Evidence of meeting #94 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 tisa.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Ana Renart  Director General, Market Access, Department of Foreign Affairs, Trade and Development
Darren Smith  Director, Services Trade, Department of Foreign Affairs, Trade and Development

4:10 p.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

The hub-and-spoke concept would continue.

4:10 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

Ana Renart

That's correct.

4:10 p.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

There would be four associated states and the trading bloc itself.

4:10 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

Ana Renart

That's correct.

4:10 p.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Okay. There wouldn't be an eight-state free trade bloc.

4:10 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

4:10 p.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Thank you for that clarification.

I wanted to look a bit at the numbers from the Pacific Alliance. In our existing trade with those countries, our merchandise trade, we seem to be importing in about a 3:1 ratio in favour of the Pacific Alliance countries. For services, it's about 2:1 in our favour, but then when you look at FDI, foreign direct investment, it's almost 25:1 or 20:1 in our favour.

Are those ratios going to stay the same while the volumes increase, or will those ratios also change in the event of a free trade successful accession to the Pacific Alliance?

4:10 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

Ana Renart

The ratios are likely.... Well, they may change. Let me put it that way.

We currently have FTAs with the Pacific Alliance countries. For some of them, they've been in place—and Mexico under NAFTA—for several years. Most of the tariff liberalization has already taken place. We can expect some shifts. Especially as we start looking at accumulation of products and value chains, we can expect some shifts, but I don't think it would be huge.

4:10 p.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Okay. I'm probably out of time, Mr. Chair. Am I?

4:10 p.m.

Liberal

The Chair Liberal Mark Eyking

Yes, you're pretty well out of time.

4:10 p.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

Okay.

Thank you very much.

4:10 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

Ana Renart

I'll get your answer.

4:10 p.m.

Liberal

Kyle Peterson Liberal Newmarket—Aurora, ON

I would appreciate your getting back to me on the one question. Thank you, Ms. Renart.

4:10 p.m.

Liberal

The Chair Liberal Mark Eyking

Thank you, Mr. Peterson.

Before I go on, I'd like to welcome two members to our committee.

Madam Mendès, thank you for coming. Mr. Maguire, welcome.

On that note, Mr. Maguire, you have the floor.

4:10 p.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Thank you, Mr. Chair. It's a pleasure to be here.

Thank you very much for your presentation today. It was most interesting.

I'm looking at Mercosur and the four countries involved there in South America. We have roughly $2.6 billion, as you indicated, in exports. Is there a balance of trade with those countries that we presently have? How are we doing with that? That would be a question while you're looking that up.

4:10 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

Ana Renart

I can give you the exact numbers. We are currently exporting to Mercosur.... Our overall trade is about $8 billion. Canadian exports are $2.5 billion, and imports are about $5.5 billion.

4:10 p.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Thank you.

Of course, those countries are different from those in the Pacific Alliance. As you've noted in your comments, we are already into free trade agreements with all four of those countries. In terms of the amalgamation with them in this much smaller $2.3-trillion agreement, I guess, as opposed to the TISA at $50 trillion, which you were talking about—

4:15 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

Ana Renart

It's huge.

December 11th, 2017 / 4:15 p.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

—we have small populations here. Those four countries in the Pacific Alliance are about two-thirds the size of the U.S. population. We're in negotiations with NAFTA right now with the U.S. and Mexico. Mainly there are a lot of discussions here with the U.S. in regard to our side of the border, while for these countries, we were into the TPP with them.

Where's the overlap in the discussions between what we were doing with the TPP with the Americans involved and now without them involved? Is that having any impact on these countries in the Pacific Alliance and the Mercosur to find deals with us?

4:15 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

Ana Renart

With regard to the Pacific Alliance countries, what's interesting is that there is a little bit of overlap with the CPTPP, but it's not complete. The CPTPP includes a number of countries that are not part of the Pacific Alliance, and one of the four Pacific Alliance countries is not a part of CPTPP. Colombia is not a part of the other agreement.

One of the issues I mentioned earlier and one of the reasons we tend to negotiate with other country groupings is to ensure a level playing field so that we can remain competitive, and that if other countries are negotiating potentially different or better access, we're in on it as well.

Despite the fact that with the Pacific Alliance there is some overlap with a potential CPTPP, the dynamics will always change a little bit with different partners—new, fewer, or different partners. It's important to be a part of that just to make sure that Canadian companies are also getting the benefits of whatever happens in that negotiation.

4:15 p.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

What areas of improvement that you mentioned would we bring to the table that would give us an advantage over the other countries they're dealing with, particularly in the Pacific Alliance?

4:15 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

Ana Renart

The Pacific Alliance over what we may be doing at CPTPP—is that what you mean?

4:15 p.m.

Conservative

Larry Maguire Conservative Brandon—Souris, MB

Yes.

4:15 p.m.

Director General, Market Access, Department of Foreign Affairs, Trade and Development

Ana Renart

To start, it's early to give you some specifics. We've had one round of negotiations, so it's just the beginning of signalling our interests, rather than talking about where we may land.

One of the things we're looking at in the context of the Pacific Alliance, for example, is cumulation of goods within the region and creating a free trade area in that sense, so that we can count products from each other's markets as originating to get preferences. That would be an improvement from what we have now.

We are looking at a number of other areas as well, such as electronic commerce and the treatment of small or medium-sized enterprises. We also have some of these provisions in other potential agreements, but there are always innovations. Darren mentioned earlier that the information is always changing. We're always modernizing and updating our FTAs because there are always things that we learn as time goes on and improvements that we can make. It's building on things that already exist.

It's hard for me to give you specifics, because it's just the beginning of the negotiation. I can just talk generally and say that these are some of the things we've been looking at, and this is how we can build and improve and include other innovations.

4:15 p.m.

Liberal

The Chair Liberal Mark Eyking

Thank you.

I know you'd love to ask more questions, Mr. Maguire, but your time is up. They were good questions.

We're going to move over to the NDP now. Madam Ramsey, you have the floor.