International Trade Committee on April 10th, 2014

[Jennifer Moore]

I don't see the relevance of your question, but our work is directed at providing technical support to mining-affected communities to better ensure protection for ecology, for lives, for water, and to also advocate for stronger corporate accountability here in Canada. We work both with communities that have accepted mining on their lands and communities that do not accept mining on their lands.

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

I didn't understand or hear what you said. Are you in favour or not in favour of mining?

[Jennifer Moore]

We work with mining-affected communities to provide them with technical support to better protect their lives, their interests, and their water supplies, and to help them ensure—

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

Okay, it doesn't matter.

[Jennifer Moore]

There's not a clear black and white answer to your question, and I don't think it's relevant to this debate.

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

All right, thanks.

Mr. Heidrich, one of the interesting facts you came up with in your presentation is that Honduras is already at the top in terms of market access.

[Pablo Heidrich]

It's one of the developing countries with the best market access, and that is very much—

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

Developing countries? Is it also a developing country? I'm asking.

[Pablo Heidrich]

Honduras is considered a developing country, yes.

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

Okay, I didn't know that. In terms of market access, how is that determined? I'm shocked.

[Pablo Heidrich]

Sure. Market access is determined as the average applied tariff rate in the trading partners that country X has. So what you do is you take the trading partners for Honduras, you look at the average tariff rates for the lines of products that Honduras exports to them, and then you make a weighted average for that.

The biggest trading partner for Honduras is the United States, and it has had a free trade agreement with Honduras since 2006. That very much explains why Honduras already has great market access, much better than most other countries.

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

That explains a lot. Are they a net exporter or importer?

[Pablo Heidrich]

They are a net exporter once you consider services as well.

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

They export services?

[Pablo Heidrich]

They export services, of course. They have a lot of call centres, and there are a lot of offices that provide back-office accounting for financial services, and so on.

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

What's their major export?

[Pablo Heidrich]

The major export is textiles that come from the free zone, the region of San Pedro Sula where Gildan, among other firms, has factories.

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

It's interesting, because even when the officials came here on Tuesday, they didn't expect trade to really increase. And Canada is a net importer of products from Honduras, so would you agree with that in terms of the...?

[Pablo Heidrich]

Canada has a large deficit with Honduras, but if you ask me about Honduras and the world, Honduras has a small surplus, once you count in services.

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

They have a surplus with the world, but they also have a surplus with Canada.

[Pablo Heidrich]

Yes.

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

You don't feel there will be any change after this free trade agreement will be signed?

[Pablo Heidrich]

No, I don't think there will be any significant change.

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

Is that because Canada—and the officials confirmed it, so I'm not trying to interrogate you—won't be able to sell, as you said? Or is it because Honduras won't be able to export more goods than what it already does?

[Pablo Heidrich]

I think it's both. I think the market in Honduras is very limited. It's not growing. It might be shrinking because inequality is growing and the economy is not growing sufficiently. Also, on the Honduran side, there are problems of what we call supply, right? There is no growing international investment, and there is not much investment from the domestic side. Actually, most of the investment that is being done in Honduras is in services, and servicing the local population. It has to do with a particular development, or actually underdevelopment of the Honduran economy: about 20% of the Honduran working population has already left the country, including half of all high school graduates, and about three-quarters of all university graduates. They mostly work in the United States, but also in Europe, and small numbers here. They send remittances, which are equivalent to 16% of GDP to Honduras every year. That is the highest in the western hemisphere.