International Trade Committee on May 2nd, 2022

[Elizabeth Kwan]

That's correct.

[Brian Masse, NDP, Windsor West, ON]

It's written into the agreement. You just gave a perfect example of what we have “new” versus what we've had in the past.

Thank you very much. I know I'm out of time, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Masse.

We have Mr. Baldinelli for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair, and through you I'd like to go to Mr. Kennedy.

In terms of these negotiations, he alluded in his testimony to the nuances that are required as part of any different trade negotiation. In terms of the two negotiations that would be taking place with Indonesia and then the ASEAN countries, what areas would Canada be most sensitive to in terms of the impact that it would have on Canadian companies?

Would it be certain areas, for example, like clothing or textiles? I'd like to get your opinion on that, and secondly, in the areas where we could most benefit.

[Trevor Kennedy]

Thank you for the question.

They're very important negotiations, where sometimes there is some overlap, but there are also unique elements to them as well. In the case of Indonesia, we were able to launch negotiations, and we certainly supported that process initially, because we were having difficulty launching our ASEAN talks. Both negotiations have a value, and Indonesia in its own right is a very important country. We can do things differently, as the Australians were able to do with their agreement with ASEAN and with Indonesia.

As for sectors, truly I'm not as familiar with some of the sectors that would be affected. We've conducted some economic impact assessments in the past for ASEAN in our report, which now would be dated in 2017, so I do apologize that the data may no longer be up to date. We did see a lot of opportunity for a lot of our traditional sectors. As I noted as well, one of the areas where Canada's done really well is in the services sector in southeast Asia. We have a very strong presence of Canadian firms in the insurance industry, for instance—a long-standing presence and a very successful presence in some of these markets. That's something I'd like to point out.

The opportunities are obviously quite broad as well. Looking at digital trade is one area that's growing, and there's another trade agreement that's also in place. It's more of a plurilateral negotiation with a digital economy partnership agreement based in Singapore. That's another opportunity to establish some standards for digital trade somewhere where Canada is well positioned to compete, and there's tremendous opportunity with the quickly emerging digital economy in southeast Asia.

There are three different trade negotiations I referenced. The Indonesian negotiation is important. It's something we may be able to negotiate in a shorter time frame and more tailor-made for a very important relationship, but we should also be aware of the importance of ASEAN and the interconnected nature of that regional supply chain and the large amount of global interest in that supply chain there, ensuring that Canada can at least be plugged into it to a certain capacity.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

I'd like to take that same type of question to the representatives from the Canadian Labour Congress, Ms. Kwan and Ms. Chang. Again, in terms of these negotiations with these two countries, specifically Indonesia and the ASEAN countries, what areas would Canada be most sensitive to? In terms of the impact of labour standards and environmental standards, how might that impact or challenge these discussions in your view?

[Lily Chang]

Elizabeth, go ahead.

[Elizabeth Kwan]

Thank you very much for your question.

I would say that, in many of these countries, they are still developing and many of their labour standards are not the same as in Canada, the U.S. or the EU. That is just the reality.

We don't want to harm workers whether it's Canadian workers or workers in those countries. We also have to respect that there's a lot that happens in Indonesia, ASEAN, India, South Korea and Taiwan that we're not as aware of, because we don't consume the news as much as we would the North American or the EU news cycle.

There's a lot that goes on, and it's very different because ASEAN is 10 countries. Indonesia is one of them. CPTPP has four of those countries from ASEAN, and then RCEP has 15 countries, of which there's another subgroup. There is a lot of complexity to it, but I don't think we should ever forgo lower labour standards for Canadians going into these trade agreements. What are we trading for, if not for the mutual prosperity of peoples from both those trading partners?

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry. You're 20 seconds over time.

Ms. Dhillon will be our final speaker, please.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Thank you, Madam Chair.

Mr. Kennedy, have the members of the Business Council of Canada expressed their interest in a potential free trade agreement with Indonesia and ASEAN?

If so, how would you summarize where you are in terms of investments?

[Trevor Kennedy]

The investment climate in southeast Asia, I understand, is quite attractive. I know many large Canadian institutional investors have found a lot of opportunities there, and not exclusively in southeast Asia. Once again, there's quite a range in the individual countries within ASEAN.

We're also seeing that a lot of businesses have a lot of interest in Singapore as one key hub for global growth. It's becoming a real magnet for investment and trade within the region, so broadly speaking, there's a lot of opportunity. There's some variation if you look at certain ASEAN economies.

I had a chance to interact with the business community of Indonesia last week. There's a lot of mutual interest both from the Indonesian standpoint and the Canadian standpoint in investing and trading between our two countries.

It's a very encouraging trend, and we think it will continue to grow with trade agreements and other tools to enhance those ties.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Thank you.

How could the potential free trade agreement with ASEAN eliminate certain tariff or non-tariff barriers that Canadian industries currently face in the region?

[Trevor Kennedy]

One thing, certainly from a market access standpoint, is eliminating tariffs on certain Canadian exports, technical and non-tariff barriers as well. Just improving access for Canadian firms and ensuring that they have a level playing field is very important.

Also, as I referenced before, on the digital trade side, it's important to ensure that there are important provisions around cross-border data flows and to ensure that our digital services firms have the ability to operate in the country to interact with our Canadian and regionally based industries.

Trade agreements serve, I guess, an important role in that sense, but we've also seen with recent trade agreements something we refer to as the announcement effect. That's when a new trade agreement comes into force. We can actually generate additional interest and awareness for firms both in Canada and southeast Asia in doing business with each other based around a free trade agreement. That's something that we've been able to benefit from with recent agreements like the CPTPP and could benefit from with a Canada-ASEAN or Canada-Indonesia FTA.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Thank you.

To what extent would it contribute to diversifying Canadian supply chains if a free trade agreement were signed with ASEAN?

[Trevor Kennedy]

Was that addressed to me?

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Yes.

[Trevor Kennedy]

One thing we've witnessed is that there's a lot of movement towards southeast Asia right now, including in the context of the geopolitical uncertainty we're facing. There's a lot interest in operating in southeast Asia and a lot of global attention towards southeast Asia, so it's an opportunity for Canada to be plugged into those supply chains as they form.

We believe that the path forward for Canada's trade diversification agenda is to champion trade growth and not diversion. Really, the extent that we can grow our trade and accelerate trade growth in parts of the world—and in southeast Asia principally—is beneficial for Canada. Trade agreements, once again, can assist in that process.

Trade agreements are a bridge. It's up to businesses to cross that bridge, as our former trade minister used to say, but it's an important bridge for businesses to have.

[The Chair, Liberal, Judy Sgro]

We're reaching 5:30. Does any member of the committee have any outstanding question that they must ask?

All right. Thank you all very much.

Thank you so much to the witnesses. We offer our apologies for the time that we lost.

The meeting is adjourned.