International Trade Committee on May 13th, 2014

[Dr. Duncan Cameron]

No, I wouldn't agree, and if you let me finish.... In 1988, once we had locked ourselves in with the U.S., we committed ourselves to jointly negotiating multilaterally with them. We gave up on multilateral negotiations. We became an adjunct to the United States.

What we should have been doing is working with countries like India and China, and other emerging nations such as Brazil, and working out a system that would allow countries who were recipients of foreign investment to have rules that protected their ability to manage that investment, as opposed to being with the Americans and trying to open doors to new foreign investments, when that wasn't what we were doing.

I think we made a fundamental shift in our attitude and the way in which we dealt with international trade at that point. Once the bilateralism goes on, of course, then the Americans turn around and we don't just have an agreement with them. They start negotiating with Japan, with everybody else, and then of course each time we get the door slammed in our face.

[Randy Hoback, Conservative, Prince Albert, SK]

Sir, that's what we've done.

We've done FTAs with a lot of the TPP partners that we have in place right now. We've done agreements into Central and South America, Peru and Chile, two very well-known emerging markets.

Actually, it's embarrassing. When you go to Chile, I think they had something like 54 bilateral trade agreements and we had eight, if we look back about three years ago. You look at the growth of their economy versus the growth of the Canadian economy, and where they're heading to.... I'm not saying that's an example to follow, but I just find it really puzzling for people to say we have to keep looking internally when we're an exporting nation. We rely on exporting to do what we have to do to give the quality of life that our kids want to have and that we want to have.

If we're going to say that we're not going to export, what kind of quality of life do you really want to see for your kids and for your grandkids here in Canada? If we're not selling to the Chinese, Japanese, Americans, Mexicans, or around the world, if we're not doing that and not doing that on a level playing field created by a bilateral trade agreement, then what are we really accomplishing at the end of the day?

[Dr. Duncan Cameron]

Well, I'm certainly not here to argue against trade. I'm in favour of trade and trade agreements. I just don't think bilateral agreements provide a level playing field. Multilateral agreements provide a level playing field; everybody's on the same level. If a country wants to protect its shoe industry under multilateral agreements, it can protect its shoe industry. That costs the citizens of its own nation for not being able to have access to lower-cost shoes, but that's a decision we make as a nation. When we go into a bilateral agreement, we have to give up the shoe industry in order to get access in, say, canola. It may be good for canola, but it's not good for the shoe industry.

Try to buy a pair of Canadian shoes.

[The Chair, Conservative, Rob Merrifield]

Thank you. That's my sense as well.

Mr. Pacetti, the floor is yours.

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

Mr. Chair, you could have cut their seven minutes and agreed to disagree at the beginning.

[The Chair, Conservative, Rob Merrifield]

Let's see where you go.

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

I'm more balanced. You know that.

Thank you to the witnesses for coming today.

Mr. Quick, I'm going to have a crack at you with my first question. You were here in the room. Ms. Campbell said that for any company that's going to be in free trade, the question we should be asking is what their plan is.

What plan do your member companies have when it comes to exporting?

[Jim Quick]

Well, we not only have individual member plans, but we also have an industry plan. We have a market access, market development, strategy that looks at how we're going to deal with existing mature markets and continue to have the market share that we require. Then we look at emerging markets and we say, “Where are those emerging aerospace markets, and how do we become part of that market?” It's about supply chain development. It's about business-to-business activity within that individual jurisdiction.

As I said to you in my comments, the reason we like GMAP is that a lot of the emerging markets that the strategy identifies are those that we as an industry have identified. We have an industry plan, but individual companies also have their plans.

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

What happens if one of your member companies does not agree with the industry plan? Does that happen?

[Jim Quick]

No, not really. We develop a plan based on the greater good of the whole of the Canadian industry. There may be a company in British Columbia or Manitoba that has an interest in Latin America. Somebody in Montreal doesn't have that interest in Latin America, but they have their interest somewhere else. I would say that 99 out of 100 chances are that their somewhere else is also in our plan.

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

That leads me to my next question. You represent different-sized companies, I'd imagine, from—

[Jim Quick]

Yes, I do.

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

—Bombardier, which would probably be the biggest one, to some of the smaller companies providing the services to companies like Bombardier. I know there's a whole gamut. You have regional interests also, companies from different regions of the country that you represent.

How do each of these utilize the resources the government has to offer? You spoke highly of the trade commissioners, but are there are others that you use? How does a small company use a trade commissioner, versus the way a company like Bombardier uses a trade commissioner?

Let's start with that.

[Jim Quick]

Actually, sometimes they'll use it in the same way, which is, “Can you help us connect? Here's our capacity and here are our capabilities. Is there somebody in that jurisdiction that needs that capacity?”

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

Would a company like Bombardier not have a person in that area?

[Jim Quick]

Yes, they would have staff who would work specifically in those areas, but probably their main point of contact, or a contact, would be through a trade commissioner.

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

A smaller company would contact a trade commissioner and say, “We want to get into this bigger market.”

[Jim Quick]

Absolutely. Normally a small company would call me and say, “Jim, I have an interest in whatever country. Can you help me connect with somebody?” Our first step would be...trade commissioner.

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

Thank you.

I want to get two questions in for Mr. Cameron.

On the first one, you're pretty clear on being opposed to bilaterals, but you're in favour of multilaterals. When we're talking about Canada negotiating within the TPP, would you be in favour of that?

[Dr. Duncan Cameron]

Well, my great preference is through universal multilateral organizations such as the World Trade Organization. Now, I think the World Trade Organization has its defects. I think it has reflected too much the interests of the western industrialized countries and has not reflected the interests of the poorer countries.

The Trans-Pacific Partnership was a political initiative of the Obama administration. They really want to pivot away from Europe and do some kind of encircling of China, or develop some privileged commercial relations with countries other than China. They're trying to ensure that China does not use its Asian base to become a world hegemonic power. It's a political discussion more than a trade discussion, I think.

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

From your viewpoint, has an organization like the WTO been successful in what it's done up until now? Isn't it too large? Isn't it overly complex? Isn't that a problem right now?

[Dr. Duncan Cameron]

When we negotiated in 1988, the great benefit to Canada from the bilateral agreement with the United States was going to be dispute panels, dispute resolutions. That was the Canadian lawyer enabling legislation. That meant that any Canadian company had to have a law firm in Washington working on its behalf. A law firm in Canada had to pay for all these disputes if they were challenged by American companies, which love to sue Canadian companies when they are successful. We got involved in all this.

At the WTO it's all free. There are no lawyers involved. It's civil servants who do the trade adjusting, and the companies rely on the trade commissioner service to help them out rather than having to pay.

If you have a smaller Canadian company that's phenomenally successful and it is actioned by a European company, the company can go to the WTO and be represented by Canada, and it doesn't have to pay ruinous fees in order to settle out of court.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Hiebert, the floor is yours.

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

Mr. Quick, we had testimony earlier today about Canadian trade to other countries in comparison to the U.S. and the European Union. We were given numbers as they relate to our foreign trade since 2006.

Can you tell us how exports have been in the aerospace industry since 2006? How do they compare to your competitors from the EU and the United States?

[Jim Quick]

Our exports are growing.

In terms of the United States, we still export about 50% of what we produce into the United States. About 25% goes into Europe. That number has been relatively static.

Where we're seeing big increases in exportability, it is in emerging markets like Asia, the Middle East, and Latin and South America. For example, our exports into China have increased by about 238% over the last five years.