Thank you very much.
Good morning, everyone.
Good morning, everyone.
My name is Kirsten Hillman. I am the Associate Assistant Deputy Minister of the Trade Policy and Negotiations Branch at Foreign Affairs, Trade and Development Canada, and Canada's Chief Negotiator for the Trans-Pacific Partnership, or TPP, negotiations.
Mr. Chair, I am very pleased to have the opportunity to speak with the committee today in support of your study on the benefits of the TPP to Canada, particularly at such an important juncture in the negotiations.
With me today, from DFATD is Nadia Theodore, who is our director of the TPP division, communications and engagement.
I'd like to start by saying that I have read with great interest the exchanges that you have had with witnesses appearing before the committee in the spring, as well as more recently with several Canadian stakeholders in British Columbia. I noted in particular that a number of stakeholders in B.C. highlighted the importance of free trade agreements as a way of helping diversify Canadian trade.
They also cited the potential to lower both tariff and non-tariff barriers impeding Canada's exporters' access to key markets, including in the Asia Pacific, and the importance of competing on a level playing field with other global players.
The value of being part of the TPP as a transformative agreement, as they call it, was also expressed. If successful, the TPP with its current membership and as it continues to grow will undoubtedly set the terms of trade in Asia.
I note that the comments you have heard are similar to those we have heard from our own consultations with Canadians. Consultations have been a very important part of the process for us and have helped us inform our positions, the positions that we have taken throughout the negotiations since we joined. We continue to welcome the input of stakeholders, and have mechanisms in place to support an ongoing and productive consultation process.
From a comprehensive Canada Gazette notice as well as through meetings, briefings, and other methods we have used to engage Canadians, we've heard a number of views including those of Canadian businesses, provinces, territories, academia, civil society, and organizations and individuals. While a few concerns have been raised with specific elements of the negotiations, overall there is very strong and very broad support for Canada's participation in the TPP.
I'd like to talk a little about the TPP as a strategic opportunity for Canada.
Budget 2014 reiterated the government's commitment to opening new markets for Canadian goods, services, and investment. The government has demonstrated its commitment through the recent conclusion of the Canada-Korea Free Trade Agreement as well as through expanding trade with emerging markets in Asia and the Americas through our engagement in the TPP.
The TPP is an initiative that is squarely in line with the government's ambitious trade policy agenda. The global markets action plan, which is the blueprint for creating opportunities for Canadians through trade, identifies both the emerging and established markets in the TPP as priority markets for Canada, given the important opportunities they represent for Canadian businesses.
Broadly speaking, the TPP represents an important economic and strategic opportunity, I would say, in three ways. First, the TPP negotiations are a significant part of Canada's efforts to expand our commercial presence in the high-growth Asian markets. Second, being part of this transformative initiative enables Canada to be part of the rule-setting process that will impact how trade and investment are negotiated more broadly going forward. Third, the TPP provides Canada with the opportunity to work with our largest trading partner, the U.S., to pursue outcomes that protect and further enhance North American integration and supply chains.
I'd just like to turn to each one of these briefly.
First, the Asia Pacific is a priority region for Canadian businesses as well as for Canadian trade policy promotion. The Asia Pacific region is home to some of the fastest-growing economies in the world. And with both the U.S. and Japan, the world's largest and third-largest economies, respectively, the TPP market represents more than 792 million people and a combined GDP of $28.1 trillion. This is almost 40% of the world's economy.
The TPP holds significance for Canada's relationship in the Asia Pacific region and for our broader efforts to diversify Canada's trade and investment in order to create new sources of prosperity for Canadians. Solidifying and expanding Canadian access to global markets is essential to maintaining and enhancing Canada's competitiveness in an increasingly complex global environment. The TPP is among the best mechanisms we have to achieve that goal. This is particularly true as the TPP is expected to grow to include other countries in the region in the future. In fact, Korea has recently expressed strong interest in pursuing participation in the TPP. As more countries follow suit, the value of the TPP to us, from both a commercial and a geopolitical perspective, simply grows.
As a modern, high-quality agreement, the TPP will become the leading mechanism for Asia Pacific economic integration. For Canada, this expansion is fully in line with our trade priorities in the region and highlights the critical point that Canada's participation in these negotiations is essential.
Second, it is important for us to be part of the rule-setting process. Although there are currently other regional negotiations in the Asia Pacific, including the ASEAN-led Regional Comprehensive Economic Partnership, or RCEP, nothing in the region compares to the TPP in terms of level of ambition, comprehensiveness, or scope.
Canadian companies have long recognized that sitting on the sidelines is simply not an option when it comes to today's global economy. Participating in the TPP means that Canada is at the forefront of designing new rules governing trade and investment not only for the Asia Pacific region, but for the wider global market.
The TPP has been called a 21st-century initiative, but what exactly does that mean? To put it simply, it means that in addition to lowering tariffs we are placing significant emphasis on new and emerging challenges that our companies face in the modern knowledge-based economy and the highly competitive global market. For example, we're seeking strong rules in relation to intellectual property protection and enforcement for our innovators; we're seeking to raise the bar in relation to reducing non-tariff barriers to trade; we are trying to ensure effective competition rules for state-owned enterprises; and we're focusing on transparency and regulatory coherence. Negotiators are also pursuing rules that support small and medium-sized enterprises, and recognize the unique nature of the digital economy. We're working to support supply chains.
These are all the kinds of issues that make this, the TPP, a modern, 21st-century trade agreement.
That brings me to the third reason that the TPP is a key element of Canada's pro-trade plan. This initiative provides Canada with the opportunity to work alongside our largest trading partner, the U.S., in pursuing expanded opportunities in the broader Asia Pacific region. Our economy continues to be highly integrated with the U.S., and while we look to pursue new opportunities and to diversify trade to support sustained growth, we cannot forget the importance of promoting and protecting this relationship.
The potential offered by the TPP to strengthen the North American partnership was highlighted, as you will likely have seen, in the North American Leaders' Summit joint statement that was issued last month.
The TPP is giving Canadians an opportunity to protect and enhance North American supply chains, while advancing Canadian interests vis-à-vis our critical partner to the south, the United States.
Let me now briefly summarize our key objectives in the negotiations. Naturally, we are seeking an ambitious TPP outcome across all areas of the negotiations.
That said, with respect to the rules being negotiated under the TPP, several areas have been of particular interest to stakeholders. As such, we have been pushing for strong outcomes in relation to protection and promotion of inward and outward investment, strong and balanced rules on intellectual property rights and enforcement, improved regulatory transparency, and effective disciplines on crown corporations, among others.
We are also placing priority on improved market access for a wide range of goods, while also seeking gains through market access enhancements for government procurement and services trade, including for service providers. These are areas that could have significant positive economic impacts and that Canadian businesses have emphasized.
We're working hard to achieve outcomes on these and other issues in order to meet our goal of realizing tangible benefits for Canada.
The TPP countries are at an important stage in the negotiations, having concluded 19 full negotiating rounds, of which Canada has taken part in the last five. We have moved to a new format with frequent engagement at the level of technical experts, chief negotiators, and ministers.
Our most recent meetings were in Singapore. Chief negotiators met from February 17 to 21, while ministers gathered for four days from February 22 to 25. The meetings in Singapore enabled frank discussions among members on a path forward. They also allowed TPP members to reaffirm our shared commitment to conclude a comprehensive next-generation agreement that supports the creation and retention of jobs and promotion of economic development in all TPP countries. Members are aware of the work that needs to be done to meet these goals and will be continuing to resolve outstanding issues.
As for the next steps, negotiators have been working tirelessly over the last several months. These efforts will continue as TPP countries work to narrow the remaining gaps and move towards concluding the balanced, ambitious, next-generation agreement that we all seek.
Canada will also continue to ensure that a high level of engagement is maintained with the Canadian public, as well as with Canadian provinces and territories, particularly in areas of provincial/territorial jurisdiction and interest.
In conclusion, Mr. Chairman, free trade negotiations are increasingly important for promoting Canadian commercial interests around the world and therefore for creating prosperity here at home. Our competitors are negotiating agreements at a pace never seen before. Canada has risen to the challenge with our own ambitious pro-trade plan, and Canada's participation in the TPP is a key element of that.
The government is committed to ensuring that Canada pursues its interests across all sectors in the TPP in order to secure tangible benefits for all regions in Canada.
I thank the committee for this opportunity. My team and I look forward to hearing your views. I would also be happy to take any questions at this time.