Thank you, sir.
I would like to talk to you a little bit today about the Trade Commissioner Service and its evolution in the ever-evolving trade dynamics around the world that Canadians have to cope with and that they have to cope with. You have heard good things about the Trade Commissioner Service in your earlier meetings. I really don't have anything to contradict that, and wouldn't want to.
I have been working with trade commissioners for many years. It has been interesting to see how the service has evolved. Strangely enough, for a former officer of the Department of Finance, I think that there is a serious risk that if you try to cut back budgets for the Trade Commissioner Service, it will be very penny-wise and pound foolish. The Trade Commissioner Service needs more resources, not less.
We have a basic change in the focus of our exports in terms of what's happening in the United States. The weak economy is only one part of it. The strong loonie you have heard about already, so I won't go into that. That's a particularly dangerous problem in the United States. The other side of it is the United States' very aggressive export policies. When President Obama says he's going to double exports in four years, trade isn't increasing at that rate. Those increased exports from the United States are going to come out of somebody else's hide, and we're the closest available hide. We need to look at that.
We also need to look at what the United States is doing to attract manufacturing jobs and manufacturing back to the United States through tax policies, if they ever materialize, because essentially that's a beggar-thy-neighbour policy. We've seen it happen not so much on the tax side but on locational subsidies, such as the Electrolux plant being pulled out of l’Assomption and moved to Memphis. They gave them $179 million to build a $181 million plant. It's pretty hard to compete with that.
We need a strong Trade Commissioner Service to help us to attract exports. We need it to help track investment. We're also in an environment where if you're not inside a big trading group, you're outside. You're at a disadvantage. You're being discriminated against. You are a least-favoured nation. That hurts a lot, if you are an agricultural or commodity exporter. If it's rocks and logs, it doesn't hurt at all, because they are mostly duty free, but when you get into products like beef and pork, it's a really serious problem. We were in a coma with Korea for three and a half years; the United States, which was there with free trade, is now eating up our $250 million in exports. Commodities are very tough.
Where the Trade Commissioner Service can help is with small and medium-sized businesses. It can help with businesses that have innovative products, that have high tech, that have high value-added where the tariff is either lower than it is for agricultural products or where the uniqueness gives us an advantage that puts us back on an even footing.
The Trade Commissioner Service on the ground, supported by locally engaged staff, is essential. We really do have to take a look at where we place our resources. We have to make sure there are enough jobs out there to train the new people. A lot of the people who have been there are baby boomers. They are getting ready to retire. How are we going to pass on the expertise? How are we going to pass on the institutional knowledge? There need to be resources.
A question was asked of me: “Why should we do this for business?” My answer is, because everybody else does. If we don't do it, we're going to be at a serious disadvantage. Big companies can look after themselves, but they still find the TCS very helpful to them. I look at things from these perspectives.
Who are we competing with in the United States on agriculture? The Foreign Agricultural Service is massive. It produces reports on countries and products. Now the U.S. Commercial Service in the Department of Commerce is being beefed up, and they play hardball.
We've also had clients who have been trying to get into the Russian market, and they have complained that the Europeans have much better commercial services on the ground in the Russian market than Canada does. That has improved; I used to get a lot of grumbling about our staffing in Russia, but I don't get it anymore. I understand the people who are saying, “Don't rock the boat in Russia; just put some more resources in there.” We need it.
That's generally where I'm coming from on this issue. I'd be happy to answer questions for you.