International Trade Committee on Feb. 15th, 2018

[Randy Hoback, Conservative, Prince Albert, SK]

In your speech you talked about using the TPP to set the rules for trade in Asia. We've talked about the best way to go about doing an agreement with China. I know my beef producers and grain producers want to see trade increase with China, but they want good, enforceable rules. Do you not think it would be better to get a good, enforceable trade agreement using the TPP as the platform, rather than doing a bilateral agreement on our own, under which it's tough to enforce the rules on non-tariff trade barriers?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

The only thing I can say on that is that a number of countries have expressed a desire to join the CPTPP. You may have heard about Korea. I have even heard about the U.K. wanting to join the CPTPP. I think the negotiation or discussion we have with China is on a separate track.

We want to get, obviously, to the signing and ratification of the CPTPP. What I can tell you is that we have a broad-based agenda when it comes to this region, but I think for the time being my understanding of the discussions that have been going on with the trade minister on the CPTPP is that people are trying to get to signatures and ratification, and then look at what other countries could join.

As I said, a number of them have already publicly expressed a potential desire to join that group.

[Randy Hoback, Conservative, Prince Albert, SK]

Do you have reports...?

[The Chair, Liberal, Mark Eyking]

Oh, no, Mr. Hoback; sorry. You're at six minutes now. We're going to move over to the Liberals.

Mr. Peterson, you're starting off.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

Minister, thank you for joining us today.

As you know, we did tour the TPP across Canada. There was a lot of support for it, and some concerns. A lot of the concerns related to two issues, I think. They were the IP and ISDS. It seems to me that both of those provisions are improved in CPTPP.

Can you elaborate on those improvements and how they make this a better deal?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you very much.

This is one of the things I wish I could have answered to Ms. Ramsey before. The IP was one of the crucial things I think we've achieved for Canada. As you know, the innovators and interpreters were really concerned by the terms that were in the original text of the TPP. You may have seen the op-ed from Jim Balsillie. What we were successful in—and I think this is very much a Canadian initiative—was to suspend a number of provisions of the 22 that relate to IP, namely in copyright extension and patent extension as well. This gives a better outcome for all the interpreters and innovators across Canada. I think it is very much thanks to Canada pushing the envelope that we got a much better deal for industry.

The other thing you mentioned, ISDS, is the same thing. We were able to push back and seek suspension to make sure we could regulate in Canada's best interests, obviously, but also that ISDS would not be applying to certain decisions taken under the Invest in Canada Act, protecting our ability to enforce this act the way we deem fit for Canada. I think at the same time we struck the right balance, protecting our investors who want to be in these markets and at the same time protecting our own right to regulate in the best interest of Canadians. I think these are two significant achievements.

The market access in the auto sector is one that's significant as well. I would just use that to complement the answer I gave to Ms. Ramsey. My understanding is that for the first time in Japan's history, they have given the largest market access and they have provided Canada with an enforceable mechanism through a side letter. Not only did they do that, but we want it to be evergreen, so we have a most-favoured-nation clause in it. That means if Japan were ever to give preferential market access on better terms to any country, such as the United States or Europe, it would apply automatically to Canada. That's an evergreen by which we wanted to make sure we would always be in the best possible position.

On IP and ISDS, I think we've achieved great things for Canadians.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you for that.

Mr. Chairman, I'm going to share my time with Mr. Fonseca so that he can get his question in.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you, Mr. Peterson and Mr. Chair.

Minister, thank you very much. I'm going to bring us from Asia over to South America. I had the opportunity and the pleasure to be with you last week at the TSX. We had the opportunity to meet with stakeholders. You spoke and you presented. Those stakeholders were talking about the Mercosur countries and the Pacific Alliance and the opportunities we have there. We had mining, infrastructure, financial services, etc. What are you looking for to formalize an agreement with the Pacific Alliance and perhaps the Mercosur countries?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

You're right that last week we had a round table. I would include that we had people from the auto sector quite significantly in the room as well to look at opportunities for the sector in opening up markets.

As for the Pacific Alliance, as members would know, Canada was asked to join with associate member status, and this we achieved along with New Zealand, Singapore, and Australia, which basically advances the position of Canada when it comes to the Pacific Alliance. Although we have free trade agreements with each and every country, this is about removing non-tariff trade barriers and engaging further with these countries.

When it comes to Mercosur, the interesting thing is that governments in Argentina and Brazil—those are huge economies, obviously—and Uruguay and Paraguay have been asking Canada to restart these discussions. What we're doing, which I think is the proper step, as I said, is that Canada is not rushing into anything, despite my colleagues being eager for Canada to engage. I said that the first thing we need to do is to talk to stakeholders. We want to engage with stakeholders to understand the benefits, and if there are some concerns, to address them up front so we can take all that into consideration.

What we did at the TSX last week, and what we will be doing, is engaging with stakeholders to understand whether and how this would be in their best interests. We received almost unanimously positive feedback at the table. While understanding that there are some concerns about non-tariff trade barriers, people saw that this agreement should be a mechanism to remove them and facilitate trade and mobility to allow people to sell services and goods in very big markets in South America.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Fonseca.

It looks as though we have time for two more MPs, if it's okay with the minister.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Yes, Chair. I was late, so I'm quite happy to stay.

[The Chair, Liberal, Mark Eyking]

We're going to go to the Conservatives now. Mr. Carrie, you have the floor.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

Minister, thank you for being here.

One of the things you said was that the most important issue with these agreements is these non-tariff barriers, and I think I and many people agree with you.

You also mentioned that you're not rushing into anything, and I'm going to push back on you on that a little bit. As you know, the Senate is now doing their hearings on the marijuana legalization, and we're finding major issues with it domestically. In other words, the science isn't there. How do we determine impairment?

As you know, there are three international treaties that Canada has signed onto—and Canada's signature means something, or at least it has meant something—in which we agreed to ban marijuana. Now Canada will be withdrawing, and I think the responsible, proactive thing, if you weren't rushing, would have been to give notice that we would be withdrawing from these treaties.

We've had Canadian companies in front of this committee that were concerned that how you have not managed the marijuana file could become a non-tariff barrier for these companies, particularly with major trading partners that have issues with marijuana being legal. I'm talking about the United States and Mexico, and you mentioned Japan and China. Basically, what I'm going to ask you today is to put on the record what your government's plan is. Have you updated our major trading partners on your plan to manage the marijuana file, and can you guarantee Canadian companies that this not going to be a non-tariff barrier that's going to thicken the border?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you for the question. It's an important question.

I'm sure that the member would appreciate that this would be best addressed by my colleague Minister Freeland of Foreign Affairs, who has a responsibility with treaty obligations. What I can say is that we are engaging broadly in our diversification agenda.

You were mentioning non-tariff trade barriers. This is something, I must say to this committee, that I take very seriously. As you said, tariffs are going down. I've been engaging also with stakeholders about not only non-tariff trade barriers but, for example, the role of data in future trade agreements to make sure that data is properly addressed in trade agreements. We understand that data is probably going to be one of the most—

[Colin Carrie, Conservative, Oshawa, ON]

Excuse me, Minister. We're not talking about data. I understand that Minister Freeland might be the best person to discuss this, but we are the international trade committee here. Obviously I would assume that she has updated you and kept you briefed, so maybe you could just explain if you have brought this up with any of our major trading partners and maybe give a specific example.

We've had Canadians stopped at the American border just by admitting that they've used marijuana in the past, and they've been turned back. We have literally—I think you know the numbers—$750 billion per year going across that border, which is significant. To not address this issue would be seen as very irresponsible.

How about a specific question on inadvertent exposure? If Canadians are inadvertently exposed to marijuana through edibles, which our government's planning to legalize soon as well, is there going to be random testing at the American border? Have you brought any of these issues up with the United States, our major trading partner?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

As the member would certainly appreciate, all of these issues have been considered. There are many ministers who have been involved, such as the Minister of Public Safety, for example, and Minister Freeland. We are engaging with stakeholders. We are making sure that Canada's position is well understood, not only domestically but internationally.

What I can say when it comes to international trade is that we are eager to deal with any and all irritants that come to our attention. That's why I recently created this task force to make sure that there would be notification of non-tariff trade barriers so that they would be addressed and we can respond properly.

If there are any other trade irritants that you see, if you bring them to our attention, we'll make sure that we investigate them under our trade agreements.

[Colin Carrie, Conservative, Oshawa, ON]

Minister, I am bringing it to your attention. We've had Canadian companies here who are concerned about it. We don't see a plan from your government. From your statements, I think I can clarify that you don't have a plan. You haven't addressed it with our major trading partners. There is no certainty out there that this issue will not become a non-tariff barrier, which as you stated at the outset is the most important thing that you have to deal with, so it's very disappointing to hear that.

There's less than five months, Minister, before your own deadline. Hopefully you pay attention to what the Senate is doing and see if you can address this proactively for Canadian companies and not rush into it.

I have a quick question on the rules of origin. It seems that the CPTPP and NAFTA are going in different directions. Could you consolidate that?

I believe that with the North American Free Trade Agreement, Mr. Trump wants to raise North American content. The TPP appears to lower content—

[The Chair, Liberal, Mark Eyking]

Mr. Carrie, your time is up, but the Minister could give a very quick answer.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I would be happy to.

With respect, I would say that we do have a plan, Chair. I was trying to bring the question and the comments of the member into the context of international trade, in telling him that we are looking at all non-tariff trade barriers and that the Minister of Foreign Affairs as well as a number of members of cabinet have been addressing and considering the questions that he raised. We do have a plan.

With respect to international trade and the rules of origin, you don't need to take it from me. You can take it from our chief negotiator, Steve Verheul, who has said that with respect to rules of origin, the CPTPP and NAFTA are on separate tracks.

From the discussion I had with representatives of the industry, they understand very well that in order to sell in the North American market, they'll have to meet the threshold that will be established under NAFTA, and that we are working together. People understand that they are very much engaged. We have consultations, as you would expect, with the industry throughout the negotiations. We have been quite clear that those are separate tracks.

That's why it is so important in CPTPP to make sure that we have bilateral letters, side letters, with Australia and Malaysia in order to get market access. We know that with Canadian content alone, we cannot meet the 45% threshold, so we need to make sure that we have bilateral letters with Malaysia and Australia in order to be able to sell Canadian vehicles in these markets.

[The Chair, Liberal, Mark Eyking]

Thank you, Minister.

We're going to wrap up with the NDP. Ms. Ramsey, you have three minutes.

[Tracey Ramsey, NDP, Essex, ON]

In light of a large portion of the debate and speeches yesterday that were given around the rights of indigenous people to self-determination, I'd like to ask, with regard to the TPP specifically, whether indigenous people have given free, informed, and prior consent to sign the TPP.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I was pleased to see in the report that you've consulted representatives of first nations and that they have given testimony. I think this is an important part. As an open and transparent government, we are always looking at engaging with first nations to make sure that these trade agreements serve them, as well as serving every other Canadian in the nation.

[Tracey Ramsey, NDP, Essex, ON]

That's different from their giving free, informed, and prior consent. Consultation is quite different from that.

In a true nation-to-nation relationship with self-determination of indigenous people, have you received their free, informed, and prior consent to sign the TPP?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

What I can say, Mr. Chair, is that I've been hearing for more than a year through the committee and throughout the 40,000 or 50,000—

[Tracey Ramsey, NDP, Essex, ON]

We've heard from indigenous people that they were not happy with the deal and that they would see a charter challenge in it. I just have to ask again: have you received that consent from indigenous people?