadvantage with the United States as a result of this. It defies description why any number of governments--and I'm not picking on any of them--have taken this long to get us here. Because it's an easier deal than some, this may well be, as some people have said, an opportunity for us to use Jordan as an entree into the rest of the Middle East. That might well be true, particularly since Jordan has some bilaterals that I've mentioned in place.

It's rather interesting; the other night, Tuesday night, I attended a council of Arab League ambassadors to Canada and the Canada-Arab World Parliamentary Association. This was a group of ambassadors and chefs de mission. I'd like to read out the countries they represented, because I think this does matter: Algeria, Tunisia, Egypt, the United Arab Emirates, Iraq, Jordan, Yemen, Kuwait, Mauritania, and Morocco. In all of that, as soon as I mentioned to them that I sit on the Standing Committee on International Trade, the interest was huge, because they're all interested in doing more business with us.

By the way, we do business with them. Let's be clear; we trade with every country in the world in varying degrees--except for Canadian beef in Jordan, perhaps--but we clearly do trade all around the world.

Here's what strikes me. I made reference to the United States. The United States--and by the way, I would encourage all members around the table to remember that the United States has had a free trade deal ratified since 2001 with Jordan--does $220 million in exports to Jordan. We do $1.5 million. That is 147 times more than we do, and they're not 147 times larger than Canada. That's the loss that happens when we don't show the initiative to get this done.

Mr. Masswohl, I have a question for you. It seems to me that three years ago there was a little bit of business, about $19,000 of fresh beef, sent to Jordan, and it stopped in the last two years. Why would that be? Was that all this BSE issue?

[John Masswohl]

I was looking at the numbers myself, and I was wondering how that beef even got in there when we've been shut out of that market from 2003 until just last year. Sometimes when the numbers are that small, you wonder if somebody coded something in the wrong column or something.

[Ed Holder, Conservative, London West, ON]

Effectively, there were no exports to speak of.

[John Masswohl]

Maybe we had one tonne over the last five years. Maybe we had nothing.

[Ed Holder, Conservative, London West, ON]

Listen, first I want to say how much I appreciate your acknowledgment of Minister Gerry Ritz and his negotiations with Jordan in terms of lifting the BSE ban. That actually matters to us, and it's not just the minister, but all his staff. I think that's good for Canada and good for all the provinces of Canada, if I might be so bold.

Here's my question. There's an issue that typically comes up with some members opposite about promotional budgets. We heard an expert witness in our last meeting, Thomas Marr, a director at DFAIT. We talked about this very issue of financial dollars, and I know Mr. Keddy talked a bit about it. I just want to ask whether you would support this notion. It was his view and his experience that, given opportunities to eliminate tariffs in a country like Jordan, where the tariffs are 10% to 30%, where we could do business immediately, where 99% of our product would move tariff-free immediately and the rest over the balance of, I think, some seven years, private enterprise would take up the slack and seek the opportunities. When it came to promotion and opportunities, whether in grains or in beef, they would do that.

What is your thought? Do you think private enterprise--and I look at you as private enterprise--would take up that slack? Would you be able to compete effectively in Jordan with your own marketing budgets?

[John Masswohl]

First, I also want to pick up on the fact that the minister has been travelling in order to open beef markets. He's in China this week, and we want to thank him for being there. We also want to thank the Liberal Party and the Bloc for sending MPs with him on this trip this week, which made that trip possible as well. That's the kind of all-party cooperation that we'd really like to see continue through the parliamentary session.

With reference to your question, I would agree. The tariff on beef is 5%. That's not an insurmountable tariff; we ship to Japan at a 38% tariff. In a high-income market that doesn't produce any beef, you can sometimes get beyond the tariff, but if it's a smaller market where there's not a lot of awareness, if you get an agreement and you're in the region anyway, I think an agreement like this is going to help.

For us, the big thing about this agreement is that it proves we can actually do an agreement that lets us get beef opened right way, fully, and we want to see that be the standard that Canadian negotiators repeat in future agreements.

[Ed Holder, Conservative, London West, ON]

Would our colleagues from the “grains, beans, and things”, as I like to call that side, like to make a comment?

[Richard Phillips]

Yes. To put it in perspective, the private sector is very active in the pulse sector there right now: in 2007 Jordan was Canada's largest chickpea market. I think you will see that the private sector has already got its fingers in there, and with the tariff barriers gone, I think we will see a growth in sales, so the private sector will pick that up to a large degree.

With reference to promotion budgets, if money came to us, we'd certainly never send a cheque back. There's only so much money to do promotions, so you have to focus on where you get the best return.

With respect, Mr. Julian, I'm not sure a price-sensitive market, where you can easily be displaced by another commodity, is where you'd want to spend your promotional budgets, as opposed to going into a higher-valued end market and doing your promotion there, where there are longer-term and higher-end returns.

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

We're not doing either.

[Richard Phillips]

Well, fair enough.

I too would like to thank the opposition members for pairing. It's really important. We had a huge problem in the Chinese market with blackleg on our canola, and if opposition MPs did not go along on the trips and pair on this, we wouldn't be able to resolve the issues. Whether you like Minister Ritz or don't like Minister Ritz, sometimes it takes a minister-level person to talk to a minister-level person and resolve issues, so we really appreciate your support on this too.

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

We really like Mr. Ritz.

[Ed Holder, Conservative, London West, ON]

Yes, I will say for the record that I like Mr. Ritz too. If my Cape Breton mom knew him, she'd probably like him too.

[The Chair, Conservative, Lee Richardson]

Thanks very much. I can't imagine who wouldn't like Minister Ritz--even Mr. Julian.

We've got time for a couple more.

I'm going to go to Mr. Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chairman.

My colleague, Mr. Guimond, mentioned earlier that beef exports to Jordan would mainly be done using the halal method. He asked if this method only involved the slaughtering or if it also applied to livestock production.

Does it also involve the shipping? Must this meat be delivered within a prescribed timeframe following slaughter? And, according to circumstance, should it be transported by sea or by air? Are any such requirements imposed by virtue of halal guidelines?

[John Masswohl]

To be honest with you, I just don't know the answer to that question. We can look up the halal process and we can forward that information to you.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

You say that there already are exports, but in the case of countries that are as far away as Jordan, are the goods shipped by sea or by air? I am simply curious.

[Richard Phillips]

For the grains sector, it would be by sea. There would be no air--

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

And what about for meat?

[Richard Phillips]

It was over 10,000 tonnes of chickpeas, so that would be either containerized or in a hold in a vessel or two. It's large volumes going on the bulk grain side.

[John Masswohl]

Usually when we get into large commercial quantities, we're selling containers, and they go by sea. Sometimes a specialty purchase could go by air. If somebody's going to buy a couple of hundred kilos or one tonne of something, and they need it and they're willing to pay for it, it will go by air.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you.

[The Chair, Conservative, Lee Richardson]

Merci. Thank you.

Mr. Harris, did you have a question; or Mr. Julian?

[Dick Harris, Conservative, Cariboo—Prince George, BC]

I think I have a question.

[The Chair, Conservative, Lee Richardson]

Very good. Go ahead, Mr. Harris.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

I want to go back to product promotion. You said that a beef buyer in Jordan, for example, given the choice between American beef at 0% and Canadian beef at 5%, would choose American beef in most cases.

As far as the promotion goes, while some seem to think the government has an obligation to pour untold amounts of money into promoting our products, when you establish a free trade agreement with a country like Jordan, I would assume that there are entrepreneurs in Jordan just waiting for opportunities to deal with new countries via a free trade agreement. I think you could safely say that the business could possibly be self-propelled through the efforts of entrepreneurs in the country that's going to enter into a trade agreement, and of course the industries in Canada--in this case beef and grains and pulse--are doing their homework too.

Having been in private business all my life, I tend to think that people in business, who have to answer to the banker, tend to spend the money a lot more wisely than government does most times, so I'm thinking that with the free trade agreement, the entrepreneurs on both sides of the agreement will do what it takes to get the products in there. Is that a fair assessment?