International Trade Committee on Sept. 20th, 2018

[The Chair, Liberal, Mark Eyking]

You're way over five minutes.

[Tracey Ramsey, NDP, Essex, ON]

I didn't realize we were timed.

[The Chair, Liberal, Mark Eyking]

I'm trying to keep around five minutes for everybody, because we have a few more. If that can be answered quickly, then we can move over to Mr. Peterson. You can come back to it. I'm fine with that.

[Bruce Christie]

If the committee agrees, perhaps we can come back to it once we get into the clause-by-clause part of the discussion.

[The Chair, Liberal, Mark Eyking]

Go ahead, Mr. Peterson.

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

Thanks again for being with us.

I have a couple of questions.

The dispute settlement mechanism was one of the changes from the original TPP agreement. Can you briefly elaborate on the differences between the old ISDS and what we have now in this new agreement?

[Bruce Christie]

I'm going to call on the negotiator who is responsible for the ISDS provisions and who can provide more precision to answer your question.

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

Perfect. Thanks, Mr. Christie.

[Julie Boisvert, Deputy Director, Investment Trade Policy, Department of Foreign Affairs, Trade and Development]

The ISDS process is the same. In the original TPP, the scope of potential dispute had been broadened to include investment authorizations and investment agreements. Those two provisions were suspended. That's why there seems to be many suspensions in the investment chapter, but it's all references or definitions, and then the specific clause.

Those were the only elements that went beyond the usual investment chapter that Canada has done in the past. They were suspended, and everybody agreed to it.

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

That's one of the 22 suspensions. When we talk about it, that's one of them.

Thank you for that. I have one more question.

The importance of it being one of the first six has been explained already, but can you elaborate on the importance of the agreement from an economic standpoint beyond the increase in the GDP that you talked about—$4.2 billion over the long term? Is there any analysis, or a concept economically, that this is a good deal—not only because of the economic impact of the deal, but because we're also negotiating NAFTA and this is a good way for Canada to diversify its markets, and there's value in that on its own? Has that been analyzed at all? Is there any way to quantify what that value might be?

[Bruce Christie]

Our office of the chief economist did an economic study looking at what the impact on trade and investment into Canada will be as a result of the ratification implementation of this agreement. We looked at how, especially given the fact that the United States had decided not to participate in the agreement....

We're anticipating through the study that yes, it's been reported that there will be some initial losses in the auto sector, but there will be significant gains in exports for Canada in key export sectors such as beef, pork, dairy, other agricultural products, forestry, lumber, fishing, mining and extraction, manufacturing, and services.

We see significant increases. I can give you some of the numbers. We see a 9.3% increase projected in agriculture, 36.6% in beef exports, 29% in pork, 10% in forestry and lumber, etc.

Through the economic modelling performed as part of the study done by Global Affairs Canada's chief economist, we see significant gains in our key export sectors as a result of this agreement.

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

Thank you for that. I'm probably out of time.

[The Chair, Liberal, Mark Eyking]

We'll now go to Mr. Carrie.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much, Mr. Chair.

I want to take this opportunity to thank the officials here. I know it's been quite a busy time, and the hard work you've put into this file is extremely important.

I want to talk a little about the historical context, because, you know, hindsight is always 20/20. In November 2015, just a couple of weeks after the election, Mr. Trudeau and Mr. Obama had their first meeting, and I'm going to put a quote into the record here. Mr. Obama said, seated next to Mr. Trudeau in a small room following their first formal meeting:

We are both soon to be signatories to the TPP agreement, and that's another area where we can continue to have important discussions. I know Justin has to review what's happened, but we think that after that process has taken place that Canada and the United States and the other countries that are here can establish the kind of high-standards agreement that protects labor, protects the environment, protects the kind of high-value-added goods and services that we both excel at.

Now, this was a year before the election in the United States—and I know the President and the Prime Minister at the time were BFFs, and I think they still talk and get good advice—but one of the reasons that things were not moved forward was these other side agreements, so to speak.

I was wondering if you could comment on the big structural differences between the original TPP and the CPTPP. What are the big differences we're getting now that, if we signed on then, would cause that much of a difference? As my colleague was saying here, right now we're stuck in this NAFTA situation, and if we had signed with a willing president way back then, we may have been able to avoid some of this really stressful stuff that our industries have to face right now.

[Bruce Christie]

There aren't really any structural differences between the two agreements.

As I mentioned, after the United States announced its withdrawal or its intent not to ratify, Japan brought us together to discuss at the ministerial level how we could continue this process and not let all the good work go to waste. All of us who were dealing bilaterally with the United States through these negotiations and the original TPP made concessions in areas that we would have preferred not to. In the case of Canada and other countries, these concessions were bilateral in nature because we were negotiating bilateral access between the United States and Canada. I think it's fair to say that Canada really championed the process through the negotiations over the past year to lift the suspension of issues and provisions that were really unfavourable to us, and they were less meaningful to other commercial partners among the group, given that the United States was no longer there.

That was a very prolonged negotiating process. Some countries didn't want to see many provisions suspended at all, because they wanted to keep the door wide open for the United States to join. Others felt that it was better to suspend the provisions based on the commitments that we undertook in the TPP that were really bilateral in nature, but the TPP agreement remains. It's incorporated into the CPTPP by reference. All of that still exists. All we've done is lift 22 suspended provisions until such time as we agree to bring them back, and we set up a different legal instrument to bridge the gap between the two agreements and to deal with such issues as accession and whatnot.

[Colin Carrie, Conservative, Oshawa, ON]

That was kind of my follow-up.

Do I have time?

[The Chair, Liberal, Mark Eyking]

If it's a quick one. We're running late.

[Colin Carrie, Conservative, Oshawa, ON]

Should Canada support the United States' accession to the CPTPP if it seeks to join the agreement? How would it likely affect Canada?

[Bruce Christie]

It is a hypothetical question you're posing. I have not seen any signals today under the current administration that the United States is interested in joining. Even if the United States decided under the current administration that it wanted to come back to the fold, we would expect that they would immediately want to lift the suspended provisions, and I would expect on top of that that they would make additional demands, because I don't think the current president likes the CPTPP agreement.

In terms of our view—and I don't speak for the country—my own personal view is that we would welcome any country to join this agreement if they're prepared to take on the high-standard, ambitious commitments made in the agreement. If they're not prepared to do that, then I don't think they'd be welcome to negotiate an accession process with us.

That said, the agreement was originally structured so it could expand. Hopefully one day, or ideally one day, it could include all 21 APEC economies, plus others. You heard from my opening remarks that the United Kingdom, which does have an island in the Pacific, has expressed an interest in joining if they separate from the European Union.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you very much.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Carrie.

I'm trying to get to clause-by-clause study by 12:00, but Ms. May has said she would ask one small question, which will have a short answer, unless anybody objects to it.

Go ahead, Ms. May.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Thanks, Chair. This is a follow-up to Ms. Boisvert's comments.

Ms. Boisvert, I think I took the note down correctly, the one in which you referred to this TPP ISDS as not different from the usual ISDS we have done in the past. I don't think there is a usual ISDS. I'd love to be enlightened. We have the completely secretive chapter 11 of NAFTA and the very secretive Canada-China investment treaty. We have the more open CETA agreement, with its innovation of an investment court and access to open hearings, although it does not allow interventions from friends of the court, which was originally proposed and taken out. In between, we have a lot of different agreements.

In your mind, what is the usual ISDS we have done in the past?

[Julie Boisvert]

A model was put in place in the original NAFTA, which we then followed. It's the same thing for the bilateral agreements. A model was put in place in 2004 that we then followed for FIPAs.

I think you were asking about transparency with respect to the process for the ISDS claims. There are transparency provisions in CPTPP. They were in the TPP agreement. They include open access to hearings and to documents being made available to the public.

The key difference, as I said earlier, between what was originally agreed to in the TPP agreement versus what we had done before was the reference to investment agreements. There could have been a breach-of-contract dispute between an investor and a country—for example, Canada—or an investor could have made a claim if an investment authorization had been withdrawn—for example, under the Investment Canada Act using the net benefit test.

Those were suspended because we had never included such provisions before. The Canadian position is to not include them. That's why we convinced the others to suspend them too.

[The Chair, Liberal, Mark Eyking]

Thank you very much. That's going to be it for the dialogue back and forth.

Mr. Christie, I thank you and your group for coming here. I understand some of you are going to stay here for our clause-by-clause study.

We're going to suspend for four or five minutes so they can get their seating arrangements done, and then we're going to come right back. Feel free to grab a sandwich, and we'll get back to it.

[The Chair, Liberal, Mark Eyking]

How many clauses do we have?