Thank you, Mr. Chair and committee members. Thanks for the invitation to be here today to take part in your consultations.
As you know, the Business Council of Canada represents chief executives and entrepreneurs of 150 leading Canadian companies. Our members employ 1.7 million Canadians and are responsible for most of Canada's exports, corporate philanthropy and private sector investments in R and D.
It almost goes without saying that trade with the U.S. is critical to our prosperity. The Canadian economy depends on international trade, and the U.S. is by far our largest trade and investment partner. Trade of goods and services represents 64% of Canada's gross domestic product, with the U.S. being the destination for over 75% of our goods exports alone last year. As a result, the Business Council strongly supports CUSMA, NAFTA 2.0, USMCA—whatever we want to call it—and calls for the swift passage of Bill C-100, for the following four reasons:
First, it protects our market access. When these negotiations were first launched, we really had one overarching recommendation to government and that was “do no harm”. To avoid damaging employment, trade and investment, Canadian, American and Mexican businesses needed to retain their preferential market access and commercial opportunities in each country. By this measure, CUSMA is an overwhelming success. The resulting agreement is based upon reciprocal access and treatment, and no Canadian company will face new tariffs or other market access barriers into the North American market.
The second reason is the ability of this agreement to remove uncertainty from the economy. The ratification of CUSMA will eliminate significant trade uncertainty, which has persisted since these negotiations were launched. According to the Bank of Canada's recent monetary policy report, it is assumed that trade uncertainty will reduce the level of business investment in Canada by around 2.5% by 2021. Given that the U.S. remains a key market for Canadian firms planning to invest abroad, 65% of which were recently surveyed by EDC, we believe that reducing uncertainty in the relationship will be a significant boost for investment and the Canadian economy more broadly.
Third, the agreement modernizes NAFTA. CUSMA will improve the trade relationship by modernizing long-outdated elements of NAFTA. The agreement is based on the text of the TPP, which is our most modern free trade agreement. For example, it contains a chapter on digital trade that prohibits customs duties and other discriminatory measures from being applied to digital products. It also ensures that data can be transferred freely across borders. That's one example of the modern new chapters that were not in the original NAFTA.
Fourth, we believe that the agreement will enhance North American competitiveness. It includes important new provisions that will help Canada, the U.S. and Mexico develop a more productive and mutually beneficial trilateral relationship. As two examples, there are chapters on competitiveness specifically, and a chapter on good regulatory practices that establish committees meant to promote economic growth and strengthen regulatory co-operation. We're calling on the government to develop a robust agenda for these committees and start preparing immediately, so that when this agreement does come into force, we're ready to make progress in those areas.
Before I conclude, I want to comment on timing. Last week, a group of CEOs from the U.S., Canada and Mexico were in Washington to discuss CUSMA/USMCA, to meet with House Democrats, and basically to get a sense of how this is moving through Congress. The message was very clear: The window for ratification is closing extremely quickly. Once we get into the presidential elections of 2020, all bets are off, quite frankly.
Business leaders across North America support the swift ratification of this agreement to keep North America tariff-free, make the economy more vibrant and competitive, drive investment and support the creation of high-value jobs. We're expecting Mexico's Senate to approve the trade agreement this week. We believe that if Canada passes Bill C-100, it will send a strong signal to Congress that this agreement has support and should be ratified.
With that, thank you for the opportunity. I look forward to any questions.