International Trade Committee on June 5th, 2013

[Peter Clark]

You can't be outside the tent. You just can't be outside the tent. It's not just a question of the tariffs, because in a lot of cases the tariffs are disappearing anyway. The tariffs are not as big an issue. It's the differential treatment. You're not going to be dealing.... For example, when you have these agreements, you usually have ministerial committees where you deal with problems. You have a different relationship.

[Shelly Glover, Conservative, Saint Boniface, MB]

Economically, though, we would suffer more, would we not?

[Peter Clark]

We wouldn't be able to take advantage of opportunities where other people are in the market with preferences.

The other way to look at it.... I can give you an example. I represent pork producers. I'm doing that most of the time these days. When we got into Colombia before the Americans, the Americans raised a great fuss because we were taking their market. We were getting in there, we were getting the distribution, and we were getting the best retail opportunities.

The Americans got into Korea before we did, and now we're suffering. We're really suffering. We had a lot of business—$100 million—and it's just being.... Well, it's like being nibbled to death by ducks.

[Shelly Glover, Conservative, Saint Boniface, MB]

Very good.

I do want to move to Mr. Phillips. I have to tell you, Mr. Phillips, that I was thrilled to see you on the agenda, because I have tremendous faith in our grain growers. In Manitoba, of course, where I'm from, I know an awful lot of producers who do a fantastic job. They add to our GDP. They are some of the most hard-working people I've ever had to deal with. I commend you for what you've done.

You were sitting in when the Canola Council was talking about the opportunities that trade agreements provide. I want you to touch on that. Do you agree with what the Canola Council said with regard to opportunities for your grain growers? How do you see this potentially affecting jobs? We've heard that it won't affect any jobs, but will it in fact increase your exports? Will it in fact allow you to potentially increase jobs?

[Richard Phillips]

Thank you for the question.

As you know, what a trade agreement does is it gives you the opportunity to be successful. It doesn't guarantee you'll be successful. That's up to your own entrepreneurial skills. It's up to you to go out there and market your products and displace someone else. What it does is give you a head start over other countries, if you're in there earlier with the tariff lines. Every time there's an agreement like this, yes, there's the opportunity for creating jobs. As the canola people said, there's tariff escalation. If you can ship more value-added goods, that actually keeps the jobs here in your country, versus only shipping raw goods. That's one opportunity.

But I want to go back to not being part of it. South Korea is a really good example. If you're not in that trade agreement, if you say to not do one because you can't see the balance working, then we're losing out on the pork side, we're going to lose out on the malt barley side, we're going to lose on the canola side, and we'll lose out on the wheat side. By not being in the agreement, you actually can suffer harm and lose jobs. That's the flip side of it.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Thank you, folks.

At the risk of having another rant or sermon from the member opposite, I think you mentioned, Mr. Phillips, that it's not a question of being for or against an agreement. I'd agree with you, but one of the difficulties we do have with this government.... I think the real idea is this. How do we get the best deal to make a trade agreement work for Canada?

I maintain and stand by the fact that we're not doing well under trade. Of the last 61 months, 41 have shown trade deficits. Now, even with a trade deficit, you're still in the value chain and make some gains within Canada. Mr. Clark mentioned the $100 million in pork exports to Korea, where we had a market. In total, when you add in beef, it's a billion-dollar market lost, and the Americans are bragging about taking over our market.

I don't think we're doing well under the trade agreements, and I agree with Mr. Clark that we would do worse if we didn't have them. However, any time you open up a discussion to say there are some problems here, the government takes it as criticism.

Do either of you have any suggestions as to how we can do better under the current trade agreements than what we're doing? What do we need to do to make trade agreements work for Canada? Those questions are for both of you.

[Richard Phillips]

I think on the grain, oilseed, and pulse side, we are selling to a large degree. We are selling malt barley. We are selling wheat. We are selling canola. We're selling a lot of our crops to a number of these countries that are already in the TPP. We are selling a lot of that. I think where we see the challenge in our sector is the non-tariff barriers.

I think we need to put as much effort as we can into sitting down with the countries to discuss the following: how we can come up with biotech acceptances, how we can come up with a low-level presence, how we can agree on maximum residue levels. So if I go out and spray the weeds on my field here, I don't have to keep that grain separate for South Korea versus Japan versus Thailand versus the Philippines. Can't we harmonize some of this in these larger agreements with 14 countries? I think that's where we need, on the grain side, to see more focus, because people are masters at coming up with reasons to stop trade.

[Peter Clark]

I think what we have to do, Mr. Easter, is to try to conclude the agreements faster. Now somebody might ask me how you do that, and I would then say shoot all the lawyers—

[Wayne Easter, Liberal, Malpeque, PE]

It's a good idea.

[Voices]

Oh, oh!

[Peter Clark]

But that's not really the problem. The problem is the spin and the way that people try to sell these things. You have to be much more focused on what's practical. If you can do the deal on 98% of the tariff lines, you should do the deal on 98% of the tariff lines, instead of taking two years to get the rest. It's just being more pragmatic and taking a little bit more leadership.

If the next step, really, for us is to try to get the ASEAN countries, we should be exploring with them how to get that deal. I think that ASEAN is probably a better deal for us than trying to open up trade with South America, with MERCOSUR, because there are more people, and they're essentially less protectionist.

[Wayne Easter, Liberal, Malpeque, PE]

You did say in the beginning that you've seen the real value of this as being a bridge to Asia, and that this is very important. I happened to be at a trade session put on by the school of economics at the University of Calgary, which was here in Ottawa the other day. One of the things that came up there was in terms of the timeframes we're working with. I think there's a real concern that if we do not sign trade agreements within the next 10 years—it seems like a long timeframe, but it's not—that the driving force in future trade agreements would be China, and they would be different kinds of agreements from what we might want to accept. What's your view on that? It's not really related to TPP, but I know you're involved in that area.

[Peter Clark]

China does want to be in TPP, and China is negotiating a deal called ASEAN+6. It's a reality. I understood that we were almost ready to announce negotiations of a free trade agreement with China, and there was a hiccup and it didn't happen. I think that if the Americans can get their deal with Europe, and we get the TPP and other things, these blocs are going to start to come together. Firstly, business isn't going to want to cope with different standards from one agreement to the next.

[Wayne Easter, Liberal, Malpeque, PE]

Are you saying that some of the bilateral agreements will eventually lead to a kind of a multilateral agreement?

[Peter Clark]

I would think so.

[Wayne Easter, Liberal, Malpeque, PE]

That's what was said the other day, and that's an interesting concept. That would be a good thing.

You raised some really serious points, I think, on the United States—the exclusion of the states, the cagey game they have on access—and you raised your concerns about the automotive industry. Could you expand on that? I do think that's a real issue for us. We lock in everything on our side. The Americans have really a double standard.

[Peter Clark]

Well, they're bigger. They're bigger and they can do these things. That's really the reality. We need the Americans to get a deal with Europe so we can get better access to Europe in terms of cumulating our content. When we're dealing with Japan, we started out first, and hopefully, we stay first. But what we're looking at.... If you're looking at the concerns that the auto workers and the companies have about competition from Japan, and on the currency, I did a presentation in Washington where one of the senior representatives from Ford told me that the currency differential from Japan was costing them $6,000 a vehicle, and it has gotten worse since then.

[The Chair, Conservative, Rob Merrifield]

Thank you.

We'll now move to Mr. Adler.

Welcome to the committee. The floor is yours.

[Mark Adler, Conservative, York Centre, ON]

Thank you, Mr. Chair.

I am not a regular member of this committee. I'm normally on the finance committee. I'm sitting in today and I'm glad to be here. Trade is somewhat of a part-time passion of mine.

I was interested in hearing Mr. Clark. I've read a lot of what you've written in the past. I was interested when you said you are representing pork.

[Peter Clark]

Not here!

[Mark Adler, Conservative, York Centre, ON]

No?

[Peter Clark]

Oh no, I was giving an example.

[Mark Adler, Conservative, York Centre, ON]

I understand that. I would suggest that after today's meeting you follow up with Mr. Easter, because he and his party are experts on pork. It might be worth a conversation.

[Some hon. members]

Oh, oh!