International Trade Committee on Nov. 15th, 2016

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

Thank you, Chair.

Mr. Verheul, like the others, I'd like to congratulate you and your team for the success you've had. It has been great. I also want to thank you for your determination and your perseverance, starting back in 2009, as well as that of Mr. Ritz and Mr. Fast, the former ministers, and others in the previous administration and now this administration. It has been a long road, and I'm sure you're delighted that we're reaching the end and starting a new beginning, and that's very important: how long these agreements take to conclude.

This started after a recession in 2009 when we said, listen, we have to diversify and open up our markets, etc. Things changed. The economy got better stateside and things picked up in terms of our trade with the United States, and it would have been easy enough for us to pull back and say that we don't have to put so much focus on CETA, or to put on it the emphasis that we have.

I understand that a year or so ago, things were still unsure in terms of CETA. Can you tell me, through your office and your staff, as well as with the minister in particular, how things got going again? How did we re-engage? How did we push this forward to make it happen? Can you give us some insight into what went on behind the scenes?

[Steve Verheul]

Sure. To start with a bit of context, you mentioned the economic crisis and said that this was coming out of that. I think one of the driving forces we've had to help negotiate CETA—and I think this has cut across all governments—has been that we do have a very strong reliance on the U.S. market. Perhaps this is even more relevant now, but I think we do need to try to reduce that reliance, to some extent, by paying greater attention to other markets. The EU is a natural, because their values and their approaches are very similar to ours, and it's a large market of 500 million people.

There was this interest in diversification, which was an interest throughout the negotiations. We finished the agreement in principle in I think the fall of 2013. We finished the final text of the agreement a year later, in August of 2014, and then we had a very extended legal review of the text that took far longer than it usually takes, in large part because there were increasing concerns on the EU side about the investor-state dispute settlement mechanism.

The EU had been having particular difficulties with the U.S. on that question and had decided that they wanted to develop a new policy. When the Liberal government came into power, there was a strong desire on their part to also modernize the system of the investor-state dispute settlement. That took a while to negotiate out. We had some concerns about the EU proposal, so we did have a negotiation on the new improvements that we talked about.

That put us in a position where we could then sell CETA, not just because of that provision but because of the labour and environment elements and others, as a modern and progressive agreement, even more so than before. I think that helped to get it across the line at the end of the day.

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

You spoke about the United States also with regard to TTIP. Are you monitoring TTIP? Do you monitor where they're at? We have this competitive advantage now, and I think that right now, when the iron is hot, we have to strike and use this to our full advantage to attract business and to increase our exports. Can you give us more insight into where you see TTIP and how far out that would be if it would ever come to fruition?

[Steve Verheul]

Obviously, we do have a strong interest in TTIP and how that's developing. I've talked to the EU TTIP negotiator on a number of occasions about how things are going. We've certainly been looking at information coming from various other sources.

There are large gaps between the EU and the U.S. on that negotiation, and there have been for a very long time. There have been issues of ambition, with differences on that front, and differences over particular areas. The EU is looking for much more in government procurement. There are issues such as geographical indications. The U.S. is adamantly opposed to some of those. Also, the problems on regulatory standards have been difficult, so they haven't progressed all that far, I would say. There are still some fundamental differences of view. Now, with the incoming new U.S. administration, I think those problems will be even more difficult to get around.

I think the best-case scenario is probably that the TTIP negotiation will be parked for the time being, and it is unlikely to progress a lot more, at least for the near future.

[The Chair, Liberal, Mark Eyking]

Thank you.

Your time is up, Mr. Fonseca, and that ends our program.

Thank you, Mr. Verheul and team, for being here. I know that your team has worked hard over in Europe and here in going back and forth, and we really appreciate the work you're doing. It's a challenging time for trade in the world, and we're going to need your help going forward. We're going to have a few more meetings on this topic, and we might have to draw from your expertise again. Thank you for coming.

We're going to break for a couple of minutes, folks, because we have some in camera future business to do.

[Proceedings continue in camera]