Evidence of meeting #7 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 ceta.
A recording is available from Parliament.
9:05 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you very much.
We'll move over to the Liberals for six minutes.
Go ahead, Mr. Dhaliwal.
9:05 a.m.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Thank you, Mr. Chair.
Thank you to the panel members.
Mr. Verheul, you briefly mentioned the services sector. When we look at British Columbia's economy, 76% of B.C.'s GDP is as a result of the services sector. Two million are employed in that sector there.
What are the sectors that will impact positively and negatively when it comes to CETA?
9:05 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
As you say, services are taking up an increasingly large portion of economies in most developed countries. Your number of I think 75% is about where the EU is at overall, and Canada is not far behind in terms of the proportion that services take up of the current economy.
Now, in terms of our interest in the EU, the EU has a services market of some $12 trillion. It's a huge market compared with ours. We have a lot of opportunities to enhance our services exports into that market. That has been a big part of our focus. We've included provisions that allow more open access to the EU market in services than they've ever provided to any other country.
9:10 a.m.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
If you take environmental services, professional services, and then clean energy, B.C. is a leader. Among mining, oil, gas, and transportation, which are the ones that will benefit more?
9:10 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
That short list you provided represented some of our primary objectives in the negotiations. When it came to environmental services, engineering services, mining services, and construction services, Canadian service providers have an advantage in many of those areas. Those are areas we highlighted as priorities.
Now, part of our other concern with respect to services was that we didn't want other countries to gain advantage over us in the future. We negotiated what's called a “most favoured nation” obligation, which means that if another country in the future—including the U.S., for example—negotiates better access than we have, we will automatically get that access as well.
You also asked about the potential negative impact on imports of services. In this case I don't see there will be a lot of negative impact. Many of the services that EU companies would be providing are services that we actually have an interest in. We have an interest in drawing on some of the expertise developed in the EU, on some of the advantages they have that they could bring to Canada and that could also benefit our economy at the same time.
9:10 a.m.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
On the other hand, when it comes to British Columbia, fisheries and aquaculture is a key industry. How would it affect that, again positively and negatively?
9:10 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
Fisheries was something we spent a lot of time on because it was a key objective both in the eastern part of our country and in the western part, and particularly in B.C. As it stands now, the EU has tariffs on about 95% of that—sorry, it's not quite that high, but we're going to have elimination immediately on 95% of their tariffs, and 100% after the phase-in period.
They do have significant tariffs. Currently only about 13% of their fish tariffs are duty free. Therefore, that access will be important, and not only with respect to the products that we would ship; the EU also has additional restrictions on processed fish and seafood products. Those will be removed under CETA immediately. That's another advantage.
Then, on agriculture, similarly the EU has provided us with greater access for agricultural products than they have ever provided to anyone. That means we will have open access on over 95% of the tariffs. We will have tariff quota access on a relatively small proportion of products, including beef and pork, but even at that access level, there are substantial gains to be made.
In the case of B.C., both on the fish and seafood side and on the agricultural side, we met all of the objectives that B.C. provided us with in terms of their priorities.
9:10 a.m.
Liberal
Sukh Dhaliwal Liberal Surrey—Newton, BC
Thank you.
On the investment side, the EU is the second-largest investor in Canada. When it comes to the EU investing in B.C., how would it help growth and job opportunities?
9:10 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
We see huge opportunities in that regard. Actually, I think the Netherlands is the second-largest investor in Canada after the United States, and that's only one EU member state, so there's a lot of potential for further growth in investment.
Also, we've already been hearing anecdotally that EU investors from different member states are starting to look a lot more closely at the Canadian market, and that includes British Columbia because of a variety of benefits that are offered there.
I think that kind of investment coming into our markets will lead to further jobs and further opportunities for Canadian businesses, and I think we can see that as a very promising outcome of this agreement.
9:10 a.m.
Liberal
9:10 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
On forestry, we've done a number of things. We've established a committee with the EU to address some of the technical barriers that still exist between us. We have protected our regime with respect to log exports, although we have undertaken to provide the EU with the same access that anyone else might get in terms of our log exports. Generally we're very satisfied with the outcome on the logs and forestry side as well.
9:15 a.m.
Liberal
The Chair Liberal Mark Eyking
Thank you very much, Mr. Dhaliwal.
We're going to go to the NDP for six minutes. Go ahead, Ms. Ramsey.
9:15 a.m.
NDP
Tracey Ramsey NDP Essex, ON
Thank you so much for your presentation today. I think we've all been watching what's happening with CETA, so it's great to have you here. I think it's very timely after what has just happened.
According to a January 2016 document prepared by the European Parliament, it has not yet been decided whether the Canada-EU CETA in its entirety would fall under the exclusive competence of the European Union or would also touch upon member states' competences. Is it expected that the Canada-EU CETA will have to be ratified by each EU member state?
9:15 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
That remains to be determined by the EU. At the moment, we certainly would anticipate that it has to go through the steps at the EU level, including approval by the Council of the EU and the European Parliament. It may then possibly have to go to member states as well.
After the agreement is approved by the European Parliament, the EU will pursue something called “provisional application”, which would allow them to put in place probably 95% of the agreement. Then member states could subsequently ratify, if that's required, over a period of time that would be of less concern to us.
9:15 a.m.
NDP
Tracey Ramsey NDP Essex, ON
Do you think there's a risk that some of the EU member states would decide not to ratify CETA?
9:15 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
No, I don't think there is much of a risk. We have had some concerns expressed about CETA, largely because of the U.S. negotiations. Those were largely coming from Germany and France. Germany and France have since said they're fully on board.
I've visited the majority of the EU member states over the past couple of years, and there's strong support in all of the member states. Even the smaller ones see significant new opportunities that could arise.
9:15 a.m.
NDP
Tracey Ramsey NDP Essex, ON
Going back to the changes that have been made, then, from the ISDS to the ICS, is it a common practice to make these types of modifications to the text of an agreement during the legal scrub process?
9:15 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
I wouldn't characterize it as a common practice, but it's certainly not unprecedented, particularly in the EU, because of the various challenges they have in making sure that 28 member states are staying on board. They have tended to negotiate issues even after negotiations have been finalized. They certainly did that in the case of their agreement with Korea, for example, as well as some others.
9:15 a.m.
NDP
Tracey Ramsey NDP Essex, ON
In your opening remarks to us, you mentioned some of the revisions that were made. One of them was “strengthened provisions on the right to regulate for all levels of government”. Can you expand on that for us, please?
9:15 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
This is something that has been a long-standing part of the Canadian position. We have it in our agreements that we should protect governments' right to regulate.
In our discussions with the EU, we strengthened that further by putting it in the preamble to the agreement, which already asserted the right to regulate, and also putting it into the investment chapter itself. We also have protections for the right to regulate in the individual reservations that we've taken in particular sectors. We have additional protections for areas like environment and labour and that type of thing. We wanted to make sure that there's a very clean line between a government's right to regulate and the rights of investors to be able to challenge any impact of those regulations.
9:15 a.m.
NDP
Tracey Ramsey NDP Essex, ON
There's also some timing that you mentioned around the appellate mechanism, which will become operational after Canada and the EU agree to the administrative and operational aspects of its functioning. When do you envision that happening? What is the timeline on that appellate court process being agreed upon and then having something operational?
9:15 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
We haven't established a set date, but we have indicated that we would do that as quickly as possible, particularly once the agreement comes into force.
As I mentioned earlier, this is the first time that there's ever been an appellate body in investor state dispute resolution processes, so we want to make sure that we design it in a way that's going to function well and make sure that it does what it's intended to do. We have to look at certain practical details, such as the remuneration of appellate body members. We just wanted to make sure that we took the time to be able to get that right. We can work on that—
9:15 a.m.
NDP
Tracey Ramsey NDP Essex, ON
Do you anticipate that by the time of the 2017 signing, by the time it comes into force, it will be in place?
9:20 a.m.
Chief Trade Negotiator, Canada-European Union, Department of Foreign Affairs, Trade and Development
It may not be in place that quickly. We will be working on it in the interim and certainly will be considering it, but I think it will probably take a bit of time after the agreement is in place before we actually have the appellate body functioning and in place.