International Trade Committee on Oct. 6th, 2016

[The Chair, Liberal, Mark Eyking]

Thank you, sir. Those were good questions.

We're going to move over to Ms. Ludwig.

You have the floor.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Thank you.

Thank you very much for excellent presentations.

My questions are a little different. When we were in the Atlantic region and we were doing our consultations, we heard from the Oxford Frozen Foods Limited. It was David Hoffman in the area for blueberries. We also heard from Mr. Burke regarding lobster and snow crab. They talked about not only the tariffs currently on their products in countries like Japan but also the significance of rural communities.

How might ratifying or not ratifying the TPP impact our rural communities that rely on, if we're looking at the east coast, blueberries, forestry, and fisheries for snow crab, groundfish, and lobster? How are they protected through the trade policy?

[Kirsten Hillman]

I don't know exactly what testimony you're referring to and what they were raising.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

I'll give you an example.

Mr. Hoffman said that, in Nova Scotia, two-thirds of the world market are wild blueberries and 90% of Nova Scotia's blueberries are exported, but currently right now in Japan the duty on blueberries is 30%.

[Kirsten Hillman]

Thank you. That's helpful.

As I was saying in my opening presentation about access for Canadians to new markets, we are hearing and we have heard not universally but almost universally support for the TPP. There are two reasons for that.

One is that there are some new significant high-growth markets in the TPP that we don't have FTAs with. Japan is obviously the biggest of them, but there's also Malaysia and Singapore, and some of these countries have very high tariffs. If you look at Mr. Downs' study, he has some charts in there that show you the average tariff rates of some of these countries. Our smaller communities that rely on the export of specific goods, and some of these very highly prized specialty goods in some of these markets, tend to be very much in favour because they will be able to get their product to market more cheaply and have a competitive advantage over others.

The other thing we hear—and I don't know if you have heard this or not but we have heard it quite a bit—is that there is quite a bit of hope in the Canadian export community that the TPP will grow to include more countries. There are a lot of countries in that region that I think Canadian exporters are quite interested in looking at. At least some of the conversations we have had have been about the actual opportunities that could exist under the agreement and then the opportunities that could exist if it were to grow.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Okay.

Just as an aside, we heard from one witness who came before the open mike, who said.... I'll just find the quote. I can't find it now. He was a member of the Council of Canadians and he said that probably never before had the committee heard this position, but he was going to put it forward that the trade deal is partially about the U.S. control over China and a role for the military.

Have you heard anything on that basis?

[Kirsten Hillman]

No, I've never heard that.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Okay, thank you.

The concerns that you've heard, or that have been expressed to government through the consultations and with the work that you've done, how have they differed from previous trade agreements? Is it similar for dispute mechanisms and intellectual property? Are they any different than the way we've been negotiating other trade agreements?

[Kirsten Hillman]

No, not really.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Okay.

We heard from Paul Gaunce in New Brunswick, from the New Brunswick dairy producers, and we also heard from the dairy producers, I believe, in Nova Scotia. Here was the question that was posed: if there is a compensation package, might they be penalized if they also wanted to diversify at the same time? When I spoke with Paul, he said that they were not opposed to TPP, in fact they were willing to accept it, as long as there was support for them. He also said they wanted to see their industries diversify, but not be penalized if they were being compensated at the same time.

[Kirsten Hillman]

Do they mean penalized under the TPP or penalized...?

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

That they would not get the same level of compensation if they were trying to diversify their efforts at the same time.

[Kirsten Hillman]

That's more of a domestic policy, political question, to be frank. How it is decided and what is decided with respect to helping sectors adjust, and the balance of that, is not our area of expertise. What I can say is that in providing support to Canadian industries of any kind, we do have to abide by rules with respect to subsidies. There are some rules with respect to subsidies at the WTO, under NAFTA, in the TPP, in the CETA, and in all of our trade agreements, but they are straightforward. You have to be sure you follow those rules, and we do always.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

I have one last question—

[The Chair, Liberal, Mark Eyking]

No, don't try to sneak that one in there. You're time is up, and we're going to go over to Mr. Hoback.

Go ahead, you have the floor.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair, and thank you witnesses for being here.

The first thing is that I'll just go back to the study. The way I read it, if we're not involved, we lose $5.3 billion. If we are involved, we gain $4.3 billion. There's a $9.6-billion swing in our economy with this deal. Is that correct?

[André Downs]

Yes.

[Randy Hoback, Conservative, Prince Albert, SK]

Okay, so that settles that. That tells us why—

[André Downs]

You have to understand that when you look at TPP, the status quo is not an option. You're either in or you're out.

Essentially, when you analyze the drivers of your decision, you have to look at the difference between the two scenarios. Usually the status quo is an option when we're talking about policy options, but in this case it's not.

[Randy Hoback, Conservative, Prince Albert, SK]

I'm glad to see that $5.3-billion number because a lot of times some of the anti-trade people say, “We've been part of this agreement and we've had no gains”. They've never done the analysis on what it would have been like if we wouldn't have been part of that agreement. What would we have lost? They never take that into their formulas. They always say, “We didn't gain anything”. Wait a minute, we didn't lose $5.3 billion, like we would have if we didn't participate in this. Sometimes it's how they distort the answers, right?

[André Downs]

TPP is a bit different because it encompasses major trade partners, i.e., the U.S. and Mexico, so there's a major impact on existing preferences. That's why, essentially, you have to look at both scenarios.

[Randy Hoback, Conservative, Prince Albert, SK]

In regard to the perception that it was done in secret, who was told that they couldn't participate in consultations? Have you ever told anybody, “No, we can't talk to you”?

[Kirsten Hillman]

No.

[Randy Hoback, Conservative, Prince Albert, SK]

Anybody who wanted to be informed or be consulted, right from day one, if they had brought that up, and said, “I have an interest here, I have a concern there”, they would have been included in the process. Is that fair to say?

[Kirsten Hillman]

Yes.