Madam Chair, members of the committee, let me first thank you for inviting me to appear before the committee.
I would like to clarify that I am speaking in the context of my mandate within the European Union Chamber of Commerce in Canada. So we represent the interests of European Union businesses and chambers of commerce in Canada. Our chamber does not represent any Ukrainian business interests and has only peripheral expertise on the Canada-Ukraine Free Trade Agreement.
With this reservation, I would like to express our solidarity with Ukraine, its people and its representatives. We support the measures adopted by European governments and the Canadian government and their allies to stop the Russian invasion. As necessary as they are, the sanctions and restrictions adopted so far, combined with Russian countermeasures and the disruption of trade with Russia and Ukraine caused by the conflict, have not been without effect on our economies and industries. The sanctions have multiple repercussions and will require a variety of responses from all of us in the short and medium term.
The conflict in Ukraine has had an immediate effect on energy, commodity and food prices, and this is having an impact on all our economies. Developments in commodity prices and financial markets since the start of the war could reduce gross domestic product, or GDP, growth, and push up inflation. To address this, some European governments have already announced tax cuts as well as quick, targeted and time-limited measures in the form of new state-guaranteed loans or direct aid for fossil fuel-intensive companies.
The war in Ukraine has thus harmed industries directly affected by the sanctions and restrictions put in place by Canada and its allies, foremost among them the financial industry, the dual-use goods and technology industry, the transportation, mining, oil and gas equipment and supplies industry, the aerospace industry and the high-tech goods industry. These are complemented by hundreds of companies with an industrial and commercial presence in Ukraine and Russia, including in the automotive, manufacturing, agricultural and agri-food sectors.
In the event of a prolongation of the conflict, with associated restrictions, a thorough sectoral impact assessment would be in order to possibly adopt sectoral or targeted aid for industries and companies particularly affected by the conflict. Many European and Canadian companies will also seek to redirect all or part of their production to other markets. As such, any efforts to improve the implementation of the Comprehensive Economic Trade Agreement, or CETA, and other agreements, or to advance ongoing negotiations, would be welcome.
Many supply chains have been affected directly or indirectly by this conflict. I will focus today on three particularly critical chains.
First, there is the energy supply chain, which has already been mentioned. It could be hit even harder in the event of a halt to exports or an embargo on Russian oil and gas imports. At a time when Europe will be seeking to diversify its energy mix, there are many avenues for this committee and Canadian negotiators to explore, which are also in line with the necessary transition.
Secondly, there is the supply chain for critical materials and minerals. A strengthening and acceleration of the co-operation between the European Union and Canada in the framework of the strategic partnership on raw materials now seems crucial, as well as an increased triangulation with Washington on these issues.
Third, the supply of agricultural and agri-food commodities in many regions could be affected, which could cause serious short- and medium-term food security problems globally.
To conclude, I would like to add a final word on the Canada-Ukraine Free Trade Agreement, which, at the end of the conflict, could prove to be an extremely valuable tool to support and help rebuild a ravaged Ukraine. Three dimensions seem particularly important to us today: a facilitation of trade in food, basic goods and materials needed for the reconstruction of Ukraine; the adoption of an inclusive approach and the establishment of transparency mechanisms to facilitate access to public procurement for businesses, especially SMEs; and, finally, the inclusion of mechanisms to facilitate professional mobility between the two countries.
On these considerations, Madam Chair, I thank you. I am at the disposal of the members of the committee to answer their questions.