International Trade Committee on Oct. 27th, 2016

[Tony Negus]

As I said, broadly, Australia already has an FTA with China, quite separately. But I think stability in the region is good for everybody, including China. I think it certainly does encourage appropriate behaviour in that part of the world.

[The Chair, Liberal, Mark Eyking]

Thank you.

We'll move over to the Liberals now.

Mr. Fonseca, you have the floor for four minutes.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Your Excellency, our two countries share a rich history, a Commonwealth history, and a friendship that has gone on for many decades. I think we've approached the TPP in very similar ways.

I want to ask if Australia did an economic impact study on the TPP before embarking upon its consultation with its people.

[Tony Negus]

There's been, obviously, very wide consultation and I think between 2011 and 2015, there were over 1,000 briefings and consultations with a wide range of community groups and others in that regard.

Some of the economic modelling says that there will be a 0.7% jump in GDP to Australia, a permanent jump in GDP, and that's about $15 billion. That's from the World Bank that the 0.7% figure was predicted.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Can you tell me a little bit about the consultations that you've done with your indigenous peoples?

[Tony Negus]

There weren't specific consultations with indigenous peoples, but there's a range of different things done with respect to protecting any cultural and indigenous rights in that regard.

Just let me find my notes here.

Like Canada, Australia maintains a range of policy measures in place to facilitate indigenous policy, and protect indigenous rights, and cultural rights, more generally. Australia successfully sought carve-outs protecting the government's ability to adopt measures with respect to creative arts, indigenous traditional cultural expressions, and other cultural heritage, providing favourable treatment in the services sector and according preferences in investment to any indigenous persons or organizations.

There were broad-based consultations across community groups, and indigenous community groups were part of that consultation process.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

Thank you.

The major concerns that we've been hearing in our consultations have been those around ISDS, as well as increased costs when it would come to something like prescription drugs. How have those been addressed in Australia?

[Tony Negus]

Certainly, it won't surprise you to hear there have been issues in Australia as well. The ISDS provisions we think benefit Australian companies investing abroad. The TPP's investment provisions will promote a more predictable and transparent regulatory environment for investment by enshrining principles such as non-discrimination and fair and equitable treatment. The TPP ISDS mechanism contains explicit safeguards protecting Australia's government's right to regulate in the public interest, including regulation in the health environment.

Whilst there's been broad-based support from our political parties for the TPP, certainly the opposition has raised concerns over the ISDS over the period of the consultation process, and it continues to be one of those issues that is raised.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

You commented that you don't see ratification until in the new year. Is that due to what we see happening in the United States? Is that where you're waiting to get some signals from?

[Tony Negus]

No, it's more about our parliamentary process. We have the Joint Standing Committee on Treaties. It's part of our process that they must consider this and make recommendations to the government. That process is ongoing, and they've had a range of public consultations and meetings. They'll make recommendations, but the parliamentary process around that and any legislation that's required before it can be ratified will take, realistically, into the new year.

Certainly, we're watching what's happening in the U.S. carefully, but it's not contingent on what's happening in the U.S.

[Peter Fonseca, Liberal, Mississauga East—Cooksville, ON]

In Canada, we find that the TPP in some respects favours certain regions. It could be the west, because of its proximity to Asia, or some other regions that may have products or services that would do well with trade. There are some regions that would be impacted negatively.

Is that the same case in Australia? Are there some areas that would be winners and some that would not fare as well?

[Tony Negus]

I think in these types of deals, there are always areas that benefit more than others. Broadly based, there haven't been any specific areas that I'm aware of that have raised concerns about these issues.

[The Chair, Liberal, Mark Eyking]

The time is up.

We're going to move over to the NDP.

Ms. Ramsey, you have the floor for four minutes.

[Tracey Ramsey, NDP, Essex, ON]

Thank you for your presentation today, Your Excellency. There have been excellent questions from my colleagues on the committee.

We share much in common with Australia. As you said, it's a vast country without the population to fill it, which is something we have here as well.

We have travelled, and I am happy to hear that you've had so many briefings on the TPP across the country.

You mentioned jobs specifically. In our own economic impact study that we had done by Global Affairs, it showed a GDP growth by the year 2040 of $4.3 billion. We have a compensation package that's still unknown to our supply managed that would equal that in the first 15 years. We're looking at that, but also at jobs. We have one study that projects Canada would lose 58,000 jobs under the TPP.

I wonder if you have any modelling on job projections that have been done in Australia, and what that would look like for you.

[Tony Negus]

I don't have any job modelling figures with me, I'm afraid, but there's nothing that I've read that suggests anything like that.

[Tracey Ramsey, NDP, Essex, ON]

Okay.

Another thing that's come up is that, I believe, we're largely tariff-free with Australia already. I wonder if you could speak to the tariff reductions that you're looking to see in terms of Australian exports coming to Canada, but also the non-tariff barriers. What's been highlighted at our committee is the fact that non-tariff barriers are more difficult to overcome than the actual percentages that exist in tariff format.

I wonder if you could speak to us about how that's been discussed in Australia as well.

[Tony Negus]

As I mentioned in my opening comments, the trade agreement, the trade situation between Canada and Australia, is fairly modest. In fact, I think it's less than half a per cent of your imports and/or exports go to and from Australia. In the context of your own situation, it's a very low number in that regard.

I don't have any numbers specifically for the Australia-Canada relationship, but the elimination of tariffs for Australia itself would be about $9 billion in dutiable exports to TPP countries, which would include Canada in that regard. It's a significant amount for Australia in its own right.

Market access issues and all of those other benefits that I talked about before also add to that process.

[Tracey Ramsey, NDP, Essex, ON]

Were there any non-tariff barriers that were highlighted in your consultation processes?

[Tony Negus]

In fact, we've just identified.... It says basically over 93% of tariffs were eliminated on entry into force, including for Canadian industrial exports such as diesel electric locomotives, which is the major export from Canada to Australia. I don't really have anything else on the broader issues other than the things I've already mentioned that we talked about. Services are the big thing, we think in this regard, that will actually benefit significantly, and a lot of that will be further developed by the elimination of all of those issues we've discussed.

[Tracey Ramsey, NDP, Essex, ON]

One of the other issues that we have is of course the opening and expansion of our supply-managed system, and in particular dairy here in Canada. We're opening that for the first time. We see New Zealand indicating that they would like to have seen that opened further with Canada. I wonder what Australia's position is around the dairy markets, and what you've heard from dairy farmers in Australia.

[Tony Negus]

Yes, absolutely, supply management has been an issue. We've been interested in watching this for some time. Of course, there are some interesting comparisons to what Australia did some 15 or 16 years ago, but from the 1980s the Australian government's been gradually dismantling its dairy industry regulations to the point now where there are no dairy industry regulations per se. In the late nineties, the state and federal governments agreed to remove all domestic regulations relating to supply and processing of milk. Since 2000 there's been no regulated prior support for the Australian dairy production.

There was almost a $2-billion structural adjustment package supplied to actually help the transition in 2000, and that was to lessen the initial impact of the withdrawal of price support measures. Basically, that was implemented, but that was wound up in 2008, and it's now free of government incentives.

[The Chair, Liberal, Mark Eyking]

Thank you.

Thank you, Ms. Ramsey.

That wraps up our time.

Thank you, High Commissioner, for coming today. We welcome the Australians to come up here and visit us more, and we to visit you more, and enjoy our relationship. Thank you. Your presentation is going to be a big part of our report when it's finished. Enjoy the rest of the winter in Canada.

MPs, we're just going to suspend for one minute and then we're going to do future business.

[Proceedings continue in camera]