International Trade Committee on Dec. 1st, 2016

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Thank you, Mr. Chair.

Thank you to the department for being here.

This is a very interesting discussion for me to have. I had the opportunity back in the mid-nineties to live in Ukraine for five months. At that time, I was working with a company that was training managers to manage in a free market. To be here now in a different role, talking about these trade opportunities, is quite amazing, really.

One of the things you talked about and one of my colleagues asked you about was how we can prepare Canadian companies now to take advantage of the opportunities that are there for trade. You mentioned several areas. Maple syrup, pet food, french fries all kind of resonated with me, being from New Brunswick. Also, did you mention fisheries, lobster? Is there any opportunity there?

[Marvin Hildebrand]

There are opportunities. Our exports to Ukraine of fish and seafood products have been significant in recent years, which is the kind of time frame we would look at for this.

As a practical matter, one of the good things about this deal is that in the area of fish and seafood, all of their tariffs are going to zero on day one. Where they did seek phase-out periods was not in that sector; it was in agriculture and in industrial goods. To the extent that a government can pave the way for success through the elimination of tariffs, this is as good as it gets. There will be no tariffs once this deal is implemented on day one.

The current mix of products is what it is. It involves some of the products that I mentioned already. It remains to be seen whether things like frozen lobster or live lobster will take off in the way they have in Korea following the removal of tariffs there a couple of years ago with the implementation of that deal, but certainly the access will be there. It's always that knock-on question of, after you open a bunch of doors, which ones are people going to walk through?

[Alaina Lockhart, Liberal, Fundy Royal, NB]

I know there was a consultation process around this with Canadians. Were there specific areas that Canadians identified, had concerns about, or had recommendations for?

[Marvin Hildebrand]

There were. The consultation process began in 2009 with the Canada Gazette notice, and it was supplemented in the years following that with web-based invitations for Canadians to comment and give input.

What happens in these sorts of things is that from the submissions that are received, it soon becomes somewhat evident who's most interested in the deal and in the negotiations, how they will end, and what the provisions will be. As I said earlier, our largest agricultural export to Ukraine is pork. One of the groups we spoke to was made up of Canada Pork International, the Canadian Pork Council, and the Canadian Meat Council. We spent a fair bit of time with them, especially toward the end of the negotiations, to do everything that we could to make sure that the final outcome would be satisfactory to them. From all indications, including their public expressions of support for the deal, I think we succeeded on that front.

There were others as well. Spirits Canada, Canadian Manufacturers and Exporters, and the Canadian Agri-Food Trade Alliance also have issued public expressions of support for the deal, so I think that we can be happy that there's good support for this deal. I'm not aware of any concerns or any stakeholders who feel that there's anything deficient about the deal.

[Alaina Lockhart, Liberal, Fundy Royal, NB]

Thank you very much.

[The Chair, Liberal, Mark Eyking]

Thank you.

We're going to go to the NDP now for three minutes. Go ahead, Ms. Ramsey.

[Tracey Ramsey, NDP, Essex, ON]

Thank you.

You've mentioned a lot about agriculture, certainly pork, and different sectors that will win, but at this committee what we often hear in relation to agriculture is that it's not the tariffs but the non-tariff barriers—for example, the sanitary and the phytosanitary issues. Can you please speak to any concerns that any of the sectors had in this trade deal?

[Marvin Hildebrand]

While the negotiations were proceeding and even in the last year or so leading up to the summer of 2015, we had access for beef and pork, but we didn't have the access we would have wanted, mainly because of the number of Canadian establishments that were authorized to ship.

Obviously, we have many meat-packing plants in Canada for beef and pork and others, and there was a fairly small subset at the time that were authorized to ship. By leveraging the negotiations, building relationships, and working closely with Ukraine at various levels, coincident with the end of the negotiations or very soon thereafter in 2015, we received what's called systems-wide approval for our meat-packing plants. Now any federally inspected plant is eligible to ship to Ukraine.

Frankly, that was by far the biggest SPS issue that we had going with Ukraine. I actually asked our people just recently whether we had any issues currently or anything that was causing problems vis-à-vis Ukraine and our exports to Ukraine, and the answer was no.

Right now we don't have issues on the SPS front. As I said, I'm confident that the relationships that we've been able to build and develop and this agreement put us in a good place to deal with things if and as they come up in the future.

[Tracey Ramsey, NDP, Essex, ON]

My colleague asked about sectors that will give us a really great lift. Are there any that stand to lose or are concerned about this deal?

[Marvin Hildebrand]

I'm not aware of any that stand to lose or that are concerned.

[Tracey Ramsey, NDP, Essex, ON]

Okay.

[Marvin Hildebrand]

Frankly, we just haven't had anyone make representation to that effect.

[Tracey Ramsey, NDP, Essex, ON]

We talked about the expansion of services down the road with that review clause in the agreement. What kinds of services do you think would be included in the future? I'm sure there were services that were discussed in these rounds, so what services do you see us looking toward in those future rounds?

[Marvin Hildebrand]

As I said, that will be a couple of years down the road. At that point, we could do a couple of things. We would take a very hard look at Ukraine's GATS commitments, the general agreement on trade and services commitments in the WTO. We would take a hard look at Canadian services interests and probably do some further consultations if we were heading in that direction. We would take a look at where the possible gaps might be and where we could supplement their current WTO commitments with that.

Areas of Canadian strength would feature in that, but regarding the details, because it's a little ways down the road, I'd be a bit reluctant to speculate on specific areas that we'd be looking at.

[The Chair, Liberal, Mark Eyking]

Thank you.

The last questioning is going to come from Mr. Fonseca. You've got the floor. Go ahead.

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

Thank you, Mr. Chair.

Thank you to the witnesses and Mr. Hildebrand. Congratulations to you and your team.

What I've come to learn on this committee is that these trade agreements are never a sprint. They're a marathon. It's great that we're reaching the finish line and we're just about there.

Also, just recently we commemorated the memorial of the Holodomor, a man-made famine caused by the Stalin government that took place in Ukraine and killed millions of Ukrainians. We're talking all about food here, and their food was taken away from that rich land and millions of Ukrainians died.

This agreement is not only an economic agreement. It's not only a political agreement. Really, it's symbolic for the diaspora here, for all the Ukrainians. My wife is of Ukrainian background, and knowing that this agreement is going through will be something that we will be able to share with many of our diaspora communities from coast to coast to coast, so congratulations.

I did want to ask about who initiated the agreement back in 2009 or 2010. Was it Canada or Ukraine? Who reached out? Who said that this would be a good thing?

[Marvin Hildebrand]

I believe it was Canada. I would like to confirm that. I didn't have the opportunity to be involved from the beginning, but what I can say for sure is that midway, when I got involved, it was one of those negotiations where both parties really wanted to get somewhere. As I said, there were constraints—there always are—and we didn't include everything that we might have or that we would have preferred to include in the deal, but the negotiations were characterized by a spirit of wanting to get things done and achieve a win-win outcome, and I think the nature of the deal reflects that.

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

Mr. Hildebrand, I'm sure you and your team studied different trade agreements globally. Prior to this agreement, Ukraine signed two other agreements. In June 2014, the Ukraine-European Union agreement was signed, an economic agreement. As well, there are deep and comprehensive Free Trade Area agreements with Georgia, Moldova and Ukraine.

When you looked at those agreements, compared to our agreement, were they similar? Did you have some of the...? I notice that in some of those agreements they did bring in services that we excluded. Did you look at those agreements as we were constructing ours?

[Marvin Hildebrand]

Yes, we did, very much so. The one that's most important in this context, and instructive in some ways because it was concluded before ours was, is what's called the Deep and Comprehensive Free Trade Agreement, which is part of a larger framework, what they call a framework agreement between Ukraine and the European Union.

I would say that this agreement is, on balance, not as ambitious. It has many more quantitative restrictions on access for Ukraine into the EU, and vice versa, than we have in ours. We call it “tariff rate quotas”. On balance, our agreement is more open.

They do have some services and investment elements, but frankly, in terms of investment, our foreign investment promotion and protection agreement would provide a more robust and comprehensive coverage than whatever they have in the DCFTA. In services, I would suggest that there are very modest, if any, provisions that go significantly beyond what's in the WTO.

They touch on those areas, but not in a particularly significant, meaningful, or comprehensive way.

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

I hope our agreement will help. I know that Ukraine is looking to join the EU, and they are looking at a 2020 path to the EU. Would this Canada-Ukraine agreement help in terms of that effort?

[Marvin Hildebrand]

That's a very significant, complex undertaking on the part of Ukraine that you just mentioned.

Canada, as you know, is a great friend and supporter of Ukraine. Starting in the fall of 2013, with the events that gave rise to the Maidan events that winter, the people of Ukraine have clearly signalled a desire to orient themselves westward, which obviously includes Canada. What we can say is that this deal will facilitate the desire on the part of the Ukrainian people to orient their economy and their country westward.

An FTA with a G7 country of a very high standard is, I think.... It's a great achievement for both countries, and it's certainly a great achievement for Ukraine.

[The Chair, Liberal, Mark Eyking]

Thank you, Mr. Fonseca.

That wraps up the dialogue with the MPs. We had a good two rounds, and everybody got a chance, so that's good. As you can see, they were good questions.

It's a very important agreement, I think, not only economically but also when you deal with the society and history of both countries. I think you are going to see this move quite quickly through our committee when we get it, but we have to do our due diligence.

Thank you very much for coming and shedding some light on this for us, and thanks to all of the people who work around you to make this happen.

Have a merry Christmas.

[Marvin Hildebrand]

Thank you very much, Mr. Chairman.

Thank you to all the committee members.

[The Chair, Liberal, Mark Eyking]

I'll just let members know that I'm going to suspend for a few minutes. We're going to go in camera.

[Proceedings continue in camera]

[Public proceedings resume]

[The Chair, Liberal, Mark Eyking]

Our meeting is back on the go here. We have about an hour left.

We have the great pleasure of having the Minister of International Trade here today.

Welcome, minister. You've been very busy. We've seen you all around the world. Your team has been very busy. We're hearing reports from them. We just finished up a briefing from Mr. Hildebrand about the Ukrainian trade agreement. There are a lot of balls in the air and a lot of agreements floating around. It's a busy file, but we're a trading nation.

We thank you for being here. The floor is yours.