International Trade Committee on May 1st, 2013

[Theresa McClenaghan]

I think the ones with these countries are too new to say. The NAFTA one is the longest standing one.

There's the Commission for Environmental Cooperation that was set up with Mexico, Canada, and the United States. There are some useful mechanisms there. For example, when there's tri-country reporting on the level of pollution by the biggest polluters in the three countries, it's been useful for the three countries to see a joint report where they see who are the biggest polluters, in which country. The embarrassment factor that results can be useful.

[Don Davies, NDP, Vancouver Kingsway, BC]

Do you have any suggestions for what you'd like to see in a trade agreement or in any kind of negotiations if Canada does enter the Pacific Alliance? I'm looking for positive suggestions for how we can better protect the environment in our trading relationships.

[Theresa McClenaghan]

I mentioned investor state in particular, because I do worry about that operating as a regulatory chill. I'd like that to be deleted. Any of the harmonization provisions should specifically retain the right of the countries and jurisdictions in question to be able to pursue what they, in good faith, see to be proper health, welfare, labour safety, environmental protection rules.

There is a concern that with the harmonization initiatives, sometimes the country that thinks it should pursue—or their citizenry would like to see them pursue—a stringent standard is dissuaded. I note with interest the point that Pulse Canada made about small differences; differences they can operate within are not the issue. I think that's important to note. It's not that we should all race for the least restrictive standard. Each country should pursue the one they think is best.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Holder, you have seven minutes.

[Ed Holder, Conservative, London West, ON]

Thank you, Chair.

I'd like to thank our guests for being here today. I've appreciated your testimony.

I want to make an opening comment, if I have a brief amount of latitude, Chair, because I think it ties into setting some of the backdrop of our whole review of the Pacific Alliance.

One of the things we've heard, and you'd all appreciate this, is that when Canada has entered into free trade agreements, somehow we have been disadvantaged as a result of that. We've heard that certainly from at least one member opposite. However, I was doing some research and I just want to enter it into the record. I think it would tie in particularly to the pulse industry. I just want to share this.

With respect to Chile, which is our longest standing trade agreement, in merchandise trade going back to 2009, we had $644 million in exports, and in 2012 we increased that up to $789 million. In service trade in 2007 we had $89 million in exports, and we increased that in 2010 to $137 million.

For Colombia, in merchandise trade back in 2009, there was $602 million in Canadian exports. In 2012 this increased to a whopping $827.9 million in Canadian exports. Service trade with Colombia back in 2007 was $80 million in service exports. This had increased, three years later, to $146 million in exports.

For Mexico, in 2009, in terms of merchandise trade, we had $4.8 billion. Certainly it's our largest player in Canadian exports. In 2012 we increased this to about $5.4 billion of Canadian exports. In service trade in 2007, we had $677 million in exports. In 2010 this moved to $691 million in service exports.

Finally, for Peru, in merchandise exports, in 2011, Canada, for merchandise trade, had $516 million of Canadian exports. This increased the next year to $536 million.

My point is that in every one of these countries where we have free trade agreements, we have increased, and in some cases significantly increased, our exports both in merchandise trade and service trade.

I have a question for our representatives from lentils. We had a question the other day, and I want to ask this on behalf of some members, because this became a question: can you define what lentils are?

I'd just like to ask you to explain that in simple terms, Mr. Kurbis, for those of us who don't have an agriculture background.

[The Chair, Conservative, Rob Merrifield]

I think the question was on legumes, but let's go with lentils.

[Ed Holder, Conservative, London West, ON]

I thought I said pulses.

Don't take this question out of my time, Chair, because you asked it now.

[Wayne Easter, Liberal, Malpeque, PE]

You should have brought a sample.

[Gord Kurbis]

Legumes are a category of plants that draw their nitrogen directly from the atmosphere, so they self-fertilize with respect to nitrogen. Pulses specifically are a subcategory of legumes that are the edible seeds of legume plants, excluding oil seeds. In practical terms, for us that's peas, beans, chickpeas, lentils, but it would include lupins, fava beans, etc., in other parts of the world.

[Ed Holder, Conservative, London West, ON]

Thank you. For the record, I love lentils.

We have free trade agreements with all four of these countries. I'm trying to get a sense from you, knowing that we already have free trade agreements—and in your comments, Mr. Sekulic, you mentioned that some of the tariffs are going to be coming off as a result of prior agreements—of what interest you see in Canada's going from observer status to full membership in the Pacific Alliance. Where do you see the benefit for your industry?

[Nick Sekulic]

It has more to do with the harmonization of the regulatory issues, the MRL limits. Obviously, in becoming full members you would have a greater amount of discourse with these partners.

[Ed Holder, Conservative, London West, ON]

How does that help you?

[Nick Sekulic]

We could avoid the potential of what you would call a standby ruling on the MRL level.

[Gord Kurbis]

Or a breach, or a trade disruption.

[Nick Sekulic]

Those could be put in place as an impediment to our expanding a market. We'd rather have them dealt with in a harmonized framework.

[Ed Holder, Conservative, London West, ON]

We've heard some prior testimony that suggests that coming in as full members gives us the opportunity to promote trade and attract investment opportunities with markets beyond the current four, because there are several other players now involved.

Does that serve as a potential benefit for your industry?

[Nick Sekulic]

In addition to what I just stated, yes, it does. That would be a similar benefit.

[Ed Holder, Conservative, London West, ON]

Thank you.

Ms. McClenaghan, thank you for your testimony. Your comments were very thoughtful.

By the way, I want to agree with my colleague who just commented. We don't believe in child labour. We don't believe in exploited labour. I think we're all of one mind on that as a position.

You mentioned that Canada should learn its lessons from home, but may I ask you, could you imagine, in the extraction industry.... We already do business with all of these four countries and we do business with countries throughout the world in the extraction industry, but particularly in South America. Do you think that having a fuller relationship with these countries would somehow potentially diminish Canada's code of conduct for its business here in Canada?

[Theresa McClenaghan]

No, I'm not saying that.

[Ed Holder, Conservative, London West, ON]

I appreciate that.

Could you imagine, then, that somehow we might be able, with what I think is our reasonably strong reputation worldwide in the extraction industry, to upgrade some of the extraction activities in the countries we deal with? I sure hope so.

[Theresa McClenaghan]

Yes, I do, and I would say starting with Canada's own companies operating abroad. CELA did work in the past. We had a trade and environment program and specifically had a project with CIDA funding. One of the issues that was extremely important was the public participation and engagement of the surrounding community in the process of deciding whether, how, and how to operate the benefits, etc. Those are all areas that are extremely important to pursue. It's true as well in Canada's north with our first nations.

[Ed Holder, Conservative, London West, ON]

Thank you all. I appreciate that.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll move to Mr. Easter for seven minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Thank you, folks, for your presentations.

I will begin with the Pacific Alliance, and this is mainly to the pulse industry. There is a kind of debate about what the Pacific Alliance is really and what it is going to do for us. From my perspective and from everything I've heard to date, it seems to be a kind of high-level club in which we can have discussions, but it's not a specific trade agreement with rules.

Nick, earlier you may have touched on how it would be useful. I'm still trying to figure out the usefulness of this Pacific Alliance, other than having wonderful discussions and meetings. You may have touched on its being an area in which perhaps you can have some discussions, whether on zero tolerance issues, methods, or whatever, and can head off a problem before it occurs.

What do you see as the benefit of the Pacific Alliance, which is an entirely new concept, different from anything I've seen discussed around here? It's not a trade agreement; we already have trade agreements with these countries. The department couldn't explain what we're doing in doing this study on the Pacific Alliance, but we're into it.