Thank you, Mr. Chair.
Dear friends and colleagues, thank you for being here today.
I want to start by thanking our officials who are here: our deputy minister, our chief financial officer, and our chief negotiator on Mercosur. I'd like to thank them for their hard work and for also supporting us this morning in providing answers to all the questions of the members.
If you will allow me, Chair, I'll make a very brief statement and then take questions from the members.
I am pleased to be here this morning to discuss with the committee a possible free trade agreement between Canada and Mercosur, an economic bloc consisting of Argentina, Brazil, Paraguay and Uruguay.
I would like to take this opportunity to highlight the committee's excellent initiative in undertaking this study.
As you know, the government strongly believes that the global economy should enable the free flow of products, services and investments according to clear and transparent rules. This is essential for the economic prosperity and well-being of Canadians across the country.
Mercosur, with a population of over 260 million and a combined GDP of over $3 trillion, is an emerging market that is currently difficult for our business people to access. I think the committee has heard from stakeholders on this.
Historically, the Mercosur bloc has been less ambitious than Canada in its trade agreements. It has mainly concluded agreements covering only goods.
Over the past year, Canadians interested in this proposed agreement have shared with us their priorities for negotiations, some of which were brought back before this same committee.
Given its growing middle class and continued development of its services and infrastructures, Mercosur represents a myriad of opportunities to expand and develop our modest bilateral trade relationship, which stood at $8.9 billion in 2017, with Canadian exports of $2.3 billion and imports of $6.6 billion.
That said, simply eliminating tariffs will not be enough to realize the full potential of our trading relationship.
Canadian exporters would all tell you that access to a foreign market must be stable, efficient, transparent and, of course, predictable. No SME could or would run the risk of exporting its goods to the other side of the world to be delayed at customs, or of investing significant capital to gain market share in countries where technical barriers to trade abound.
Our government understands this and is ready to act.
The free trade agreements we are negotiating are not for the sole benefit of companies, whether they be big or small. Our agenda is specifically designed to bring more people into the equation and to give them the tools necessary to compete and win. As Canadians, we know that when we have a level playing field we know how to win. That's part of the Canadian spirit.
More than anything, small and medium-sized enterprises, the main job creators in Canada and the backbone of our nation's economic growth, need to benefit from the free trade agreements. We will negotiate a dedicated chapter on SMEs with Mercosur to guide co-operation between us, to share best practices, and to make information available and, above all, easy to access for small and medium-sized businesses.
I know that this committee has been hearing from a lot of people, but you will always hear me, Chair, talking about how we can make trade real for people, and how we can make trade real for small and medium-sized companies, which definitely need access to this market. We will also work together to raise awareness of the opportunities and the support available to those small and medium-sized businesses across our nation.
Women entrepreneurs, whose businesses mainly operate in the service sector, would benefit from an FTA that increases the predictability that their nationality and/or their gender will not be discriminated against when they engage in international transactions, such as, for example, when applying for permits or licences to provide their services on a cross-border basis.
Guided by the principles and objectives embedded in our progressive trade agenda, our potential free trade agreement with Mercosur will seek to ensure that all segments of society, including those traditionally under-represented—whether they are women entrepreneurs, our youth, indigenous people, or people from the LGBTQ community—will be able to take advantage of the opportunities and benefits created by the agreement. As I said in other fora, I want to make sure that everyone has a seat at the table.
Our government's approach is to ensure that increased trade and investments create opportunities for more people. That applies across the nation. We should be making sure that people in each and every riding in this country can benefit from what we're doing.
The status quo and the old approach to trade are no longer acceptable. We've seen good examples of that very recently. As I often say, trade should be a march to the top, not a race to the bottom. People have given us a broad mandate to engage in trade, but not at the expense of labour standards, environmental laws, or governance principles. Quite the opposite, Canadians expect of us that every time we engage, we raise the bar, whether it's about labour standards, governance principles, or environmental standards. That's how we're making a difference in the world.
At the same time, this initiative presents a strategic opportunity for Canada to further our political relationships and progressive trade agenda with a group of countries that we all know is increasingly looking to play a key role in that very important part of the world. It also supports these countries' efforts to promote good governance and build a better economic future for their citizens.
When I announced the launch of the FTA negotiations with Mercosur counterparts in Paraguay on March 9, we all agreed to work towards an ambitious, inclusive, and progressive FTA. As a matter of fact, I can confirm to you that we already started discussing—thanks to Ana, our chief negotiator—labour, environment, gender, indigenous peoples, and issues with small and medium-sized enterprises at the first round of negotiations, which was held here in Ottawa on March 20 to March 23. I had the chance to meet the chief negotiators from all of the countries and to try to inspire them to make to a difference.
In fact, my very first meeting after launching the negotiations in Paraguay was with trade union representatives. I must thank the Canadian Labour Congress for facilitating those discussions. I will say I was pretty proud, Mr. Chair, to be one of the first ministers of a foreign government to take part in these negotiations. We announced at the start of the negotiations that we would meet with civil society and labour unions. I did this in Paraguay, and I did it in Argentina before, engaging with labour and making sure that in these agreements everyone would be heard, because everyone deserves to be heard.
Back then, I also encouraged negotiators on both sides to consider innovative ways to make this FTA more ambitious and more progressive than any previous agreement negotiated by Canada or Mercosur. I wanted us to create, in other words, the new gold standard of agreement for the South American region. With Mercosur, we aim to secure a comprehensive, progressive, and inclusive FTA that will serve to diversify our markets and capture emerging opportunities for Canadians for decades to come.
In conclusion, this is the long-term vision we have with respect to Mercosur.
I would like to thank the committee for inviting me to appear today. I will be pleased to answer your questions.