International Trade Committee on Feb. 23rd, 2016

[Brian Kingston]

I think it's definitely a good starting point for further integration into the Asia-Pacific region. I thinks it's a little bit difficult to tell right now if China would be able to meet some of the standards of the TPP as negotiated. I think it would be a good template, but I'm not sure if you would be able to apply this agreement exactly to an FTA with China.

[Randy Hoback, Conservative, Prince Albert, SK]

The reality is that dealing by ourselves with China on a bilateral wouldn't give us a lot leverage, whereas with TPP behind us we would have a lot of leverage. Is that correct?

[Brian Kingston]

Absolutely. That's why, for example, we got that access to Japan. It was because we were part of the TPP. We probably had more leverage being there with our partners in the U.S., whereas if we were on our own, it would be harder to get that type of access.

[Randy Hoback, Conservative, Prince Albert, SK]

Is it fair to say that NAFTA also brought strength to TPP negotiations by having our partnership with the U.S. and Mexico already done and in place?

[Brian Kingston]

Definitely, yes.

[Randy Hoback, Conservative, Prince Albert, SK]

So it's very important that we have our ducks in a row in an appropriate order before we proceed with other trade agreements. Is that fair to say?

[Brian Kingston]

Yes, I think so. As I said in my remarks, the North American partnership has been critical to Canada's prosperity, so anything we can do together as three countries and build on that platform will only enhance our economic competitiveness.

[Randy Hoback, Conservative, Prince Albert, SK]

I'm going to give my two minutes to Mr. Ritz.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

It's good to see you, Brian. Thank you for your presentation.

You made the comment that trade, both import and export, drives innovation and efficiencies. I couldn't agree more. You also had a figure of about $60 billion in gains through the TPP framework.

Have you put any dollars to the fact that we would face a severe erosion of trade agreements if we didn't do this? Is there a dollar figure that you would put to that?

[Brian Kingston]

That's an excellent question. We don't have that dollar figure. I've been trying to see if anyone has looked into that, but I think it's one of the huge things that we need to be aware of with the TPP. Yes, there's the benefit to doing it, but I think that the bigger downside is what happens if we're not a part of this.

I don't know what the dollar figure is, but I imagine that the erosion of supply chains would be significant.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

From an agricultural perspective, before we had our agreement with Korea, which is also now sniffing around the edges of the TPP, we lost $1.5 billion of pork access because we weren't a part of that supply chain.

When we look at global supply chains across the board under the TPP, I would be very interested if you could quantify those numbers. We could take a guess at it, but you would probably have the ability to do that. If you do, would you send that in to this committee?

[Brian Kingston]

Absolutely.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Good. Thank you.

[The Chair, Liberal, Mark Eyking]

You still have a half a minute, if you have anything else. No?

Okay, we're going to move over to the Liberal Party for six minutes.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Thank you, Mr. Chair.

Thank you, Mr. Kingston.

You mentioned that it's very important for us to have deep ties with the U.S. and Mexico. What will the consequences be if we are not part of the TPP?

[Brian Kingston]

Our whole economy has oriented itself to trade with the U.S. and Mexico, with 70% of our exports going there. By not being part of the TPP, we suddenly erode that special preference that we've had with the U.S. and Mexico, and we enlarge the North American platform, if you will, to this larger TPP group.

One example would be that if you're a company and you're looking to build a new facility, say in North America, and you have a choice between Mexico and Canada, if Canada's not part of the TPP, you have all kinds of rules of origin implications. If you put that plant in Mexico, you can use inputs from all of the TPP partners, and those inputs can come in duty-free. If Canada's outside of the TPP and you put that factory here, you can only take inputs from Mexico and the U.S. duty-free—and our other trade agreements—but not the broader TPP network.

That right there, I think, would have a significant impact on Canada's economic outlook.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

I come from a professional engineering background. On the second front, you mentioned only two sectors that will benefit from this. One is the financial sector, and the second that you touched upon is the architectural sector.

How would it negatively affect many of the trades and technical fields out there? You talked about positives for these two sectors, but are there negatives that you want to bring to the table?

[Brian Kingston]

With regard to sectors that would be negatively affected, I can't think of any off the top of my head. Canada has generally low tariff protection as is, so we would be getting rid of those tariffs. I can't see it having a major impact on particular sectors.

Every trade agreement is going to have its pros and cons, of course. I can't think of any—

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Say, 10 years down the road, how would it help our young people coming out of university to be competitive in the international scene? That is my question.

[Brian Kingston]

I think what it does in helping our young people.... For example, we've been looking at the Asia-Pacific region for the past five years as an area of aggressive growth. By Canada being a part of this deal, we're giving our companies and our young people access to that market in a way that they've never had before.

If you ask me, that's the future of the global economy. That's where we're seeing the rise of the middle class. I think that it creates huge opportunities for our young people.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Countries like India expressed interest to get into the TPP, but out of 189 countries, India ranks 130 for ease of doing business, and 178 out of 189 when enforcing agreements.

How can we, our businesses and companies and young people, manage these situations if we have those countries as part of the TPP?

[Brian Kingston]

In terms of enforcing rules and so on?

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Right.

[Brian Kingston]

That can be a huge challenge.

I think that's why it's important to have trade agreements in place. It allows companies to use a dispute mechanism, and if there are issues in terms of enforceability or non-tariff barriers, the agreement sets that legal framework so you can try to enforce the rules.

I think that it's critical. I'd much rather have this framework in place than not have it at all.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

I'm going to pass my time on to Madam Lapointe.