International Trade Committee on May 6th, 2013

[Wayne Easter, Liberal, Malpeque, PE]

However, it does seem remarkably strange to me.

I have one point for the Library of Parliament first, Mr. Chair. We have the estimates here, which are virtually useless because they give only a one-year comparison. I'm wondering if the Library of Parliament might make, say, a five-year comparison of the estimates going back.

Mr. Minister, again welcome.

You mentioned the Trans-Pacific Partnership. I expect your department has prepared an economic impact analysis of the negotiations to date on what we expect to gain and what we expect to lose. We know we didn't come in until I think it was the 14th or 15th round. We don't know what was discussed in the previous rounds.

I wonder if your department has done that analysis and if you're prepared to table it with the committee.

[Ed Fast, Conservative, Abbotsford, BC]

I can certainly assure you that we have done a comprehensive analysis of what Canada can expect to gain from being a member of the Trans-Pacific Partnership and what the expectations would be of our membership within that group of trading nations.

As you know, these assessments are done by officials within my department. They are also done by my team within the department. We, of course, were able to determine that there was a very significant benefit to Canada being at the table.

We had discussions with all of the existing partners. They obviously wanted to determine the level of ambition that Canada would bring to the table in terms of trade liberalization. I did remind them, Mr. Easter, that Canada is one of the most liberalized economies in the world and that they could expect Canada to be a very productive and helpful partner at the negotiating table.

I can tell you that in the last two rounds in which we have engaged, even the nine partners that were there very much appreciated how well prepared Canadian negotiators were and how easily they integrated into the process.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Minister, that's all well and nice and we're glad to hear that, but are you prepared to table that analysis with this committee so maybe we can offer some constructive advice?

I've been trying at this committee ever since I've been here.... We want to give you advice. We want to help you out. I've been suggesting we have value to add to our trade agreements within Canada and that there would be a net benefit to Canada. We can't get your colleagues to agree to that kind of a study.

Are you prepared to table with this committee the analysis you have done?

[Ed Fast, Conservative, Abbotsford, BC]

As you know, those are confidential reviews—

[Wayne Easter, Liberal, Malpeque, PE]

Okay, so the answer is no.

[Ed Fast, Conservative, Abbotsford, BC]

—and evaluations that cover a wide range of issues, and the scope of that assessment is broad. We want to make sure we get it right for Canadians. We want to make sure there is value in any trade agreement we enter into.

[Wayne Easter, Liberal, Malpeque, PE]

Let me turn, Mr. Chair.... You said in your remarks, Minister, that for the Prime Minister trade is a priority. Based on results, Mr. Minister, I would have to say heaven help us if the Prime Minister makes some other issues a priority, because the results are not there in terms of trade. Mr. Davies, using a Library of Parliament analysis, clearly showed the results are not there. You outlined a number of discussions, but the fact of the matter is that in 39 of the last 52 months, we had a trade deficit. That's not really very successful.

If I could, I want to come to the Canada-South Korea negotiation. In regard to this one, we're not gaining results; we're losing results. You will know that negotiations started under the previous government in 2005. It's currently a billion-dollar market—or was, not now—for Canadian beef and hogs. I happened to be in the United States at a meeting which Secretary of Agriculture Vilsack was at. All he could talk about was—blowing up and down—how the beef industry in the United States was taking markets from Canada in the South Korean market.

If I go to your plans and priorities, what it states for this year is, “advance free trade negotiations with Japan and South Korea”. Mr. Minister, advancing is not enough. Why is the government not concluding a deal with South Korea? Since the Americans have their agreement, we're falling behind.

Second to that, I would add you indicated previously on the Canada-European trade agreement that it would be done in December. Now we're in the same position on CETA vis-à-vis the United States as we were in South Korea. They're into negotiations. It seems to me we're playing second fiddle to the United States on CETA.

When can we expect CETA to be signed? When are your negotiators going to conclude a South Korea agreement so that we're not falling behind the U.S.?

[The Chair, Conservative, Rob Merrifield]

We'll get an answer now.

[Ed Fast, Conservative, Abbotsford, BC]

Let me answer your first question, and that is on CETA. As we speak, our negotiators remain engaged in Brussels bridging the remaining very small handful of issues. These are difficult discussions, but our negotiators are finding creative ways of bridging the outstanding gaps.

However, I want to be very clear on this, Mr. Easter. Our conclusion of these negotiations will not be driven primarily by a calendar or a timetable. It will be driven by the quality of the deal. We have made it clear to Canadians throughout our negotiations that we will only conclude negotiations if we can say to Canadians that it is in Canada's best interests. That is the standard our government has set. It is the standard we will meet. That is the standard that also applies to South Korea.

You were quite correct in stating that those negotiations were started back in 2005. By 2007, as you know, the whole BSE crisis was in full bloom. Korea had closed its market to our beef, and they were not moving. It took this government to actually solve that issue, which we were able to resolve about a year and a half ago with the Koreans. We now have full access to their market. Until we were able to resolve that issue, it was very difficult to move forward in trying to find additional ways of deepening our trade relationship.

As you know, since that time we've had ongoing discussions with the Korean leadership as to how we might be able to continue to deepen that trade and investment relationship. They've gone through a transition of government over the last number of months. They've actually completely retooled their trade portfolio. They've included a number of other disciplines in that portfolio. It's taking some time to even find out who would be my counterpart who can actually receive instructions, or provide instructions to negotiators in terms of what can be achieved within a trade agreement negotiation with Canada.

I'm confident that we'll be able to find a way of securing the kind of outcome Canadians expect us to get. Canadians will not accept us selling out Canada's economy. You know that. I would also remind you, Mr. Easter, that over the 13 years your government was in place, you were able to secure only three free trade agreements, and they were all tiny ones—

[Wayne Easter, Liberal, Malpeque, PE]

And I believe we had a surplus the whole time.

[Ed Fast, Conservative, Abbotsford, BC]

—and we're now engaged in very significant negotiations with Japan, the EU, and TPP.

[Wayne Easter, Liberal, Malpeque, PE]

That's when we had a surplus.

[The Chair, Conservative, Rob Merrifield]

Very good.

We will now move on.

Mr. Cannan, you have seven minutes.

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

Thank you, Mr. Chair.

Thank you, Minister Fast, and thanks to your officials.

Mr. Kennedy, congratulations on your recent addition. We had a good working relationship with Canada-U.S. and regulatory reform. We thank you for your work there. It's very important for trade for Canada, for both countries for that matter, and for harmonization.

I thank you, Minister Fast, for your great work and your recent successful trip to Japan and China, working to promote Canadian companies, specifically in the information and communications technology sectors.

I know it's important to sign new trade agreements and expand new markets that way, but we can't forget about existing companies that are doing business and want to grow deeper and more extensive in their relationships and their trading opportunities. Maybe you could enlighten the committee as far as what you are doing to help businesses abroad or Canadian exporters to expand not only to new markets, but in existing markets.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you for that question.

A lot of people whom I meet assume that the trade minister is engaged in trade policy and trade framework agreement negotiations and that's it. In fact, trade is much bigger than that. I would mention trade promotion.

In my opening remarks I mentioned the Canadian Trade Commissioner Service, which I referred to as one of Canada's best kept secrets, because many Canadian businesses, especially small and medium-size enterprises, don't yet know the value that the trade commissioner represents in providing support to Canadian businesses that want to penetrate new markets around the world.

As you know, through your study of the Canadian Trade Commissioner Service, our trade commissioners on the ground in many of those new and emerging markets can provide our Canadian businesses with intelligence on the regulatory context in which they'll be doing business, the legal framework, and the business environment. They can point Canadian businesses to a roster of trustworthy partners which they may want to partner with to improve their prospects of success. The Canadian Trade Commissioner Service is part of our trade promotion tool kit.

I should also mention that one of the biggest challenges Canadian businesses have is access to capital for them to expand into new markets. That's where Export Development Canada comes in. This is an organization, an agency of the government, that provides support for Canadian companies that are looking for financial support, especially where there are gaps in the traditional private sector, for example, the private banks. Often EDC can step into that gap and provide the kind of financial and insurance support that our Canadian companies need to do that.

I should also mention our Canadian Commercial Corporation, which focuses on government-to-government procurement relationships. This is also a tool that we use to allow Canadian companies to explore new markets around the world.

For example, if you have a Canadian company that hasn't yet exported a defence product to a foreign government, that foreign government may say they don't know this company and don't yet have the assurance that they can deliver under their contract. So the CCC steps in, and because they're essentially an agency of the government, the purchaser has the confidence that the goods will be delivered as stipulated under the contract. Again, we're able to facilitate and expand opportunities for Canadian businesses to be successful around the world.

I would be remiss if I didn't mention trade missions. I think all of you are aware that I, as well as some of my parliamentary colleagues, lead trade missions around the world. These are our key markets, the ones we want to see our Canadian companies engaged in. We'll take a number of companies along, often 20 to 30, and these trade missions have a sector-specific focus. We don't want 10 to 15 different sectors represented, where we don't have the scale to be able to make a difference in that foreign market.

Our trade commissioners on the ground will arrange face-to-face meetings with prospective partners in that new market. They can also help to open doors to key decision-makers in that market. I think if you check with those who have taken advantage of our trade missions around the world, you'll find an overwhelmingly positive response has come back. We provide this valuable service, teaming up the services of our Trade Commissioner Service with some of us who are elected officials, to lead these trade missions where Canadian companies can experience what it's like to be on the ground and forge new trade opportunities.

Finally, I'll talk about trade facilitation. This is another thing that I do, more at the multilateral or plurilateral level. I'm engaged at the World Trade Organization and other plurilateral forums, such as APEC and the OECD, where we have regular discussions about how we can get rid of red tape, paperwork that is an artificial means of inhibiting trade, which would serve countries around the world. Some of the work that has been done shows that trade facilitation, the elimination of many of these barriers, would benefit the least developed countries in the world the most.

These are some opportunities we have to go beyond just trade policy and do some real things for Canadian businesses and grow prosperity here at home.

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

I think it's very important to inform all of us of the hard work you're doing. As you said, oftentimes people are under the impression you're opening new markets through trade agreements, but it's all those other issues. As you said, eliminating red tape or regulatory reform is very important. It's hard to believe that some people still don't understand how integrated trade and job growth are, as one in five jobs are based on trade—

[The Chair, Conservative, Rob Merrifield]

Very quickly.

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

—almost two-thirds of our GDP.

Could you elaborate exactly what you meant when you said that you won't sign an agreement unless it's in the best interests of Canadians?

[Ed Fast, Conservative, Abbotsford, BC]

When we're looking at what's in Canada's best interest, we're looking at a number of different things. First of all, are we opening up new opportunities across all sectors of our economy? Are we opening up opportunities across all regions of our economy?

We want to make sure that our core values and our core interests are not in any way compromised when we forge new investment and trade agreements around the world.

We want to make sure that, at the end of the day, the tools that we're adopting and putting into place are actually driving economic prosperity long term in Canada.

These aren't quick fixes. Mr. Easter mentioned that he felt that trade wasn't being generated by the initiatives we've undertaken. The reality is these initiatives take 5, 10, 15, 20 years to actually take root and bear fruit.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Davies, we're into the second round. You have five minutes.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chairman.

Mr. Minister, the media reported this week that DFAIT has set up a special insider group that'll be consulted on the TPP negotiations and updated regularly on Canada's position.

Can you confirm whether the TPP consultation group, or something like that, exists? Will you provide this committee with a list of who is part of that group? Can this committee, elected officials sent here to Parliament to represent Canadians, expect to receive the same level of information as those industry groups, if in fact they are receiving this information?

[Ed Fast, Conservative, Abbotsford, BC]

I can tell you that we don't have an insider group, as you've insinuated. Of course, our officials collaborate. They meet regularly with stakeholders across all sectors of our economy. They also meet regularly with provincial, territorial, and municipal governments.

As you know, we have a good working relationship with the Federation of Canadian Municipalities, which strongly supports our trade plan, our efforts to open up new opportunities around the world for trade and investment, but we also seek the advice of stakeholders on a very regular basis. There's no stakeholder who is told that they can't have input into the process.

Obviously, we let stakeholders know the minister and his officials are prepared to hear what they have to say, because we want their concerns to inform the actual outcomes in those tools that I talked about. When we're talking about investment agreements, trade agreements, double taxation agreements, or nuclear cooperation agreements, we want our stakeholders to share with us what it is they need to open up new markets.

I seriously challenge your insinuation that there's this insider group, but I make no apologies for meeting regularly across a broad, diverse cross-section of stakeholders to seek their input. We'll continue to do that.

[Don Davies, NDP, Vancouver Kingsway, BC]

Well, I encourage you, Mr. Minister, then, to meet broadly with stakeholders and to meet with this committee more than once every 14 months, because we represent stakeholders as well. I think that seeking the input of this group might be just as valuable to you as seeking the input of industry groups.

More than one member of Parliament, Mr. Minister, has commented that it's strange to get more information about the state of negotiations on CETA with the European Union from the Europeans than we get from our own government, including members of your own caucus, might I add.

I'm going to turn to something else. In 2006, Prime Minister Harper said:

I think Canadians want us to promote our trade relations worldwide, and we do that, but I don't think Canadians want us to sell out important Canadian values....They don't want us to sell that out to the almighty dollar.

Your government recently concluded a FIPA with China. Article 28 of that agreement allows China to hold hearings in private at its discretion, something that looks to me, as a lawyer, like a sellout of our Canadian values of an open court system. I know you're a lawyer, too, so you'd be familiar with that concept.

For a FIPA that gives substantial rights to China's investors in Canada, can you tell us if any human rights commitments were received from the Chinese government in exchange?

[Ed Fast, Conservative, Abbotsford, BC]

First of all, let me talk about the last point.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'd like you to answer my question.