Evidence of meeting #59 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 indian.
A recording is available from Parliament.
4:05 p.m.
Conservative
The Chair Conservative Rob Merrifield
If you can get them and give them to the table, because those are new numbers to me....
4:05 p.m.
NDP
Don Davies NDP Vancouver Kingsway, BC
Mr. Chairman, might I just ask something as well? I'm sorry, a number of us have referred to the article that Mr. Beaulieu wrote. Could we maybe have that tabled before the committee at some point? It would help us all to have that.
4:05 p.m.
Liberal
4:05 p.m.
NDP
4:05 p.m.
Conservative
4:05 p.m.
Conservative
The Chair Conservative Rob Merrifield
If you can get it to the table, we'll have it translated and sent around. I appreciate that.
4:05 p.m.
Conservative
4:05 p.m.
Prof. Eugene Beaulieu
Again, part of my early comment was not to oversell the trade agreement. Saying that trade agreements either increase inequality or significantly diminish it is probably not the right way to look at a trade agreement. There is very little evidence that inequality is going to be affected one way or the other.
On the one hand, it might help, because if trade and investment increase economic growth and development in India, then it's going to reduce worldwide inequality. Within Canada, it's not likely to have much effect at all.
In employment, it's the same thing. A trade agreement with India, as far as I understand the evidence—and I haven't crunched the numbers; the trade numbers are small. If you look at trade agreements even with large countries like the United States—and I've looked specifically at these agreements and at the impact on labour forces—there is no evidence that inequality increased because of free trade with the United States and Mexico. There is no evidence that long-term employment was affected. Manufacturing is declining not because of trade. Those aren't the right considerations.
In the article I wrote, I asked, “What do we have to gain?” and I said, “Not much”, because I just don't think there is an appetite in India for having a free trade agreement with Canada—not that we shouldn't do it. I haven't changed my view on that, but I may be a little bit more optimistic that something could come, because one of the stumbling blocks was the nuclear issue we had with India and we've addressed that.
The mission seemed to be successful, and now with attention to the state-owned enterprises, we have really got India's attention. So maybe we have some leverage to get something done.
Market access is a key, and we've heard that today. The way Canada can benefit is if we get market access. I'm just a little bit skeptical that India is willing to give that up.
That's my view.
4:10 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Thank you very much.
Thank you, both, for being witnesses today.
Mr. Beaulieu, I want to follow that up, because it's an interesting topic you raised regarding the Friday announcement by the Minister of Industry and the Prime Minister. I think that's an awareness issue you've indicated.
One of the things we've heard from other witnesses who have come in is: how do we get people in India to know about Canada? We have a distance thing, and we have a population of 34 million compared to 1.2 billion or 1.3 billion.
You indicated that you are dubious that it would create jobs. I’ll have a question for Mr. Pomerleau, where in pork, we are basically selling zero. I'll follow up with that.
We had the manufacturers and exporters in last week. They were indicating—I don't have the numbers, but you may have that in your research work—that their members would easily have the ability to double what they're doing. I guess if you start at a low enough level, doubling becomes easier.
One of the other things they talked about, though, was that because of this, there is the significance of being able to develop value-add to the products they sell to India.
When you say you're dubious that it would generate any jobs…it's sort of interesting that when we talked about science and technology, resources development, as we're moving to ship to Asia, and also the development.... One of the things they talked about, not just in India, but actually here, was to make sure that we have a transportation infrastructure to make sure we can move products if we're going to be selling, to get them there.
Could you comment on that, please?
4:10 p.m.
Prof. Eugene Beaulieu
If you look at the evidence of impacts of agreements—not specifically the India agreement because I haven't studied that one specifically—if you look at the vast literature of the impact of liberalizing trade, often it does shift employment from some firms to other firms. Typically, smaller, less productive firms may close and those jobs may disappear, and larger, more productive firms will find markets in places like India or the foreign market and those firms will expand. So there would be a shifting of employment, but not a net effect.
Again, if you look at the Canada–U.S. agreement in NAFTA, it didn't affect our unemployment rate. It did contribute to a decline in employment in manufacturing, but those jobs later became part of other manufacturing sectors or the service sector. So some firms expanded, some firms contracted, and the net effect was pretty much a wash.
That's why I say that an agreement with India...you're right, it will generate employment and trade opportunities for some firms, and for other firms it may go in the other direction.
4:10 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
Would it be fair to say that what it does will promote and give businesses, manufacturing, and industries of all kinds that opportunity to profit, if it's not generating jobs, as you say? When you add value, you move the bar up. Now you would have a higher skill...better-paying employment. Is that part of the thought?
4:10 p.m.
Prof. Eugene Beaulieu
It's probably important to separate short-run effects from long-run effects. We have already talked about how this agreement doesn't represent a lot of trade, but it does represent potential. There is potential for growth. In the longer run, it's probably going to increase productivity and improve the employment situation at that end. In the shorter run, it could lead to some transitional effects where some people are laid off from some firms and other firms are hiring to expand. An example is if the pork industry does expand with trade with India, there could be expansion in some of those firms. There would likely be some contraction in other firms or maybe some shifting within the pork industry. Maybe we will go to the higher end. Maybe it's bacon production.
4:15 p.m.
Conservative
Bev Shipley Conservative Lambton—Kent—Middlesex, ON
I'm going to get to that right now then.
Mr. Pomerleau, the value shipped now and sold to India is basically zero; it's non-existent. A side that we recognize, through CFIA, is that we need to get a veterinary agreement in place. We know that. We're hoping that the recognition we talked about before...now that we're in the talks, there would be a notice to the bureaucracy by those elected that we actually start to move forward on that.
What sort of potential do you see for the pork industry, and what sorts of products do you see?
4:15 p.m.
President, Canada Pork International
In terms of products, it's fairly easy. It would be the very high-end, further processed products, like hams, bacon, sausages—of that nature.
One thing that needs to be recognized is that in India you don't have large retailers yet. As soon as the Metros or Walmarts of this world get into India, there will be a demand for those kinds of products. It cannot be found in India.
4:15 p.m.
Conservative
4:15 p.m.
President, Canada Pork International
It's major in India. You just don't try to move product from Mumbai to Delhi. It doesn't work, unless you have days ahead of you. That's one thing people need to be aware of. The four corners have to be worked differently.
4:15 p.m.
Conservative
December 11th, 2012 / 4:15 p.m.
Conservative
