International Trade Committee on March 25th, 2013

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

I appreciate the fact that you used, in a very short time, an illustration to help explain that there is some benefit actually in having some trade deficits, and how those actually come about. We had another individual talk to us about not always considering a trade barrier as a negative, because it creates jobs, it creates processing here.

With that, you used the example—and I hadn't actually thought of this—of gold, a very precious metal worth a lot of money that comes into Canada. We have the technology in Canada obviously to process that, to refine it, and then have a value-added product. Would that be a fair assessment of what you're talking about, or what Ms. Buck talked about?

[Cameron MacKay]

I think that's one example. If you have economists come and speak to you, they'll tell you about global value chains and the equal importance of imports to the Canadian economy as exports, and where we're not just focused on exports. It's about efficiency in trade, tapping into global value chains where imports are as important as exports, and gold is one example.

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

Yes. Thank you for that, because actually in the budget—about which one of us across the way didn't have a lot of good to say—we've taken the position that it is important to put dollars towards technology and competitiveness, and then again, developing marketing. I want to make sure that we were, from your perspective, right, because we often hear remarks like, “I wish Canada could process and value-add more to our products. We're a primary producer.” I hear it in agriculture—that's my base—but we also hear that a lot in the natural resources sector.

Do the countries in the Pacific Alliance see Canada as one of the leaders able to help them through technology so that we can deepen our trade relationships—I think that's the term that you used—with them?

I don't know who might want to answer that.

[Kerry Buck]

We're just doing inter-divisional consultations here.

Do you want to talk about what we're doing on mining?

[Neil Reeder, Director General, Latin America and Caribbean Bureau, Department of Foreign Affairs and International Trade]

Maybe I'll just mention—

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

Because if it isn't, we need to hear it. That's all.

[Neil Reeder]

I think we have a very strong record to share in terms of corporate social responsibility, which has been a focus of the government, including the extractive sector, for example. Because of the scope of Canadian investment in that sector, it's an area where we can work to build capacity and to have those countries better manage those sectors. So we're very engaged in this. We also have a new centre for extractive industries being developed at UBC and Simon Fraser University, funded by CIDA. That will be coming forward in the next year or so in terms of engaging.... So I think we have a very good story there. This is an area where we can continue to work with the region.

I would like to add one small point, if I can, on trade and investment, because there's a lot of talk about trade, but in fact you're talking about investments that generate jobs back in Canada in the extractive sector, because of the processing of the ores. If you looked at the numbers we talked about, the direct investment in the four countries is $25 billion, and that also creates jobs and opportunities for Canadians and in the region. Our experience has been that investment follows trade, and a FTA gives comfort to investors, like a FIPA, to enable them to go into the region with confidence. Where we don't have an FTA or a FIPA, sometimes investment communities are less than certain. So when you establish this network, this web of FTAs and FIPAs, then you begin to provide a better environment for investment. That investment creates jobs not only there but back here.

It would be interesting if you asked Scotiabank one day how many jobs in their towers in Toronto depend on their investments in Latin America and the Caribbean; it's huge. Those are Canadian jobs created by investment in the region.

[The Chair, Conservative, Rob Merrifield]

Okay, the time has gone. That's what happens when you're having a good time.

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

Thank you very much.

[The Chair, Conservative, Rob Merrifield]

Mr. Cannan, you're next.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair, and our witnesses.

I just wanted to clarify a comment, to follow up on Mr. Davies' questions. I know he has asked several times about the current account and the trade deficit balance, but from my seven-plus years of being on the committee, is it fair to say that a country can have a trade deficit but still have the strongest economy in the G-7?

[Cameron MacKay]

I believe that's the case today.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you. I just wanted to clarify that.

Related to the Pacific Alliance, one of the issues we've been looking at—coming from British Columbia—is expanding our Asia-Pacific connection. We were in Japan in November, working on the partnership agreement there and looking at expanding trade. But specific to the Pacific Alliance, would Canada support expanded membership in the Pacific Alliance to include Asian countries?

[Kerry Buck]

That's a very good question. I don't think we're at the stage of answering that.

As I said, there are two purposes or major objectives of the Pacific Alliance. Objective one is deeper integration among the members, and objective two is reaching out to the Pacific. Our approach to membership of this body, as it is with other bodies, is that if it is open to a liberal economy and meets 21st century trade standards, then we should be a viable member of such trade bodies—or trade-plus bodies, as the Pacific Alliance is. That's been our approach across a number of multilateral forums.

As you know, Asia has been a very important partner for us, and a market and a region where we have expanded significantly over the last while.

I can't say which specific Asian members would be welcome in the Pacific Alliance because we're not there yet, but I know that we're very supportive of our own enhanced engagement with Asia. It makes sense that those Asian members that are consistent and take the same approach as us to 21st century trade standards would be viable members.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I can appreciate it's still somewhat hypothetical because, as I said, we're just at the observation stage. Would there be a specific country, a group of countries, we'd lean toward more favourably to include in the Pacific Alliance?

[Kerry Buck]

I think I went through a list of observers. Those are ones that have stepped up to become observers already. From the Asia–Pacific region there's Australia, New Zealand, and Japan. To go back to my earlier reference to like-minded countries, that they are among the most like-minded with Canada in the Asia–Pacific region, so they would be in a good position to move forward. Again, we're the only ones with FTAs with all four members. They're not there yet.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

In your handout, in your opening statement, you talked about how this is an exciting initiative that you're embarking on in the region. On May 23 it will be your first leaders summit in Colombia.

I have two questions. One is, basically, what do you hope to accomplish by that May 23 meeting? Also, it indicates that there are Canadian private sector companies that are going to be invited. Have those invitations gone out? Do you have any idea who's going to be going, or which sectors?

[Kerry Buck]

On the first one, the Prime Minister has received an invitation. He's considering his participation or the participation of Canada. The agenda isn't set yet, so for me to speak about objectives and “gets” from that meeting is premature. The final agenda isn't set yet; it's not yet set by Pacific Alliance members.

I do no believe the invitations have gone to any of the businesses yet. We have a preliminary indication from the Pacific Alliance that they will extend invitations to the Canadian private sector. We're counting on that, but no, this hasn't been finalized yet.

The meeting is still a way's away. As Mr. MacKay said, the Pacific Alliance is still negotiating some elements.

Prior to that, there's also a possibility that there might be a ministerial meeting held the day before the summit, but again this is not finalized yet. Really, the May 23 meeting is still a work in progress. We have been speaking to the Colombians very, very frequently to work with them to clarify the meeting objectives.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Can I just ask a quick question?

[The Chair, Conservative, Rob Merrifield]

No, your time is done.

Madame Papillon

[Annick Papillon, NDP, Québec, QC]

Thank you very much, Mr. Chair.

First of all, will the department promise to provide the committee with a cost-benefit analysis of being an observer of the alliance.

[Kerry Buck]

Actually, I have included the analysis in my opening remarks. So that means that we have very strong ties with each member of the alliance.

[Annick Papillon, NDP, Québec, QC]

If an analysis was done, there must surely be a written report or a document that outlines the costs and benefits and that provides an overview of everything. That might be very useful for our committee.

Is there a document like that?

[Kerry Buck]

Excuse me for reverting to English. My apologies.

[Annick Papillon, NDP, Québec, QC]

It's okay.