International Trade Committee on Sept. 27th, 2012

[Wayne Easter, Liberal, Malpeque, PE]

When the canal is built, there will be opportunities for services, etc. There's no question about that. However, on the main procurement for the project, I think we're getting to the starting gate after the project is basically contracted out. On that area though, as I understand it in terms of the background I looked at, there are a number of projects over the next five years for which there might be an opportunity for Canadian companies to put in a competitive bid. Can you tell us what any of those might be?

[Jorge H. Miranda Corona]

For other investment that will occur in terms of procurement, I don't have the exact numbers here.

[Wayne Easter, Liberal, Malpeque, PE]

Okay.

[Jorge H. Miranda Corona]

They are mostly managed by the Panama Canal Authority, and they have a plan to tender those bids. What I could say is that since 2010...for the Canadian approval of the FTA that will allow the entry into force of this agreement, it's important to note that the TPA with the U.S.A. will probably be effective at the end of October, which means that the American exporters will be able to use the preferences established.

That's why we are expecting the agreement with Canada to pass soon, because companies from Canada that invest in Panama will benefit from the free trade agreement, but with the Americans going—

[Wayne Easter, Liberal, Malpeque, PE]

We don't want to be displaced in the market by the Americans. We are being displaced in Korea, and we don't want to be displaced any more.

[The Chair, Conservative, Rob Merrifield]

Your time is gone.

Thank you very much.

Mr. Holder, you have seven minutes.

[Ed Holder, Conservative, London West, ON]

Thank you, Mr. Chair.

I would like to also acknowledge your presence and welcome you here to Canada. We're delighted, Mr. Ambassador, that you're here. Panama has been well served by your predecessor, His Excellency Carlo Escobar. We very much look forward to your following in those steps in having a very successful time. You will actually be the ambassador in place when the Canada-Panama free trade agreement is put in place.

Welcome. We're just delighted by this, and we're honoured to have your colleague here as well. I echo Mr. Keddy's comments. It's rather interesting that Mr. Keddy has grown natural highlights since this Panama free trade deal started.

It's been going through a few different intercessions. This is our third time, and we think this will be a charm. It's our hope that we will have this done. I hope for the sake of all of our colleagues that we will be supportive and show good faith to Panama. I would say that in the last Parliament the Liberal Party, which today is the third party, was very supportive. I have no doubt that they will be again, and it's my hope that our colleagues in the official opposition ultimately will feel the same way. That might be a shift, but I certainly appreciate the spirit of the words that I've heard, so perhaps there will be some movement there.

Mr. Ambassador, you made reference about the United States agreement being in place by the end of October. We certainly heard that from our officials this past week. My concern is with Canada not being quite there and our not moving this as quickly as we should have already done; however, we are where we are today. What kind of disadvantage do you think Canada might experience in its relationship with Panama as a result of this trade deal still not being passed? Do you have some thoughts?

[Jorge H. Miranda Corona]

What I have in my instructions, and it reflects part of the answer that you are looking for, says that American exporters, with the recent coming into force of the free trade agreement with the U.S., will be able to use the preference established in the agreement, while Canadian exporters will pay the MFN duties. That's why we are expecting the—

[Ed Holder, Conservative, London West, ON]

You said the Canadian exporters will pay. Isn't that the point, Mr. Chair? I think that's a very valid point.

We could have done this before, but we had such significant opposition in the last Parliament, which is not your issue, that we were not able to do it. We've disadvantaged our farmers. We've disadvantaged our manufacturers. We've disadvantaged every exporter who exports from Canada to Panama.

What's clear about this free trade agreement is that it takes immediately drops tariffs off almost 90% of the exchange of all goods that we trade. I think that makes a big statement. It's a great opportunity for us, particularly as we try to compete against the United States in Panama. With Panama being that great gateway to the southern hemisphere and to Central America, I think this is critical.

I need to ask you a question. I was looking at our statistics. In 2011, I think bilateral trade between Canada and Panama wasn't the biggest number. It was some $235 million, split almost equally, but it was not a large amount.

In your opinion, Mr. Ambassador, why do you think this free trade deal is so important when, of the agreements we have with other countries, it doesn't necessarily represent the biggest number? Do you have an opinion on that?

[Jorge H. Miranda Corona]

Yes, indeed I do. Thank you for the question.

As I said earlier, Canada is gaining a space that is very important in Panama, not only through the investments of the biggest companies but also from the presence of the little entrepreneurs who are going to Panama. Many people retiring to Panama from Canada are looking for other options for living. With the passage of the free trade agreement, this space will be solidly gained. It's a step I think is necessary for gaining ground in the country, doing more investment, and having more presence.

As I understand it, your country is reliant upon trade, as is my country, so it would benefit both sides. I think the passage of this free trade agreement will benefit us all.

[Ed Holder, Conservative, London West, ON]

I'm glad my colleague from the third party is here to hear this question. He asked a very important question earlier about procurement—

[An hon. member]

It was about potatoes.

[Ed Holder, Conservative, London West, ON]

Well, I love their potatoes—too many of them, actually.

The discussion has been around the Panama Canal Authority. That expansion project is worth something like $5.3 billion, I think.

I want to come back more specifically to this question of procurement. Is this done, or will Canada, through procurement opportunities, have some ability to do business in Panama with the Panama Canal Authority? How do you see that working?

[Jorge H. Miranda Corona]

As I said, they have a plan. I don't know if they have finished the plan and have put out all the bids for companies abroad, but I am sure that the expansion will continue the way it is right now. I am pretty sure that there is more space for companies abroad to invest in the Panama Canal.

[Ed Holder, Conservative, London West, ON]

It's rather interesting. Over the time we have had these discussions about Panama free trade, we've had many hearings. At one point, as I refer to some older notes, Panama committed to implementing the OECD standard for the exchange of tax information to combat international tax evasion. Last summer, the OECD placed Panama on its list of jurisdictions that have substantially implemented international standards for the exchange of information. I think your country needs to be applauded for that kind of progress. I think that's important for Canada.

I was listening to my colleague, the vice-chair of the official opposition, when he was making some reference to what gets signed first, the free trade agreement or an exchange of tax information, and what Canada should do. With all due respect, we don't take our marching orders from the United States. We will do a deal with Panama because it's in Canada's interest. Frankly, it's in Panama's interest, as well.

[The Chair, Conservative, Rob Merrifield]

I will allow a very short answer. Do you have any comment?

[Jorge H. Miranda Corona]

I have no comment.

[The Chair, Conservative, Rob Merrifield]

Okay, very good. That's a good comment. It's a good way to close it off.

We have Mr. Sandhu, for five minutes.

[Jasbir Sandhu, NDP, Surrey North, BC]

Thank you, Mr. Chair. Welcome to the committee, Mr. Ambassador.

I'll follow up with a question from my colleague. You've told this committee that you have already negotiated a tax exchange treaty. You have that.

[Jorge H. Miranda Corona]

Do you mean with Canada?

[Jasbir Sandhu, NDP, Surrey North, BC]

Yes.

[Jorge H. Miranda Corona]

Yes. We are expecting the signature.

[Jasbir Sandhu, NDP, Surrey North, BC]

Could you provide a copy of that to this committee?

[Jorge H. Miranda Corona]

Yes, of course.

[Jasbir Sandhu, NDP, Surrey North, BC]

Thank you.

You know, up until recently we haven't had cooperation, or at least Panama was hesitant to sign this agreement. That was up until recently, until now.

I understand that you've signed treaties with 14 other nations. Why was Panama hesitant to sign these treaties previously?