International Trade Committee on May 1st, 2012

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

I just want to follow up on your answer that including an investor-state dispute settlement mechanism is a standard part of every agreement. You also testified, quite rightly, I think, that Canada and Japan have mature, established judicial systems and court systems, which protect investors regardless of nationality, I would presume. In light of that, what's the justification for including the investor-state dispute settlement mechanism?

[Ian Burney]

It would be an enhanced degree of stability and security that we could afford to investors on both sides. Through the investment agreement, we would be taking obligations in relation to national treatment and most favoured nation, basically non-discrimination provisions, with the ability, then, to have recourse to international arbitration. So it's an added advantage.

[Don Davies, NDP, Vancouver Kingsway, BC]

Now to follow up on Mr. Holder's comments about a number of cities that have expressed concerns about CETA, I think one of their concerns is that they're worried that these international agreements may somehow impact on their ability to have local procurement initiatives.

Is there anything that you see in the investor-state dispute settlement process or in the Canada-Japan negotiations that you think would impact in any way or impede in any way cities' ability to have local procurement policies?

[Ian Burney]

Certainly not from the standpoint of the investor-state mechanism. In terms of what obligations may end up in an eventual government procurement chapter, we haven't even started to negotiate, so I'm not able to speculate on what the outcome there might be.

[Don Davies, NDP, Vancouver Kingsway, BC]

So it's possible that there may be some elements in this agreement that may impact on cities' ability to have local procurement policies?

[Ian Burney]

As I said in response to an earlier question about government procurement, we have just obtained a substantial increase in government procurement opportunities bilaterally through the multilateral process under the WTO auspices. This is literally just happening now, and the approach that we take on government procurement with Japan, in a bilateral context, would have to be informed by that. The first discussion we would have is whether, in light of that, there's a need to try to negotiate something further to that. We're not even at that stage.

[Don Davies, NDP, Vancouver Kingsway, BC]

Right.

Do you anticipate any consultations with the major municipalities in this country over this agreement? Toronto? Vancouver? Montreal?

[Ian Burney]

To the extent that there are going to be disciplines that might have an impact on them, that's possible. But at the moment I'm not seeing that the kind of negotiation we will have would have direct impacts on municipalities.

[Don Davies, NDP, Vancouver Kingsway, BC]

In terms of the Trans-Pacific Partnership that I asked you about, and Canada-Japan, if we're pursuing simultaneous tracks of TPP and Canada-Japan, if that happens, can you expand a bit, Mr. Burney, on how that would work? Could you see us signing two agreements, a Canada-Japan agreement and a TPP? And if so, which would supersede the other? How would that work?

[Ian Burney]

It's a bit difficult to speculate, since we're not in the TPP, so we don't have all that much clarity in terms of how the architecture would work there. From what we understand, the current members are wrestling with exactly that question, because a lot of them already have separate arrangements among some of the members. In fact, we already have free trade agreements with a number of the existing TPP members. So those kinds of architectural questions would have to be addressed.

But the fact that current members of the TPP already have bilateral FTAs among themselves is not deterring their pursuit of a broader TPP process. They portray the TPP as being the vehicle that will expand and become the vehicle for integration across the entire Asia Pacific region, so it's entirely possible that you would have a network of bilateral agreements co-existing within a broader framework, in the same way that bilateral FTAs co-exist with our obligation to the WTO.

[Don Davies, NDP, Vancouver Kingsway, BC]

I understand that if countries that are currently members of TPP or who are seeking admission to TPP already have free trade agreements, those exist, so the TPP is something different. But the different situation here is that we have neither an agreement with Japan, nor are we a member of TPP. It just seems—not impossible—but a little bit unique to be pursuing both of those at the same time. Do you see any difficulties with that?

[Ian Burney]

What I would say is that the last broad regional negotiation that we were a part of was the free trade area of the Americas, and that ultimately did not succeed. Given that there could be no guarantee that it would succeed—and I'm not suggesting the TPP is going to go that way—then I think it would be in Canada's interest—

[Don Davies, NDP, Vancouver Kingsway, BC]

It would be prudent to pursue both.

[Ian Burney]

—and Japan's interest, for that matter, to pursue both.

[The Chair, Conservative, Rob Merrifield]

We're very tight for time.

[Don Davies, NDP, Vancouver Kingsway, BC]

In terms of consultations, have you consulted any environmental groups in the country about any potential impacts that an agreement with Japan may have in the environmental sector?

[Ian Burney]

We put a solicitation out to everybody to send us any comments. I don't know off the top of my head whether any environmental groups provided submissions. I don't think so. To my knowledge, we have not proactively consulted with environmental groups. If there's going to be a negotiation of an environmental side agreement, that's something that our colleagues at Environment Canada probably would do.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you.

Ms. St-Denis.

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

Within the process of negotiations, you twice mentioned sanitary provisions. You said that they were very important.

Can you tell us whether these provisions or requirements come from Canada, from Japan, or from both countries, and can you give us some examples?

[Ian Burney]

I will ask my colleague Denis Landreville to answer your question.

[Denis Landreville]

In the agricultural sector, I would say that in the framework of our bilateral relationship, most phytosanitary provisions are, for now, on the Japanese side. There is nothing on the phytosanitary side in agriculture on the Japanese side. The current sanitary and phytosanitary issues in agriculture are mainly on the Canadian side.

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

So we are the ones who have requirements of Japan. Is that what you are saying?

[Denis Landreville]

I am saying that, for now, issues under discussion are mainly on the Canadian side as far as Japan is concerned with regard to access. However, I believe that both Japan and Canada would like to see general principles and provisions included in an agreement to implement a process to address these types of issues. This would mean including a chapter on these issues.

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

In your presentation, you said that Canada and Japan would like to sign an agreement which would include the rigorous environmental and labour standards that already exist in both countries.

When you refer to rigorous environmental standards, what exactly do you mean as far as Canada is concerned? Canada does not want to be part of the Kyoto Protocol anymore, and in its budget it has reduced to one the number of environmental assessments. In fact, it used to be that there was both a provincial environmental assessment and a federal one. So when you talk about Canada's environmental requirements, are you referring to the standards which currently exist, which will exist in the future, or which were in effect previously?