International Trade Committee on June 5th, 2013

[Mark Adler, Conservative, York Centre, ON]

I would like to follow up—

[Wayne Easter, Liberal, Malpeque, PE]

If you want to talk about who is breaking election laws, let's talk about today. There's a member sitting here who shouldn't be here.

[Mark Adler, Conservative, York Centre, ON]

Mr. Chair, should I be subject to this abuse?

[The Chair, Conservative, Rob Merrifield]

Just carry on.

[Mark Adler, Conservative, York Centre, ON]

Thank you.

Mr. Clark, I'm interested in the comments you made. “Free trade agreement” is a bit of a misnomer because it's more managed trade rather than free trade. Is that correct?

[Peter Clark]

It's not truly free—there are still subsidies and regulatory differences.

[Mark Adler, Conservative, York Centre, ON]

Exactly. It's more like codifying a legal regime so that everybody who falls under that regime knows the rules to play by. It provides predictability and stability so there are no surprises.

[Peter Clark]

That's a fair description.

[Mark Adler, Conservative, York Centre, ON]

Let me go back in history a bit. We talked about how the raising of tariffs is not necessarily a good thing. If we go back to the depression, the natural reaction of countries was to raise tariffs to protect domestic industry. Is that correct?

[Peter Clark]

That's the way we built our manufacturing industry, with the National Policy.

[Mark Adler, Conservative, York Centre, ON]

The raising of tariffs in the late 1920s was a major cause of the global depression. Is that right?

[Peter Clark]

I'm not sure it was the 1920s or if it was the late 1920s and the 1930s. Smoot–Hawley was 1928, I think.

[Mark Adler, Conservative, York Centre, ON]

That was a major cause of the global depression, you would say.

[Peter Clark]

Yes, it was.

[Mark Adler, Conservative, York Centre, ON]

So tariffs are not necessarily a good thing, I think it is safe to say.

[Peter Clark]

I used to work for the Department of Finance. They didn't mean much to revenue but they did have a use.

[Mark Adler, Conservative, York Centre, ON]

Canada's trade deficit is a major result of our strong dollar. Is that correct?

[Peter Clark]

Yes, it is.

[Mark Adler, Conservative, York Centre, ON]

I know that the opposition would like us to have a weak dollar because that's what they base their industrial policy on. They say that Canada should have an industrial policy based on a weak dollar, but that's not what we believe on this side.

There are a number of trade deals that are negotiated for defensive purposes. Is that correct?

[Peter Clark]

Yes.

[Mark Adler, Conservative, York Centre, ON]

The Canada-U.S. Free Trade Agreement was certainly one of them.

[Peter Clark]

The Canada-U.S. Free Trade Agreement gave us a significant market opening because we were prepared to make concessions on the security of energy supply and a number of other issues. NAFTA was a defensive agreement for Canada

[Mark Adler, Conservative, York Centre, ON]

Okay.

There were exemptions even under the initial free trade agreement. For example, Canada exempted beer, right?

[Peter Clark]

Yes.

[Mark Adler, Conservative, York Centre, ON]

It's a common practice to have exemptions.