International Trade Committee on Dec. 11th, 2012

[The Chair, Conservative, Rob Merrifield]

You have 30 seconds.

[Devinder Shory, Conservative, Calgary Northeast, AB]

That's very kind. Thank you.

I'll quickly come to a question to Mr. Beaulieu. You made a comment that we are not high on the list in Indian eyes. At the same time, you said we have their attention now. They have ONGC Videsh, a company in Calgary. They brought their office and they have made a bid to buy some interest in oil and gas.

Then you talked about distance, that distance matters. My question is, once we sign this agreement and everything is online, with the volume and the rebate in the tariffs, etc., and distances becoming shorter and shorter every day, would that not help?

[Prof. Eugene Beaulieu]

I do think that a trade and investment agreement will facilitate and help trade between the countries. The distance won't go away, but that's one of the barriers—the tariffs and the investment. Walmart was just mentioned. India doesn't want big box stores in their country right now. They are resisting that. That's an issue, right? That's one place where they are not liberalizing. They are not prepared to move. That indirectly would affect Canadian business.

[The Chair, Conservative, Rob Merrifield]

Thank you.

Mr. Sandhu, you have five minutes.

[Jasbir Sandhu, NDP, Surrey North, BC]

Thank you. It's a very interesting discussion.

Mr. Beaulieu, I have a question for you. Given that the primary products we export to India right now—peas, lentils, potash, chloride, and newsprint—make up, what, 45% of the trade we do with India, what impact do you think this will have on value-added products that we could export with the new trade agreement? Do you think there will be quite a bit of expansion in that? Are we looking at a huge benefit to Canadians?

[Prof. Eugene Beaulieu]

I don't know exactly. I don't have a good answer for that question. A good example is what we just heard from the pork side—that there is potential. That's an industry that I wouldn't have thought was going to benefit from this, but he was talking about market access, and not only affecting the volume of trade, but also the value added, or the products that are traded—higher-end products going to India. I think there is potential for that, certainly. I just haven't crunched the numbers.

I don't know the chick pea industry. I don't know if there are any value-added opportunities there. There are value-added opportunities in other sectors, so our trade would expand, not just in those industries, but in other industries as well.

I don't know the answer in terms of value-added improvements.

[Jasbir Sandhu, NDP, Surrey North, BC]

You talked about how when we're signing trade agreements it's not just a matter of signing trade agreements, but it's a matter of taking a strategic place. Can you expand on that a little?

[Prof. Eugene Beaulieu]

Part of it is this: who should we sign agreements with? I'm an economist, so I believe there are resource constraints. And there must be some resource constraints in negotiating agreements, so how do we decide which countries to sign agreements with?

I read in the newspaper a couple of weeks ago that we have to be doing more with Vietnam, that Vietnam is a fast-growing economy and we're missing the boat. You could rank the countries and go through the list, but I think having a more systematic approach to understanding which countries we should have agreements with and where we're going to get the big returns.... I think that kind of analysis should be done, and that should be part of the global commerce strategy. Then we could go down the list and knock them off. I don't know if any kind of prioritizing system exists. I just think there should be some way of doing that.

In the paper that you've been talking about, I do mention some of the reasons why India is a prominent case for us, and that's because of the fact that it is large and it is growing rapidly. Those kinds of things are reasons to have an agreement with them. Also, we have some common history and some commonalities that reinforce this. But again, going against that are other challenges.

One of the reasons why India is a positive place is the growth in trade that we've had with them, even without having an agreement. I think if businesses are showing that they're interested in an area where the government has some evidence that it could be a potential market.... I think that's happening with Canada and India. We are starting to expand trade, even without an agreement.

[Jasbir Sandhu, NDP, Surrey North, BC]

Our trade critic and we in the official opposition have talked about looking at trading with countries that are of strategic importance to us. Countries we have mentioned are Japan and Brazil, with India being part of that, but also South Africa. These countries are emerging countries, like Vietnam. It's something that I think we can benefit from strategically in looking at the resources we have.

I know that this government has been interested in negotiating with anybody; it doesn't matter if we have a 0.3% growth-to-GDP trade with these countries. Yet there may be a little bit of a shadowy past to these countries.

I'm going to ask Jacques a question.

You talked about the Indian market. How is the refrigeration in India?

[Jacques Pomerleau]

It's a challenge, a major challenge. I visited the largest cold storage in Delhi, and it is smaller than this room. It is a major challenge, and it's also something that is one of the major opportunities for Canada. In Canada, we're used to the big distances and everything. That's the kind of experience we need to share with India. We have a lot of expertise that could be of help to them.

Instead of just trying to open the door, maybe we should also look at how we could become a friendly partner in helping them to develop what's badly needed, such as transportation and distribution and that kind of thing.

[The Chair, Conservative, Rob Merrifield]

Mr. Holder, perhaps you could finish this off.

[Ed Holder, Conservative, London West, ON]

Thank you, Mr. Chairman.

I thank our guests for being here today. It has been very, very interesting. I appreciate your testimony.

It's always fun when you hear discussions from folks opposite. When I heard the member of the third party switch the subject from India to South Korea, it reminded me of something my Cape Breton mother used to say when negotiating. She said, “If possible, win the argument, but if you can't win the argument, attack your opponent, and if that doesn't work, change the subject.” I think he's mastered that—or he listened to my Cape Breton mother, I'm not sure which.

[Voices]

Oh, oh!

[A voice]

A wise lady.

[Ed Holder, Conservative, London West, ON]

It's interesting when we talk about market access being the key.

Mr. Beaulieu, you mentioned that, and you said you were skeptical that India would give it up. I was compelled by that comment, because when I think of something a member of the official opposition said, which is that Canada's trade does not make the top 10 list with India, it strikes me that perhaps that is all the more reason for us to want to do a deal like this—to increase those numbers.

Speaking of numbers, though, it was interesting to hear the Export Development Corporation give testimony recently. I just want to share it with you in case you haven't heard it. It's very compelling. Let me just get the exact stat so I don't mislead you; that would not be right. I'll come back to that stat in just a moment, but let me just say this.

I direct this to you, Mr. Beaulieu. You wondered if CEPA would have a significant economic impact on Canada. The Forest Products Association of Canada thinks so. The Association of Universities and Colleges looks at that as a monster opportunity...and I say these as organizations you might wish to follow. The Export Development Corporation has a number of stats you might like to see. The Canada-India Business Council reported that, the Indo-Canada Chamber of Commerce.... Spirits Canada talked about the volume of opportunity. It sounded very much like the pork industry in terms of opportunities there—phenomenal.

Mr. Pomerleau, if you were able to export pork to India the way you want to, what would that do for jobs in Canada?

[Jacques Pomerleau]

One thing for sure is that it will increase the competitiveness of our plants, especially the further processing ones, because they have a very limited capacity and market. Right there it will increase, as Mr. Beaulieu said, the level of competitiveness and expertise in our plants.

[Ed Holder, Conservative, London West, ON]

Will you sell more pork?

[Jacques Pomerleau]

Obviously, yes.

[Ed Holder, Conservative, London West, ON]

So if you sell more pork, presumably that will mean you're going to hire more people for the processing of pork.

[Jacques Pomerleau]

For the whole chain.

[Ed Holder, Conservative, London West, ON]

So that's kind of like employment; that's like jobs.

[Jacques Pomerleau]

Yes.

[Ed Holder, Conservative, London West, ON]

Okay. I just wanted to be clear on that.

Perhaps you and Mr. Beaulieu should chat about that, because I think sometimes in real-life scenarios, especially when there are opportunities that are.... I'll call them “ground zero” opportunities.

Again, Spirits Canada...which has such an incredible trickle effect through various of our grains and other sectors, and what it means to producers right across this country. It's actually very compelling.

Actually, often we ask you for information, but you should seek out, or we should give you, the information and testimony from Spirits Canada.

You know, Mr. Pomerleau, I heard you talk about where Canada is with India, and ask what our strategy is. Well, actually, I would submit to you that we have a strategy: in fact we call it a global commerce strategy.

What that means is that we tried to make sure we secured North America. We started 25 years ago with the United States, then expanded that to NAFTA. You can look at what we've done with Central and South America in terms of trying to ensure that we've done that. With CETA there's a population of 500 million people—huge opportunities for the pork industry as well, just since you happen to be here, sir.

Then you look at India, with 1.1 billion people. We're also dealing with Japan right now. We're dealing with countries, frankly, that have stability politically, which we think is important; that are areas where we have the opportunity to expand our markets—and not every market, but that's why we do these kinds of things; and that are geographic opportunities for us as well.

I look at the balance of trade between Canada and India. We started with some $400 million in 2005, and we've grown to $2.6 billion in 2011. I just look at those kinds of numbers...and that's without an agreement. Imagine what we could do with an agreement.

Mr. Pomerleau, would you think that if we were able to somehow challenge those norms, that if we had the circumstance where we could get rid of those subnational governments...cooperating, that this would matter to your industry? Do you not think that would be supportive to you?

[Jacques Pomerleau]

No, no, we would support it. There's no doubt about that.

[Ed Holder, Conservative, London West, ON]

Chair, can I just suggest that if we get into this business, I'd like to get into the fridge business in India?