International Trade Committee on May 1st, 2012

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chairman.

You said the CAW put in a submission. Have projections been done regarding the impact this deal would have on the automotive sector in Canada and specifically on automotive jobs in our country?

[Ian Burney]

Yes, projections have been done. In fact, back in 2006-2007 we commissioned a study on the possible impact of free trade with Korea, Japan, and the EU in the automotive sector. That study, which is now a bit dated, has just been updated. It's undergoing final translation and will likely be on our website soon.

The new study, like the old one, projects a very minimal impact on the Canadian automotive sector. Specifically, it projects a possible impact on Canadian production of less than 0.3%, a decrease of 0.27%.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Keddy.

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

Thank you, Mr. Chairman.

Welcome to our witnesses. I will be splitting my time with Mr. Holder. I know all my colleagues here have a number of questions they want to get on the record, so I'll try to be brief in my quick submission.

This is a great agreement, one on which the door of opportunity has opened, and we absolutely need to take advantage of it. I'm very pleased to hear we're moving expeditiously and you'll be in Japan on May 8.

Mr. Burney, there is one little irritant that's been there for a while. I think I've spoken to you and a number of your colleagues about it, and that is the paralytic shellfish poisoning regulations Japan has on Canadian lobster. We have an opportunity here to re-address that.

Quite frankly, what has happened is that our lobster is exported into the United States. The United States relabels it as American lobster and ships it in without any PSP restrictions.

This is a multi-million-dollar industry. We used to have 50-some exporters that sent lobsters to Japan; we now have two. Rhode Island, which is a very small state that wouldn't produce more than a couple of hundred two-and-a-half to three-pound lobsters—I might be exaggerating a little in that comment, but not a lot of lobsters of the size you want to ship to Japan—has increased its production by a thousandfold. That's all Canadian lobster that's being relabelled.

So if you could re-address that and have a chance to put that back on the table, I think it's extremely opportune.

[Ian Burney]

Thank you very much for that.

I am not aware of the specifics of that issue. I will certainly brief myself on it, and you can be confident that we'll be carrying that into the discussions.

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

I would appreciate that, and so would seafood producers in Atlantic Canada. Beyond that, keep up the good work.

I know Mr. Holder has questions.

[Ed Holder, Conservative, London West, ON]

Thank you, Chair.

I thank our guests for being here today.

I want to reinforce Mr. Keddy's point about the lobster. I would ask you to take it back as a critical part of our Atlantic economy, not just because I have a Cape Breton mother, but I would tell you it's critical that this be done for the sake of the industry. I appreciate the serious attention you're giving to that.

I'd like to move over to the auto side. I'm from London, Ontario, Canada's tenth-largest city. We've been impacted very directly by the auto manufacturing. I was pleased that you thought there would be very minimal impact on the auto sector. I was hoping it would go the other way, though, frankly. I was hoping to hear that there might be some potential for growth there.

Mr. Burney, you mentioned that the CAW had expressed concerns, that they were one of two that put in some views to the contrary. Are you in a position to share some of what their concerns are? I'm not aware that they have supported any free trade agreement in the history of negotiating free trade agreements, and frankly they're a very loud force in southwestern Ontario and in my city in particular. Can I ask you what concerns they expressed?

[Ian Burney]

Well, the concerns that have been expressed.... And you're right: to my knowledge, the CAW has opposed all trade initiatives the government has taken. It was expressed as a concern that trade liberalization with Japan would lead to job losses. That's why the government felt that it was important, in light of those concerns, to ensure that we had the best analytical capacity put on those questions. They have arisen in the context of our negotiations with Korea. They have arisen in the context of our negotiations with the Europeans and will be an issue vis-à-vis Japan. But that's why the analysis I pointed to was so important, which shows that the impact would be as minimal as I've indicated, less than 0.3%.

[Ed Holder, Conservative, London West, ON]

Mr. Burney, what I thought I heard you say was that was in relation to Japan and Korea and…. Help me.

[Ian Burney]

The EU.

[Ed Holder, Conservative, London West, ON]

And the EU. Specifically, on Japan, have you isolated that, and can you make a comment on the impact specifically to Japan?

[Ian Burney]

I should be clear. The study looked at all three, but the numbers I presented were for the impact only of Japan. But the numbers in the study exist for Korea, for Japan, or for the EU, and for all three together. Under any scenario, the impact is well under 1% of production in Canada.

The reason is that the vast majority of cars produced in Canada are sold in the United States, and so would not be impacted by a trade agreement between Canada and anybody else. As well, the Canadian market is already saturated with imports; four out of five cars sold in Canada are imported. So it's likely that if more cars are imported through a free trade agreement, they're going to displace other sources of imports and not Canadian manufacturing.

[Ed Holder, Conservative, London West, ON]

With our beef producers here today, could you just explain to us what the current relationship is with exporting beef in whatever fashion we do? What improvements are you looking to make with our negotiations with Japan?

[Ian Burney]

I think the biggest issue we've had with Japan relates to measures put in place in the wake of BSE. Right now, we have access to beef from cattle under 21 months. We've been seeking an expansion of that for quite some time, and we're pleased that the issue now is before the Japan Food Safety Commission. It operates at arm’s length from the Japanese government. There isn't a specific timetable attached to that, but we remain hopeful.

Denis may have further comments he could add to this, that we'll be able to achieve an increase in our access to that market through that process and in parallel seek improved market access through the FTA negotiations.

[Ed Holder, Conservative, London West, ON]

On the assumption that the Japanese Food Safety Commission does what it does independent of your negotiations, are there any other areas...?

I'm just going to stay specifically with beef. Perhaps Mr. Landreville might make a comment on any enhancements to Canada's position vis-à-vis exports. It appears what the cattlemen are telling you.

[Denis Landreville, Lead Negotiator, Regional Agreements, Trade Negotiations Division, Trade Agreements and Negotiations Directorate, Department of Agriculture and Agri-Food]

I think Mr. Burney touched on the SPS and BSE process, and I think that's accurate. We're collaborating and working with authorities on the Japanese side, to provide the information they need to advance that issue.

[Ed Holder, Conservative, London West, ON]

What's your expectation? I'm interrupting. I apologize.

[The Chair, Conservative, Rob Merrifield]

Just very quickly.

[Ed Holder, Conservative, London West, ON]

What's your expectation of a resolution? Sometimes in politics we're accused that after all is said and done, there's a lot more said than done. At what point do we raise an expectation, timeframe-wise? I appreciate that in negotiations it's easy to say that. Do you have a sense of timing or of expectation?

[Denis Landreville]

No, I don't.

[Ed Holder, Conservative, London West, ON]

Have you given them any expectation?

[The Chair, Conservative, Rob Merrifield]

Time has gone.

Madame St-Denis.

[Lise St-Denis, Liberal, Saint-Maurice—Champlain, QC]

Non-tariff barriers are considered a greater obstacle to trade with Japan than tariffs on the free movement of goods and services. Can you begin by explaining to us the difference between these two tariffs?

[Ian Burney]

The difference between these tariffs?

[Lise St-Denis, Liberal, Saint-Maurice—Champlain, QC]

The difference between non-tariff barriers and tariffs on the free movement of goods and services.