International Trade Committee on March 20th, 2013

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

You mentioned some statistics at the beginning that I think deserve repeating. The fact that Colombia has averaged 4.5% growth in the last decade is nothing short of remarkable, and the fact that you've increased your middle class—doubled it, from 16% to 30%.

I have to tell you that when we were studying Colombia here at committee and travelled to Bogotá and through Colombia, at the time it quite frankly wasn't safe to travel throughout Colombia. The FARC had secured large portions of the country. During the period of time that we were negotiating our bilateral agreement, that changed; you have freedom of travel. I have to congratulate you.

Just give me a second here, Mr. Chairman.

It was because of your respect for the rule of law, for your long history of the judiciary, for the maintenance through many criticisms of an active and professional police force and military.

I think that expanding trade beyond our bilateral agreement with Colombia into the possibility of being a part of the eighth largest trading block on the planet holds tremendous opportunity for Canada.

I can tell you that if the opposition members supported this, they would be criticizing us as a government if Australia were there ahead of us, if New Zealand were there ahead of us, or all the other nations that wanted to join were. We have a great opportunity to be first in line and to work with like-minded partners for the advantage of all of us.

He can comment on that.

[The Chair, Conservative, Rob Merrifield]

I'll let you comment on that, if you like.

[Nicolás Lloreda Ricaurte]

Thank you for your words.

As a Colombian, I will tell you that many times in my life I never thought that Colombia would get out of the terrible situation it was in. Every day I am so happy and surprised that we were able to overcome very difficult obstacles, such as violence and respect for human rights, and having control of the territory, in terms of changing the story and making all Colombians try to row in the same direction.

So thank you very much for your words.

[The Chair, Conservative, Rob Merrifield]

Now we're going to find out if that's absolutely true or not. We're going to hear from the opposition.

[Voices]

Oh, oh!

[The Chair, Conservative, Rob Merrifield]

Go ahead, Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Welcome, Mr. Ambassador. We too would congratulate you on your success; we just won't be as flowery as the parliamentary secretary over there.

We already have a free trade agreement with Colombia, and it was going to be what the government promoted as the be-all and end-all, and yet now we're talking about a Pacific Alliance. So could you tell me how this Pacific Alliance would work? As I said, an FTA, a free trade agreement, was going to be the move. We were going to increase our GDP, increase our wealth, do more trade. It hasn't happened that way in Canada. We're finding in all of our trade agreements that we're not doing as well as many governments have promised.

In fact, we've had trade deficits in 10 of the last 12 months. Our manufacturing sector is in decline in this country, so there's a problem here.

How do you see the so-called Pacific Alliance being a huge boon over and above the FTA? How would this thing work?

[Nicolás Lloreda Ricaurte]

Thank you, Mr. Easter.

I'm not going to comment on Canada. I will comment on Colombia, which has signed and implemented a number of free trade agreements, some of which have in some aspects—for example, we will receive a lot of foreign investment but perhaps our exports to those countries are not growing as much as our imports.... Why? Because we had high or higher tariffs, so when they came down it was obvious that the country with the lower tariffs was not going to benefit as much.

I know that Canada increased its exports to Colombia by 19% in one year. That is a very significant number, especially when the types of things we are buying are industrial machinery and vehicles. Those are products that generate a lot of value-added and a lot of jobs.

Specifically on exports, it has been useful, but my point is that the alliance is not just a free trade agreement; it goes far beyond that. It has a lot to do with countries that share values, believe in basic principles, and want to harmonize rules to create a bigger market.

As you know, when you talk about economic liberalization the first liberty is goods. You also have services, investment capital, goods, and people. Perhaps the European Union is the only example of a successful effort at liberalizing capital and people in some aspects, but any economist will tell you that harmonizing rules brings down a lot of barriers and creates a lot of opportunities.

In the case of Colombia and the Pacific Alliance, we already had free trade agreements with Mexico, Peru, and Chile before we started this. We see it as a much deeper integration. For us, it's not just an FTA.

[Wayne Easter, Liberal, Malpeque, PE]

I'm trying to get my head around just what the Pacific Alliance is. Would you see this as a style of trade, commerce, and investment, something along the lines of the European Union?

[Nicolás Lloreda Ricaurte]

No, I mentioned the example of the European Union as a process in which there has been integration in other aspects.

The Pacific Alliance is what its leaders decided it would be, a framework to explore a joint effort with Asia and to further integrate the economies because they share the same values. For Colombia it is very important because those are all very important markets for us.

[Wayne Easter, Liberal, Malpeque, PE]

You're almost as hard to get answers out of as the government is.

[The Chair, Conservative, Rob Merrifield]

No, no, I think the answers are very good.

[Wayne Easter, Liberal, Malpeque, PE]

Based on the documentation we have here, Canadian direct investment in Colombia is $1.685 billion. Is that mainly in the mining sector? Where is that Canadian investment in Colombia? Is that something you think we should be expanding, and if so, how?

[Nicolás Lloreda Ricaurte]

Mining and financial services are the key. A number of Canadian companies have been purchasing minority and majority stakes in some financial institutions and looking into others. Aside from mining, we have a big presence of Canadian entities now in the financial services. Mining is definitely the area where you see more investment.

A couple of weeks ago, I was in Bogota and the Canadian ambassador had some people over. He invited me and he took me to a room where he showed me a map of Colombia, divided by what we call states, and in every state there was a Canadian flag because there's at least one Canadian company exploring the country. The Canadian attention in the mining sector towards Colombia is very significant and very important. I think Colombia was not a mining country because we did not control territories. But there is now a very big part of the territory that is being explored. We're learning from the experience. We are very lucky to have a very close cooperation with the Canadian government. For example, we took our vice-minister of mines to Sudbury a few days ago. We're working together so we can accomplish responsible mining. I think the Canadians can be very good partners for that.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Ambassador.

[The Chair, Conservative, Rob Merrifield]

Thank you very much. That's why I think the Liberal opposition voted in favour of the Colombia free trade agreement. It took them a while to come around to that, but they did.

Go ahead, Mr. Shipley, you're next.

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

Thank you.

Mr. Ambassador, it's always an honour to have an ambassador come before our committee to talk about his country and the benefits and the values that are changing, particularly in Colombia.

I had the opportunity a little over a year ago to visit your country. I was in Medellin, and it was incredible. When we went to the hotel, we looked around for security. We looked around for all the things that we had been told about not many years before. I was told that, two years before, if we had come to this hotel, there would have been armed guards in front of it. For those few days that we were there, we had an opportunity to talk about our free trade agreement. And we never saw one armed guard. I give credit to your country for taking hold of something. They had tried to brand Colombia as a country of high crime and high violence. You've been able to grasp that and deal with it in a very positive manner. I congratulate you on that.

One of the things Canada is doing, and wants to do, is to have a presence in Latin America. The Pacific Alliance of the four countries, Colombia, Chile, Peru, and Mexico are the ones that we're talking about right now. I wouldn't mind getting your opinion of Canada's becoming part of the Pacific Alliance. This would make Canada more visible in Latin America. Do you see this as a benefit to Canada?

[Nicolás Lloreda Ricaurte]

I think it's up to Canada to decide if it wants to change its status from observer, where it is very welcome, to something more hands-on. I think it has been good for Colombia and for Latin America that Canada has recently turned more of its attention to Latin America. We're neighbours, and we value the presence of Canada. Canada has had an independent position towards Latin America on many issues, like human rights cooperation. There are many Canadian initiatives that Colombians value. I hope that Canada increases its attention towards its neighbours in Latin America. There are many things that we are doing together now, like regional security efforts in drug interdiction, and working in the Caribbean together. There are many aspects that we still can explore and go further. As to the changing of status, that's really up to you.

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

Then obviously we're interested because this is why we're having these discussions.

I was impressed. You said that your economy doubled in 10 years. Canadian exports to Colombia, if I heard correctly, were up 19% a year ago, contrary to what the member across was saying. You also talked about your middle class and the rising number of people in it.

When free trade agreements come about—and we've had that discussion—they help to boost an economy. Do you see the free trade agreement that we have with Colombia as having helped lift your economy and living standards?

If that is the case—and you can say yes or no—what do you see the trade alliance doing for the economy and the same sort of situation?

[Nicolás Lloreda Ricaurte]

Yes, our president, since he was trade minister 20 years ago, has always been a champion of free trade. He believes strongly in free trade. He actually pushed for the first comprehensive trade agreement with our neighbours, Venezuela, Peru, Ecuador, and Bolivia.

The real consolidation of the Andean Community was done under his watch as trade minister over 20 years ago. I remember because I worked for him as an assistant, and he has never wavered. He has been finance minister; he has been defence minister; he has always believed that free trade is a very important element. It's not the only one. In the case of Colombia—and every country has its own policies—the secret for growth comes from security, comes from free trade, comes from opening our economy, and comes from programs of social inclusion, because there are those who will not benefit just by free trade, and those who require some help in order to get to the middle class, and that's what we're trying to do, work with all these elements together.

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

I congratulate you for that.

Going to agriculture, the things that Canada is renowned for—among a lot of things, quite honestly—are our natural resources and our agriculture. We're recognized around the world for the quality of products not only that we grow and produce but in our genetics and livestock also. That was a significant discussion in terms of lentils and some of those crops when we were talking about agriculture to Colombia. But as we move into and become a partner with the Pacific Alliance, what would that mean in terms of the Pacific Alliance, having Canada come on with the things that I just talked about? Or are they just entitled, wrapped up into the free trade agreements that we've already got?

[Nicolás Lloreda Ricaurte]

Look, our position is, and my experience is, that in every free trade agreement, agricultural products are always the most sensitive. Just think of any country, and there's always the category that we don't want to open and touch, agriculture products, with the exception of the ones the country feels that it really has to export because it has a lot to offer.

So those are all very sensitive points. If you look at the Colombia-Canada free trade agreement and the U.S.-Colombia free trade agreement, there are those categories of agricultural products that have the longer phase-outs, 10 years, 12 years, because they are very sensitive politically. I can't comment on a specific issue. Again, these are all elements of a whole negotiation, so they have to be seen as that.

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

Ambassador, thank you for your time.

[The Chair, Conservative, Rob Merrifield]

Monsieur Morin.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Thank you, Mr. Ambassador, for being here, and I apologize for coming in a few minutes late.

I can really hear that the alliance will cover a large range of issues, such as movement of business persons and facilitation of immigration, including police cooperation and customs cooperation.

What kinds of changes do you foresee in that range of issues? What would you like to see change in the future or to be integrated with Canada as much as it is within your four member countries, let's say?