Evidence of meeting #6 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.

On the agenda

MPs speaking

Also speaking

Jerry Dias  National President, Unifor
Dianne Craig  President and Chief Executive Officer, Ford Motor Company of Canada Limited
Caroline Hughes  Vice-President, Government Relations, Ford Motor Company of Canada Limited
Angelo DiCaro  National Representative, Unifor
David Worts  Executive Director, Japan Automobile Manufacturers Association of Canada
Flavio Volpe  President, Automotive Parts Manufacturers' Association
Stephen Beatty  Vice-President, Toyota Canada Inc., Japan Automobile Manufacturers Association of Canada

9:25 a.m.

Liberal

Sukh Dhaliwal Liberal Surrey—Newton, BC

In a Maclean's article, Trevor Tombe says that access to cheaper parts will ultimately lower the price of the car and this is beneficial for both consumers and producers. With lower production costs, cars will become more affordable for consumers and equally the auto sector will have increased export opportunities.

Would you agree with that statement, or do you have any concerns, Ms. Craig?

9:25 a.m.

President and Chief Executive Officer, Ford Motor Company of Canada Limited

Dianne Craig

I would not agree with that statement.

I think it's going to reduce the cost for the producers. It is not a given that it's going to be passed on to the consumers. We can just look to last year with the South Korean free trade agreement and what's happened with Hyundai and Kia products that have come into Canada. Their prices have not gone down. They have gone up.

You price to the market and if you have an opportunity to reduce your costs, you're going to do so.

9:25 a.m.

Liberal

Sukh Dhaliwal Liberal Surrey—Newton, BC

Mr. Dias, did you have something to add?

9:25 a.m.

Liberal

The Chair Liberal Mark Eyking

Your time is up for this round.

We still have roughly 10 minutes left for the second round of questioning with the witnesses we have.

There was a question from Ms. May, but the clerk has informed me there has to be unanimous consent for the member to be able to do that.

She's just asked for a couple of minutes. Do we have agreement? Okay, Ms. May, you have two minutes—sorry, we don't have unanimous consent?

9:25 a.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

Mr. Chair, I appreciate your efforts and I'm sorry the Conservatives will not let me speak at this committee.

Thank you.

9:25 a.m.

Liberal

The Chair Liberal Mark Eyking

Okay, we're going to move on to Mr. Peterson. These rounds have six minutes and we're probably only going to have two questions.

9:25 a.m.

Conservative

Randy Hoback Conservative Prince Albert, SK

Mr. Chair, I have a point of order.

On this whole handling of Ms. May, as I've said to you before, I have no problem with her coming and asking at the end of the session once everybody else has had a chance to discuss and have their rounds, because these rounds have been set up and it's been very tightly scripted on who gets what.

I'd be willing to share some of my time with her in the last round if she wants to wait until the next round of witnesses and speak then, but for her to try to insert herself at this point and without any warning to the chair that she was coming today is not appropriate. It makes it really awkward. We have our questions that we want to get on the floor and if we insert her now and then I don't get a chance, nor do the Liberals, nor do the NDP, that's not fair to the rest of the committee who are working on this file day in and day out.

9:25 a.m.

Liberal

The Chair Liberal Mark Eyking

Your point is taken, Mr. Hoback.

Maybe when we start the second round if we want to bring it up again then, we will.

We're going to finish this round and go from there.

We're talking about the next set of witnesses.

Sorry for that, Mr. Peterson, because we'll probably only have two questions left. You have six minutes.

9:25 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

I'm going to split it with Ms. Lapointe, if that's okay. I just wanted to make sure we get that, so I'll take three minutes and let me know when that's up.

First of all, to the witnesses, thank you for the presentations. They were very informative, and we appreciate your taking time to come here and for putting the work into these presentations.

Mr. Dias, you mentioned in your comments about structural issues in the Japanese economy that present more barriers to trade than the tariffs do. Can you elaborate on what those are?

9:30 a.m.

National President, Unifor

Jerry Dias

Of course.

Japan manipulates their currency better than anybody. That's why their export industry, especially in auto, is so successful. On top of that they have a culture whereby if you buy an imported vehicle, there are frequently taxation issues, and there's a whole culture of making sure they buy Japanese vehicles within Japan. So it's structural as it relates to their trade policies, how they deal with trade, but all the decisions they make are geared to a successful export industry.

To the credit of the Japanese citizens, they understand the importance of buying Japanese.

9:30 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Ms. Craig, on the currency manipulation, you alluded to the IMF and WTO provisions about how to deal with those scenarios, but you're saying they are not effective.

Could you elaborate on why they are ineffective? Is there a way to address these issues when it comes to the TPP?

9:30 a.m.

President and Chief Executive Officer, Ford Motor Company of Canada Limited

Dianne Craig

To add to what Jerry said, Japan has a very strong automotive manufacturing industrial strategy. The Japanese companies produce in Japan nine million vehicles. They only sell four million. Because their entire industrial base is so strongly geared to manufacturing, the production has to go somewhere. This is the reason they are so keen on trade agreements and the opportunities to export more to Canada.

On the IMF and the WTO, they just haven't been effective. The principles have been there, but for whatever reason they have not been enforced, even when we know we have had currency manipulators.

Caroline, do you want to speak a little more about our thoughts on making the IMF more enforceable?

9:30 a.m.

Vice-President, Government Relations, Ford Motor Company of Canada Limited

Caroline Hughes

Certainly. As I mentioned, the IMF has a strict definition of currency manipulation. In fact, there was a proposal put forward as part of the TPP negotiations in the U.S. It was developed by external experts in monetary policy and external economists. It suggested how you could take those IMF principles and in a simple three-part test put them into a trade agreement. If a country failed to meet the three-part test, there would be a remedy. We would suggest the remedy should be that the tariff goes back on the imported goods until such time as the currency manipulation ends.

That three-part test is as follows: Did the TPP member have a current account surplus over a period of time? Did it add to its foreign exchange reserves over that same period of time? Are the foreign exchange reserves more than sufficient?

All three of these are what the IMF uses when they evaluate currency manipulation. In fact, I'd be happy to have this proposal translated and submit it to the committee if you're interested in having it.

9:30 a.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

I'm going to defer to Madame Lapointe, who has a few questions.

9:30 a.m.

Liberal

Linda Lapointe Liberal Rivière-des-Mille-Îles, QC

Thank you, Mr. Chair.

I thank the witnesses very much for being here with us today.

I would like you to answer briefly because I have a lot of questions for you.

Ms. Craig, you said that the current agreement needs to be amended. In your opinion, what should be changed in this agreement? Earlier you said that other manufacturing sectors and other businesses could be impacted in a negative way. What businesses did you have in mind when you said that the agreement could have negative effects?

9:30 a.m.

President and Chief Executive Officer, Ford Motor Company of Canada Limited

Dianne Craig

I apologize. I missed the beginning of the question.

9:30 a.m.

Liberal

Linda Lapointe Liberal Rivière-des-Mille-Îles, QC

I asked you what should be changed in the current agreement. In your opinion, what is not the way it should be in the current agreement?

9:30 a.m.

President and Chief Executive Officer, Ford Motor Company of Canada Limited

Dianne Craig

There are two things, and if we change just these two areas, Ford would be supportive of the TPP. First, we need to have the tariff phase-out match that of the U.S., so 25 years on cars and 30 years on trucks. Second, would be to add currency disciplines. As Caroline just outlined, with the IMF principles in place, we could understand what the provision would be regarding the snap-back, when it would happen.

Those are the only two things. We want to support the TPP.

9:30 a.m.

Liberal

Linda Lapointe Liberal Rivière-des-Mille-Îles, QC

You also mentioned that other business sectors may be negatively impacted. Which ones did you have in mind when you said that?

9:35 a.m.

President and Chief Executive Officer, Ford Motor Company of Canada Limited

Dianne Craig

The small automakers in the auto industry will be harmed by this agreement. There are lots of global automakers in Canada that have supported the TPP because of, as I mentioned earlier, self-interest for the organizations, the companies, versus what is in the interests of Canada in the longer term.

That's why the smaller manufacturers of auto parts will be harmed.

9:35 a.m.

Liberal

Linda Lapointe Liberal Rivière-des-Mille-Îles, QC

Thank you.

Mr. Dias, you said that you are a unionist and that you represent the automotive industry. You also referred to telecommunications, health care, the media and agri-food.

What impact would the agreement have on these industries? Do you think it would be the same as for the automotive sector?

9:35 a.m.

Liberal

The Chair Liberal Mark Eyking

Please keep it short, Mr. Dias, because the time is up.

9:35 a.m.

National Representative, Unifor

Angelo DiCaro

Yes, I'll try to keep it short.

9:35 a.m.

National President, Unifor

Jerry Dias

Because I can't.

9:35 a.m.

Voices

Oh, oh!