Evidence of meeting #56 for International Trade in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was tpp.
A recording is available from Parliament.
Liberal
The Chair Liberal Mark Eyking
We're going to start our meeting. First we have a little update from Mr. Hoback.
Conservative
Randy Hoback Conservative Prince Albert, SK
Yes, Chair. We talked about going into the U.S. to some of our trade commissioners across the U.S. Is there anything to report on that file? We were talking about going to Denver or Chicago.
Liberal
The Chair Liberal Mark Eyking
No. We've just sent the preliminary overview to see if we can get a rough agreement from all parties that we can go, and then we'll put the meat on the bones. That's where it's at right now.
Liberal
The Chair Liberal Mark Eyking
Before we start, I'd like to congratulate the committee for all the work we've done so far, especially seeing the two bills in the House today and the trade bill getting through.
Our business agenda with the U.S. is coming up.
Without further ado, Ambassador, thank you for coming in. I'm sorry for the wait.
We have with us Ambassador Duc Hoa Nguyen.
Is my pronunciation of your name okay?
His Excellency Duc Hoa Nguyen Ambassador for the Socialist Republic of Vietnam to Canada, Embassy of the Socialist Republic of Vietnam
Yes. Thank you.
Liberal
The Chair Liberal Mark Eyking
Thank you very much for coming. As you know, our committee started this process to deal with the TPP over a year ago. We took our consultation process right across the country. We were in every province and territory, and we also did a lot of communication with the public on the TPP agreement.
We will probably be tabling our report in the House in a month's time. We really appreciate the input from ambassadors. We are in the final stages of our study on the TPP, and even though there's a sense that the original TPP might not go very far with the United States not being part of it, we feel that all the information we've gathered from Canadians, from other countries, and from ambassadors could bode well for future bilateral agreements.
One thing I am very impressed with is how your country has grown so much economically over the last three or four decades. It's amazing, this miracle in your country and what you've gone through. Vietnam is one of the countries I've never visited, but it's on my bucket list.
Without further ado, sir, welcome to our committee. You have the floor.
H.E. Duc Hoa Nguyen
Thank you, Mr. Chairman, dear friends, ladies and gentlemen. It is my great pleasure to be invited to speak on the TPP in front of the Standing Committee on International Trade of the House of Commons after the United States president's decision to withdraw the U.S. from the TPP.
Before I go straight to the points, I would like to say that the views and the insights I present today are my own, not those of our government.
The first point I'd like to make is that the TPP is a free trade agreement of the new generation, which was signed by the 12 participating countries in New Zealand on February 4, 2016, after long-lasting negotiations over six years.
If launched, the TPP will meet the interests of all the participating countries: removing trade barriers; cutting most tariff lines; increasing the degree of trade and investment openness, facilitation and liberalization; pushing a strong momentum for regional economic connectivity; and, strengthening peace and stability in the region. It's a common agenda.
In the TPP negotiations, the United States said that it expected the TPP to create a new benchmark for the “FTAs of the 21st century” and considered the TPP one of the key pillars of its “rebalance to Asia” strategy to consolidate U.S. leadership and balance China's rising power in the Asia-Pacific.
The U.S. presidential memorandum to pull the United States out of the TPP is causing an unpredictable future for this deal. In my personal opinion, the withdrawal is not a wise decision. Without the United States, the TPP is truly meaningless, but it is also a disaster for the United States, economically and strategically.
Economically, it could put U.S. businesses at a competitive disadvantage in Asia. The U.S. will have less leverage to engage in writing new rules and setting up new games in reshaping a new economic order in Asia.
Strategically, it will raise fundamental questions about the Asia strategy of the U.S. and about the U.S. role and U.S. credibility and reliability in Asia. The U.S. allies and partners are less confident in United States leadership in Asia, and U.S. influence and power in Asia continue to decline relative to other major powers in the region. A geostrategic shift in the balance of power is likely to emerge, to the disadvantage to U.S. national and security interests in Asia and in the world as a whole.
Therefore, in my own opinion, not all Americans and U.S. allies welcome this decision.
The TPP is said to be dead since Washington's exit, but some countries do not accept that. Japan and Singapore already have ratified. Japan and Australia are working together with other partners to go ahead. Chile has come up with the idea of hosting a meeting in mid-March and has invited all 12 participating countries, as well as South Korea and China. We welcome this idea and highly appreciate all efforts and initiatives to seek new ways to go beyond the TPP.
Vietnam's joining the TPP—and other bilateral and multilateral FTAs—is part of our consistent policy to expand and deepen the comprehensive international integration into the global economy.
The opportunities and benefits we look forward to in participating in the TPP are as follows: to boost exports and imports, promote foreign investment, and improve the competitiveness of our national economy; to build a more favourable business environment for home companies and foreign companies, and for trade facilitation and liberalization; to accelerate institutional and structural reform centred on the legal reform, the economic restructuring, the administrative public system, and the education and training institutions; to perfect the market economy system and transform our model of development; to enable Vietnam to expand and deepen co-operation with leading partners in the region and beyond, contributing to the growing trend of economic integration in the region; and last, to strengthen the political relations, mutual understanding, and trust between Vietnam and the partners in the TPP.
The TPP brings about opportunities for Vietnam, as well as challenges and risks, but in the long run we look forward to the positive impact on sustainable development and a shift in the model of growth, and to higher living standards and a better quality of life for our people.
Vietnam will continue our renovation, our economic reforms, and comprehensive international integration despite the decision by the United States to pull out of the TPP. Vietnam will take the necessary steps to ensure the effective implementation of its commitments under existing and future free trade agreements. Also, Vietnam will work with other TPP partners to find new solutions for the TPP, because we believe this deal will bring about major trade and investment benefits to Vietnam and other countries and will create strong driving forces for economic integration in the region and in the world.
Vietnam and Canada are among the participating countries of the TPP. No matter whether or not we have the TPP, we are optimistic about the bilateral relations and co-operation between our two countries, particularly in the fields of trade, investment, education, student exchange, agriculture, high tech, environmental protection, and mitigation of climate change.
The opportunity that Vietnam offers to Canada is growing. Vietnam is now the largest trading partner of Canada in Southeast Asia, with trade values recorded at nearly $5 billion Canadian in 2016, and the growth in bilateral trade is about 25% to 30% annually.
Vietnamese students in Canada now top 5,000 and are one of the fastest-growing sources of foreign students for Canadian universities, and the numbers will increase in the incoming years.
Vietnam's leading exports to Canada are textiles and garments, footwear, seafood, furniture, edible fruit and nuts, and sports equipment. Vietnam is also the destination for major Canadian exports, especially wheat, seafood, oilseeds, and fertilizer. Canadian high-end garments, leather articles, and fur skin products are also becoming more attractive to Vietnamese consumers, with sales of certain products increasing tenfold in recent years.
Trade between Vietnam and Canada complements each other, rather than competes, and there is much more potential and opportunity for trade and investment co-operation between our countries due to the following factors.
Vietnam’s economy grew by 6.5°/o in 2016, one of the fastest rates in the region, and it has a large market of 90 million consumers. By 2020, the middle and affluent classes in Vietnam will double from 12 million to 33 million, with a growing appetite for high-quality goods and a better life. Vietnamese consumers love made-in-Canada products such as cold-water lobster, snow crab and geoduck, high tech, biochemicals, agricultural technology, and medicine and pharmaceutical products.
Vietnam not only offers Canada its tremendous market but also serves as a gateway to the ASEAN market, now becoming an economic community, and to China if Canadian firms want to access the Chinese market without placing all of their eggs in one basket. As a signatory of FTAs with major trading partners like China, Japan, South Korea, the EU, and India, Vietnam could be helpful as a connecting point for Canada in the Asia-Pacific.
Vietnam and Canada are among APEC's member economies. This year we will host the APEC summit in November. When the TPP is stuck, APEC and other regional institutions are important for us to work together on the issues of common concerns and interests in response to the fast-changing world—most importantly, in trade and investment liberalization, growing protectionism, innovation, inclusive growth, job creation, human resources, gender equality, sustainable development, and climate change.
While NAFTA is likely to be renegotiated, as President Donald Trump has stated, APEC is also a window for Canadian firms and entrepreneurs to access Asian markets and diversity your trade policies. Vietnam is actively working with APEC members to lay out the priorities of APEC Vietnam 2017. We look forward to working closely with Canada within the APEC and will welcome Prime Minister Justin Trudeau to the summit in November.
We should work together to accelerate the discussion and the signing of the MOUs on co-operation in agriculture, finance, and banking sectors and a bilateral agreement on promotion and protection of investment. We should collaborate to intensify business-to-business ties, people-to-people links, and student exchanges.
We do hope that all of you will support the deepened and substantial relations based on the mutually beneficial co-operation between our two countries.
Thank you so much for your attention.
Liberal
The Chair Liberal Mark Eyking
Thank you very much, Your Excellency, for that very good report.
We will have some questions from the different parties here. We'll start off with the Conservative Party.
Mr. Ritz, you have the floor for five minutes.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
Thank you, Mr. Chair.
Ambassador, gentlemen, thank you so much for the gift of your time and knowledge here today as we work toward carrying on the TPP even without the United States.
You've outlined Vietnam's concerns as well as the opportunities. I think you're absolutely right in that the meeting coming up in Chile will be very fundamental in deciding what the direction will be, moving forward. A lot of major players are considering doing just that. I think it's worthwhile. I don't see any reason why we can't move forward without the United States. It's their loss, and in some cases our gain. At the end of the day, tremendous opportunities for like-minded countries on developing agricultural capacity in Vietnam, using Canadian feedstock and genetics, is certainly paramount in the foundation of this type of agreement. I've had the great opportunity to be in Vietnam a couple of times talking about those connections, and I look forward to a third trip.
I really don't have any questions to ask you. That said, I know that other countries as well are coming to that meeting in Chile. That includes China. I'm not sure if serious about joining TPP, but they'll make sure that they know what's going on. There's South Korea, and I've even seen that Colombia, the Philippines, and so on are considering coming. I think that's good, because it breeds new life into the TPP agreement.
So will Vietnam be there?
H.E. Duc Hoa Nguyen
Yes. I've already made the recommendation to our foreign ministry and other ministries to have a representative at these meetings. I don't know who will be there, but I've personally recommended to our minister that we should have a person at these meetings.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
I think it's very important that we all are there. Japan has been pushing for this as well.
Conservative
Gerry Ritz Conservative Battlefords—Lloydminster, SK
It's a good sign that they're ready to move ahead. Multilateral agreements like TPP always give you more ambitious outcomes than bilateral ones. We look forward to moving forward on that.
Thank you for your strong presence during the negotiations and as we continue to work on some sort of completion of the TPP.
Liberal
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Thank you, Mr. Chair.
Your Excellency, thank you so much for being here today and spending your time with us.
During your opening remarks you talked a lot about the economic importance of a trade deal like the TPP, but you also alluded to the geopolitical importance of it. I wonder if you could elaborate a little on that for those of us on this side of the Pacific who don't necessarily have the same appreciation you might have for the importance of the geopolitical component of whatever arrangement comes forward as we work together.
H.E. Duc Hoa Nguyen
It is very important, in my personal opinion.
Of course, I am now working at the policy and planning department in our foreign ministry and I really look at the TPP mainly from a geostrategic perspective. In my view, the TPP is important not only economically but also strategically for economic arrangements. Now, we have to ask again how important it is. I think it is really important.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Okay. What role do you see Canada playing in that geopolitical reality, in building relationships with countries like your own, Vietnam? We look at Japan and we look at other parts of your part of the world. How important would the trade agreement be in fostering those other relations?
H.E. Duc Hoa Nguyen
Canada's role will be very important for us, even if Canada is far from Asia, when we look at the grand scheme, not only in Asia but on global issues. Canada is very important for the TPP, so we would like to encourage that and would like to see Canada go ahead with other countries for the TPP and beyond the TPP.
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
Okay. Thank you.
You alluded to the United States, and obviously it's not going to be a part of this agreement. I think you've also alluded to there being an appetite and a desire to move forward into some other arrangement. Do you see that including a number of the TPP countries or would you consider bilateral agreements with either Canada or any other TPP partners going forward? Are you open to all sorts of ideas at this point?
H.E. Duc Hoa Nguyen
It is too early now to predict exactly what will happen, but I think countries now are pretty flexible and some countries are looking forward to bilateral trade relations and bilateral trade bills. I cannot give you the right answer now, but I think all countries in the region now are flexible on trade issues and also on some others.
Liberal
Liberal
Kyle Peterson Liberal Newmarket—Aurora, ON
I was going to share with one of my colleagues if I had any.
Liberal