International Trade Committee on Feb. 5th, 2021

[Ben Lobb, Conservative, Huron—Bruce, ON]

What about in pork? The access into Europe has been dreadful, and it mainly hinges on testing for trichinella. What are our prospects of trying to gain some access into the U.K. for pork? Are they zero, or do we have great prospects here if we can get over trichinella? How do we get past this?

[Doug Forsyth]

The pork outcome that we were able to achieve in the Canada-U.K. TCA is reflective of the potential of the bilateral trade. There's no question that there have been more than a few challenges in accessing the European Union marketplace, both on the pork side and on the beef side. Those are key outcomes. A number of our key agriculture stakeholders are very concerned with the inability to access those markets, and we share their concerns. Those were important outcomes that we negotiated in both agreements.

On the pork side we have a TRQ similar to what we have with the EU, except it's resized, so it's a bit less than 6,000 tonnes of duty-free pork.

[Ben Lobb, Conservative, Huron—Bruce, ON]

I'm sorry, Mr. Forsyth. Fair enough, but the issue hasn't been the TRQ, as you well know. It's the issue around trichinella, I'm pretty sure. Are there any discussions on the fact that there are no cases, there have been no cases and that there is no risk to the British population about this? Is there any hope in sight for us to get over this issue?

[Doug Forsyth]

Thank you for the question and clarification. That's where I was going with some of the SPS issues that we have to deal with in the EU that may not necessarily be translated over to the U.K. It will take some time for them to get their own domestic SPS provisions in place, to perhaps modify them as they do their own domestic consultations and move forward. I think there are some opportunities there. They won't be in the short term. It will take a little bit longer. We'll have to see.

My colleague from AAFC might want to add to that.

[Aaron Fowler]

I agree with what's been said. I think the outcome on pork is a positive one for the sector. We have had non-tariff challenges to accessing markets in Europe in the past. This agreement maintains outcomes that will allow Canada to work with our partners in Europe and to improve the access beyond the tariff for Canadian red meat exporters. Pork is an important one. We have exports—more than 300 metric tonnes went to the U.K. in 2019—and we're confident that this agreement maintains the market access conditions that will allow the pork sector to build on that.

Beyond what my colleague said, I would just note that the first-come, first-served methodology for the administration of TRQs has been in the past a key ask of the pork sector. It's something we pursued in the CETA negotiations and we're happy to have as an outcome in the TCA.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thanks.

I have one quick question—

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Lobb, but your time is up.

Ms. Bendayan, you have five minutes, please.

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you, Madam Chair.

My first question relates to the memorandum of understanding we signed with the United Kingdom. From having spoken to some of our exporters and of course to our team in the Minister of International Trade's office, it seems that everybody is quite happy with the terms of the MOU that was agreed to.

Can you give us an indication of what you're hearing from our exporters and how smooth the exporting is for our Canadian companies to the U.K. right now?

[Doug Forsyth]

I think the MOU was seen as very helpful by businesses, because it eliminated some of the uncertainty that would have happened as of December 31 as a result of not having the TCA in place as of that day. From that point of view, it was very positive.

We have heard from Canadian companies exporting goods into that market that things are going well. There have been a few glitches, but they're not necessarily trade-related glitches. I think it's part of the overall challenges the U.K. is having in terms of importing goods, which they might not have had when they were part of the European Union. I think those are kinks that will work themselves out.

One thing that is important to note with respect to the MOU is that it covers only goods. It doesn't cover the services, as I mentioned earlier. We don't have the entire agreement in place, but from a goods perspective I think it is working very well thus far.

I might just ask my services colleague—

[Rachel Bendayan, Liberal, Outremont, QC]

Thank you very much. That's very helpful. Of course, that is one of the reasons that it's important for us to act quickly in order to ratify the agreement.

My next question for the panel of witnesses is with respect to the industries that are here in Canada that might be able to benefit from this U.K. agreement. What opportunities do you see for some of our industries that might not have previously exported to the U.K.? Can you perhaps identify some of those industries for us today?

[Doug Forsyth]

The United Kingdom is our third-largest export market. We have had a strong and stable bilateral trade relationship with them for a great number of years. I think it's more likely the case that we will see ongoing opportunities in that marketplace. We are certainly seeing them in the agriculture space but also in other commodities, wood products and industrial products as well.

I think from an opportunity standpoint what we have heard from stakeholders is that the automotive sector remains very interested in the U.K. marketplace, especially as we turn now to electric vehicles. I think that there is a real opportunity for our automotive sector, not just in the U.K. but also in the EU and around the world. There's a lot of opportunity there for growing the bilateral relationship and continuing to make sure that it stays strong.

I'll turn to my colleague from AAFC to see if he wants to add anything.

[Aaron Fowler]

I would agree. I think this is largely an exercise in preserving the opportunities for access to the United Kingdom market that our exporters have enjoyed in recent years, including since the provisional application of CETA. We see it as an important market. Our stakeholders see it as an important market.

The European Union is the world's largest importer of agriculture, food, fish and seafood products, and fully 20% of Canada's recent exports of those products to Europe were destined for the United Kingdom—over $550 million worth of agricultural food and seafood products in 2019—and I think that—

[Rachel Bendayan, Liberal, Outremont, QC]

I understand that. I was asking for opportunities that the government could perhaps explore for new industries to be exporting to the U.K.

[The Chair, Liberal, Judy Sgro]

Sorry, Ms. Bendayan, but your time is up. Maybe the witnesses could try to include that in an answer to some other member who might be interested in the same thing.

We go now to Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Chair.

Witnesses, I'm kind of curious. How vulnerable are our trades going into the U.K. at this point in time when we are without a formalized agreement in place?

[Doug Forsyth]

Again, from a goods perspective, I don't think they're vulnerable. I think we are covered by the memorandum of understanding, which provides for duty remission on Canadian exports into the U.K. marketplace for goods that would qualify under the TCA. So I think we're—

[Randy Hoback, Conservative, Prince Albert, SK]

So that MOU then, legally, has standing in a court?

[Doug Forsyth]

That's correct. It does.

[Randy Hoback, Conservative, Prince Albert, SK]

Is there anything in the agreement that legally forces both sides back to the table?

[Doug Forsyth]

There are provisions in the agreement that will strongly entice, as opposed to compel, both countries back to the table. The cumulation provision, a very important provision, before the United Kingdom, will expire after three years, so on December 31, 2023, unless it is renewed.

Similarly, the United Kingdom has expressed strong interest in cheese access to Canada. We have provided them with the ability to continue to access the European Union pool of our WTO quota, and that will expire after three years. There is a provision in the agreement for the launching of negotiations within a year and then best efforts to finalize them within three years. So—

[Randy Hoback, Conservative, Prince Albert, SK]

I'm sorry, and I don't mean to cut you off, Mr. Forsyth, but five minutes is very short.

So the MOU expires at the end of March. Is there any way to get that extended if this should take longer to get through the Canadian Parliament? I understand the U.K. has finished.

[Doug Forsyth]

That's correct.

The U.K. has finished, and the MOU does expire at the end of March. It does allow for it to be extended if necessary, and so we do retain that as a possibility.

[Randy Hoback, Conservative, Prince Albert, SK]

So we have some time.

I'm just kind of curious. With the CPTPP now coming into the lines of sight here for both countries, what types of things would we like to get out of the U.K. in a bilateral agreement that we wouldn't necessarily achieve in the CPTPP?

[Doug Forsyth]

I think we will see what happens, certainly, in the interests of our stakeholders vis-à-vis the CPTPP versus the bilateral negotiations. Are there certain areas? I think there are other areas in the bilateral where we could go farther than we would have under the CPTPP—for example, with respect to small businesses, digital trade, trade and gender, and the environment.

The one thing about the CPTPP is that, as a plurilateral agreement, some of the provisions don't go as far as you might see in a bilateral agreement. Since we have completed the CPTPP negotiations, we have also completed CUSMA negotiations. The world has changed a bit in the last three years, so are there areas where we would want to go further in the bilateral? I think we'll discover some of that as we do our analysis and as we hear from stakeholders through the consultative process.

[Randy Hoback, Conservative, Prince Albert, SK]

Are things like labour mobility, financial taxation treaties and education opportunities the types of things you'd look at in more of a services-style bilateral agreement?