International Trade Committee on Oct. 30th, 2020

[Randeep Sarai, Liberal, Surrey Centre, BC]

Thank you, Madam Chair.

Thank you to all the guests we have here today.

Surrey Centre is home to one of the largest softwood lumber mills...and employers in the province and perhaps even in the country. As you are well aware, lumber prices are very high right now. In fact, there are record highs of $800 per thousand board feet, or more. It's good for the industry currently, but my fear is that the Americans may retaliate again, as we've seen in patterns in the past.

What pre-emptive conversations or work has your office done with the Americans to make sure that this doesn't happen?

[Sara Wilshaw]

Thank you, Madam Chair, for the question.

The trade commissioners are working with the clients, of course, to ensure that they have opportunities presented before them and that they are in the best position to take advantage of those opportunities.

In terms of the discussions with the Americans and negotiations regarding softwood lumber, I would defer to my colleague Kendal Hembroff for that response.

[Kendal Hembroff]

This particular dispute that we have with the United States on softwood lumber is outside of my own responsibilities. If the member would appreciate more information on that, I might suggest that we maybe provide some clarification in writing. I don't specifically work on our softwood lumber discussions with the United States.

[Randeep Sarai, Liberal, Surrey Centre, BC]

I would appreciate it if you could send something over to us afterwards. I think other members on this panel would also appreciate that.

Second, although my riding is not an agrarian riding, it's a port riding and we have a lot of exports out of it. Lentil exports have been doing very well. Canadian lentils are being exported to Asia in particular, as well as the Middle East. How is the trade commission working to ensure that this steady supply is not interrupted? As we've seen, different countries, sometimes arbitrarily, have imposed either tariffs or unreasonable fumigation policies.

Can you elaborate on that and let us know how we've been working with those countries to make sure that it's consistent and that Canadians know they can sell their food products globally?

[Sara Wilshaw]

Thank you very much for the question.

Of course, our trade commissioners in the field are always working with our farmers and producers to help them find opportunities, to diversify those opportunities, to ensure that they have good, solid partnerships in place and to help them solve problems when problems arise, including informing our trade policy colleagues when certain barriers come up and asking them to work very closely and quickly with our colleagues at Agriculture and Agri-Food Canada to try to resolve them in a longer term.

Short-term, of course, we are always there to help with problem-solving. I can speak to personal experience. When I was posted in India, we had occasional difficulty getting product through or off the dock. We engage on the ground with the local governments and try to work through these things using science-based evidence to talk about those kinds of market access issues.

I would defer to my colleague, if she has anything to add from a trade policy and negotiation standpoint.

[Kendal Hembroff]

As the member may be aware, right now our pulses trade is facing significant challenges, in the Indian market in particular. I think you raised one of the issues in that case, which relates to some fumigation requirements, among others.

We're working very closely with our Indian counterparts to try to find a science-based solution. We raise our concerns at a variety of levels. We also work through the various WTO committees that are responsible for allowing WTO members to raise these kinds of issues when they arise.

Ultimately, in some cases our government may decide with a particular irritant to proceed to formal dispute settlement, when we feel that another country's measures are outside the commitments they have made under our trade agreement. Of course, we work very closely as well with the trade commissioner service and our missions abroad in engaging in international advocacy. Ultimately, our aim when these types of problems arise is to resolve them as quickly as possible.

Now, some of these issues can be quite challenging, so sometimes they can take some time to resolve. Certainly we're aware of some of the significant challenges facing our agriculture sector in a number of different sectors, including the pulses sector in India.

[The Chair, Liberal, Judy Sgro]

Thank you very much for that.

We'll move on to Mr. Savard-Tremblay for two and a half minutes, please.

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

Thank you, Madam Chair.

My question is for you, Ms. Hembroff. You alluded to certain negotiations being under way right now. How are the current trade negotiations with Mercosur going? We know that environmental groups have recently stepped in to ask Ottawa to temporarily suspend discussions because of the record-breaking forest fires. This issue has an environmental aspect to it as well.

In the European Union, France and Germany have also moved to suspend the negotiations for the same reasons.

Have you also put them on hold for now? What is the current status?

[Kendal Hembroff]

Chair, we have not had a negotiating round with the MERCOSUR countries now since—I'll just double-check the date—almost one year ago. This is largely due to the pandemic, which did not allow us to host a negotiating round this fall as we had originally hoped to be able to do.

In the meantime, though, we are engaging virtually with our MERCOSUR counterparts across a number of different areas. At the same time, we are also aware of the concerns that have been raised with respect to some of the environmental protection issues, in Brazil in particular. We have really made a point in all of our international trade agreements to ensure that trade and environmental issues are very prominent.

We're certainly committed, in the context of a possible Canada-MERCOSUR agreement, to ensuring that trade liberalization and environmental protection are mutually supportive. From that standpoint, we have been pursuing in the negotiations a very robust and comprehensive environment chapter. This includes core environmental provisions focused on maintaining high levels of environmental protection and ensuring robust environmental governance, as well as a range of provisions to address global environmental issues, including commitments to promote sustainable forest management and combat illegal logging and related trade.

[The Chair, Liberal, Judy Sgro]

Thank you very much for that information.

We'll go now to Mr. Blaikie for two and a half minutes.

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

Thank you.

On that theme, is it the position of Global Affairs that it can sometimes be a legitimate way to put pressure on other countries to improve their behaviour with respect to, for example, the environment by abstaining from trade negotiations or refusing to enter a formalized trade relationship? Does the department think that that can be a legitimate strategy from time to time?

[Rachel Bendayan, Liberal, Outremont, QC]

Madam Chair, on a point of order, with respect to the relevance to the motion that is before the committee, I think we're straying a bit far from Mr. Hoback's motion on the impact of COVID-19.

[The Chair, Liberal, Judy Sgro]

Thank you very much for pointing that out. This could be a very, very broad topic, so with the motion we are trying to focus exactly on the impacts of COVID-19 on trade.

I'll go back to Mr. Blaikie. If you want to take your comments in a different direction, that would be helpful.

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

Well, I certainly look forward to following up on this theme at some time, Madam Chair, but I do take your point that another forum or another study might be a more appropriate venue. The issue may come up, though, because as we discuss with other countries, for instance, supply chains for goods that are required in the pandemic context, there may be countries that....

Part of what I'm trying to understand is whether the government's position is that we trade first and ask questions later, or whether it can be a legitimate strategy to say that in order to put pressure on other countries for non-trade-specific types of policies, we withhold trade from Canada.

I'll put the same question without the environmental example. In the instance that we are negotiating some kind of trade provision that is pandemic-related, might it not be a legitimate strategy for the government to see its trade agenda as a way to put pressure on other countries to exhibit certain forms of behaviour regarding things that aren't directly trade issues, as we normally understand them, but that Canada and Canadians nevertheless feel very strongly about?

[The Chair, Liberal, Judy Sgro]

Could we have a very short response to Mr. Blaikie?

[Kendal Hembroff]

Chair, I think probably the shortest answer I could give is that our trade policy is an extension of our foreign policy, so when we are considering whether to embark on a prospective negotiation or conclude a particular trade agreement, there are a lot of different considerations, including potential commercial benefits to Canadian business, a variety of different foreign policy considerations and, in some cases, development considerations.

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

So those might include Canada's environmental commitments as well.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Blaikie.

I have to move to Mr. Aboultaif for five minutes.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Good afternoon, Ms. Wilshaw. Congratulations again, and welcome to you and your team who are appearing before committee today.

I've heard three figures: that we have 1,000 trade commissioners abroad, that we have about 130 back in Canada because of COVID, and that for every dollar we spend we get $26 in export.

It seems like a healthy margin, but in terms of trade, in my opinion, those figures could be in a way meaningless in terms of some of the benchmarks that we would probably be interested in seeing. We have about 13% of the trade commissioners back in Canada. The question is, how much does that affect trade and export in general?

[Sara Wilshaw]

Madam Chair, we have not seen that having the very few trade commissioners who have not been able to return to their posts being back in Canada at the moment has resulted in less trade per se. There may be other reasons for reductions in the movement of goods and services abroad. It would be impacted by some of the trade restrictions that were put in place, of course, but in terms of the trade commissioner service, I don't think that the movement of trade commissioners back to Canada has resulted in a reduction in service or in trade.

In fact, as I think I mentioned earlier, our trade commissioners have continued, even from their places of evacuation, to serve our clients and to serve them very, very well during this time.

I'll turn to my colleague Duane McMullen, who is on top of our operations. He might be able to speak to some of these examples.

Duane.

[Duane McMullen, Director General, Trade Commissioner Service - Operations, Department of Foreign Affairs, Trade and Development]

Thank you, Chair, and thank you, Chief Trade Commissioner Wilshaw.

Madam Chair, in response to the member's question, though we have had a number of trade commissioners back in Canada for duty of care purposes, most of them, as the chief trade commissioner has mentioned, are back at mission now. At the same time, we have been innovating on how we can help Canadian business be successful by doing business remotely instead of by a physical visit to the marketplace, and also to have the right tools and the right training so they can have a virtual business meeting with their counterpart.

Minister Ng is in fact leading a large virtual trade mission to Korea next week as a larger-scale test of how we can help Canadian business succeed and find new customers, even in a world where it's much more difficult to travel internationally to meet those customers.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

As a matter of curiosity, on the margin of $1 to $26, if we were to compare it to similar economies, how are we doing?

[Duane McMullen]

The economic research is done according to a standard methodology as defined by the International Trade Organization, which is a Geneva-based United Nations entity. Trade promotion organizations from many countries do similar research to generate the impact of their own trade promotion organizations. We can provide some of those comparisons to the committee as a follow-up, but Canada compares very well against other trade promotion organizations according to—

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

How often do we monitor that benchmark or that target? I heard Ms. Wilshaw mention that we had a drop in exports in some areas, not necessarily due to the current situation that we and the world are living through. Is the $26 still there now? Are we aiming higher to improve? We know that we have a lot of room to grow as far as exports go. This is something that, if it's being used as a benchmark, would be nice to look at and of course to try to improve exports further.

[The Chair, Liberal, Judy Sgro]

If we could get a short answer to that question, it would be appreciated.