International Trade Committee on March 11th, 2020

[The Chair, Liberal, Judy Sgro]

Go ahead.

[Vance Badawey, Liberal, Niagara Centre, ON]

It was with respect to—

[The Chair, Liberal, Judy Sgro]

Move your earpiece. Somebody's is close by.

[Vance Badawey, Liberal, Niagara Centre, ON]

Let's try it again.

It was with respect to contingencies. Are there contingencies in place during as well as after the fact with respect to the different sectors that are being affected?

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Excuse me. There is a noise that's preventing the interpreters from doing their job. Can we wait a few moments?

[The Chair, Liberal, Judy Sgro]

Is it the microphone? Do we need to change to a different microphone?

It's when we're putting down our earpieces, apparently.

Ms. Hembroff, perhaps you could use Mr. McDougall's microphone.

[Sukh Dhaliwal, Liberal, Surrey—Newton, BC]

Turn the volume down.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

The problem isn't related to the sound volume or my earpiece. It's being caused by some sort of interference that has been going on for some time and is not letting the interpreters do their job.

[The Chair, Liberal, Judy Sgro]

Turn the volume down on the earpieces.

Mr. Bird.

[Colin Bird]

I'll go back to the question on contingency measures and how we implement adverse decisions.

Like other countries, we have a process, and usually after an adverse decision at the WTO, there is a negotiated reasonable period of time at the WTO to implement that decision. That's also an opportunity to work with the opposing party to determine an appropriate route from where the measure is to where it needs to get to be compliant with Canada's WTO obligations.

[Vance Badawey, Liberal, Niagara Centre, ON]

If they don't retaliate....

[Colin Bird]

Well, even after an adverse decision, you have a negotiated period of time in which you have to come into compliance with that decision. That's the period of time in which we work with industry, we work with the opposing party to identify a road forward that is compliant with the rules and that can be implemented either by a subsequent decision of whether it's compliant or not at the WTO, or by a mutually agreed solution with the other party.

[Vance Badawey, Liberal, Niagara Centre, ON]

However, under article 17 of the rules and procedures, they have a mechanism built in for retaliation at any time, correct?

[Colin Bird]

That only takes effect after there has been an arbitration on the level of concessions that they are able to withdraw. From the time that you are found offside of the rules, there is an initial period called the reasonable period of time to come into compliance, and during that period of time, they can't retaliate.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Mr. Savard-Tremblay, for two minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

In that case, I will repeat my earlier question. We were interrupted and I couldn't get an answer. It had to do with the ongoing negotiations on electronic commerce, which some people are worried about.

Will this liberalization give even more power to web giants, who already have a lot of it? I heard you talk a bit about the collection of information, and I'm including that as part of my question.

Will this liberalization give free rein to multinationals, even though they already enjoy a clear advantage in e-commerce?

[Darren Smith]

I think that with the work we're doing in the WTO, along with any other trade agreement, we are looking at creating a level playing field for all companies. In fact, the work that we do in terms of increasing certainty and predictability in our trade agreement outcomes pertains to digital trade. Actually, the greatest beneficiaries are in fact small and medium-sized enterprises, because they're the ones that cannot bear the type of administrative burdens and costs associated with some of the complex rules that are applicable to digital trade and barriers that could exist in certain foreign jurisdictions. It includes issues like limitations on cross-border data flows, data localization requirements, or maybe requirements on the disclosure of a source code.

I would take your question in the sense that there's going to be, I think, an ongoing debate in society, not only in Canada, but in other countries, as to what role some of these big companies play. These are not some of the types of considerations that we would tackle in the context of a trade agreement. We are simply looking to create a level playing field for all companies, domestic and foreign, with respect to what takes place in the realm of digital trade. As I said, we are tackling issues that, in our belief, will actually give priority benefit to SMEs.

[The Chair, Liberal, Judy Sgro]

Mr. Blaikie.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

I find the comment interesting, because we did hear a lot of testimony in the study of CUSMA that suggests otherwise, which is that actually what was put in CUSMA is going to benefit the existing large web giants that are predominantly located in the United States, and that what's in CUSMA forecloses on a lot of policy option debates within Canada.

I don't think it's just a simple matter of trying to level the playing field, because we heard very clearly that on some of the provisions you're talking about, it's not a level playing field right now and that those rules are to the benefit of the established players. While it may be a level playing field on paper, in practice it's not going to establish a level playing field, because you already have major players who have serious assets they can use to perpetuate their position within the industry. Also, it may actually be a serious barrier to entry into the industry for smaller players, as those larger players are allowed to continue to use their existing advantage against entry.

When you look at companies like Microsoft and Apple, for instance, and maybe particularly Microsoft, that actually seems to be the business model. It's to use their existing size and clout to keep smaller players out of the market or to only allow them to participate as start-ups that then, once they start to do something that could challenge the position of that larger company, they are bought out and assimilated into those companies.

For what it's worth, this is a word of caution. It sounds great to say that we're just trying to level the playing field, but I'm not convinced that's actually what's going on when we enshrine these kinds of rules. I do think that Canadians have a right to a meaningful policy debate, which is being circumvented by the government, first of all in CUSMA. I'm concerned that this is happening and that Canada is a proponent of circumventing our right to a domestic debate by already taking bullish action on these types of things at the international trade table.

Have I used all my time?

[The Chair, Liberal, Judy Sgro]

You have 15 seconds for an answer.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Okay. I wanted to start on a new line of questioning, but I will have to foreclose on that for now. Thank you.

[Darren Smith]

Again, I would say that the work we do is again reflective of our domestic regime. We're also basing our activities on the work of extensive consultations with Canadian stakeholders—industry, civil society, organized labour. We certainly have, as I said, put all our proposals on the table. We'd welcome further comments and insights from all Canadians on the work we're doing.

[The Chair, Liberal, Judy Sgro]

Thank you.

Mr. Carrie, you indicated that you have a short question you wanted to ask.

[Colin Carrie, Conservative, Oshawa, ON]

Yes.

From a world trade perspective, if a country wants to protect a certain industry.... I come from Oshawa. As an auto industry, you want to move ahead with future trade agreements. You decide that you want to protect this one particular sector. What does it do to the negotiating ability of Canada or a particular country to actually first get involved in trade agreements? Does it put you at a disadvantage as far as negotiation goes if you go into these discussions with that type of mindset?

Are you able to comment on that?