International Trade Committee on April 25th, 2022

[Wilson Miao, Liberal, Richmond Centre, BC]

Can you speak to the rate of growth in the ASEAN region? Are there any specific driving forces promoting this rapid growth at this moment?

[Arun Alexander]

I don't have the GDP numbers in front of me—Mr. Allen may—but I can tell you that Indonesia and the other ASEAN countries are rapidly growing. They have growing populations. The middle class is a burgeoning sector of the economy. As a region, they'll have the largest middle class in the world by 2050. This presents great opportunities for Canadian businesses to sell into this class, which is growing by population but also by wealth, and to create new jobs and new opportunities for Canada.

Mr. Allen, I don't know if you have anything to add.

[Jay Allen]

Not really. I think you hit it on the head.

It's really about the growth in the population. It's about the increasing urbanization. They are rapidly becoming advanced economies. That is what is leading their growth. That's why they've become such a manufacturing hub and why they're so important to global supply chains.

[Wilson Miao, Liberal, Richmond Centre, BC]

What advantages would Canada have by entering into a free trade agreement ahead of other nations right now?

[Arun Alexander]

I think the key advantage is that we would be first, or one of the first, into it, so we can establish ourselves. I've been a trade commissioner in Asia, and I know that a lot of trade between countries is based on relationships. Canada would be there first to establish relationships and establish themselves in the market.

Being there first is important. Being there early is important. We're working very hard to ensure that Canadian businesses have access to these markets in a timely manner.

[Wilson Miao, Liberal, Richmond Centre, BC]

What other opportunities do countries like Vietnam, the Philippines, Indonesia and Singapore present for Canadian industries? How would those opportunities benefit Canadians or Canada's GDP?

[Arun Alexander]

All of these countries are rapidly growing. They have growing populations and growing economies. This creates opportunities for exporting products to these countries, which will create jobs in Canada. There is also potential for exporting services. Services are a fast-growing sector in these economies. Canada has excellent services, especially in areas like IT and environmental service, which will be open in these markets.

Finally, there's a potential for increased Canadian investment in these markets, which will create wealth in those countries and also for Canada. There's really great potential in these countries for growing the Canadian economy and growing their own economies.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you very much for your answers.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We have Mr. Savard-Tremblay for two and a half minutes, please.

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

Thank you, Madam Chair.

As everyone knows, the new NAFTA—in other words, CUSMA—does away with the investor-state dispute settlement mechanism. The committee conducted a study on that.

I realize that the negotiations have only just begun, so you probably haven't dug deep into the details yet. Nevertheless, will Canada advocate including the mechanism in any future agreement with the Indo-Pacific region?

[Arun Alexander]

Thank you very much for your question, honourable member.

Maybe I'll turn to Mr. Allen to speak about this.

[Jay Allen]

The government remains committed to helping investors and Canadian investors protect their interests overseas. There are a number of ways that we can do that. Negotiating free trade agreements and foreign investment protection agreements helps to provide the transparency and predictability that our investors need.

Traditionally we've sought to include provisions that allow investors to defend their own interests. That's largely been handled by way of investor-state dispute settlement. Our approach to including investor-state dispute settlement in our agreements is flexible. It will largely depend on the partner that we're dealing with.

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

Ultimately, the agreement would cover a number of countries. Am I to understand that it could include separate dispute settlement regimes between different sets of countries? In other words, Canada could have one mechanism with India, another with Malaysia, and yet another with Indonesia.

[The Chair, Liberal, Judy Sgro]

Give a brief answer please.

[Jay Allen]

Indeed. With respect to India, we are looking at investor protection outside of the comprehensive economic partnership agreement. We're looking at negotiating a foreign investment protection agreement with India. The Canadian proposal has investor-state dispute settlement in it.

With respect to ASEAN, we are expecting to negotiate an agreement that includes investment protections within its scope. The Canadian proposal has not yet been tabled because we have not yet had our first round of negotiations, but one would expect that it would include investor-state dispute settlements.

We already have an investor-state dispute settlements with Singapore and Vietnam, which are partners with us in the CPTPP context. Malaysia and Brunei have agreed to it in the CPTPP context, but they have yet to ratify the agreement.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Masse for two and a half minutes, please.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Mr. Alexander, I know that you may not be able to provide full specifics on certain topics, but I am interested and obviously that's why we even engage in the trade talks.

What has been the talk on the pharmaceutical industry, for example, in India? I know generics are an issue. I guess they'll have new industries. In 2020, India started producing medical cannabis for the first time. Obviously we've changed recently over the last number of years.

Have those types of discussions taken place with regard to pharmaceuticals?

[Arun Alexander]

Thank you for the question, honourable member.

Madam Chair, I will turn to Mr. Allen, who is responsible for the India negotiations, to respond.

[Jay Allen]

With respect to India, we have had discussions. They're really at the initial stages. In fact, just this morning we wrapped up our first round of negotiations with India. The subject has been raised. India is obviously a major world producer of both pharmaceuticals and pharmaceutical ingredients. They have a big interest in exporting this to us.

[Brian Masse, NDP, Windsor West, ON]

When would it be advantageous for committee members...? I guess the lobbying will start on us. When in the time frame, do you think there will be more of an inventory of what's really a priority on the table? Will we get a briefing on that? I can tell you that's what's going to happen. I've been around enough to know that it's going to start, so that's part of our questioning today.

Thank you, Madam Chair, and thank you to the witnesses.

[Jay Allen]

Madam Chair, could I answer the question?

[The Chair, Liberal, Judy Sgro]

Go ahead.

[Jay Allen]

The timing, as Arun was saying, is really dependent on the course of the negotiations. We expect that an early progress trade agreement with India could take a matter of months, as opposed to potentially a couple of years to negotiate a comprehensive agreement, so it could come at any point in the spectrum. I expect that stakeholders will be reaching out early and often.

With respect to when you will get a more fulsome briefing, that's outside of my remit. I can't promise you that. You have my apologies.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Allen.

Mr. Martel, you have five minutes.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Madam Chair.

Thank you to the witnesses for being here.

We are fortunate in my region to have a number of key industries, including aluminum, forestry and, on the agricultural side, dairy. We also have considerable mineral potential. I'm referring to vanadium, niobium, tantalum and mafic phosphate.

What opportunities do Indo-Pacific countries hold for Canadian businesses in those sectors?