Thank you, Mr. Chair, for the opportunity to speak to the committee today about the Trans-Pacific Partnership Agreement.
I'm speaking to you today, as you mentioned, as the chair of the St. John's Board of Trade. The St. John's Board of Trade is the voice of business in Newfoundland and Labrador and an advocate for sustained economic prosperity.
As a business owner and an active member in the board of trade for many years, I'm passionate about the components to make up a healthy economy. The opportunity to work with the Asia-Pacific region to make a meaningful impact on our economy is something the St. John's Board of Trade fully supports.
The main principle for trade is what economists call “comparative advantage”. That is the ability of an individual or a group to carry out a particular economic activity, such as making a specific product or service, more efficiently than another activity. In other words, find out what you're best at and export it. But it's a two-way street. If we have a specialty or an area of expertise and are able to trade that with another country for their specialty or area of expertise, then both nations benefit.
Across this province and country there are countless examples of where we have been more successful working together. There are many reasons that we support a TPP agreement, but in the time I have today, I will outline three.
The first is about economic opportunity. Trade is an area in which we in Newfoundland and Labrador have not been performing particularly well of late. In many parts of Canada, and in Newfoundland and Labrador, there are opportunities to enhance the number of companies that export. Part of the problem has been our failure to diversify trade towards high growth markets like the Pacific Rim. The Asia-Pacific region is an increasingly important market for Newfoundland and Labrador and Canadian businesses. In 2014 Newfoundland and Labrador businesses exported to nations such as Japan, Chile, and our biggest trading partner, the U.S., to a tune of over $7 billion. However, that is only three of the 11 other nations in this trade partnership. We could be trading with many more. The TPP offers a huge growth potential for our province and for our country. If Canada does not ratify this agreement, these other 11 nations will offer each other privileged arrangements that we will be locked out of. A TPP that eliminates trade barriers will open up new opportunities for businesses in Newfoundland and Labrador, Canada, and the Pacific.
Another reason that we support the TPP agreement is modernizing our international trade agreements. Innovations and technology have changed the world in which we now do business. Today over 10% of goods traded and 60% of services traded are happening online. Knowledge industries like financial services, management consulting, and information technology are among Canada's top five fastest-growing export sectors. That said, nothing in our current trade agreements prevents countries from blocking data flows or imposing local data storage obligations. A TPP would help extend free trade into the online realm and bring our international trade agreements into how we do business in today's technologically advanced world.
The third reason is similar to the position of the Canadian Chamber of Commerce. A TPP would be favourable for environmental reasons. The TPP requires participating countries to maintain and enforce strong environmental laws and regulations under threat of economic sanction. One environmental group went as far as to say that TPP has the strongest environmental provisions of any trade agreement in our history.
In conclusion, we recognize that there are those that could be negatively impacted by such an agreement, and there are tough choices to be made ahead. I echo the words of the Canadian Chamber of Commerce's CEO, Perrin Beatty, who said: “There are workers and companies who face challenges, and those concerns deserve respect, but if we stop doing trade negotiations except in cases where no one is affected, we stop negotiating at all.”
We think this province and country would fare much better for generations to come by taking advantage of opportunities available to us through the TPP. We at the St. John's Board of Trade support the TPP agreement and hope for a swift ratification.
Thank you very much for the invitation and for your time this morning.