Evidence of meeting #40 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 honey.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Paul Newman  Executive Director, Market Access and Trade, Council of Forest Industries (COFI), Canada Wood Group
Lee Townsend  Vice-Chair, Canadian Honey Council
Phil de Kemp  President, Malting Industry Association of Canada
Raymond Loo  As an Individual
Mark Nantais  President, Canadian Vehicle Manufacturers' Association

12:45 p.m.

President, Canadian Vehicle Manufacturers' Association

Mark Nantais

Certainly we're amenable to discussion, which is why we've been having ongoing and very constructive discussions with the actual negotiation team in the consultations that have been going on. We have to start with getting rid of the non-tariff barriers, for one. We have to also remember, however, that there's a number of policies in place, for instance, that apply to domestic vehicles themselves, which force, basically, sales of the super mini-size types of vehicles. They get preferential treatment in taxation. They get special parking permits. So even domestically there are things in place that force the market or skew the market into that small segment area. These are all the things that, again, detract from your ability to enter that market.

Clearly, we need to talk about how we get rid of the non-tariff barriers of trade, we need to talk about even some of their own domestic policies that skew the market, and we need to talk about, for instance, the other policies that prevent the extension of the dealership network, the parts supply network, etc.

So there's a number of things that would have to be done. I guess I have to look to the history, though. In the four times that the United States tried to rectify this matter, the initial response was positive, but soon thereafter other non-tariff barriers or policies came up that actually detracted.... In some cases, penetration of the market prior to those agreements being put in place was greater than after they were put into place.

So we have a real problem here with the historical record of their performance. We, still, in terms of OECD countries, are at the bottom of the heap, and with only 4% of their domestic market being able to be accessed by any country outside of Japan.

12:45 p.m.

Conservative

Ron Cannan Conservative Kelowna—Lake Country, BC

That's a fair comment. On the issue of parking spaces, local governments make those exemptions. It doesn't matter where the car's manufactured. They allow Smart cars to park for free in the City of Kelowna, for example, so it doesn't matter where the car's manufactured.

Thank you.

I'll pass the floor to Mr. Hiebert.

12:45 p.m.

Conservative

The Chair Conservative Rob Merrifield

Mr. Hiebert, you have two very short minutes.

12:45 p.m.

Conservative

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

My questions were similar to those of Mr. Cannan.

I'm astonished, by looking at this graph, that Japan's been able to keep competition out so effectively for so many years, when they've been able to penetrate so effectively everywhere else.

Does Japan have any free trade agreements that erode their ability to keep these competitors out?

12:45 p.m.

President, Canadian Vehicle Manufacturers' Association

Mark Nantais

Not that I'm aware of....

12:45 p.m.

Conservative

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

So this would be the first, with Canada?

12:45 p.m.

President, Canadian Vehicle Manufacturers' Association

Mark Nantais

I don't know. I can't say whether it would be the first, but I'm just not aware of any.

12:45 p.m.

Conservative

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

Do you think they'd be amenable to allowing Canadian domestic manufacturers into their market in exchange for a free trade agreement?

12:45 p.m.

President, Canadian Vehicle Manufacturers' Association

Mark Nantais

I think they're presently of the view that they have no tariff in place and that they are an open market. Therein lies the issue. That's their belief, and yet no vehicle manufacturer from any OECD country in the world has been able to penetrate their market. I guess I have to wonder what the answer to that is.

They have been very adept at doing this. It actually started after the Second World War, where virtually, obviously, no U.S. investment was allowed into the country. And then through a number of years thereafter, as they built up their auto industry, as more and more of these policies came to the fore, more and more of those policies protected the domestic market. It became that much more difficult to access that market over time, and despite those efforts of the United States to get in there, they have not been successful.

I think there would have to be some very significant discussions here about what their commitment would be to remove all of these barriers. Thus far, when you look at these previous attempts to open the market, they have not been successful. So it would be very interesting to see what their response would be to that.

12:50 p.m.

Conservative

The Chair Conservative Rob Merrifield

Okay, thank you very much.

And thank you very much, Mr. Loo and Mr. Nantais, for coming in.

We are going to suspend for just a short minute, as we go in camera to discuss committee business. So we'll suspend and pick it up after that.

[Proceedings continue in camera]