Thank you very much, Mr. Chairman, ladies and gentlemen.
As Mathias said, I chair the international trade and investment practice at Bennett Jones international law firm, and I co-chair the international affairs committee of the chamber.
From working as the international affairs chair for ten years and as a trade council negotiator in various capacities for 25 years, advising businesses and governments, I think the CETA negotiation clearly aims to be the most far-reaching, high-standard trade negotiation Canada has undertaken, including NAFTA. I was involved in the NAFTA negotiations in my brief stint in government at the time, and what we're looking at with CETA arguably surpasses NAFTA in ambition and in its profound impact for Canada in a very positive sense.
Despite Europe's current economic woes, the fact remains that Europe is still the world's largest economy. It has 500 million people, and many parts of Europe are wealthier than we are. It's one of the wealthiest economies in the world. They will not stop eating, driving cars, using the products we make, and consuming the services we provide through their coming years of austerity and various other measures they will have to go through.
European governments at all levels will also not stop purchasing goods and services. The European procurement market is the largest in the world, and the European capital markets also provide one of the largest pools of capital in the world. They are very significant investors in this country and important to our economy in both directions--inbound and outbound.
A robust trade agreement with Europe would make Canada the only country in the world with robust trade agreements with the largest and the second-largest economies in the world--Europe and the United States. I'm not the first to say that if Canada and the EU, as mature, sound, and well-governed economies, can't complete a high-quality agreement, both sides' credibility will be challenged in trade negotiations going forward. We have so much in common with Europe. If we can't come to agreement on some of these issues, how on earth can we hope to come to agreement with 150-plus countries of the WTO, the TPP, or any number of potential negotiating partners, some of which have very different perspectives, economies, and cultural backdrops than we have or share with Europe?
There are, of course, sensitivities in any negotiation, and this is no exception. Some industries will need transition periods to cover and adapt to a new agreement. We've been through this before. We went through it with NAFTA. In NAFTA there were some difficulties, but there were a surprising number of successes and unanticipated successes. I'll mention a couple: the office furniture industry, and the men's suit industry. Nobody expected that those two sectors in Canada would blossom the way they did after free trade with the United States. Everybody expected they would go the way of the dodo. In fact, both industries ramped up to such an extent that they started provoking protectionist sentiments on the other side of the border in the U.S.
So let's not discount our ability to compete from the outset. Canadian business is sound and we compete all over the world. We're dependent to a certain extent today on one economy disproportionately, but that has changed in the past years because of the challenges Mathias raised.
A good trade agreement with the European Union that provides better access to the European market by levelling tariff and non-tariff barriers is essential for the Canadian economy, business and Canadian businesses.
Canadian businesses face technical standards and barriers to trade in Europe, sanitary and phytosanitary measures, limits on the movement of professionals and other barriers related to the various regulatory approaches between Canada and the European Union.
The elimination of tariff and non-tariff barriers is essential to a good balanced agreement that will enable our Canadian exporters of manufactured and food products, raw materials and services to take greater advantage of the trade opportunities that abound in Europe.
In our opinion, regulatory cooperation is also an important factor in these negotiations.
Regulatory cooperation isn't only a federal European Union matter. Regulations are essential and an important part of government, but they apply at multiple levels and they impose a cost, as you all know. They are essential. Businesses have to adapt to them. When you are talking about trade across 11 provinces and three territories, and having to deal with the multiplicity of regulations, think about dealing with trade with a community that has 27 member states and countless sub-federal entities.
Again, regulation is essential for the public good in a whole host of areas. What we are talking about, and what the aim of the regulatory cooperation part of this agreement should be, is to make sure that regulations aren't adopted either by this government, by provincial governments, by European governments or the European Union without thinking about their impact on trade.
Quite often regulations are adapted in a narrow way--“Oh, we're going to fix this safety concern. Oh, we're going to fix that stakeholder concern.” And a good-faith effort is made to do that. That's fine. But an important element, and I think it's one thing the negotiators are trying to include here, is that while we are thinking of the solution to the issue that raises the need for regulation at the outset, let's also think about how it will apply and how we can make sure it doesn't create inordinate burdens on our trade.
We're very pleased to hear from the progress of negotiations that the CETA appears to be prepared to incorporate robust services and investment components. I understand the European Union has agreed to use a negative list in both areas, which is certainly a fundamental shift from the Europeans. It's nothing new to us. Again, it's important, because by using that negative list approach you can say our objective is to liberalize trade across a wide range of areas. If you have any issues about specific sectors, let's talk about them and articulate where the exceptions might be sector by sector, rather than the other way around. Nothing will be liberalized unless we say specifically that we'll lower barriers here, we'll lower tariffs there, and so on.
What a negative list approach does is set a high ambition level from the outset, and allows each side to say they have sensitivities here and there, so let's talk about those. But the ambition level and the ultimate impact is a high-standard agreement.
It's also no secret that government procurement is an important objective in negotiations on the European side. It has been raised a few times in the hearings. I've been reading through the transcripts. Let's not forget that government procurement is also important to our suppliers. Government is a massive market. The procurement market in the United States and Europe is the largest in the world. There are massive opportunities, not only on the goods side, but also very significantly for Canadian business on the services side. We hope that an ultimate deal will address that market in an effective way, both at the union-wide and at the national and sub-national level across the member states of the European Union.
Another important issue is rules of origin. Rules of origin are probably the driest and most technical aspect of trade negotiations. These are the highly detailed rules that vary product by product and that allow you to determine whether this glass or this microphone and speaker set, or whatever, made from components that come from all over the world but perhaps assembled in Canada--or may be from components in Canada with inputs from elsewhere, however it's done.... Those are the rules that say this item or that item is Canadian for the purposes of the trade agreements, and ultimately benefit from, eventually, a zero tariff.
As a trade lawyer, this issue might get me excited occasionally. I don't stay up at nights over it, but it's on the low end of emotion in my world. They are fundamental, and are fundamental in this agreement, especially when we look at industries like auto, when we have an integrated economy with the United States. We have trade agreements with other jurisdictions. We don't only trade with other jurisdictions; we make things with other jurisdictions. It's important that what we make doesn't get excluded from the benefits of free trade.
Mr. Chairman, I'll now pass it over to Mr. Hartpence, who will make some concluding remarks.
