International Trade Committee on Oct. 25th, 2016

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

That's good. You're very diversified.

My understanding is that our top imports from New Zealand are beef, wine, and lamb, which are three of Mr. Ritz's favourite things. That's probably not coincidental, but it might be.

Our exports to New Zealand, or our top three based on 2015, are potash, lumber, and pork. Those are big industries for the Canadians, and I presume your exports are big industries there.

You mentioned that there are niche market opportunities for Canadian exporters that will result from the TPP. Can you elaborate on what some of those might be?

[Daniel John Mellsop]

Sure. There are a couple of points.

The first one is that Canada has such a strong brand in the Asia-Pacific region. On the agricultural side, for example, you're well known for your food safety and food security issues. That will work well to your advantage in Asia.

The second point I wanted to make was that New Zealand has been actively trading with Asia for many decades now. We know the market extremely well through our free trade agreements. There are New Zealand businesses that will be interested in partnering with Canadian companies on joint initiatives in the Asia-Pacific region, whether they be in the goods trade or perhaps more likely in the services and investments space.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you. I think I have time for one more question.

You indicated that there was consultation with your indigenous people, the Maori. Can you expand on that? What was the process, and what shape or form did those consultations take?

[Daniel John Mellsop]

Sure. The Maori word for “meeting” is “hui”. I can give you the exact number later on, but I think there were around a dozen of these meetings with the different Maori communities around New Zealand. They were either led by the chief negotiator or by the minister of trade. They were to consult specifically with the Maori groups on what their interests were.

The Maori exporters are a significant part of our export community. They have an asset base of around $42 billion. They're very interested in things like forestry, seafood, wine, and tourism, so there's a lot of export interest there.

There are also some questions around sovereignty issues that came up. We were able to reassure them that the TPP doesn't undermine our Treaty of Waitangi, which is our founding agreement between the crown and the Maori people in New Zealand. We were able to reassure them that the TPP did not in any way undermine that arrangement.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Peterson.

We're going to move over to the NDP now. Madame Trudel, you have the floor.

[Karine Trudel, NDP, Jonquière, QC]

Thank you, Mr. Chair.

Thank you very much for being here, Mr. Mellsop.

In my riding, the main source of revenue is milk production. As you certainly know, we have a supply management system in Canada. Please correct me if I am wrong, but as I understand it New Zealand eliminated supply management in the 1950s.

[Daniel John Mellsop]

We didn't have the same arrangement as you have here with supply management, but what we did do was remove all our agricultural subsidies in the 1980s. We didn't provide any industry support under specific sectors. That enabled the farmers of New Zealand to move into the most productive and profitable areas of production.

Back then we were supplying a lot of wool around the world. Wool prices went down. The economy went down as a result, but deregulating the agricultural sector enabled the farmers to move into more profitable sectors like dairy production or wine production.

[Karine Trudel, NDP, Jonquière, QC]

If the TPP is concluded, how can supply management be adapted to it? How can this agreement and supply management co-exist for everything to run smoothly?

[Daniel John Mellsop]

To be quite frank, we were quite disappointed when the TPP came out. Our objective was to eliminate all tariffs on all products in the TPP region, including on dairy, so we were disappointed that we didn't get a strong outcome on dairy. The agreement is still overwhelmingly of benefit to New Zealand. The outcome here in Canada for dairy was quite a small opening of the market, so I wouldn't expect any significant impact on the supply management system as a result of TPP.

[Karine Trudel, NDP, Jonquière, QC]

Thank you.

[The Chair, Liberal, Mark Eyking]

You have three minutes, if you want.

[Karine Trudel, NDP, Jonquière, QC]

That's okay.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to move over to Madam Ludwig. Go ahead.

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

Good morning, Your Excellency. Thank you so much for joining us here today.

In terms of exports to Australia, what percentage of your exports are destined for Australia?

[Daniel John Mellsop]

I think it's around 18%, off the top of my head.

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

I was just trying to see if there's any comparison between New Zealand's relationship with Australia and Canada's relationship with the United States, because we are heavily dependent. Many of our exports go south of the border, but we are physically aligned geographically.

One thing we've heard about from a number of companies across the country has been in the area of trade training. As your population is 4.5 million, how many of your companies would be considered small to medium-sized businesses, roughly, as a percentage?

[Daniel John Mellsop]

I think the answer is just about all of them.

In terms of the North American definition of a small or medium enterprise, most of them would fit into that category. There are probably 100 or so that would be in the large company category.

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

Thank you. That one is very similar to Canada. Roughly 98% of Canadian businesses have fewer than 100 employees.

One thing we've heard from exporters would be in the area of preparation for trade, in preparing our small to medium-sized businesses to not only know the information they need to know to enter those markets, but also to sustain themselves in those markets and then diversify their product lines. They could be emerging markets, or they could be well-established markets for other industries.

What is your government doing to support the small businesses, or I guess in your case all businesses, for export preparation and sustainability?

[Daniel John Mellsop]

That's a huge focus for us in terms of my own government department. We have an entire section that's dedicated to free trade agreement implementation. It's also integrated across all the economic agencies under one umbrella. The government policy that leads all of this is called the business growth agenda. We have one policy to govern them all, if you like. It focuses very much on getting the most out of these free trade agreements and helping the businesses to succeed in those markets.

In some markets it's very challenging. If you look at our free trade agreement with China, for example, which we signed in 2008, you see the resources that we've had to put in from the government side into the market in China are hugely significant. We've opened, I think, four new posts across the country, and put in agricultural officials, trade promotion officials, to help the New Zealand businesses and customs officials. There's a lot more work required.

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

Thank you.

Kirsten Hillman was the chief negotiator for TPP for the Canadian government. She had submitted a brief, and in that brief she said, “Under the TPP, facilitated access into Canada would be limited to highly-skilled business persons that have either invested substantial capital or have pre-arranged contracts or employment offers in Canada.”

Do you hear much concern from the people who have come before your committees regarding labour mobility or labour shortages?

[Daniel John Mellsop]

It's something that's discussed regularly in New Zealand.

I think the context, in some ways, is similar to here in Canada. Our countries are multicultural and embrace immigration. We know that both of our countries need inward migration for economic development and the investment that goes along with that.

We're very strong and positive about the clauses around labour mobility, including the provisions that give New Zealanders the opportunities to work overseas. We would be happy for an even more ambitious arrangement in the services area. Our services exports, which labour mobility is a big part of, are growing much more rapidly than the goods trade. They're growing almost three times faster.

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

Thank you.

Looking at the TPP going forward, if it is ratified and Canada is not in the deal, but we do have Japan and the United States, how might that impact your relationship, and vice versa, on trade with Canada?

[Daniel John Mellsop]

From the High Commission perspective, that would be very disappointing.

As I mentioned right at the start, the trade agreement is the missing link between our two countries. Our relationship in many other areas is so strong. Business communities, both here in Canada and New Zealand, are keen to do more business with each other.

I'll use our indigenous communities as an example, because I think it's one that's growing very rapidly. Your indigenous communities here are very keen to do business with the Maori people in New Zealand, so having a trade agreement that can facilitate that sort of co-operation is something that we want on both sides.

I think it would be very disappointing if we didn't have that bilateral relationship squared away with a trade agreement.

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

Thank you very much.

[The Chair, Liberal, Mark Eyking]

Thank you.

Sir, that wraps it up. We thank you for coming today. I think Canada really appreciates your representing New Zealand here in Canada over the last while. We look forward to your having a good posting in Jamaica

Sir, do you have any last comments you're willing to make?