Evidence of meeting #5 for International Trade in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ceta.
A recording is available from Parliament.
Senior Director, International Policy, Canadian Chamber of Commerce
As I alluded to in my opening remarks, there was a study done by a Canadian economist, Dan Ciuriak, looking at the impact in a Canada-U.K. context of the U.K.'s ratification of CETA.
There are some health warnings that I had mentioned about why it's not an apples-to-apples comparison on what a transition agreement means, but I think it actually provides a fairly good signpost that can be used. I would be happy to share those studies directly with the clerk.
President, Canadian Labour Congress
We haven't conducted any study, but I will check with my colleague, Chris Roberts, to see if we have colleagues who have done so. If we do, we will be happy to submit it to the committee.
Daniel Blaikie NDP Elmwood—Transcona, MB
Thank you very much. I appreciate that greatly.
One of the things I'd be interested to hear from our witnesses on is that we've often heard, in discussing Canadian trade and how we shape the economy coming out of the pandemic, that one of the things Canada lacks and has lacked for a long time is any type of real industrial strategy. The Canadian government hasn't really identified those sectors in which it wants to see Canada take a leadership role and we don't really have a plan for those industries.
How do we negotiate a trade deal in a context where we don't have, and we haven't done, any meaningful industrial planning? Could you speak a little to that question?
We'll start with Mr. Brown and then go to Mr. Yussuff.
President, National Union of Public and General Employees, Trade Justice Network
Thank you. That's a very intriguing question.
One of the things we've seen for probably 30 years now is that any type of planning for our economy has been signing another trade deal, which actually, every time we do that, further eliminates or limits our ability to actually plan our economy. It just becomes an ongoing contradiction.
One of the fascinating things about trade deals, though, is that if you look back at most, or not most but every successful developed economy, or whatever the current description is, basically they all used mechanisms that would now be invalid under a trade deal.
The way that we got to be rich and powerful we can no longer use, because we gave away those rights under trade deals. We're now saying to other countries that aren't yet rich and powerful, “Well, you can never get where we are, because we want to sign a trade deal with you that will take away your right to do the things that we did to get here.”
It seems to me that most of what we're talking about with trade deals—the Trans-Pacific Partnership, CUSMA, CETA and anything new with the U.K.—would be simply further limiting our ability to make independent economic decisions on behalf of our own people.
Trade deals are fundamentally, in a term that an academic from the University of Toronto came up with, international corporate constitutions. They say what governments can't do, not what governments can do. They're all limitations on the ability of governments to control the behaviour of international corporations, which is the exact opposite of an industrial strategy.
President, Canadian Labour Congress
Very briefly, I would simply call on the committee to do an assessment and an impact study as to how a transitional agreement and a permanent agreement with the U.K. will impact Canadian industry. Of course, we know from experience that we lost the Auto Pact not because we woke up one morning and said we're not going to have it. We were negligent in our negotiations not to exclude it from our signing of the WTO agreement.
Subsequently, that agreement is completely gone. We put Canada in a much more difficult position in maintaining a strong industry that we had in this country that provided millions of jobs and development for a key part of the Canadian economy.
NDP
Daniel Blaikie NDP Elmwood—Transcona, MB
Thank you very much.
I might just throw it out to our other two witnesses, if they want to talk to the issue of industrial planning and how you negotiate trade agreements in the absence of any meaningful industrial planning.
Senior Director, International Policy, Canadian Chamber of Commerce
We don't have a coherent industrial plan. Really, what our industrial policy in this country has been is actually the summation of a patchwork of policies at the federal, provincial and municipal level.
Ultimately, what you do in an FTA reflects your domestic industrial policy. People like to talk a lot about CETA's intellectual property provisions on pharmaceuticals. Yes, there were some changes made around patent term restoration, but at the end of the day, fairly marginal in the grand scheme of things, and that reflected our own domestic IP policy.
To respond to the point about democracy and taking away the rights of governments, at the end of the day, sovereign governments remain sovereign to withdraw from these agreements. If governments and their citizens are not happy with them, invoke the withdrawal clause, and that is the way to get out. These agreements are not permanently binding on governments in perpetuity once you sign on the dotted line.
Liberal
The Chair Liberal Judy Sgro
Thank you, Mr. Blaikie.
We're moving on to Mr. Aboultaif for five minutes, please.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
Good morning. Thank you, witnesses, for appearing before the committee this morning.
The question to Mr. Agnew and Mr. Kennedy is this: Do you believe that we will have an agreement on December 31?
Senior Director, International Policy, Canadian Chamber of Commerce
How many angels can dance on the head of a pin?
I'm not saying this to be flippant. I genuinely don't know. I'm not in the room. As a very matter-of-fact observation, we have to finish the discussions, introduce implementing legislation, pass the legislation and then operationalize it. Time is running very short to do all of those steps.
Director, Policy, Business Council of Canada
I would echo that.
It's hard to say. We're not in the room and not part of the negotiations. I'm certainly hopeful, but we don't have much time.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
If you don't mind, beyond being hopeful, do you believe that the government has a contingency plan in case we fall short of an agreement by the end of this year?
Director, Policy, Business Council of Canada
I think in that case you'd have to speak to the team at Global Affairs and others who are working more directly on this. I imagine they've been thinking about that inevitability for some time now.
Once again, I'm very hopeful that we will have an agreement in place or some sort of a mechanism to bridge at the end of the year.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
It's surprising that organizations such as the Canadian Chamber of Commerce and the Business Council of Canada are not somehow enlightened of what's going on. I think it's very important for such organizations to be part of at least the consultation on this end.
If there is no agreement—hopefully there will be one—which industries do you believe will be at the forefront and will be most affected by the circumstances? What will the job market look like if we don't have one?
Director, Policy, Business Council of Canada
I suppose it depends on how long the gap is between the end of the Brexit transition period....
We have a fairly diverse trade relationship and investment relationship, so I would hope that.... As I mentioned in my opening remarks, we have momentum in the market and we want to keep that momentum going forward. To the greatest extent possible, we want to continue to build up that competitive position that we've been able to establish under CETA. We want to keep that going forward through a transitional deal and then eventually a more permanent arrangement.
I guess we'll see how things turn out, but Canada is in a good position now relative to others. We want to keep it that way.
Senior Director, International Policy, Canadian Chamber of Commerce
In terms of the macroeconomic downside to the Canadian economy, it is much more weighted toward those who export goods as opposed to those who are exporting services. If we are in a world where an agreement has been finalized before December 31 but has not yet gone through the parliamentary procedures, then we would hope that the government would be able to look at some kind of measure to perhaps exercise some discretionary forgiveness, so that a company's not in a situation where the agreement is on the cusp but they have to pay a tariff nonetheless.
In very simple terms, if you're having to pay that tariff, someone has to eat that cost. You might be knocking off something from the price that you weren't anticipating or having to pay out additional costs that you weren't anticipating when you first signed your contract with your buyer.
Conservative
Ziad Aboultaif Conservative Edmonton Manning, AB
With regard to the effect of COVID-19 on everything we do, and given the circumstances that this could go beyond the end of this year, how do you see COVID-19 affecting our international trade in general now?
Looking at CETA, which is an agreement with the EU right now, do you believe that a lot of CETA will be translated into a new agreement with the U.K.?
Senior Director, International Policy, Canadian Chamber of Commerce
The international trade picture for Canadian companies has absolutely settled down since March. There are still industries that are not doing as well as they should. If you're exporting a service, that is quite difficult to do at the moment, particularly because of travel restrictions. I think people who are moving physical products have largely seen their prospects settle down.
On the second part of your question about moving over the agreement, as I understand it, it is largely going to be a transposition of the whole package with only a renegotiation where there's a numeric value. That value was written for 28 EU countries, whereas the U.K. might have a different TRQ or derogation quota.
Liberal
Liberal
Randeep Sarai Liberal Surrey Centre, BC
My first question is to Mr. Yussuff. Is there any gap or discrepancy between Canada's labour laws and the U.K.'s labour laws of which we should be aware? Is your concern in adding labour protective measures more to protect us and labour going forward, or is it to enhance labour protection that perhaps Canada has and the U.K. does not? Can you elaborate on that?