International Trade Committee on Feb. 15th, 2018

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

It's an issue that is paramount to me, Minister of Agriculture MacAulay, every minister of this government, and I would think every member of Parliament, for that matter. When 30% of your trade is pulses or canola, we have to make sure....

When I had the joint committee meeting with Minister Prabhu, the minister of trade for India, I made sure that this was front and centre. If my memory serves me well, we also had a representative of Pulse Canada. I wanted to give them access to the Indian minister to express that Canada wants to be part of India's food security. On our side, we need predictability and stability for our farmers.

We have been discussing long-term solutions, but rest assured that this is top of my mind and top of our agenda. Every time we have the opportunity to engage with civil society, business leaders, and with government leaders in India, we restate how interested we are in our bilateral relationship.

Obviously we need to address some of these irritants, because they are very meaningful to our farmers in Canada.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Minister, we are studying the CPTPP now, and the human rights issue has been raised during those proceedings.

Could you tell us—?

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

Human rights is a key element of our foreign policy and our trade policy. When it comes to our trade policy, one way we're doing that is, for example, to promote gender. Canada is the first G7 nation to have a gender chapter in one of its trade agreements. We were the second country in the world, the first G7, and this was in our trade agreement with Chile. In the CPTPP, we have an enforceable labour chapter and an enforceable environment chapter. As I said, I think Canadians, those who are watching us, want us to have a broad-based trade agenda, but not at the expense of the environment, of labour rights.

In many places around the world where I have been, I say trade is a march to the top, not a race to the bottom. Every time Canada is at the table, we're trying to raise standards. You cannot do trade the way we used to do it. Trade needs to benefit everyone, and we need to look at win-win situations. Just as we're doing in NAFTA, we're trying to do that in all our trade agreements.

[The Chair, Liberal, Mark Eyking]

Thank you, sir.

Thank you, Mr. Dhaliwal.

We might have time for another round. We're going to start with the Liberals.

Ms. Ludwig, you have the floor. How are you feeling? Are you okay?

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

I'm great.

[The Chair, Liberal, Mark Eyking]

You're tough.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

I won't be running anytime soon.

[The Chair, Liberal, Mark Eyking]

You're from New Brunswick. You've got to be tough.

Go ahead.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

Thank you for your help this morning, Minister. It was well beyond the call of duty. Previous witnesses who have attended the committee have talked about CETA and TPP as the gold standards for trade agreements, so I wanted to thank you and your team for all the work on those agreements.

One of the things we heard recently from a witness was that if we're looking at scaling up our capacity for trade, perhaps we should focus on the sectors with high growth potential and be very targeted. I'm wondering what your thoughts are on targeting trade versus broadly approaching trade among our SMEs.

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

Committee members will know that as I took this mandate, what's paramount for me, and I think Canadians, is trade diversification. We know that more than 70% of our exports are currently going to the United States. The U.S. will always remain our largest trading partner because of our geography and the size of the economy, but at the same time, last year, on the 21st of September, we opened up the European market to Canadians, a market of more than 500 million people and $3.2 trillion of public procurement. As we did that, we looked east because we understand that Asia-Pacific is growing. We know the economy is moving in that direction, and we want to position Canada.

What I was saying on CPTPP is that it's not just a trade agreement; this is about making sure that Canada is front and centre to develop the terms of trade in a region with countries like Australia, New Zealand, Singapore, and Japan. You want Canada to be there, obviously, to frame the discussion.

For example, under the CPTPP, we'll have an accession clause, which means Canada will need to consent for anyone else to join or for the agreement to be amended. Being front and centre, being among the first, gives us first mover advantage. We talked about the agricultural sector. I think, to your question, we're also looking south. We have initiatives with the Pacific Alliance, which is Colombia, Chile, Peru, and Mexico. We're also having discussions with Mercosur, which is Argentina, Brazil, Paraguay, and Uruguay.

I think what you're talking about is a diversification agenda, which means allowing small and medium-sized businesses to access these markets. Canada represents 0.5% of the world population and about 2.5% of global trade. For us, opening up new markets not only ensures our current prosperity, but prosperity over decades. When you look at these agreements—and I understand some concerns that have been raised—you need to look at what the economy is today and what the economy is going to be in five, 10, 20, 30 years from now, and put Canada in a position where we will be part of these large trading blocs.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

I represent a coastal riding, so fish and seafood are important components of our economy in New Brunswick. Why is it important that we have, as you've said, a very whole-of-government approach, a coordinated approach, to trade in terms of environment and climate change, fisheries and oceans, or the examples of investments in the oceans protection plan and clean technology? How does all that work together if you're trying to explain building and scaling up trade to the average person?

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

You can certainly look at the seafood industry opening up the market, for example, in Europe, where tariffs, which were sometimes up to 25%, are going down to 0% over time. I think shrimp went from 10% or 9% to 0% on the 21st of September. Lobster, which is one of our primary exports, is going down over three years from about 20%, depending on whether it's frozen or transformed, to about 0%. It's the same thing when you look at markets like Japan, with the CPTPP. The reality is that I think the export market....

First, you're becoming more competitive. When I did a tour of Atlantic Canada last summer and parts of Quebec that are involved in the fisheries, I could see, with the transformers and the fishers, that this is a game-changer for them, because obviously with tariffs going down, you open up new markets and you become more competitive.

Certainly that's true in the European market. Japan is one of the largest importers of seafood in the world, so when the CPTPP comes into force, it will give a competitive advantage, because if you are tariff-free that obviously makes your product far more attractive for export.

However, as we do that, to your point—I sat down at round tables with communities there—we also need to think about the infrastructure we need for that, because it implies logistics and investments in our trade corridors. I think Mr. Garneau has an initiative about trade corridors, because you're opening up new markets and obviously you need to work to get your product to market. E-commerce is playing a big part in that. I was with some of the biggest platforms.

I think the chair is asking me to leave it there.

[The Chair, Liberal, Mark Eyking]

Yes, thank you. The time is up.

We're going to move over to the Conservatives.

Mr. Hoback, you have the floor.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Thank you, Minister, Deputy Minister, and staff for being here this morning.

I met with three of our trade commissioners in Tokyo the same week you were there, and I got to enjoy the snow. I will say this: those three commissioners were impressive. They knew their stuff. We had great discussions on the potential for Canada trading through the Asian trading blocs in Japan, and I think they're excited to see this signed, because they see lots of opportunity. They commented on how well the pork producers have done in marketing their pork in Japan and around the Asia-Pacific through Japan. I look forward to seeing beef and other products moving through TPP.

This is where I come to my question. It's so crucial that we get this agreement through the House as quickly as possible. Do you have any idea when it will actually come into the House for us to get it through second reading and get it into this committee?

I'd like to think the committee has done so much study on this topic—both in the previous government and this government, plus the Senate has had many discussions on it—that outside of maybe looking at the side agreements that you've added, since the existing agreement is much the same, we can maybe just add one or two meetings for that and put it through the committee and get it out so that it can be implemented and we can be one of the first six countries to ratify it and move forward.

Can you give us an idea on the timing, because it's very important?

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

First of all, you mentioned beef and pork in Japan. Thank you for that.

I just wanted to say that I'm having a round table today with the ambassador of Japan and a number of people about trade between Canada and Japan to make sure that we benefit from these agreements.

As you know, the signing is in March. You're quite right that the Senate, the House, and many people have studied that agreement. After we come back from the summer, we should be in a position to bring that—

[Randy Hoback, Conservative, Prince Albert, SK]

We won't see it until after the summer? There's no chance we could have it in here this spring?

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

We are going to be doing that as soon as possible. I'm just mindful of the timetable. With your help, I think we can get that to the House as quickly as possible. However, at the same time I want to be realistic in terms of the timetable with respect to signing. As you know, there are a numbers of processes that need to take place. Trust me: we are as committed as you are with the official opposition to work this through the Senate. That's why I appeared in front of the Senate—

[Randy Hoback, Conservative, Prince Albert, SK]

I'm concerned, because once six countries ratify it and other countries move forward, they do have the ability to approve who comes in and who doesn't come in without our actually having ratified it. In this situation somebody could come into the agreement, and then we'd better hurry up and ratify it because they're going to make a decision without us.

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

I would say no, that's not exactly the case. No one can join the CPTPP until the initial members have ratified it. The accession clause will not allow other countries to join until the agreement comes into force. You would need the consent of all the agreement signatories in order to amend the terms of the agreement or approve any new members.

[Randy Hoback, Conservative, Prince Albert, SK]

There are six members.

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

The signatories would be the 11 countries. Eleven countries will be signing in March, and ratification needs six countries. We are protected at the time of signing.

[Randy Hoback, Conservative, Prince Albert, SK]

We did allow market access for dairy in this agreement, even though the U.S. is out of it. We haven't publicly discussed what the compensation for the dairy producers is going to be. There was a pre-established compensation figure when we were in government because of that market access. That access hasn't changed. Even though the Americans are not shipping milk or dairy products, New Zealand would love to get into this market.

First of all, who's in charge of negotiating the compensation with dairy, or with supply management, I should say? Is it you? Is it the Minister of Agriculture? When will those terms be released to the public so that we can see exactly how they're going to be compensated with?

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

What I've been doing with the dairy sector, in conjunction with Minister of Agriculture MacAulay, is meet with them in order to first understand the impact.

You said rightly that the U.S. is not there. Quotas have been increasing. There were numbers in the original agreement, but production has also increased.

What we're doing now.... You may have seen that they were here this week. I met with the president last week. We are in ongoing discussions with them about first understanding the impact on the sector, and second about next steps. We're still very much meeting with our officials and their officials to try to understand the impact. As you said, and rightly so, there are discussions around whether you can ship fresh products. However, I would say that I'm very pleased to see that we are working diligently with them.

[Randy Hoback, Conservative, Prince Albert, SK]

I don't mean to cut you off, but he's very tight on time.

[The Chair, Liberal, Mark Eyking]

You have half a minute, so a quick question, Randy, and a quick answer, Minister.