International Trade Committee on Oct. 25th, 2011

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Reeder, thank you very much for your answer.

If I may, do your services include the resources required to fill this gap between the small and medium enterprises and the large companies?

[Neil Reeder]

I would say they do, and it's our responsibility, our mission, to work with all Canadian investors/exporters. We don't make a difference between these two types. The question is still knowing whether the company in question is ready and able to export. That's the key element of the decision. Still, Brazil is not the United States. It's another market, a large, much more complicated market. It's important to take everything into account before making a decision. We are there to help businesses in that sense.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Easter.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

I have just a couple of quick questions. Is the Free Trade of the Americas basically off the table? Is it basically kaput, if I can put it that way?

[Susan Harper]

Yes.

[Wayne Easter, Liberal, Malpeque, PE]

Okay, thanks. It just confirms what I thought.

In terms of the Mercosur, does that group have comprehensive trade agreements elsewhere, and on what basis? You said, Ms. Harper, that a number of other tools can be used in trading relationships, which might be useful of summarize a little bit.

So, does Mercosur have other comprehensive trade agreements, the type that we seem more interested in?

[Susan Harper]

I apologize, if you've covered some of this already, but I think you're aware that there are countries in South America with which they have relationships. In some cases they are called associate members of Mercosur, and in some cases they have an FTA with Mercosur. But these tend to be goods-based agreements and much more limited in coverage than the one, for example, which the European Union has been negotiating for some time with Mercosur, and certainly much more limited than the kind of agreement we would be looking for.

On the previous question about SMEs, we're very aware of value chains and investment and exports of goods and services—that is, very much the full range of what we have to offer and what these countries have to offer. We would be looking for a comprehensive agreement, and to date we have not seen that kind of comprehensive agreement.

In fact, in some of our discussions the Mercosur countries have pointed out that they aren't in a position to discuss this with us yet, because they're in the midst of discussions and negotiations among the four of them on government procurement, for example. I think we're not at the stage yet at which we can come to conclusions on this, but we certainly see an interest in a full range of topics. And in the two exploratory discussions that we've had, we're certainly putting that range forward and not being pushed back. It's when we get into the details that we'll have a better sense of this.

You asked as well about some of the other possibilities and what some of the other trading and economic tools are. I'm not sure what Neil has already covered, but these would be some of the things that a trade commissioner, for example, would use—and here I use the term “trade commissioner” in the largest sense of the word to mean those who are working in business development, science and technology, etc. We have talked about some of the deliverables that were announced by the Prime Minister during his trip.

Some of these other tools are key to enhancing the relationships that will be the foundation of a greater relationship with the countries. Again, the trade policy tool we are specifically discussing is a very specific one, but some of these others, such as science and technology agreements—and perhaps Neil can help me out here with others—would be the other agreements we would be talking about for enhancing a trade and economic relationship.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Hiebert had some final questions, and then we'll move to the in camera part of our session.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

Thank you.

We have talked about Brazil a lot. Can you provide us an update on the status of our parallel agreements with Paraguay, Uruguay, and Argentina? That's my first question.

My second question deals with supply chains. I'm wondering whether the infrastructure and logistics are advanced enough that Canada and Brazil actually have an active supply chain experience. Or are we really dealing just with completed exports, wherein we manufacture entirely here, or they do over there, and send over completed product without further value-added components on the other side? Could you elaborate on that?

My last question deals with education. In your opening remarks you made the point that Canada was the number one destination for Brazilians looking for language education of less than six months long. Can you give us an idea of how many students are enrolled in Canadian institutions for a longer-term period, including for a college or university degree? How does that compare with language programs?

[Neil Reeder]

Maybe I'll answer the question on education.

We have about 2,500 full-time Brazilian students in Canada annually. The number of part-time students is about 15,000, as I said, annually. So Canada is the biggest destination for language students from Brazil—primarily studying English, but also French—for six months or less. Then they return to Brazil, and because of that certificate and that training, they can advance much more quickly in the job market there, having English as their second or third language.

So the number of full-time and part-time students is over 17,000 annually, which puts Brazil way up as a destination for foreign students in Canada.

We're also seeing benefit for Brazil from the scholarship programs. The Prime Minister has an emerging leaders in the Americas program, a Ph.D.-level scholarship for students from the Americas. Brazil has been the largest beneficiary of that program, again because they're well established and have good university-to-university linkages, so they can identify and send students to Canada under that program.

So across the board, the education story is very good.

Tourism is very good, as I mentioned. Our visa office in São Paulo is now the fourth largest visa-issuing office in the world, which is quite significant. It's a kind of circle, in that we talk about the multiplicity of engagement with Brazil. The air transport agreement now will facilitate code-sharing; it will facilitate access to airlines from both countries. All of this will generate more tourism, more students, and more business visitors.

[Susan Harper]

Concerning your first two questions, I can't speak to all of the agreements that we have with the other Mercosur countries, but if you would like some of that additional information, we can certainly provide it.

In our area, the key agreement we look to is a foreign investment protection agreement. We have one with Uruguay, we have one with Argentina, and we are currently in discussions with Paraguay, at their request. This is an important building block for us in the kind of work we do. We're certainly aware that there are other economic and commercial relationships with each of those countries, with companies active there. Especially since the crash in the early 2000s, in 2001 and 2002, we have increased our economic relationships with them. Again, we can provide more information on the kind of economic agreements we have with the other three Mercosur countries.

As for the value chains, absolutely, they are a key focus for us. This is what we hear from business increasingly: it's not just about a market, but about a value chain. We want to make things together with companies from that country, as we do with companies from the United States. So this is very much an area that we would be looking to.

Like Canada, these countries are rich in natural resources. They too want to build things, so we think this is an area in which we will have a mutual interest in building these value chains together. That's where business is going, and that's where we would like to go with these potential partners.

[Neil Reeder]

As a very quick follow-up on the global value chains, we actually have an officer in our mission in São Paulo who does just that: plug Canadian companies into opportunities in Brazil. The best example I can give is this. We talked a little at the beginning about Bombardier and Embraer and all of that, but the reality is that from a global value-chain perspective, Canada is doing very well. Embraer in 2007 imported $2.6-billion worth of equipment for their airline—different parts of their equipment, composite materials, engineering services—and Canada now is getting 25% of the benefits from the global purchases they're making. So despite the tensions in the past at a higher level, our aerospace industry is in fact now contributing several hundred millions of dollars in services to Embraer as they assemble and manufacture their planes.

That's a very good news story, and it comes back to the whole discussion about global value chains and becoming positioned in that market.

[The Chair, Conservative, Rob Merrifield]

I want to thank you very much for coming and giving us this information on the negotiations as they proceed. I'm quite amazed at the number of students who are here in Canada studying. It must be the weather, I assume.

[An hon. member]

It's the hockey.

[The Chair, Conservative, Rob Merrifield]

Yes, maybe it's the hockey; that's right.

Mr. Chisholm, we're just going to go in camera, but did you have a question for the witnesses before we do?

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

Actually, just before we do that, I have to tell you that I don't feel comfortable about this in camera stuff, because this is business—

[The Chair, Conservative, Rob Merrifield]

Okay. We'll do that as we excuse the—

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

No, just hang on. The motion, actually, that—

[The Chair, Conservative, Rob Merrifield]

No, no, that's fine.

I want to thank you for coming.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

There's no need for this secrecy. That's the point. There's no need for it.

[The Chair, Conservative, Rob Merrifield]

We'll excuse you from the meeting. Thank you.

[Neil Reeder]

Thank you again for your invitation.

[The Chair, Conservative, Rob Merrifield]

Now we'll entertain a motion to go in camera. If there's discussion on that, we'll discuss it.

We have a motion by Mr. Keddy to go in camera.

Now you want to discuss that motion. Fair enough. Go ahead.

[Robert Chisholm, NDP, Dartmouth—Cole Harbour, NS]

As a member and vice-chair of this committee, I'm serious about how this committee operates, the business that it conducts and how it conducts its business. If we get into a contentious item, we can agree as a committee to take it off to the side. But this is just regular stuff that we're dealing with—motions and who's going to be a witness. We have to get our steering committee going.

It just doesn't feel right. It feels like we're hiding things by moving in camera just to deal with this, and I don't think we need to do it. I don't think it makes our committee look particularly professional, frankly, that we're doing this. If I as an opposition member want to embarrass the government, I don't have to do it in this committee. There are other ways to do it and that's not why I'm here. That's not why I'm here.

[The Chair, Conservative, Rob Merrifield]

There are some issues that I'll be bringing up that I think we should be dealing with in camera, no question.

Mr. Easter, go ahead.