International Trade Committee on March 18th, 2013

[Ed Holder, Conservative, London West, ON]

I'd like to thank our guests for being here today. It's sincerely appreciated.

I recall when I had the great honour to visit your country back in December. We were treated with great grace, and I must say, it's a stunning place. I look forward to going back.

I want to put something to rest if I can. My colleague opposite, Mr. Easter, talks on about trade deficits. I was looking at Canada-Chile trade, and it struck me that in 1996, just after we did a free trade deal with Chile, our two-way merchandise trade was $718 million. We've more than tripled that. In 2010—the last figures I have—it was $2.7 billion. The other interesting thing is that Canadian direct investment has reached $13.3 billion, again going back to 2010.

It strikes me that you can't have this both ways, that somehow if we're helping Chile by taking their exports in our country, it's assisting Chile only. While the members opposite will often say, well, what's in it for the other country, I think it's two-way. I think the opportunity for us to take products and services from Chile certainly assists your country, but at the same time it gives us good-quality products in our country. Conversely, when we look at the opportunities that this trade agreement has resulted in, were it not in place, I believe we would be at a very significant disadvantage.

I'm just talking—with no disrespect—about the country of Chile.

Now we have this new arrangement that you're talking about that is in place, this Pacific Alliance. What I'm curious about, Mr. Ambassador, is that we already have some trade agreements in place with the four countries that we know are there—Chile, Colombia, Mexico, and Peru. But I'm looking at the sideline countries—Australia, Spain, Guatemala, Japan, New Zealand, Uruguay, Costa Rica, Panama. With some we have arrangements, but we trade with every country in the world.

I'm trying to get a sense of what you think. If Canada goes beyond observer status, if this agreement goes beyond just the current four countries to other countries, do you think that will give us—as a country, Canada, but certainly Chile as well—the opportunity to expand those relationships with countries that we don't currently have formal arrangements with?

[H.E. Roberto Cristian Ibarra Garcia]

I think that yes, it will give us the opportunity, but I think we have to settle ourselves beforehand. Most of the countries that you mentioned, Mr. Holder, are really there as observers, such as Japan and Australia. They are very interested in following the negotiations. They are very interested because they see the figures, they see the dynamism of our economies. But I cannot say if it's going to be good for us and how trade with them is going to develop.

But of course, I'm sure that if we present ourselves as a Pacific Alliance we will be stronger, especially to face countries such as China or Japan or whatever.

[Ed Holder, Conservative, London West, ON]

I was pleased to hear my friend Mr. Easter say that they're not opposed to our being there. So my question comes back to you, then, as it relates to Canada.

We currently have observer status. The possibility of going beyond that might be there. I want to be very clear about Chile's position. Should Canada wish to go beyond observer status, what would your response to that be?

[H.E. Roberto Cristian Ibarra Garcia]

I think we would be, as we have been since the beginning, in favour of Canada's increasing its participation in the Pacific Alliance, provided that you engage in the commitments that we have already, or that we will get in the next years. I think this is a very serious project, and we would like really to establish a win-win relationship with the members.

[Ed Holder, Conservative, London West, ON]

I appreciate that, Ambassador.

Where I'm coming from is that we already have relationships with all of these countries. We don't need to do this, but maybe we do. What I'm looking for is the argument for Canada to do more than just sit at the table and watch. You know, I'm not a very good hockey player; in fact, I'm a very bad one. So I coach, but when I engage my players, I engage them to participate fully. Sitting on the sidelines watching is not nearly as much fun.

In terms of direct involvement, what contribution could Canada make to the Pacific Alliance by getting off the bench and becoming a participant?

[H.E. Roberto Cristian Ibarra Garcia]

Yes. First, in my view it's going to be good for the alliance to have a partner like Canada, with the credentials of Canada in the world, and to have Canada on our side. Of course, it's going to strengthen the relationship with countries that are like-minded countries.

If you consider it well, the four countries of the Pacific Alliance are privileged partners of Canada. I think it would be good for Canada to be there, to improve your business there, to sell more goods, to talk about services, and even to develop things that are very weak at the moment, such as tourism, for instance. With the exception of Mexico, probably, tourism is very weak. I have some figures somewhere showing that 32,000 or 38,000 Canadians went to Chile last year and only 40,000 Chileans came to Canada. Why is that? In order to have much more of a relationship, we should ask ourselves what we are not doing well.

As I said, it's a win-win relationship. I think you will add to our association. You will add value, you will add good practices, and you will get to know much better the Latin American markets that you are doing now.... I think it's a good deal—

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

[H.E. Roberto Cristian Ibarra Garcia]

—provided that you fulfill the conditions. That's important.

[The Chair, Conservative, Rob Merrifield]

Okay. Thank you.

We'll split the time between Mr. Sandhu and Mr. Shipley with two and a half minutes each.

Go ahead, Mr. Sandhu.

[Jasbir Sandhu, NDP, Surrey North, BC]

Thank you.

Thank you, Ambassador.

Canada, as has been pointed out, has observer status right now. You have ambitious plans to have the four countries complete this deal by the end of March, in a few days, to have 90% of the goods traded tariff free. You also talked about other countries joining in if they meet certain conditions.

Would Canada be able to negotiate what has been negotiated already in that 90%? Or would we have to sign on to that 90% free trade agreement of goods right off the bat?

[H.E. Roberto Cristian Ibarra Garcia]

It's very difficult for me to say. Once the technical negotiations are finished by the end of this month, we will have the situation of what was achieved. As you are an observer member, I think you will have all that time to appreciate how you can get into those conditions. Probably it's going to be easier than you think, or probably it's going to be more difficult than you think, but again, we will have to finish the technical negotiations among the members.

At that point, you will have a situation in Canada where you will say, “These guys have done that and they have achieved that, so is Canada ready for that?” Are there sectors that you are not going to get into? Can there be some exceptions? What can you offer to the alliance if the case is that you would like to get full membership?

[Jasbir Sandhu, NDP, Surrey North, BC]

If I understand you correctly, we can still negotiate part of the agreement that is going to be signed by March 31.

[H.E. Roberto Cristian Ibarra Garcia]

No, because this is an internal negotiation—if I understand you correctly—among the members of the alliance. Once it's finished, it's finished. Canada is just an observer. If Canada wants to get into the other category at the level of a full member, it will start negotiations. There is at least a year to negotiate some sensitive points, and then there is going to be a decision of the Council of Ministers of the foreign alliance to decide if Canada or another country has fulfilled the conditions to get in.

[The Chair, Conservative, Rob Merrifield]

Go ahead, Mr. Shipley.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Thank you very much.

Thank you, Ambassador. It's great to see you again.

In the discussions that you see in terms of Chile, where is the significance of agriculture in terms of the trade between Canada and Chile, for example? Or you may expand that to the Pacific Alliance. To follow up a little bit, I was told a couple of times by countries that when the Americans go, they go en masse. Canada needs to show up. To follow up on the comments of one of my colleagues in terms of Canada's position on the world stage and in trade, we are showing up, and I think that is so important for us as Canadians.

Can you just help me a little in terms of where the significance of agriculture is in your terms and in terms of the Pacific Alliance?

[H.E. Roberto Cristian Ibarra Garcia]

Agriculture is exactly one of the areas where we have a deficit, if you like. In terms of what we export from Chile—fruit, for instance, for which Canada is a good customer as well—it's only 14%.

We have had a variation in our exports of fruits, but with salmon.... Well, salmon isn't agriculture; it's aquaculture. In terms of wine, for instance, and you know very well Chilean wine, we are also improving our exports.

We can do much more. I think agriculture is still very...I'm not going to say “neglected”, but I'm going to say that we have concentrated on mining, on natural resources in general. Agriculture and agro-industrial products are not on the map, but we are intending to include them.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

I think that's it, Mr. Chair.

Thank you, Mr. Ambassador.

[The Chair, Conservative, Rob Merrifield]

I want to thank you very much, Mr. Ambassador. We gave you a little extra time for your presentation. You gave a great overview and introduction to the Pacific Alliance.

[H.E. Roberto Cristian Ibarra Garcia]

It was very interesting to listen to Mr. Easter, anyway.

[Voices]

Oh, oh!

[H.E. Roberto Cristian Ibarra Garcia]

Thank you very much.

[Wayne Easter, Liberal, Malpeque, PE]

Yes, tell them, tell them—

[The Chair, Conservative, Rob Merrifield]

No, no, don't encourage him.

[Voices]

Oh, oh!

[The Chair, Conservative, Rob Merrifield]

With that, we'll suspend.

Thank you very much.

[Proceedings continue in camera]