International Trade Committee on Oct. 2nd, 2012

[Cameron MacKay]

Broadly speaking, Panama, as a member of the World Trade Organization, now has commitments to all of the members of the WTO—a certain level of liberalization. Panama is allowed to go beyond that and provide preferential treatment to certain countries under free trade agreements, for example. They can negotiate those one by one and then provide basically extra, privileged, more liberal access to those free trade partners.

It has done so with the United States. The agreement is not implemented yet, but we expect that it will be soon. It has other certain free trade partners, mostly in the region in Latin America.

So the agreement that we have negotiated with Panama basically allows Canadian companies, if and when the agreement is implemented, to compete head-to-head with, for example, the U.S., or companies from other countries that have negotiated a privileged agreement with Panama, on a level playing field.

Let me just expand on that by mentioning—we haven't focused on it much in the committee questioning yet—that the European Union also, subsequent to Canada negotiating a free trade agreement with Panama, negotiated a preferential trade agreement with Panama and the other Central American countries. That was signed this summer. It basically is in the ratification process now in Central America and Europe and could also come into force soon.

So what we are doing is basically trying to provide a foundation so that Canadian companies can maintain the access they have with respect to their counterparts from not just the U.S. but the EU also.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Holder, five minutes.

[Ed Holder, Conservative, London West, ON]

Thank you very much, Chair.

I'd like to thank our guests for coming back. You've brought reinforcements, I see. That's always a good thing.

I'd like to talk about the humble potato. We heard Mr. Easter speak in terms of some of the concerns.

Can you clarify, with respect to the humble potato, the areas that will benefit as a result of this free trade deal coming into force? Whether that's frozen or whether that's fresh...help me understand how you intend to defend the potato.

[The Chair, Conservative, Rob Merrifield]

That may be a political question, but I'll let you answer it.

[Voices]

Oh, oh!

[A voice]

That's a hot potato.

[Cameron MacKay]

That's a hot-potato question; that's right.

Certainly one of our objectives in negotiating the FTA was to improve our access, in particular for frozen potato products. We have negotiated so-called duty-free immediate access for frozen potato products from Canada, meaning to say that if and when the FTA is implemented, the day upon which it enters into force Canadian frozen potato products will be duty-free in Panama.

[Ed Holder, Conservative, London West, ON]

Okay. I appreciate that clarification. I think it's important.

I would like to focus on the potato, if I might, Chair, for just a moment, because if “bombasticity” was a word, I think my colleague from the third party might have his picture beside it. He talks about somehow this trade deal not being sufficiently important to justify the efforts that have been made by the people at this table today and others who are with you. He cites the fact that somehow that 300ths of 1%...which is still the 84th-largest trading partner of Canada, is some justification for us not putting in the kind of effort we had.

Well, I've done some research, and it might surprise you to know that the great province of P.E.I. represents some 0.42% share of the gross domestic product of Canada, a mere less than 0.5% of Canada's GDP. I would suggest to you that this does not denigrate my view of P.E.I. and its importance to Canada, and unlike some members opposite, I want to defend Prince Edward Island.

[Some hon. members]

Hear, hear!

[The Chair, Conservative, Rob Merrifield]

I knew it would get political.

[Voices]

Oh, oh!

[Ed Holder, Conservative, London West, ON]

I'd also like to go a little bit further. Here's the other thing. I find this striking, and you might wish to comment or not. Obviously frozen potatoes are even something less than that 0.42% of gross domestic product that P.E.I. represents on behalf of all of Canada. It strikes me that I also want to defend the potato. It strikes me that if we want to do this right, if we want to defend the potato in Prince Edward Island, you have no choice but to proceed with this agreement.

Do you agree with that?

[Cameron MacKay]

Mr. Chair, I'm not sure I can answer the question exactly as it was stated. But I would note that Prince Edward Island's merchandise exports to Panama in 2011 were $1.1 million, and they were led by frozen french fries and frozen potato products. If and when the FTA enters into force, the duties would drop. Current duties range as high as 20%, and they would drop to duty free immediately.

[Ed Holder, Conservative, London West, ON]

So this would be a good thing for the P.E.I. potato?

[Cameron MacKay]

I think that would be a good thing for the P.E.I. potato.

[Voices]

Oh, oh!

[Ed Holder, Conservative, London West, ON]

Then I feel somewhat better.

Mr. Reeder.

[Neil Reeder]

Well, I don't want to say that I frequent McDonalds restaurants in Central America, for fear that we're getting off track here, but I will say, having spent a lot of time in that region, that frozen french fried potatoes from the Maritimes are all through Central America, and having lived in Costa Rica for three years—as did Cameron, who succeeded me as ambassador in that country—almost all the McDonalds in that country are providing french fried potatoes from Canada. So this is an important market. It comes back to the point that the dollar volume may not be big, but farmers and farms and real people benefit.

In the case of Central America, we saw Canadian french fried potatoes throughout the region.

[Ed Holder, Conservative, London West, ON]

Well, it may not be big, Mr. Reeder, but it's big to my farmers in P.E.I.

[Neil Reeder]

I'm from Saskatchewan. I hear you, sir.

[Ed Holder, Conservative, London West, ON]

All right, then. I appreciate that; it was a very thoughtful response.

It's rather interesting too, because my colleague opposite is the only person I know on the planet who says that when another deal has been signed ahead of him, somehow he's figured out that it has put them behind Canada. I have to tell you, that's a very curious logic. Maybe it's just the singular logic of my friend, but it comes to the point: that to the extent that we don't get this deal in place now, we're already behind.

My colleague opposite from the official opposition very thoughtfully made the comment that we've lost out on opportunities on the Panama Canal because we didn't sign this deal before.

With no disrespect, because you weren't in this House at that time, I would say to you, sir, that it was your party that prevented us from putting the Panama Canal opportunity in place, because your party was the one, unfortunately, that went against putting this deal in place.

Is that a fair comment?

[The Chair, Conservative, Rob Merrifield]

I think you need to speak through the chair.

[Cameron MacKay]

Mr. Chair, I think I'd leave it to you to respond as to whether that's a fair comment or not.

[The Chair, Conservative, Rob Merrifield]

Well, I love the exuberance of a Cape Bretoner defending P.E.I.

[Ed Holder, Conservative, London West, ON]

If Cape Bretoners don't defend P.E.I., who will? I ask you.