International Trade Committee on July 9th, 2020

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Rioux.

We will move on to Mr. Hoback for four minutes.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Thank you, witnesses, for being here this nice day.

Five minutes isn't enough, Chair, and I think you know that, but I'll go to Ms. Citeau first.

One of the concerns I have post-COVID is that countries are using non-tariff trade barriers to restrict access in order to protect domestic sectors as they try to recover economically in their country. On the agriculture side of things, of course, they use all sorts of items as we've seen in Italy and in China, for example, in canola. We've seen it in India and a few other countries that you mentioned.

Do you think the government has put in place enough people, for example, CFIA inspectors? Do you think our trade commissioners are positioned properly? Do you think we have the mechanisms in place for this turmoil that's coming in front of us? Do you think they have properly prepared, or are you aware of any changes they have made in regard to making sure we can represent Canadian companies in these countries when this turmoil erupts?

I'll start with you, Ms. Citeau.

[Claire Citeau]

I'm not aware, myself, of changes, or at least recently, but it's certainly an area that we need to look at as these trade barriers continue to increase. As I mentioned, the list of countries continues to increase when it comes to countries adopting non-tariff barriers. Certainly, they need the opportunities to have boots on the ground even before those issues become problems. That can certainly help.

This is something that some of our members are asking for in certain countries and regions of the world, to make sure that non-tariff barriers are dealt with before they become problems. Having trade commissioners on the ground doing advocacy can certainly be helpful as well.

Overall, I think it can only help when it comes to making sure that the rules are enforced and respected around the world. This is certainly one of our major issues and concerns for members today.

[Randy Hoback, Conservative, Prince Albert, SK]

I'm a big fan of the trade commissioners and, in fact, I want to compliment them. I know that, when this crisis erupted, a lot of them shifted to finding the PPE supplies that we got into Canada, and they were trying to help in the logistics in regard to that. A lot of them stayed in countries when probably they would have preferred to come back to Canada.

That's one of my concerns now. We've had a lot of our bureaucracy who have been around the world, stationed in countries that are important to us, come back to Canada. What's the process of getting them back to the countries moving forward post-COVID and reflecting on making sure our Canadian companies have proper representation and that Canadian travellers in the future are properly represented and taken care of, too? That is one concern I have.

I'm going to shift a little bit to the U.K. One of the things I'm hearing from agriculture producers.... Here is a classic example. Last night I was on a conference call with some agriculture producers out of southern Ontario. They grow lots of beans, and they sell a lot of those beans into the U.K. They're very nervous that they don't know what the price of those beans is going to be on January 1, because they don't know what possible tariffs could be in place or not in place.

The other concern they have is, when they see other countries, such as the U.S., that compete with them, that the U.S. may have first-mover opportunity, which is what we had in Japan with TPP that really gave us good market access and a great advantage.

Are you concerned that we haven't entered into a negotiation with the U.K. and that we haven't even done the simple stuff as far as the easy, low-hanging fruit and at least get that out of the way?

[Claire Citeau]

I think certainly there has been some anxiety that our members are feeling, not only about non-tariff barriers but also the pace of negotiations that some of our competitors have adopted when it comes to negotiating free trade agreements around the world. That has been the case with the U.K. and other countries as well.

We know that we lose when our competitors are first to markets we are also after. Seeing the U.S., Australia and the EU engage with the U.K. certainly raises eyebrows and questions, but that's also the case with the U.S. and China, or the EU and Thailand and others. It all certainly creates some anxiety, and they find that Canada's response in large part to our global competitiveness can provide confidence, or not, on a path forward.

That's why we support the inclusion of the U.K. among Canada's priorities for negotiation. It's important that Canada be actively engaged in the discussions with the U.K. and not necessarily wait and see.

[Randy Hoback, Conservative, Prince Albert, SK]

Yes, I was talking to one of the grain companies, G3, a couple of years ago, and they were concerned. They sell a lot of wheat into Warburtons, and they were trying to figure out their pricing mechanism in their futures contracts while not having the visibility of what that was going to look like. They were raising that issue for sure.

Do you think we're going to see a lot more challenges and a lot more ruckus, for lack of a better word, in our trading markets over the next year or year and a half? Do you get a sense from talking to your producers that it's not business as usual as it has been in the past?

[The Chair, Liberal, Judy Sgro]

Make a short response, if possible.

[Claire Citeau]

I certainly think the road ahead is going to be rocky for us. We need to make sure our existing free trade agreements are going to work and that we continue to diversify, but we can't take for granted what we had before the pandemic. That's for sure.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll move on to Ms. Bendayan.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Madam Chair.

Thank you, Ms. Citeau. We've spoken several times during the pandemic. I'm glad to see you again, even if it's just virtually.

I have more of a general question. Your sector, the agri-food sector, was especially hard hit by COVID-19 and the global pandemic. As you know, Minister Ng and others have worked extremely hard and been leaders in the international community, promoting international trade and making sure we don't turn inward and protectionist. One thing that comes to mind is the April 22, 2020 statement that was signed with 23 other WTO countries to ensure open and predictable trade in food and agriculture products. I know that was important for you.

Can you give us a general idea of what this period has been like for you? Do you think, as I do, that the Government of Canada has taken a strong position so far and really championed international trade in a number of multilateral organizations?

[Claire Citeau]

If you read the press releases we put out during the crisis, in the past few months, you'll see that the Canadian Agri-Food Trade Alliance has applauded Canada's efforts. As I understand it, the Ottawa Group was largely responsible for those efforts. The fact that the borders remained open to agri-food trade is precisely why families were still able to put food on the table, not just in Canada, but also all over the world.

When we think about agriculture, we think about the products we see on store shelves, but there's a whole ecosystem of underlying sectors: distribution, transportation and retail. For the supply chain to work, all of those sectors need workers, ingredients, services and so on. Those networks were able to keep operating because the borders remained open. Not only were we able to continue feeding people, but we were also able to protect jobs and keep the economy moving. The work that was done was vital. I mentioned this earlier—and I hope it was heard despite all the technical difficulties: the work was tremendously important, but it's imperative that it continue.

According to the Ottawa Group's most recent news release, the export restrictions adopted by some countries during the pandemic were limited and are coming to an end. Of course, those efforts have to continue as well. We, too, have some suggestions and we'll definitely be sharing them with the government and the committee soon. We've observed certain things during the pandemic. The Ottawa Group could take a closer look at some of our proposals.

[Rachel Bendayan, Liberal, Outremont, QC]

Mr. Langrish, with the Canada Europe Round Table for Business, I understand you have been around for about 20 years with a very interesting membership.

I was wondering if you could comment a little on something you mentioned earlier. I believe you said earlier that it was your opinion that we might not come to a negotiation or final agreement with the United Kingdom until 2021.

I was wondering, if that were the case, what you think would be our most prudent step forward to ensure, after CETA no longer applies at the end of the year, that there is predictability for our exporters here in Canada.

[Jason Langrish]

It is worth remembering that this is largely on the U.K. The U.K. made the decision to leave the European Union, so the U.K. is the demander in all of these things, including their discussions with the EU and discussions with third parties like Canada.

In my view, the U.K. hasn't done a very good job in outlining its priorities. They're poorly defined, and it's a difficult party to negotiate with. It doesn't have a lot of capacity. The trade negotiations have been conducted by Brussels for the last 40-plus years. They have been doing their best to build up their capacity, but it's not there.

There are a couple things. First is that I think there was a remark that we aren't doing anything while the U.S. and other countries are negotiating, but we have been doing things with them. We have been discussing a rollover agreement, a CETA-like agreement that would be put in place in the event of a no-deal scenario. However, as I mentioned, the U.K. government unilaterally said they're going to remove all import tariffs. That's a huge piece of what would have been negotiated, which was negotiating away those tariffs, so we could get it for free. We don't even need to negotiate an agreement to get that tariff reduction. That changes the dynamics.

Also, the idea that the U.K. is going to strike a deal with the U.S. this year is not very realistic, with an election campaign and the difficulties of getting the deal through Congress.

I think we need to keep the lines of discussion open with the British. We should be having concurrent discussions with them, but we're going to have to face the reality that there are going to be some chapters of a potential Canada-U.K. deal, which will look like a CETA deal, that we won't be able to close before we know what the U.K. and the EU are going to agree on. First and foremost on that is how much a regulatory approach is going to diverge—

[The Chair, Liberal, Judy Sgro]

I'm sorry. I have to cut you off, Mr. Langrish.

[Jason Langrish]

These are the key answers to the question, so if you don't want to hear that, then….

[The Chair, Liberal, Judy Sgro]

We certainly do. It's just that each members has…. I still have two members to get their time as well. There's only so much time. I'm sorry about that.

Mr. Kram.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you. I'll be splitting my time with Mr. Lewis for this round of questioning.

Mr. Partyka, are you aware of any requirements during the procurement process for the electrical project in northern Ontario? Are you aware of the past dumping by the South Koreans being taken into consideration in the procurement process for that particular project?

[George Partyka Sr.]

I'm not aware of it, no. I'm pretty confident that the same kind of approach was taken by the Koreans, but I'm sorry. I'm not privy to the procurement side of things, so I couldn't comment on that.

[Michael Kram, Conservative, Regina—Wascana, SK]

All right.

In general terms, is there anything else that policy-makers should be doing or need to be aware of to stop unfair dumping practices?

[George Partyka Sr.]

Mainly it's to influence training procurement specialists and procurement officers so that they are more aware of what dumping means. I think the incentive for all these people is just to buy low and not to consider the real value or the fact that dumping is going on. It's a lengthy process to determine dumping, but on the other hand 90% of the material is traded on the open exchange, so it shouldn't be difficult for them to realize where the price level should be in the first place.

I'm thinking training would be the biggest thing for procurement awareness.

[Michael Kram, Conservative, Regina—Wascana, SK]

Thank you.

I said I'd be splitting my time with Mr. Lewis, so I'll hand things over to him.

[Chris Lewis, Conservative, Essex, ON]

Thank you to my colleague Mr. Kram.

I would like to continue to hear from Mr. Langrish.

Sir, if you could continue on your answer from the former question, that would be fantastic.

[Jason Langrish]

Yes, it's just to say that we cannot close chapters on rules of origin. We spent almost two years negotiating rules of origin and going through lists with which services would be covered and those types of things. This is a very lengthy process. The idea that we're going to be able to get this all done and ready to go by the end of the year is, in my view, just not realistic. We need to advance a CETA-like deal with the U.K. and have those negotiations occurring, those talks, and take those discussions as far as we can go, but be cognizant of the fact that, until we know what the outcome of the U.K.-EU talks are, we will not be able to close certain chapters of that agreement.

[Chris Lewis, Conservative, Essex, ON]

Thank you.

This is probably a question specifically for, I believe, Madame Citeau. If there is anybody else who would like to jump in, feel free.

Specifically to our wine industry, I believe the WTO's decision has been pushed off until July 17, which I suppose in a lot of ways is, perhaps, good news for us. At least there's still a fighting chance. I'm wondering if there are any other industries out there that you know of specifically that are equally as concerned with our relationship with the WTO and/or Australia and kind of being bullied into a corner.

What are the thoughts of any of the experts here?

[Claire Citeau]

For the record, we represent a large portion of the agriculture and agri-food sector, not the supply management sector and not the wine industry but beef, pork, wheat, cereals, whole seeds, grains, pulses, malt, sugar and processed food products.

We are very concerned about the state of the WTO, which needs to be modernized. Its dispute settlement system is not fully operating. There needs to be reform work done on its negotiating processes as well as the overall governance of the organization. The Doha round has not moved for a long time, yet it's remained a very important forum for us to address, not only dispute settlements but important things like agriculture and domestic subsidies as well. We absolutely need the WTO because it's the basis for the global rules-based trading systems. There needs to be adherence to the rules, and those need to be made based on science as well. It's really important that it continue to function properly and deliver on stable and predictable trade. This is really essential for our own economic recovery.