International Trade Committee on Feb. 13th, 2018

[Juan Camilo Vargas Vasquez]

E-trade, digital trade, was in my speech, but we took it out. Regarding digital trade, there isn't a committee on it as such, but there is a committee that has a digital agenda. If there are advancements in the working group, we're not aware of them yet. If it's a concern, we recognize, of course, that Colombia has worked with Canada to develop more tools, so we can develop this type of trade that has much less effect on the environment, and it's less costly. Through co-operation with groups in Ottawa, we've been able to develop trade. We could share details with this committee. I don't have them with me, but it is something that's being considered in the negotiations.

[Carlos Gil de Montes Molinari]

I would add that, within the alliance, there's a one-ticket window for trade, and we're looking at how to make things digital, how to make transactions digital, and that's something that's worth noting.

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

Thank you.

I have another question for you. We talked about labour mobility, which has two sides. I know that many temporary workers from Pacific Alliance countries come to Canada to work for the summer. They are highly skilled workers. Afterwards, they go back to their countries.

Is there a way to improve labour mobility? What could we do to make it a win-win for both sides, you as well as us?

[Dionisio Pérez Jácome Friscione]

I can share with you the experience we have in Mexico, which is a seasonal agricultural workers program that works very well. I think it complements the needs of both countries. It has been working for over 40 years, and we have now over 25,000 workers who come every year to Canada and return to Mexico every year.

Besides that, going to the Pacific Alliance, what we are trying to do as a group is to allow for the mobility, again, to facilitate the mobility of people, which has proven to be beneficial in the case of Mexico. Something important is that if you look at statistics, the movement in the last three or four years of people from Peru, Colombia, and Chile into Mexico and vice versa, it has increased in a very important manner, which has opened up more opportunities for all of us.

[Alejandro Marisio]

With regard to labour mobility, as the Mexican ambassador said, with countries in the alliance and some other neighbouring countries, Chile has mechanisms that allow for the flow of temporary workers, and obviously this is something that interests us in the Pacific Alliance and specifically for Chile.

We would like to be able to count on, for example, expert Canadian workers who can help us to build and design all sorts of solar energy or wind projects, which we're doing with experts from other parts of the world. If we could include them in our area of work with Canada, it would obviously be positive and that does need to be on the table.

[The Chair, Liberal, Mark Eyking]

That ends our first round.

We're going into our second round, and I'm going to try to keep you to three minutes. If you can just ask a question, and then that way we probably can allow all MPs to have a question in this round.

So we're going to start off with three minutes. The member of Parliament can say a few things in a question, and we can move on to the next. We're going to start off with Mr. Peterson. You have the floor.

[Kyle Peterson, Liberal, Newmarket—Aurora, ON]

Thank you, honourable guests, for being with us today. It's very much appreciated.

I do have a couple of questions, but I think I might only have time for one, and it's going to centre on foreign direct investment. I think Canadian investments are almost $50 billion into Pacific Alliance nations.

Do you, a) see us becoming part of the bloc, a way of increasing that direct investment and, b) flowing it in both directions, as opposed to there being more Canadian money flowing into your countries than vice versa?

Consequential to that, is there a need for some sort of investor-state dispute mechanism in any agreement if there's a sophistication in the foreign direct investment that's flowing?

That's one very big question, but I'd like to hear everyone's comments on that, if possible. Thank you.

[Dionisio Pérez Jácome Friscione]

I'd like to answer the first part of the question, and if you don't mind, I'd like to ask my colleague to respond to the second part.

Firstly, with regard to foreign direct investment, we see the potential for that to increase in both directions in the sectors we've discussed such as natural resources. There are also opportunities in more advanced areas connected to technology. That has already happened with countries that we have agreements with, so we see no reason why it wouldn't occur with the four countries that could associate with us here.

Now with regard to ISDS, which is a bit more technical, I'd like to ask my colleague, who represents our economics branch, to speak.

[Yvonne Stinson Ortíz, Representative, Ministry of Economy, NAFTA Office, Embassy of the United Mexican States]

The first thing I'd like to say is that FTAs exist specifically to set rules, so that investors can feel more secure in sending their capital to other countries. With better regulation there can be more investment on both sides.

Secondly, in the case of the Pacific Alliance, it's a living mechanism. We're accustomed to seeing these mechanisms in TPP or NAFTA or CETA, and there are methods that are going to be developed in the Pacific Alliance, including the parts about labour and investment protections.

There isn't a mechanism such as ISDS, which you mentioned, but we think that in a future version of the Pacific Alliance, we could move towards the measures that are typical in FTAs. This is because the Pacific Alliance is a mixture between the aspects that we consider crucial to FTAs, such as tariffs, which in any case have already been lowered to almost non-existence, and then other areas, which we have moved forward a great deal in models such as CETA and the TPP.

[Alejandro Marisio]

Mr. Chair, I'd like to add that when it comes to Chile, Canada has $20 billion in direct investment. It's the third-biggest investor in Chile, and the biggest one in the mining sector, as I mentioned.

However, there are also significant amounts of investment in other sectors, such as electricity, water, the chemical industry, transportation, warehousing, and the finance sector.

Recently, Scotiabank acquired a Spanish bank by investing $2.2 billion, which is 14% of the market share. Now Scotiabank will become the third-biggest private bank in Chile.

Chile also has about $2 billion invested in Canada, specifically or largely in the service sector. We hope that an agreement between the Pacific Alliance and Canada will increase the amounts invested in both directions. It already exists in our bilateral agreement, but as my colleague mentioned, we hope to be able to coordinate things so that the alliance and Canada can have their mechanisms to protect investments.

[Juan Camilo Vargas Vasquez]

As for Colombia, we have an investment chapter in our bilateral agreement, but I'd also like to clarify one thing. In 2016, Canada was the biggest investor in Colombia for the first time in history. It invested over $2 billion in a major company through a fund. CDPQ has also invested in infrastructure. The Energy Management Corporation has also done so. Many provincial funds of almost all the provinces of Canada have invested in Colombia, which means that the business climate is good, and all the due diligence carried out by these various provincial funds has given excellent results. This shows that the business climate is currently very favourable with regard to what you mentioned about investment disputes.

[Carlos Gil de Montes Molinari]

For Peru, I'd like to highlight the importance of Canadian investment in mining, and the very great importance of corporate social responsibility. Mining is a very important sector for both of our countries and constitutes a pillar of our trade relationships. We would like to increase our co-operation in these areas through the Pacific Alliance. We want to broaden these relationships. Investment in mining is very significant in Peru, and the presence of Scotiabank, once again, is very important.

[The Chair, Liberal, Mark Eyking]

Thank you very much.

We'll now go to our special MP, Mr. Hoback, who is learning Spanish. We commend him for that—learning Spanish and speaking it in Saskatchewan.

[Randy Hoback, Conservative, Prince Albert, SK]

Buenos días. Bienvenido.

Now I'll switch to English.

[Voices]

Oh, oh!

[Randy Hoback, Conservative, Prince Albert, SK]

I was with Prime Minister Harper and Minister Fast in Cali when the negotiations there were ongoing. I remember us talking afterwards and being just so impressed with how the leaders were driving the agenda and how they were setting the stage to make this happen. It wasn't the bureaucrats; it was actually the leaders sitting around the table saying, “We need to do this for our people.”

The other thing that impressed me, compared with what we're seeing in NAFTA today, is that you didn't look at it as, “What can I get out of the agreement?” It was, “What can we do together to make our region, our bloc, stronger?” I think that's such an impressive goal, because it will help your people in each of your countries. It will take your strengths and magnify them by four. I know that I wished at the time that we could have joined on and been the fifth player, but there were some other issues there. I really look forward to us actually getting closer now as we move forward.

The other thing I always say is that a trade agreement should always be fluid. It should always be progressing and moving forward. This definitely will do that here for Canada and for the Pacific Alliance countries.

My question is with regard to MILA and the TSX. How do you see these two functions working together? I know that you brought your exchanges together in the Pacific Alliance countries, and I'm kind of curious to know how that's going. The TSX is the mining venture. All the mining capital is raised in the TSX. It's distributed around the world. A lot of it comes into your country. How do you see that coming together, being stronger, and working for the region if we move forward?

[Dionisio Pérez Jácome Friscione]

Let me go first.

In the case of Mexico, the way we are working with MILA is that obviously each exchange....

[Witness speaks in Spanish with interpretation, as follows:]

Each stock exchange continues to be independent, working in their own country, but they have decided to operate jointly. They did not fuse into a single entity but they do operate jointly so that businesses can benefit from all of the projects in the regions. What I mean by this is that there are more possibilities for capital funding for projects in the regions.

With the TSX, that's a very promising opportunity to further broaden the capital markets in the regions, increasing competitiveness and the terms for our various businesses. I believe it would be a very promising opportunity that would enable us to allow the businesses in the region to expand.

[Randy Hoback, Conservative, Prince Albert, SK]

Just quickly, if you list on an exchange in Mexico, do you automatically get listed on the other exchanges?

[Dionisio Pérez Jácome Friscione]

If I understand correctly, the businesses that are listed would appear on the entire market. On the technical details, I would want to consult financial experts so that I don't give you an incomplete answer.

[Yvonne Stinson Ortíz]

Perhaps I could share this with you. You may recall that when NAFTA won, when we, the three countries, were negotiating together, we had the same philosophy. We were three free traders, and we had to fight for our own constituencies as a government. But this time we have our mutual friend in between, who has a different philosophy. We have to face that fact of life. It is difficult to know what they have in mind or what the final goal is, but we know they are very concerned about deficits. As Canada and Mexico, we have to face that and be able to come out with very clear solutions in that area.

I just wanted to share that with you. When you start talking about how things have changed in the arena internationally, the U.S., not just with NAFTA, has changed its philosophy. With the WTO, we don't know what will happen in the future. I think it's very important to have a different approach this time.

[The Chair, Liberal, Mark Eyking]

Thank you.

Mr. Hoback, those were good questions.

We'll move over to the Liberals now.

Madam Ludwig, you have the floor.

[Karen Ludwig, Liberal, New Brunswick Southwest, NB]

Buenos días.

My question is for all of you, your excellencies and ministers, in regard to our progressive trade agenda that we have in Canada and that I believe is mutually supported by the member countries here.

Could you explain to our committee how you reach out to women in your countries in order for them to benefit from international trade within the Pacific Alliance and others? Maybe it's microcredit or other examples like that.

[Alejandro Marisio]

For Chile, gender is at the very top of our agenda. That is something we're addressing. In fact, we have also included it when it comes to writing trade agreements. We should recall that when President Bachelet visited Canada during the negotiations for the Canada-Chile Free Trade Agreement, there was a gender chapter that was included to ensure that women would be able to benefit from international trade and to also ensure their rights and empowerment.

After all, in Chile, women's empowerment is an important issue. For example, we have quotas for female candidates for political parties and all sorts of other protections for women. We are working closely with Canada's Status of Women department to exchange best practices and share our experiences.

In the Pacific Alliance, Canada's progressive agenda is very familiar to us and is one that we wish to adopt as well. We've had many discussions about this. We are going to continue following up on it. This is not an issue that is unfamiliar to us. On the contrary, we want to promote gender equality, and not only to help women. There are also other aspects of that progressive agenda that we consider very important.

[Dionisio Pérez Jácome Friscione]

Mexico and Canada share a vision on many of those issues. It is a common vision when it comes to gender, environment, and labour issues. For example, we are looking for new chapters in the Pacific Alliance with regard to these issues. I would say that a good indicator is what is happening in NAFTA. We want to add provisions about this to the body of the agreement, where we would include these environmental and labour provisions. This shows that Mexico wishes to continue promoting the development of these important issues. These are areas where we share a common vision with the Canadian agenda.

[Carlos Gil de Montes Molinari]

In Peru, we are working to create policies to promote the 2030 objectives, including the fifth one, which is to promote gender equality and to encourage the empowerment of women and girls.

Peru recognizes that gender equality is not only a fundamental human right but that it also will constitute the foundation for a prosperous and sustainable world. The more that women can have access to education, jobs, and medical attention, the more our economies will flourish. That is why Peru has created the ministry of women and vulnerable populations and why within the Pacific Alliance there is a technical working group on gender.

Thank you.