International Trade Committee on Nov. 29th, 2012

[Ed Holder, Conservative, London West, ON]

Okay. That wasn't particularly specific, but I do want to come to something you did say, which is that you felt that because there may be some issues that are sticky—I think that's what you said—an incremental approach might be better; that is to say, let's agree on the things we can agree on.

The challenge I have with this—and our colleagues to your left are an example of this— is that the area with respect to tariffs on their products might be one of those sticky things, and if there is ever a time to be able to do this, it would be at a time when we're trying to do a complete and comprehensive deal.

Mr. Westcott, may I ask you or your colleague a couple of things? Do you export any product to India?

[Jan Westcott]

Not really, no, not right now.

[Ed Holder, Conservative, London West, ON]

I think Ms. Papillon asked the question, which I think was a thoughtful one, as to whether it was thought that this is because there might be protection of some local markets. Can you help us understand, just in brief, the local market conditions? I have a couple of their local products in my bar—which I don't drink, but they're in my bar in case someone does—and Amrut is one brand I know of. How large is that market for them?

[Jan Westcott]

In Canada?

[Ed Holder, Conservative, London West, ON]

Well, actually, in India—

[Jan Westcott]

Oh. Well, India is the largest whisky market in the world, as I said. It's a substantial market.

[Ed Holder, Conservative, London West, ON]

Do you have any sense of their production in their own country?

[Jan Westcott]

Well, virtually everything that is consumed—I wouldn't say 100%, but probably 98% or 99%—in India is made in India.

[Ed Holder, Conservative, London West, ON]

Then would you imagine that they have a monopoly in India, or are there some examples of successful access from other countries?

[Jan Westcott]

No, not yet. In fact, we were just reading a magazine article about it. The front page of the magazine noted that India is a tantalizing market, frustrating as hell.

I think everybody looks at India and sees the huge opportunity, based on the population and the fact that India's middle class is emerging very strongly, and in the spirits business particularly, because they are whisky drinkers. It is a country.... It's tough to take our products into a place where they're predominantly wine drinkers, because you have to reorient them and re-educate them to drink whisky. There, they drink whisky.

India is a little bit like Canada was a number of years ago. They have similar systems. Canada has evolved to become more and more of a free trader and to understand the value of being embedded in the international community as a trader. India has to get there as well.

[Ed Holder, Conservative, London West, ON]

I don't think India's production into Canada is large, but what kinds of tariffs would they pay in Canada to import?

[C.J. Helie]

Most of what they would export to Canada would be either a whisky, so they would come in duty free, or a rum, and they would pay about 4¢ per litre of absolute alcohol, so it would be less than 2¢ per bottle.

[Ed Holder, Conservative, London West, ON]

Versus what is effectively a 160% duty if you were to export to...?

[Jan Westcott]

Yes, at the federal level, and on top of that, there are all the state—

[Ed Holder, Conservative, London West, ON]

Yes, the state.... I'm wondering what you think. I mean, it's one thing for us to do a comprehensive deal that may have the ability to provide some access to markets in India, but then you have the subnational governments, which you've articulated fairly well. It would seem to me even more critical that if we're going to negotiate at the federal level, the subnationals have to be part of that discussion, in the same way that we've done it with CETA and European free trade.

[Jan Westcott]

Absolutely, that would parallel exactly what has happened in Canada over the last 20 years.

[Ed Holder, Conservative, London West, ON]

What is your most successful example of the fine Canadian products you represent being exported outside of Canada?

[Jan Westcott]

The United States is our largest market. Canadian whisky, for about 60 or 70 years, has been the biggest-selling whisky in the United States.

[Ed Holder, Conservative, London West, ON]

Would the NAFTA arrangement have been helpful at all to you as it relates to this?

[Jan Westcott]

Unbelievably so, because we have a seamless border.

[Ed Holder, Conservative, London West, ON]

So you're able to export without difficulty there?

[Jan Westcott]

Absolutely.

[Ed Holder, Conservative, London West, ON]

You credit NAFTA with that success?

[Jan Westcott]

Yes, very much so.

Canada exports whisky to Japan, notwithstanding some of the economic challenges that Japan is having. Canada participated in a GATT panel a number of years ago with Japan and saw Japan restructure its taxes. As a result of that, Canadian whisky has been successfully exported for many, many years into Japan.

[Ed Holder, Conservative, London West, ON]

Have you had any opportunities to provide input to our negotiators with respect to your concerns?