International Trade Committee on Dec. 10th, 2013

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Okay, that's what I thought.

But the CETA agreement does not specifically address this regulation. It has to be done with Health Canada.

[Dr. Durhane Wong-Rieger]

Right now, Health Canada has already proposed the orphan drug regulatory framework, and we're pleased with it because it actually does take the best of what's available—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I'm sorry to interrupt—but if you were to sign CETA without Health Canada being on board, it wouldn't give you anything. So you need Health Canada to be on board.

[Dr. Durhane Wong-Rieger]

Well, you do need to have the definition and you do need to have the provisions that are already in the Health Canada agreement.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So you need Health Canada to move forward. That's what I need to hear.

[Dr. Durhane Wong-Rieger]

Well, that would provide the base of what is necessary in terms of the definition and the approval for clinical trials, and for the research and development. But at this point the Health Canada regulatory framework does not include everything that would be in CETA as well, for instance, in terms of patent restoration, etc.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Right. Okay, that's fine.

I just want to get in a question to Mr. Langrish. Thank you.

You talked about the benefits to Canada and Europe. Obviously we've been talking to a lot of people.

My problem, or my concern right now is—and I'm going to speak directly to your member companies, and you probably represent bigger companies—is whether they will pass on the savings to consumers? They would compete with each other, but would they pass on to consumers the savings they'll receive from the agreement?

[Jason Langrish]

I can't answer that question because no trade agreement will ever ensure that tariff savings—if that's what you're referencing—get passed on. So I can't answer that, yes or no. However the history of trade agreements is that they do increase competition in market, and competition drives prices down.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Until somebody takes over the market and then prices return.

[Jason Langrish]

Yes, well that's what you have antitrust authorities for, though. We're confusing two issues.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Does Canada have the skill set to export to European markets? I look at smaller businesses in my riding and they have a tough time just exporting to the States. Unless they have a real connection to Europe, they have a tough time exporting their products and their knowhow.

Do you see that as a problem? Again, I think your member companies are on a larger scale and I don't think the Bombardiers will have that problem. But would you see that as a problem?

[Jason Langrish]

Well, I think that most smaller companies will export to their neighbours. In most cases in Ontario they're going to export to export to Quebec or Manitoba or the United States. Most in New York State will export to Vermont or Massachusetts. That's just the reality.

It's only once you get to a certain size and scale that you're able to export internationally, globally. So for most there probably won't be immediate opportunities there. However, never forget about the subcontracting opportunities. Supply chains are what matter nowadays. I don't think we talk enough about how important these things are, and that's where most of the trade actually occurs nowadays. So if you can build yourself into that supply chain you don't actually have to be exporting directly to the market, but are participating in the vehicle that drives exports, and that's an opportunity that small and medium-sized enterprises can get involved in.

Generally the way they do that would be through local procurement opportunities, not just public procurement—which is what's covered under the CETA provisions—but procurement opportunities with the larger companies that have supply chains and also export.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Okay, good point. Thank you.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Shory.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair.

Thank you to the witnesses.

I have a question for Ms. Benczkowski, but I will go to Mr. Langrish before I get to her.

Mr. Langrish, one of the [Inaudible] of our million-plus SMEs is that they are in the business of exporting and the majority of them, I would say, target the U.S. market only. How do we encourage those SMEs that are the job creators to get the benefit of this EU agreement and move their products to the European market?

[Jason Langrish]

Some of that I addressed in the last question. If the company is not large enough to export globally, and this will hold true for any market outside of the markets they are in close proximity to.... A small or medium-sized company has to have the resources to be able to deal with customs procedures and those types of things.

The CETA will clean up some of those issues and will make it easier for SMEs to export. Fruits & Passion is a Quebec-based company that's active in Europe and exports products to the European Union. They're a good example of a medium-sized company, one of our members, and our smallest member frankly.

I'm not going to make the case and say that we represent this scale of company. It's not really our raison d'être.

There will be some that will crack through, but again, it's really tapping in and just accepting that these smaller companies are generally going to export to their neighbours, and if they're going to go global the best way to get them moving along that path is subcontracting opportunities with the larger, more globalized firms.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Last month I read one of the op-eds you wrote for The Globe and Mail, in which you said:

Strategically, the CETA will give Canadian firms an early mover advantage in the EU market relative to their American competitors, whose government is currently negotiating its own trade pact with the EU.

You also mention that the CETA is not just about moving products to the EU but about the services sector activity by Canadian companies on the ground in the EU.

So what should companies be doing between now and the implementation? What should they be doing to take advantage of this early mover status? Of course, if they do not lay the groundwork, there will be times when they find themselves left behind.

[Jason Langrish]

I think in some cases they're going to have to see the final text, because it will determine some things. For instance, if you're accessing government procurement markets in the EU and you're a company like CGI, you will need to know what exactly is open and what isn't open. So there will be some companies that will need to wait and see the final text.

There will be some sectors in which they can probably make the decision now. For instance, at this stage the beef and pork producers could probably ask whether this agreement will be ratified or not. And if the answer is that it will be ratified, then they can probably start getting their production facilities structured and getting their clients on the European side in place, so that once the agreement is ratified and becomes implemented, they can go. But these things tend to go out over a bit longer period of time, so I wouldn't be too worried about what happens between now and ratification, let's say, over the next year. I'd be more concerned about what happens over the next 10 years.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Ms. Benczkowski, I was reading through some of your testimony. You were in front of this committee in 2011 and said:

Over the past 30 years, many drugs have been studied as possible treatments for Alzheimer’s disease, but few have reached the market and have only been marginally successful in treating mild symptoms.

I believe you mentioned something similar today. So is there a feeling now that when the CETA is implemented it will open the door to more innovative research on this disease and more drugs actually reaching their intended market?

[The Chair, Conservative, Rob Merrifield]

That will be the last question.

[Debbie Benczkowski]

I would say I certainly hope so. There are really only four medications that are available to people right now, and they are of limited value to people. We often say the non-pharmacological treatments are of more value to people than those that are available, but we do know that if there is more opportunity to conduct research and innovation that our people may possibly be able to find hope through a cure, or even treatments for this disease, and as I said before, that has been offered to other disease groups and there has been significant progress with polio, HIV/AIDS, cancer, and those kinds of things.

We want to make sure the research and innovation that happens is happening in Canada. Obviously, if there's a cure anywhere in the world that's going to benefit people with Alzheimer's disease, we would certainly welcome that, but we want to see the research and innovation happen in Canada, because we have an excellent top-notch research community here. We want to see it being well funded. We want to see the work progress here, and equally as importantly we want people to have access to any kinds of treatments that are available as soon as they're available, so that there's no lag time for them in Canada, and so they also have the opportunity to participate in clinical trials. Those are hugely helpful for people who are dealing with a hopeless disease right now.

[The Chair, Conservative, Rob Merrifield]

Thank you very much. We want to thank all of you panellists for coming and sharing your expertise with the committee. This is a phenomenal agreement, and you point out many different reasons why. So thank you for that.

We will now suspend as we move into an in camera session, but before that, Mr. Davies, the floor is yours.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chairman.

Mr. Chairman, I previously submitted a notice of motion that I would like to move today and I'll read it into the record:

That, pursuant to Standing Order 108(2), the Committee undertake a study on the Annual Report Pursuant to the Agreement concerning Annual Reports on Human Rights and Free Trade between Canada and the Republic of Colombia for the period August 15, 2011 to December 31, 2012, which was tabled in the House of Commons on June 14, 2013 and invite officials from the Department of Foreign Affairs, Trade and Development and other witnesses to appear and report its findings to the House.

Briefly, Mr. Chair, we have had two very sparse reports pursuant to the Canada-Colombia Free Trade Agreement. As all members know, it was an integral part of the Canada-Colombia Free Trade Agreement, given that country's challenges with human rights, that an annual report be filed that tracked the relationship between trade and human rights and labour development in that country. Really, we have not fulfilled the aims of that report or the purpose of that reporting requirement in either of the last two years.

I was watching a question-and-answer session with Nelson Mandela when he came to Canada in the 1990's when he was asked about the relationship between globalization and free trade and human rights, because with South Africa, of course, trade embargos played an important role in ending apartheid. He pointed out that human rights and labour rights are inseparable from commercial and trading rights. I think this committee and our Parliament recognized that when we put that reporting requirement in the Canada-Colombia Trade Agreement.

So the official opposition of New Democrats would like to move this and conduct at least one meeting where we can call officials from DFAIT and perhaps some civil service society organizations to give us their views.

Finally, Mr. Chair, I'll just conclude by expressing my appreciation to you and Mr. O'Toole for the agreement that the committee meet with some human rights labour organizations when it does go to Colombia. As you said, it's of importance to all parties in the House. I think this motion is consistent with that.

Finally, I want to take this opportunity to express best wishes for the holiday season to my colleagues on all sides of the committee and hope that you and your families have a safe and enjoyable holiday season.

[The Chair, Conservative, Rob Merrifield]

Mr. O'Toole.

[Erin O'Toole, Conservative, Durham, ON]

Thank you, Mr. Chair.

Certainly, I concur wholeheartedly with the latter part of my colleague's statement and extend thanks and best wishes to everyone on the committee for the holidays and an exciting 2014.

As for his motion, I would call for a vote on it and no further debate unless we go in camera. I would just say to his points, the last report is online. It was clear that there's no evidence of any causal link between tariff reductions as a result of the trade agreement and human rights issues in Colombia. Considering that we have a very busy schedule to deal with CETA and TPP all within this sitting, there's no time and really no substance to discuss. So I move for a quick vote.