International Trade Committee on May 8th, 2018

[Randy Hoback, Conservative, Prince Albert, SK]

But not Parliament.

[Bruce Christie]

I can't preclude that. I'm looking at various scenarios right now where the countries that have expressed interest in joining are countries such as the United Kingdom, Colombia, Thailand, and Indonesia. With certain countries or economies such as Taiwan, they've expressed an initial interest in coming. However, the 11 of us, or whomever has acceded to the agreement at that time, would have to sit down and have a discussion first among ourselves as to whether we feel that a member or an economy such as Taiwan should be admitted to the group before.....

[Randy Hoback, Conservative, Prince Albert, SK]

That comes back to my point that the earlier we ratify, the more control we have over what happens with this agreement moving forward. Is that not fair to say?

[The Chair, Liberal, Mark Eyking]

Mr. Hoback, you're well over time. It was a very good question, so we let it go to six minutes.

We're going to move over to the Liberals now. Go ahead.

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

I have one question. I'll just preface it by saying, whether it's a Conservative or Liberal government, the Government of Canada has proven a commitment to trade throughout its history. It has been a pleasure working with members from all parties around this table to get the trade deals and the review of the trade deals that we've had to do in our two years on this committee. It's nice to see that non-partisan approach continuing for the most part.

I'm going to talk a bit about your economic modelling. Global Affairs Canada did some modelling that showed, in 20 years, Canada's GDP rising by $4.2 billion, which is obviously greater than the $3.4 billion that it would have increased if the U.S. were in the agreement. I'm referring to the numbers from your brief this morning.

Regarding the GDP growth of $4.2 billion in 20 years, I don't know if anyone here is an economist or has the answer, but if you see growth of that size, would that usually be accompanied by job losses or job gains?

[Bruce Christie]

I'm not an economist either, but I think if you look at such a significant increase to our GDP, depending on the sector, it would typically imply job gains.

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

Okay, that's what I wanted to clarify.

Madam Ludwig, I believe, has a question.

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

Mr. Christie, you mentioned you were discussing the benefits of trade through your consultations. What resonated with the opposing groups on the benefits of trade?

[Bruce Christie]

I think some of the concerns we heard had to do with the size of other economies that would have access to our market—Japan, among others—and maintaining our own competitiveness, faced with increased competition from other countries. I think it had more to do with a sector basis; we discussed autos. In the area of supply management industries we were opening up to competition or to exports from new countries for the first time by allowing countries like Australia and New Zealand to access dairy and cheese quotas.

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

Okay, thank you.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

I will continue along the same lines. Earlier, you mainly mentioned concerns about Japan's auto market. You also talked about Malaysia and Vietnam, but you did not elaborate. I would like to hear what you have to say about that, since you have only touched on the issue.

[Bruce Christie]

Related to the auto sector?

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

It was mainly the concerns about Malaysia and Vietnam. You started talking about Japan, then you touched on Vietnam and Malaysia, but that was it.

[Bruce Christie]

The concerns we had heard were that markets in Malaysia and Australia are not accessible to Canadian vehicle manufacturers to benefit from the tariff reduction. In other words, in a country like Malaysia, that has, I believe, a 30% automobile tariff, if a Canadian vehicle manufacturer wanted to export a vehicle to the Malaysian market, to benefit from the duty-free or 0% tariff, it would have to meet the rule of origin that demonstrated that 45% of the value of the Canadian-made car was sourced from parts within the CPTPP region.

In our estimation, our auto producers could not meet that 45% threshold without being able to count U.S. parts in the agreement. U.S. parts no longer count because the U.S. is not a party to the agreement. Therefore, we felt we were being put at a disadvantageous situation—punished if you will—because the United States opted to walk away. We negotiated that rule of origin in the final days of the TPP negotiation, based on the integration of the North American market. Our concerns were, even though today, those aren't commercially significant markets to our vehicle producers, we wanted to ensure those markets were open to them.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Thank you.

[The Chair, Liberal, Mark Eyking]

Okay, we're going to wrap this up with the NDP.

Go ahead, Ms. Ramsey.

[Tracey Ramsey, NDP, Essex, ON]

Thank you so much.

The economic impact analysis shows $4.2 billion in 22 years by 2030; $4.2 billion, ironically, is the amount of GDP that Canada generates every day. We're talking about one day over 22 years that we will have this agreement. I just want that on the record because I think it's interesting.

The second thing I'd like to talk about is this progressive element. We know the preamble is non-binding, regardless of the progressive elements that are referenced there. In the environment, the words “climate change” are not even used in the agreement. I don't know how that can be labelled progressive, to be quite honest, given our Paris commitments and where we need to go.

We agreed to maintain the original labour text that is based on the U.S. template, which has been proven ineffective in trade tribunals.

Canada knew this text was useless, but we didn't change it. Why did we not attempt to change it, and how on earth is this progressive?

[Bruce Christie]

We did try to change it but the problem was from the outset we agreed to these rules that we would not reopen the text. No other party would agree to reopen and renegotiating text because if you started to do that, all the text that had been carefully negotiated and agreed to would be reopened, and we wouldn't be sitting here today.

[Tracey Ramsey, NDP, Essex, ON]

Would that not have been worth it, though, to Canadians who have significant concerns about the TPP, to reopen it, to do something more comprehensive, more progressive?

To be honest, in the middle of the NAFTA negotiations, we were hit with this. There are many sectors across our country who feel a bit blindsided by that process. If it had been reopened fully, I believe it would have given an opportunity for those concerns to be heard and potentially addressed.

[Bruce Christie]

Our starting point was that we felt it was already a robust chapter. It was subject to dispute settlement—

[Tracey Ramsey, NDP, Essex, ON]

You know that's not enforceable.

[Bruce Christie]

No, I don't know that.

[Tracey Ramsey, NDP, Essex, ON]

Well, with the Guatemala decision, we know the text that's included there is not enforceable.

[Bruce Christie]

Maybe I'll let my colleague answer that question on the Guatemala case, but that interpretation by that specific panel came after the agreement was concluded.

[Tracey Ramsey, NDP, Essex, ON]

Okay, I'll let him answer in one second, but I have one more question that I want to ask you on this progressive element.

My colleague raised the matter of indigenous peoples and consultations with them. I want to ask if you had been directed by the government to obtain free, prior, and informed consent from indigenous people on the CPTPP.