International Trade Committee on March 6th, 2012

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

Thank you, Mr. Chairman. I will stay away from the Canadian Wheat Board.

I was intrigued, Mr. Woo, by your opening comments on the virtual trade commissioner service. I would appreciate it if you could just drill down a little deeper into that. It's user-friendly, but how responsive is it? How quickly do you get answers? Could you just explain that a little more?

[Yuen Pau Woo]

Unfortunately, I can't speak from direct experience in terms of getting a quick response. I'm not in the business, of course, of trying to sell stuff to markets, so I've never put in requests. What I've done is access the market intelligence reports, the sector reports. I receive some of the bulletins they put out. I have surfed the website. All of that seems to be very good.

I think the big challenge they face, of course, is to not duplicate the efforts of the many other groups out there, both commercial and non-commercial, that put out similar information. This is an obvious thing to say, but with the Internet being such a prolific source of information, there's always the risk that the virtual trade commissioner service is simply repeating what's already out there. I think they're sensitive to that.

The way they can provide real value and find a niche is, of course, to look for the Canadian interests. When I look for market intelligence on a particular sector, there is, in fact, lots out there, but much of it is oriented to American, European, or other interests. To the extent that we can really home in on what Canada has to offer, I think there's a need for this continued service.

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

Thank you very much.

I'm going to share the rest of my time with my colleague, Mr. Hiebert.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Thank you.

It's good to have you here as a witness. As a member of Parliament from the Lower Mainland, I always appreciate the service you provide to our community and to our country.

As I was reflecting on the work you do, I was wondering how you gauge your success as a think tank. The TCS looks at the number of companies they introduce to foreign opportunities. But as a think tank, how do you determine whether you're making a difference and whether you're accomplishing your goals?

[Yuen Pau Woo]

That's a bit of an existential question. I'm happy to give you my stab at it. I'd be interested to hear from you and your colleagues how you would measure our success, too.

Right now we've launched a major campaign across the country. Many of you are aware of it. It's called the national conversation on Asia. I'm off to Saskatchewan this afternoon to launch the national conversation in Regina and Saskatoon. We've done some events, literally across the country, from the east coast to the west coast to the north. What we're trying to do is get Canadians thinking about the importance of Asia, and talking about why it matters to them in their very particular interests—for their companies, for their schools, for their families, for NGOs. Then we're trying to effect change through new policy, business strategies, white papers, committees, and action.

I can tell you, Mr. Hiebert, that this national conversation on Asia is driven entirely by civil society. It's funded exclusively by the private sector. To me, that in itself is success. Getting Canadians, on their own accord, through private sector money, to act on the importance of Asia is a measure of Canadians taking this work seriously.

That's at the grassroots level. I would say that at a more abstract level, we would measure success in terms of the level of awareness and sophistication among Canadians with respect to Asia. We measure this through national opinion polls. We will release the results of our 2012 poll in about a month's time. Because we've been tracking Canadian attitudes towards Asia for six or seven years now, we can provide a time series and some indication of change. I'd be happy to share the results with the committee if there's interest. We'll look to that for some kind of success.

Finally, and we can only take a very small amount of credit for this, I've seen in the last number of years growing interest, support, and action on the Asia file from all levels of government and from the policy community, broadly speaking—the bureaucratic community, the policy analysts, of course, the political class. There's real interest in Asia. We can only take a very small part of the credit for that. But I think we're part of a group of concerned Canadians who want Canada to be more truly an Asia-Pacific country rather than just a country that is on the Pacific coast.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

That sounds very comprehensive, the work you're doing. Do you focus on any particular countries of interest, or do you try to spread your resources across all of Asia?

[Yuen Pau Woo]

The mandate we were given by Parliament was to cover all of Asia, but we cannot do that. In practical terms, we focus on the big three in Asia: Japan, China, and India. Then to the extent that our resources allow we look at South Korea and the ASEAN countries—the Association of Southeast Asian Nations—as two additional groups of countries that we focus on.

One thing I should say is that I've talked mostly about the economic relationship, and that's central and a driver of Canada-Asia relations. But as the foundation, as a group that tries to really understand what's happening in Asia, we make a very big point of stressing that the Canada-Asia relationship has to be taken in its totality.

The economic relationship is key, but we also pay very close attention to the political and diplomatic relationship, to institutional security and military relations, and above all to the people-to-people relationship—the human ties, which Canada has with Asia in a way that no other western country has. Our people-to-people ties in my estimation are longer, deeper, and more profound than any other western country's. That's an asset we can use, but haven't used quite as effectively as we could have.

[The Chair, Conservative, Rob Merrifield]

Thank you very much. We have only five minutes left.

We'll be splitting our time between Mr. Masse and Mr. Côté.

Mr. Masse, the floor is yours.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Woo.

And thank you, Mr. Chair.

You noted our manufacturing not being able to penetrate into China. Our manufacturing export deficit has gone from $18 billion in 2005 to $80 billion now. I'm just wondering whether there are things the Canadian trade commission service can enhance or do to look at trying to get some of our value-added products penetrated into China.

I wonder as well if they should be working on reciprocity. Obviously environmental, human rights, and labour rights can be used as a competitive advantage to compete against our Canadian companies. Could you touch on that? Then Mr. Côté has a question.

[Yuen Pau Woo]

Thank you for your question. I think the cluster or sector approach is probably the way to go. As Mr. Easter mentioned previously, the scale of Chinese demand, and Asian demand more broadly, is sometimes so overwhelming that our companies—whether in the commodities, the manufacturing, or the services sector—find it very difficult to meet those needs and can only meet those needs sometimes by being part of a consortium, or part of a large project that in many cases is not linked to Canada. It may be an American consortium or a European consortium to which a Canadian manufacturer is supplying a particular widget, technology, or service.

I think it's very important that we take that broader approach, find big projects, assemble consortia, assemble industry alliances, look for counterparts in Asia that have interests in this broader range of services and products, and then try to market en masse, if you will. It's a different way of doing things. It's also, I think, sometimes difficult for individual companies to take that approach because they lose a bit of control. You know they have to be part of a different group and so on. But I think that's one way to go.

I am a firm believer in reciprocity, but we have to be specific about what we mean when we talk about reciprocity, rather than use it either as an excuse for not doing anything or as a reason to criticize trading partners. That's why I think it's so propitious that we have this opportunity to begin thinking about a free trade agreement with China, because now we can tell them exactly what areas of reciprocity we are looking for, and how we can get our markets into their products.

On the question of environment and labour and so on, we have to maintain the standards that Canadians expect of our companies, and when production is done in Canada. I believe we have little or no control over labour, environmental, and other softer issues in trading partner countries. I think our best hope there is that, by example and by the process of economic development, these countries will demand for themselves higher standards for the benefit of their own people. In China, we see that happening on a daily basis.

[The Chair, Conservative, Rob Merrifield]

Thank you.

Mr. Côté, you have time for a very quick question and a very short answer.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

I would like to ask a follow-up question on the China file. I must confess that I very much liked your perspective of a sectoral approach. You talked about the enormous needs of the Chinese market.

In view of the professionalism shown by the Trade Commissioner Service, do you believe we should proceed step by step rather than going full throttle into a free trade agreement with China? Indeed, we must take into account the disproportionate size of our respective markets and the enormous needs of China, especially raw materials. This could work against us, as my colleague Brian mentioned, work against our manufacturing sector.

[Yuen Pau Woo]

Thank you for your question.

My apologies, but I do not speak French.

I think the offer of a free trade agreement from the Chinese is quite extraordinary. It allows us to begin, exactly as you said, the step-by-step, incremental approach to understanding all the opportunities and all the threats that Canada would face, if we were in fact to have such an agreement.

The first thing we have to do is to respond to the Chinese that we want to have that kind of conversation. I don't want to underestimate the difficulty in terms of the negotiations, as well as the political support that's needed domestically, for the free trade agreement to take place, but the door has been opened in a way that it hasn't been opened for any other western country. Most other western countries are pleading to have this opportunity. We have been offered it.

I am really not as pessimistic as you might seem to be on the manufacturing sector in the sense that most manufacturing imports to Canada already come into this country either tariff-free or with very low tariffs. So I can't see what more we would give the Chinese in terms of tariff-free access. We're not going to lower our standards, for sure, in terms of quality and safety and so on. That's non-negotiable. So in terms of border barriers, there's not a lot to give.

Secondly, there isn't a fundamental competitive threat between China and Canada in the manufacturing sector. We don't make toys, we don't make shoes...or we don't make many shoes, I should say. There are some companies here in B.C. that make shoes, and in Ontario and Quebec and elsewhere, but there isn't a fundamental clash like there is between China and the United States.

I think there is compatibility and a lot of opportunity for a mutually beneficial deal.

[The Chair, Conservative, Rob Merrifield]

Thank you very much, Mr. Woo. Thank you for your presentation and your answers. I think the committee found them very informative.

[Yuen Pau Woo]

Thank you. Merci beaucoup.

[The Chair, Conservative, Rob Merrifield]

I appreciate you taking the time out of your schedule to be part of this committee's work. Thank you.

We'll now suspend the meeting as we clear the room for an in camera session.

[Proceedings continue in camera]