Evidence of meeting #23 for International Trade in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was edc.
A recording is available from Parliament.
12:50 p.m.
Conservative
The Chair Conservative Rob Merrifield
Thank you.
Mr. Côté, I think you're next in line. We'll just split the time up a bit and give you three minutes.
Go ahead.
12:50 p.m.
NDP
Raymond Côté NDP Beauport—Limoilou, QC
Thank you, Mr. Chair.
Mr. Clark, I fear I wasn't clear enough when I asked my last question.
We can't ignore the fact that there is outright protectionism in the markets I mentioned, not to mention the fact that massive subsidies are granted. Several factors can ensure that Canada is straight out disadvantaged. It's a major concern because we are dealing with very serious domestic challenges. That's why I mentioned that there is very little entrepreneurship. In addition, I didn't talk about deficiencies in innovation. In fact, we are wasting a fair amount of money on rather meagre results.
Considering this and Canada's position toward its foreign competitors with which it might sign a free-trade agreement, do you think that signing an agreement is automatically a winning option and why?
12:50 p.m.
President, Grey, Clark, Shih and Associates Limited
With regard to the types of trade agreements that are being negotiated now, instead of just reducing tariffs they deal with a whole range of issues. There are dispute settlement mechanisms and consultation mechanisms, and these tend to work over time.
The example I used to give this committee when I appeared on the subject of free trade agreements was Mexico. Mexico will negotiate enough to get over the 85% WTO threshold to make it an acceptable agreement, and then they deal with other problems as they go along.
Every time you set up one of these agreements, you set up a ministerial or consultative committee that deals with problems once or twice a year. They do tend to work out.
It can happen even in a small country such as New Zealand, for example. Fonterra—it's an SOE, although they don't call it one, but it is—went into China and took up ownership of some dairies. They increased their exports of dairy products to China from $500 million to $2 billion, so there is the potential.
We're getting in early to China. We're going to be there much earlier than the United States, and probably significantly earlier than the European Union. We're a country of some 35 million people. We have a good economy and we can do things well. If we get into that market, it's such a massive market, and we can—
12:50 p.m.
Conservative
The Chair Conservative Rob Merrifield
I think you made your point and I think it was good.
Mr. Shory is next.
12:50 p.m.
Conservative
Devinder Shory Conservative Calgary Northeast, AB
Thank you, Mr. Chair.
Thank you to the witnesses for being here.
I always get little time, so I'll come to the point. I've heard quite a few times about the emerging markets such as India. I was in India, and I got a chance to meet....
First of all I want to tell you that I noticed that TCS and EDC work hand in hand, and they are very successful. This is what I heard from the companies there, and this is what I noticed.
I also got a chance to visit a Canadian company in India, McCain french fries, and I was very delighted to hear from company management that they are so successful they have been showing a profit from the first day onwards. They have been there for a few years.
That is one example, but there are other companies also, and most of the other companies are SMEs. That was another thing I noticed.
With all these emerging international markets, what are some of the challenges and opportunities Canadian companies face, and what assistance can bodies like EDC or TCS provide to better prepare them for these challenges?
I also have a follow-up questions for Mr. Poloz.
On a clarification with regard to this accounts receivable insurance, EDC basically pays up to 90% of accounts receivable and then claims the receivables from the company that has been supplied with the goods from exporters.
Does EDC have any lists of companies with whom the exporting companies should do business? Are there any criteria? Can an exporter supply to any company without doing any due diligence, and EDC will simply pay out?
12:55 p.m.
President, Grey, Clark, Shih and Associates Limited
Small and medium-sized enterprises need to understand the culture and understand particular characteristics of local demand. TCS is on the ground. They have their contacts, they have their locally engaged staff, and they're ideally suited to provide that type of guidance.
You can't sell...maybe not french fries. I'm sure P.E.I. french fries going into India don't have to be changed at all, but I have to say that sometimes I do work for the Government of P.E.I. on potatoes.
You have to understand the market; if you're a small or medium-sized enterprise, you can't spread yourself too thin, finally, if the resources are already there, you should use them.
12:55 p.m.
Conservative
12:55 p.m.
President and Chief Executive Officer, Export Development Canada
I can be very quick on that.
We do have a list of over 60,000 foreign companies we have insured in the past year, so if an exporter asks if they can ship to a certain company, about 60% of the time our computer checks and gives the exporter a green light. That's how refined that system is.
12:55 p.m.
Conservative
The Chair Conservative Rob Merrifield
Thank you for coming. It's been a great hour of testimony and of questions and answers.
Thanks to the committee for their engagement in this matter. We will pick this discussion up again next week. I believe the committee will be dealing with the EU-Canada free trade agreement study on Thursday.
The meeting is adjourned.