Evidence of meeting #15 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tpp.
A recording is available from Parliament.
9:20 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
I agree. I just wondered if there was some insight, or do you think it would be a net benefit or a net detriment to Canada? I'm hearing that it's probably, in your opinion, a net detriment.
9:20 a.m.
Former Co-Chief Executive Officer of Research in Motion and Co-Founder of the Institute for New Economic Thinking, As an Individual
As a practitioner selling Canadian ideas globally, and what I was about to comment on the pharma stuff and transparency, I look at this agreement through the eyes of somebody who is engaged in these kinds of situations globally and I can see how we'll get out-lawyered and outplayed in these agreements. I cannot see a situation where Canada will not be a colossal loser permanently and systemically under these commitments.
9:20 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Let's just say that TPP isn't there and we're starting from ground zero and we have a strategic policy in place that puts a strong emphasis on innovation. What should the Canadian government do to make sure that the Canadian innovators are the winners in any deal, as opposed to the losers?
9:20 a.m.
Former Co-Chief Executive Officer of Research in Motion and Co-Founder of the Institute for New Economic Thinking, As an Individual
Do agreements that are like CETA, not TPP.
9:20 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
And which facet of CETA? You've commented on the ISDS. Do you prefer the CETA provisions of ISDS?
9:20 a.m.
Former Co-Chief Executive Officer of Research in Motion and Co-Founder of the Institute for New Economic Thinking, As an Individual
Yes.
9:20 a.m.
Liberal
9:20 a.m.
Former Co-Chief Executive Officer of Research in Motion and Co-Founder of the Institute for New Economic Thinking, As an Individual
I'm not an expert on CETA. I've not read it, but it doesn't seem to be as invasive in our marketplace rules and rigidities precisely because the European countries would be uncomfortable with that kind of loss of sovereignty. So it's the degree to which they run our country on IP and administration and then take the ISDS outside of the country. Those were the things that I read in TPP that gave me great, grave concern.
From my understanding of CETA, though—and I have not read it like I did TPP—I understand those are not there, but I think Professor Geist or others would know CETA better.
9:20 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Thank you. That's a good segue. I'm going to ask Professor Geist a couple of questions.
You mentioned in your comments that during the negotiations there were certain issues on which Canada stood alone. What were some of those issues?
9:20 a.m.
Canada Research Chair in Internet and E-commerce Law and Professor of Law, University of Ottawa, As an Individual
There were a bunch of issues that we had opposition on in fact. We know this only through some of the leaked documents. Not all chapters were leaked, but on intellectual property, Canada tried largely to stand for its own current domestic rules as long as it could. The goal in many of these negotiations is to say we'd like to see our rules reflected. In fact, I think it is worth noting that this is the approach that virtually all countries take. They want to see their rules reflected elsewhere, which may benefit their companies as they operate elsewhere.
We lost in many instances on that front. We lost on term extension. We lost on the issue of digital rights with respect to rights management information, on which we stood alone.
There were a number of those kinds of issues, on which sometimes we were with a couple of other players and sometimes we were on our own. Then when you saw the progression of the text, and it's difficult because of course this is based just on leaks, you saw that at the end of the day we were forced to cave.
9:25 a.m.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
You also mentioned the term extensions and the idea that they are of net benefit to the U.S. but detrimental to Canada. How is that measured?
9:25 a.m.
Canada Research Chair in Internet and E-commerce Law and Professor of Law, University of Ottawa, As an Individual
It is measured in terms of the costs, the additional fees that people are going to pay as works stay within copyright protection for an additional 20 years. At the moment in Canada, we are talking about the entire life of the author plus 50 years. That meets the international standard. That additional 20 years will result in extra costs. We've seen it modelled in other countries. The overwhelming majority of economists who look at this issue recognize that nobody will wake up this morning and start thinking about writing the great Canadian novel and decide they won't do it because their heirs would get only 50 years of protection rather than 70 years. It just doesn't create an incentive for any additional kind of creation or creativity.
I wanted to pick up on the ISDS issue. You asked about examples. The Canadian experience is the example. We are being sued right now by Eli Lilly with potential liability in the hundreds of millions of dollars. Consistently, where ISDS has been applied, we have been a target, and we have lost some of those cases. We ought to recognize that the approach that we find in ISDS is to give foreign companies more power in our own country than our domestic companies have. It is rather astonishing to think that we would establish rules that would allow foreign companies to pursue certain grievances when our own domestic companies might not have the same power to do so.
9:25 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, sir.
That ends the first round. The second round starts off with the Liberals.
Madam Lapointe, go ahead for five minutes, please.
9:25 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you, Mr. Chair.
I'd like to thank Mr. Balsillie for being with us this morning. I appreciate it that we have this chance to get your comments on the Trans-Pacific Partnership Agreement.
In your presentation, you said that you weren't consulted at all about innovation. It's quite strange to think that we could consider being party to an agreement like this with 12 countries when innovation wasn't consulted.
I'd like your comments on this.
9:25 a.m.
Former Co-Chief Executive Officer of Research in Motion and Co-Founder of the Institute for New Economic Thinking, As an Individual
One of my comments is that Canada does not have sophisticated collaboration frameworks for the innovation economy. Therefore, there is no collaboration and communication between innovators on what they need to be successful.
You have to understand that the innovation economy is a set of rules, and these rules are changed and modified dozens of times every day. You have a market only because of rules. What every sophisticated innovation economy does is to tweak these rules in a whole bunch of different places, which I mentioned in my commentary, to advance their companies. You cannot advance your companies in an agreement like this if you don't have an intimate collaborative relationship with them. The U.S. had, I think, 26 different working groups that were actually reviewing text and advancing it. It was a catastrophic flaw in our approach to the negotiations, which guaranteed failure on the innovation front.
In other sectors, like maybe dairy, or agriculture, or whatever, I'm sure there was extensive collaboration and they made sure that their elements got in there, but the innovation economy did not.
9:25 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you.
A little earlier, you said that you by far prefer the European free-trade agreement to the TPP, and said that there was a huge difference when it came to innovation. You would prefer that we stay with Europe.
You also mentioned that countries like Germany, Korea and Japan are forerunners in innovation because they seem to have successful innovation policies.
I'd like to understand this matter. At some point, we need to move forward and make decisions. Could you comment on that?
9:30 a.m.
Former Co-Chief Executive Officer of Research in Motion and Co-Founder of the Institute for New Economic Thinking, As an Individual
I'm not saying who we should trade with, I'm saying what should be in our innovation strategies of approach and what should be in our trade agreements that advance our innovation strategies.
From what I know of CETA, I like its approach much more than I do the TPP's, so I would love to see CETA's frameworks in play for these new trade agreements. What I said in terms of innovation economies was that, as we create a complete innovation ecosystem in Canada, we should look at what the successful innovation economies do and adopt their approaches.
9:30 a.m.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
In short, if we had the chance to go back to the negotiating table, what would you suggest? You spoke about innovation, but I'd also like your comments on this.
Mr. Geist, do you have any comments?
9:30 a.m.
Canada Research Chair in Internet and E-commerce Law and Professor of Law, University of Ottawa, As an Individual
I want to pick up on this issue that somehow the CETA is the model. I think CETA has some things that are better in it, not the least of which is an improved ISDS and the fact that it grants us access to a market with which we don't have trade agreements in place right now of the scale that we have elsewhere.
One of the things about the TPP, one of the reasons why you're finding economic modelling that suggests that the gains are negligible, is that we already have trade agreements with half the TPP countries. We already have it with the United States, with Mexico, and with a range of other countries.
I'd actually submit that the best model for a trade agreement isn't CETA, it's actually the South Korea trade agreement, which does point to the fact that there is the possibility of an alternate trade strategy that takes us into Asia and looks at the most innovative Asian economies. We can conclude trade agreements with those countries because we have one with South Korea, but what we recognize there is that the negotiations and the kind of result that we get don't venture into some of the areas that the TPP does. What it does is try to identify where our respective interests lie, and we try to reach an agreement.
So when people talk about what we can do if we're outside of the TPP, we can do those kinds of things. We can pursue China, as the government has talked about. We can restart the Japan trade negotiations. We can continue what we've been doing with India and, in fact, come away at the end of the day with a far more strategic and effective trade framework in that region with some of the largest economies and fastest growing economies, one that actually puts us at an advantage even as against some of the other TPP countries.
9:30 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you, Madam Lapointe. Your time is up.
We're going to go over to the Conservatives and Mr. Ritz for five minutes.
9:30 a.m.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Thank you, gentlemen, for your presentations here today.
Mr. Balsillie, you made the statement that there would never be another large tech company in Canada should we ratify TPP. Would it then follow that there would be no tech companies in any of the 11 countries as well, because they're under the same rules?
9:30 a.m.
Former Co-Chief Executive Officer of Research in Motion and Co-Founder of the Institute for New Economic Thinking, As an Individual
My read of TPP, based on my experience as a global tech entrepreneur, is that the structure of the agreement enshrines the benefits and the positions of pre-existing winners and it makes it very hard for other countries to join that club of IP exporters.
9:30 a.m.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
There are other countries that are lining up to join TPP. That's another argument.
You also say that Japan has a very successful innovation strategy that Canada should emulate. Would we not be able to do that more easily with an agreement, whether it's multilateral or bilateral, with countries like Japan?
9:30 a.m.
Former Co-Chief Executive Officer of Research in Motion and Co-Founder of the Institute for New Economic Thinking, As an Individual
No, it will do precisely the opposite, because it enshrines the pre-existing positions of people who come into it.
9:30 a.m.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Well, no, their patents would carry on, but I don't understand how that would stop entrants who may look at Canada's political climate or Canada's taxation, banking, or something and do their investment here as opposed to Japan or—