Evidence of meeting #41 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 japanese.
A recording is available from Parliament.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
You listed the ingredients. At one customs office, they said....
Conservative
Owner, Boulanger Bassin Bed and Breakfast
Yes, and the Japanese officer thought it was dairy butter.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Was it a language issue? Was it an education problem?
Owner, Boulanger Bassin Bed and Breakfast
I think it was an educational issue, because the people importing it spoke Japanese. The go-betweens, the freight forwarders, the brokers, were all Japanese.
So it's not a question of a language issue. It's a question of knowing the products and that the customs officers are knowledgeable about what is coming into the country.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Wouldn't there be a list of ingredients that would indicate what's in the product? Would it be fairly straightforward?
Vice-President, International Business, Factors Group of Nutritional Companies Inc.
There are lists, but sometimes there are unique ingredients. So they look at their list and they go, “Oh, this isn't on my list”. So they ask, “Okay, what's in here?” and then they look around on their list. It does confuse them sometimes.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Trying to find something comparable. Okay.
Owner, Boulanger Bassin Bed and Breakfast
Our first attempt to get into the country was denied, because at one port the officer felt it would be impossible.... He asked my partner why he wanted to bring in a cake that was two years old. So he closed the books and we had to start from scratch again. It took us another nine months to reapply.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Another question I have is on this issue of dealing on a handshake. Do you not have a contract with your—
Owner, Boulanger Bassin Bed and Breakfast
No, I have no contract. It's all verbal.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
There is nothing that outlines when you need to get the product there, how often you need to send it, and so on.
Owner, Boulanger Bassin Bed and Breakfast
We work with e-mail. The ingredients are aged prior to making the cake, so for the next shipment, which is in September, I need to start that process on July 1. Next week I'll have our allotment for September. It will be, say, 700 cakes. Then I'll go and buy the ingredients, cut them up and prepare them, and soak them in alcohol.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Mr. Tak, is this your experience as well, that the Japanese are not keen to have contracts?
Vice-President, International Business, Factors Group of Nutritional Companies Inc.
There are different sectors, and from what I see in this sector that's what's happening. But no, all our business is with contracts, with purchase orders that lay out everything.
Conservative
Vice-President, International Business, Factors Group of Nutritional Companies Inc.
Well, if it's going to be a distribution agreement, then yes, we'll have that all laid out, or single purchases. It depends what it is.
Conservative
Vice-President, International Business, Factors Group of Nutritional Companies Inc.
Yes, it's all laid out.
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Okay.
Shifting to the comments that were made about non-tariff barriers and your suggestion that they don't really exist, or perhaps, they're more cultural, we've had a couple of witnesses before us tell us that the Japanese have non-tariff barriers in the form of preferential handling, regulatory unpredictability, costly certification, small-volume approval processes—all these non-tariff barriers—that make it very risky and expensive to export to Japan.
Can you elaborate on your comments, because it really contradicts the other testimony we've received?
Vice-President, International Business, Factors Group of Nutritional Companies Inc.
Right, and I hope I didn't say there are no non-tariff barriers. I hope I said there are fewer than people may think.
Yes, in certain cases there are non-tariff barriers where the procedures are more complex and can be interpreted to be preventing imports, unless you look around and ask whether everybody else has to go through those procedures domestically. Are they only being set up to prevent foreign goods from coming in, or is that how the Japanese do business? In many cases it's how they do business.
To me, a non-tariff barrier is something that's being used to prevent imports from getting in and to protect domestic suppliers, and that other domestic suppliers aren't being required to do. You have to be very careful to analyze that and understand it. But in some cases, yes, there are blatant non-tariff barriers. I'm not saying they don't exist, but they're not—
Conservative
Russ Hiebert Conservative South Surrey—White Rock—Cloverdale, BC
Have you found in your industry, in the natural health products industry, that there are domestic competitors that have more flexibility or fewer restrictions than you face?
Vice-President, International Business, Factors Group of Nutritional Companies Inc.
We're not finding that, other than this import tariff that we're having to pay that raises the cost of our product.
As a matter of fact, we have beaten out a couple of American competitors by going into the health authorities and registering our own products. We've hired a consultant. We have registered our products, so when we start selling them to a pharmacy or a distributor somewhere, it's very hard for them to get rid of us because we've actually registered the product, and if they go to the American company, they don't know how to do it.
It's a complex registration process, but it's the same for all Japanese. It's simply that you need to take the time, so we did. We said, “Okay, let's hire somebody. Let's figure it out, and let's do our own registrations”. Now we are actually getting into stores, because we can go now and say, “Oh, don't worry, we have registered this. All you have to do is buy it. We have inventory here. We have it in the country. It's the same as if you were buying from a Japanese company.” That's what the retailers want. They don't want complications.