International Trade Committee on May 9th, 2022

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

I call the meeting to order.

This is meeting number 17 of the House of Commons Standing Committee on International Trade. Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. For us, it's nice and pleasant. We have witnesses physically here with us. It's terrific to get back to a bit of normal again.

Welcome to all of you.

Per the directive of the Board of Internal Economy of March 10, 2022, all those attending the meeting in person must wear a mask, except for members who are at their place during proceedings.

I have a few comments for the benefit of witnesses and members.

Before speaking, please wait until I recognize you by name. For those participating by video conference, click on the microphone icon to activate your mike. Please mute it when you are not speaking. For those participating via Zoom, you have interpretation options at the bottom of your screen of floor, English or French. I would remind you that all questions and comments go through the chair.

Before we open it up to our witnesses, all of the members received a copy of the budget last week. I need somebody to move approval. This is the $18,000 budget for the study that we're currently working on.

[An hon. member]

I so move.

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

(Motion agreed to [See Minutes of Proceedings])

[The Chair, Liberal, Judy Sgro]

Thank you very much.

With us today we have Claire Citeau, executive director of the Canadian Agri-Food Trade Alliance. From the Canadian Canola Growers Association, we have Dave Carey, vice-president of government and industry relations, and Janelle Whitley, senior manager of trade and marketing policy. From the Canadian Cattlemen's Association, we have Jack Chaffe, co-chair of the trade committee, and Fawn Jackson, director of policy and international affairs. From the Canadian Centre for Policy Alternatives, we have Stuart Trew, senior researcher. From the Canadian Pork Council, we have Gary Stordy, director of government and corporate affairs. From the National Cattle Feeders' Association, we have Casey Vander Ploeg, vice-president.

Welcome to all of you.

We will start with Ms. Citeau.

I invite you to make an opening statement of up to five minutes, please.

[Claire Citeau, Executive Director, Canadian Agri-Food Trade Alliance]

Thank you for the opportunity to speak about ways for Canada to maximize opportunities in the Indo-Pacific region. CAFTA is the voice of Canadian agri-food exporters. It represents the 90% of farmers in Canada who depend on trade, and those growing the economy through better access to international markets for beef, pork, wheat, grains, oilseeds, canola, sugar, malt, pulses and processed food products.

Today, I'll be sharing three main points.

First, we need to diversify in the region. Economic resiliency is a growing concern around the world. Canada's agri-food system faced great pressures and uncertainty throughout the pandemic. An increase in protectionism continues to disrupt rules-based trade for Canadian agri-food exporters. The best way to manage risk in this uncertainty is to diversify and expand our trade and investment footprint abroad. Opening markets and upholding the rules-based trading system are perhaps the most important things the government can do to protect Canada's agri-food sector and support its critical role in the economy.

CAFTA supports efforts to enhance and improve access to large, high-value markets in the U.S., the U.K. and the EU. CAFTA members also have their eyes set on the vast and fast-growing region of the Indo-Pacific. This is where most of the global growth is expected to be over the next several decades. In this region, the top priority is the ASEAN. We support the bilateral talks with Indonesia and believe they serve as a gateway to the ASEAN region. As a market of 643 million people with a growing middle class, this region provides the opportunity to boost our competitiveness and a framework to diversify in countries such as Indonesia, Thailand and the Philippines, in particular.

As a bloc, ASEAN has five FTAs, including some with our competitors. With ASEAN, Canada's list of Asia-Pacific countries included in our FTAs would grow from four—South Korea, Japan, Vietnam and Singapore—to 10 with Indonesia, Cambodia, Thailand, Laos, Myanmar and the Philippines, and to 12 when Malaysia and Brunei ratify the CPTPP. The CPTPP has been a largely beneficial agreement for agri-food, and CAFTA supports ongoing accession talks with economies that can meet its standards. CAFTA also welcomes renewed trade engagement with India while recognizing this complex trade relationship must be handled with a constructive yet cautious approach.

In general, Canada should seek to ensure that trade negotiations recognize the importance of effective implementation. This is so negotiated outcomes can translate into real growth opportunities for businesses. There are many examples of trading partners not abiding by commitments. This means three things in particular: tariff liberalization; rules of origin and cumulation provisions that support Canadian usage of supply chains; and commitments to build a transparent, stable and predictable trading platform.

Second, we need to address non-tariff barriers. We have shared before with this committee how non-tariff barriers prevent Canadian exporters from achieving export gains in free trade agreements, and we offer the following four suggestions:

One, we need to start early in negotiations and clarify the regulatory requirements for our sectors. This means co-operation between industry and government—the regulatory and policy staff at home and abroad.

Two, within FTAs, there should be mechanisms for co-operation among trading partners on regulatory standards and approval processes. Working groups need to be established early and should include ways to elevate issues to higher levels if no resolution is found in a timely manner.

Three, the human resource requirements of our regulatory, policy and advocacy agencies increase with each new trade agreement given differences among countries and the ever-increasing expectations placed on food producers around the world. Sufficient and stable investment in staffing and expertise among our regulatory, policy and diplomatic personnel is essential to take advantage of trade agreements.

Four, to maximize FTAs, we should also learn from existing deals and conduct a review of Canada’s major free trade agreements to make sure that negotiated outcomes turn into commercial opportunities. As you know, while the CETA holds huge potential for Canadian agri-food, Europe is slow to remove non-tariff barriers.

My third and last point is the need to improve advocacy capacity and industry-government collaboration. While the importance of regular effective industry-government collaboration should be obvious to both sides, it's not always the case at home and abroad.

There's an overall need to enhance Canada's advocacy capacity so that officials are equipped with the tools and information to promote the science and sustainability behind Canada's world-class agri-food sector, and can defend a rules-based and science-based trading system. This is key to strengthening Canada's diversification in the Indo-Pacific region.

Overall, we all need to do a better job communicating with one another as industry and government, but also with our trading partners to enhance dialogues, encourage greater transparency, and foster more accountability, so we can tackle issues before they become problems. This is particularly true after two years of virtual discussions, an erosion of trust, a lack of respect of trade rules around the world and massive ongoing shifts in the global trading environment.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Citeau.

Mr. Carey, you have five minutes, please.

[Dave Carey, Vice-President, Government and Industry Relations, Canadian Canola Growers Association]

Thank you for the opportunity for the Canadian Canola Growers Association to appear on your study on trade opportunities for Canadian businesses in the Indo-Pacific. I'm joined virtually today by my colleague, Janelle Whitley, senior manager, trade and marketing policy.

CCG represents Canada's 43,000 canola farmers on issues that impact their farm's success. As the world's largest producer and exporter of canola, Canada exports nearly 90% of what we grow as oil, seed or meal. It was valued at $13.7 billion in 2021. International trade underpins the canola sector's $29.9-billion annual economic contribution and the 207,000 jobs it creates in Canada.

Expanding Canada's trade and economic relationship in Southeast Asia should be a cornerstone of Canada's Indo-Pacific strategy. The region presents exciting opportunities for market diversification, and the government's new strategy provides a platform to build stronger trade relationships in this fast growing dynamic region and strengthen canola's competitive position.

On average, Canada exports close to $45 million of canola to members of the Association of Southeast Asian Nations, or ASEAN. While not currently a large market, market opportunities for Canadian canola oil and meal are expected to increase. This is particularly true in Thailand and Vietnam for canola meal, Malaysia for canola oil, and Indonesia for all canola products. Taiwan and India, also noted in the committee's motion, purchase an additional $10 million and $6 million of canola oil a year, respectively.

The tabled objectives of negotiations for potential agreements with ASEAN and Indonesia aim to deliver commercially meaningful market access through the elimination of tariff and non-tariff trade barriers. While tariffs exist in Thailand and Indonesia, non-tariff barriers are increasing in number and are becoming more complex. While this is not unique to the Indo-Pacific, they curtail our growth potential and serve as a barrier to building markets in the region. As such, we see three distinct but interlinked opportunities for the government's Indo-Pacific strategy and the committee's study.

I'll turn it over to my colleague, Janelle, to further elaborate on these priorities.

[Janelle Whitley, Senior Manager, Trade and Marketing Policy, Canadian Canola Growers Association]

Thank you, Dave.

First, trade diversification is an important priority for canola farmers. While canola is exported to over 50 countries, a handful of markets make up the bulk of purchases. Ambitious free trade agreements with Indonesia and ASEAN would significantly extend Canada's networks of agreements and provide a platform to pivot and expand our export reach.

Duty-free access for canola seed, oil and meal would level the playing field with Australian canola farmers whose trade is governed by a 2010 agreement, as well as provide Canadian oilseeds an advantage over the United States. Given its geographic proximity and long history in the region, Australia already enjoys an advantage when selling into leading Asian economies.

Second, clear rules are needed to facilitate trade for agriculture products enhanced by biotechnology, including plant breeding innovation and grown using plant protection products. Such rules go hand in hand with commercially meaningful access as they are needed to create the certainty to grow new markets and to move major barriers faced by canola.

Considerable time and effort are exerted to manage asynchronous approvals of biotech varieties and missing and misaligned maximum residue limits for pesticides, resulting in delayed access to innovation for farmers or loss of important production tools altogether. With 95% of canola acres in Canada planted to biotech varieties, the two are linked. Farmers should not have to choose between access to innovation and access to a market.

Third, an Indo-Pacific diversification office should be established to accompany Canada's trade agenda and to capitalize on growing opportunities in the region. Complementary to the trade commissioner service activities, such an office would focus on strengthening market access, responding to emerging policy and regulatory issues and enhancing collaboration between government and industry to prevent and overcome barriers in a timely manner.

Many countries in the region lack well-developed science-based regulations and transparent commercial environments. A specialized multidisciplinary office could leverage its boots on the ground experience and regional connections to help exporters overcome market risk and proactively find solutions to the complex market access challenges facing agriculture.

In conclusion, the Indo-Pacific strategy provides the opportunities to further Canada's trade and economic ties in an important region. Commercially meaningful agreements and increased capacity to address market access barriers will create the enabling environment needed to grow canola exports.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Whitley.

Ms. Jackson, please go ahead.

[Fawn Jackson, Director, Policy and International Affairs, Canadian Cattlemen's Association]

Good afternoon. My name is Fawn Jackson, and I'm the director of policy and international affairs for the CCA. With me is Jack Chaffe, who is the foreign trade committee co-chair and president of the Beef Farmers of Ontario. We are pleased to have the opportunity to provide input on opportunities for the Canadian beef sector in the Indo-Pacific region.

CCA represents 60,000 beef farms from coast to coast. The beef industry is a significant driver of our economy, as Canada’s second-largest single source of farm income, contributing $22 billion to GDP and supporting 347,000 jobs. Certainly, free and open trade is key to the beef industry’s success, with over 50% of Canadian beef being exported around the globe.

International trade adds significant value to the industry, as producers gain more than $1,000 per animal through selling in international markets in addition to the domestic market. Last year our industry hit a record high of $4.5 billion worth of beef exports, the sixth record in a row. This is largely attributed to access in the Indo-Pacific region.

With a growing middle class, GDP and food consumption, the region is a high-growth market and one of Canada’s best opportunities for agri-trade. About 20% of Canada’s beef exports are destined for the Indo-Pacific market, with the five top markets currently being Japan, China, South Korea, Vietnam and Hong Kong.

We’ve already seen some of the positive effects of gaining market access in countries located in the region. Through the CPTPP and the removal of tariffs that followed, the Canadian beef sector has seen considerable gains. Japan is our second-largest beef export market today, with exports reaching $116 million as of March of 2022—an increase of 45% from 2021 and a 73% increase since the start of the CPTPP agreement. Vietnam has also seen exciting growth, from $8 million in 2019 to $83 million in 2021, since the implementation of CPTPP.

Canada’s agreement with South Korea has seen similar growth. In 2021 beef exports to South Korea stood at $117 million, a significant increase from the previous year of $45 million and a more than 2,000% increase since the implementation of the Canada-Korea Free Trade Agreement in 2015.

As you can see by these examples, there is significant growth in the region when we attain meaningful market access. That is why we continue to encourage the government to attain further access. Specifically, the CCA supports securing further preferential market access through free trade agreements in the Indo-Pacific, including through ASEAN, through an FTA with Indonesia, and through accession of new economies to CPTPP.

I will now turn it over to Jack to further add to our remarks.

[Jack Chaffe, Co-Chair, Trade Committee, Canadian Cattlemen's Association]

Thank you, Fawn.

At the same time as addressing tariff removals, we want to focus on the further removal of limits on Canadian beef exports, such as restrictions on certain cuts of meat and age of eligibility of cattle—for example, removing the restrictions of bone-in beef for Indonesia or the over 30-month access for South Korea and Taiwan. Japan and Singapore have removed all of these restrictions. We would like to see the other nations follow suit.

We also would like to see the focus on increasing our capacity to be proactive in addressing and preventing market access issues. This could be accomplished by creating a new Indo-Pacific diversification office. This office should have the mandate to prevent and resolve agricultural market access issues, and would complement current staff in the region and provide much-needed technical resources to address new and ongoing market access issues, deepening the connections, supporting regional capacity-building and preventing new trade barriers from arising.

We strongly encourage members of Parliament to remove trade barriers around the globe, especially in the Indo-Pacific, given the current demand and growth potential for beef exports into the region.

CCA appreciates the opportunity to provide input on trade opportunities for Canadian business into the Indo-Pacific. We would be pleased to provide any further information that the committee asks for.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Trew, you have five minutes, please.

[Stuart Trew, Senior Researcher, Canadian Centre for Policy Alternatives]

To the chair and the committee, thanks very much for the opportunity to present today.

I'm speaking in my capacity as a researcher at the Canadian Centre for Policy Alternatives. It's a progressive policy research institute with offices in Ottawa and five other provinces.

I'm going to focus my comments on the Canada-Indonesia comprehensive economic partnership agreement, but I think they also relate to the ASEAN and the India negotiations.

I'm going to make two points today. The first and main point is that, whatever business opportunities exist in the Indo-Pacific, and I'm sure there are many, obviously, we don't need the investor-state dispute settlement agreement to achieve them. In fact, putting ISDS into any of these agreements would be harmful to all countries concerned, including Canada.

This government celebrated the removal of ISDS from the new NAFTA, if you recall. They did that because, in doing so, according to Minister Freeland, it “strengthened our government's right to regulate in the public interest, to protect public health and the environment”.

As the committee will know, Canada and the U.K. also have no intention of including ISDS in their replacement agreement for the Trade Continuity Agreement for 2021.

These were good moves and very much in line with international backlash to investor-state dispute settlement as an unnecessary, unpredictable and costly handout to big business with dubious economic benefits for countries.

The climate-related case against ISDS is especially strong now that the Intergovernmental Panel on Climate Change has warned in its 2022 report that trade investment treaties could delay or even stop countries from introducing new measures to lower emissions, since countries will be worried about drawing huge ISDS cases for cancelling new fossil fuel projects, for example, or for simply not issuing new permits for projects.

Canada has been burned by such cases like the Clayton/Bilcon successful NAFTA lawsuit against the non-issuance of a quarry permit in Nova Scotia or the pending Lone Pine case against Quebec's moratorium on hydraulic fracking under the St. Lawrence.

New research published in the Journal of Science last week finds that ISDS claims from fossil fuel companies could reach as high as $340 billion in the coming years as countries start to make moves to meet their Paris climate targets.

The risks here go both ways for Canada as well as Indonesia. In Indonesia, 95% of Canadian investment is currently in the mining sector, where Canadian investors have a very high incidence of using ISDS in Canada's existing treaties to challenge environmental decisions in other countries, but they also will affect us here in Canada where there's a lot of Indonesian investment in, say, LNG, forestry and pulp and paper, where future conservation measures or just transition policies may also spark very large claims against Canada, as we experienced under NAFTA.

My second argument is about the poor chances, and I would say the almost non-existent chances, of getting a decent labour chapter in this Indonesia agreement. That will go for ASEAN and India as well. Indonesia told Canadian negotiators last month that a labour chapter is a non-starter. They haven't included labour provisions in any of their current agreements, including the 2020 deal with Australia, so I would say we're sleepwalking—or perhaps sleep negotiating—into an outcome that will likely be negative for workers, women and the environment.

As an example of what I mean, a European sustainability impact assessment of the EU's planned CEPA with Indonesia states that the deal “is expected to result in increased demand for employment in sectors historically less likely to meet decent working conditions including the textile, wearing apparel and leather industry. Concerns also arise that vulnerable groups, including women and children, would bear the brunt of poor working conditions.” The EU impact assessment also says that “considering Indonesia's rather weak implementation of laws on indigenous peoples' land rights, increasing trade in sectors where concerns on land rights are relevant, such as forestry and wood products, could run the risk of increased human rights violations.”

I won't go into detail on that because I think Greenpeace Canada put it very clearly in their presentation to the committee. I'll just emphasize that without a strong floor for labour rights, it is unlikely Indonesian workers will see any benefits flowing from the CEPA with Canada, and they may be worse off. By staying at the negotiating table without a commitment from Indonesia to a high-standards labour outcome, Canada is signalling that it is flexible on this critical issue.

To conclude, I'll just note that there was a period around 2016-17 when Canada looked to be pioneering a more progressive and sustainable trade policy. The government has done some interesting things since then, for example, with respect to gender chapters in new agreements, taking more seriously Canada's obligations to include indigenous peoples in the negotiations themselves and the outcomes, and of course taking ISDS out of the new NAFTA.

It would be a shame to throw that all away to go back to signing lopsided trade investment treaties with a new list of Indo-Pacific countries, just as countries like the U.S. and EU are testing more promising-sounding worker-focused partnerships in the region.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We move to Mr. Stordy, please, for five minutes.

[Gary Stordy, Director, Government and Corporate Affairs, Canadian Pork Council]

Good afternoon. I'd like to thank you for the opportunity to appear before the standing committee this afternoon to discuss how trade opportunities in the Indo-Pacific can benefit pork producers.

My name is Gary Stordy. I'm the director of government and corporate affairs. I am pleased to speak on behalf of Canada's pork producers, who are responsible for generating 31,000 jobs on farms from coast to coast.

As you know, we are a trade-dependent sector. More than two-thirds of what we produce in Canada is exported either as live hogs or pork products around the world. Over the past five years, Canada pork has been exported to more than 125 countries. In 2021, these exports were valued at $4.9 billion.

The foundation for this success is built on trade agreements such as NAFTA, CETA, CPTPP and most recently CUSMA. All these agreements work to lower tariffs and barriers that prohibit trade. These trade agreements brought structure to sometimes very confusing import systems and rules of trade that should allow disputes to be quickly resolved. Our industry is fortunate to have trade agreements in key markets around the world and an established industry that knows how to sell and move pork to market.

Despite labour shortages at processing plants and supply chain disruptions, Canada's pork gets to where it needs to go, but governments around the world are putting that demand at risk with policies that directly affect our industry. We are concerned by the fact that countries are restricting the use of animal health products, implementing labelling rules, restricting how animals should be raised and, frankly, being slow to grant approval, whether it's for systems or even for our ability to ship to that country.

Canada is fortunate to have dedicated a public service in our foreign posts and here in Canada that works on our behalf. They are tasked with addressing these emerging issues. However, we know that officials are stretched to the point where additional resources and staffing are needed to take advantage of new trade opportunities in the Indo-Pacific.

The Canadian pork industry is very competitive in the world market and is well-positioned to capitalize on growth and opportunities in this Pacific region. That is why we are supportive of the Canadian government pursuing a Canadian-Indonesian agreement and a potential ASEAN agreement. ASEAN countries are increasing their consumption of pork in response to their growing household incomes. They represent a great market opportunity for Canadian pork.

As you are aware, out of the 10 ASEAN countries, four are already part of the CPTPP. The Philippines and Thailand, on the other hand, are not, nor are they part of any other agreement that we have. For us, these two countries represent important pork markets. The Philippines, for example, is the fifth-largest lucrative market, with sales of over $301 million. It's the fifth-largest market for volume, with over 126,000 tonnes of Canadian pork exported there last year.

In addition to market access opportunities, we believe that increased economic collaboration in the Indonesian region provides an opening to address important global animal health challenges. The spread of foreign animal diseases, such as African swine fever, in our case, has been impacting the global meat market trade for the past four years. For Canada to be recognized as a stable supplier of pork products, any strategy in the region must include the Canadian government actively working to secure animal disease control zones with each of these countries. Singapore already has an agreement to allow for safe trade from Canada in the event of a disease outbreak, but more agreements are needed, especially with key markets such as Vietnam, Philippines and Japan.

The pork industry is aware of the importance of not being dependent on any one market, whether it's in North America or in the Indo-Pacific region. However, it's impossible not to talk about the importance of the Chinese market to our industry and the need for a strategic approach for the Canadian-Chinese agriculture trade. For us, China is the world's largest importer of pork. It imports more than twice the second-largest importer and more than 30% of global imports. However, China is currently restricting 65% of Canadian pork processing capacity from accessing the country. The Chinese market adds an additional $10 to $20 of value to the carcass. That supports the financial stability of our industry and allows our industry to prosper.

We are pleased that our industry has had some success over the past year, with the Canadian and Chinese foreign ministers recently speaking. This is a market that we are unable to walk away from. It is of utmost importance that dedicated staff in the Canadian embassy in China reinforce the importance of the trading relationship for agriculture products as a whole.

To sum it up, CPC is a staunch supporter of Canada's effort to deepen economic ties, either through trade negotiations or strategies that expand commercial interests in the Indo-Pacific.

We do see the need to address that shortage of dedicated trained technical staff that can build working relationships with foreign officials to address emerging issues and facilitate the timely implementation of zoning agreements and system approvals.

I'd like to thank the committee for the invitation to appear and for your attention. I'd be pleased to answer your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Stordy.

We'll move to Mr. Vander Ploeg for five minutes, please.

[Casey Vander Ploeg, Vice-President, National Cattle Feeders' Association]

Good afternoon.

I'm Casey Vander Ploeg, and I serve as vice-president of the National Cattle Feeders' Association.

I'd like to share three things with the committee this afternoon: first, the general landscape of our beef export trade; second, how that landscape has changed and the role played by the Indo-Pacific in that change; and, third, some recommendations addressing the challenges and opportunities of trade in general and the Indo-Pacific in particular.

It has already been mentioned that Canada currently exports half of the value of all live cattle and beef that we produce. The U.S. accounts for about 75% of those exports, but other important markets are Japan, China, Mexico and Korea. Those five nations account for almost 95% of Canada's beef exports.

Over the last 10 years, we have seen tremendous growth in our beef exports. They've moved from about $1.4 billion per year to $4.5 billion last year, as already mentioned. What's behind that growth and does the answer help to inform the future of Canada's trade policy?

It comes as no surprise that the U.S. is behind much of that growth, about 70%. Of course, it's that realization that drives concern about Canada's dependence on the U.S. and the need to diversify our trade.

What's more surprising is the share of that export growth being generated by Indo-Pacific countries, which have been responsible for 20% of our beef export growth in the last 11 years. If we add in China, the total raises to 25%.

Another way to look at all of it is through our current suite of multilateral and bilateral agreements. These have been absolutely essential in fuelling Canada's beef exports. Virtually all of our export growth has occurred in those markets with which Canada has a free trade agreement.

Moving to the Indo-Pacific specifically, we currently have an agreement with eight of the Indo-Pacific nations. These agreements have resulted in more than just export growth. In 2010, Canada actually had a negative trade balance in beef with this group of eight. We were importing $30 million more than we were exporting, but last year we had a positive trade balance of $460 million. The CPTPP and the Korean bilateral have played no small role in our ability to access the Indo-Pacific, to compete there and to win.

Vietnam is an excellent example of the benefits that can flow from these agreements. Our exports to Vietnam were always small, but they did grow slowly and steadily year over year. After the CPTPP took effect, our exports made huge leaps forward, moving from $8 million in 2019 to $83 million last year. Last year, our exports eclipsed all of our exports to Vietnam in the past 10 years.

Today, another eight Indo-Pacific nations are now in play as a result of negotiations with the ASEAN, possible accessions to the CPTPP and various bilateral initiatives. Here, Canada is going to have to be strategic. Not all of the eight countries hold promise. Beef is perhaps best left out of any discussion with India, for example, but the four that do stand out for us are the Philippines, Taiwan, Indonesia and Thailand.

We've been exporting beef to the Philippines and Taiwan each and every year, and that trade has been slowly growing. Trade with Indonesia has been more variable and spotty, but we do have history and experience in that market. In the case of Thailand, we used to export beef there, but trade has been non-existent for a number of years now.

Our priorities to the committee for the Indo-Pacific are as follows:

First, we should focus strongly but not exclusively on opportunities with the Philippines, Taiwan, Indonesia and Thailand.

Second, we need to focus on tariff liberalization and elimination, as well as addressing all of those regulatory and non-tariff barriers that can become so problematic.

Third, we believe that prioritizing accession to the CPTPP is the best route forward wherever feasible.

Finally, we need to maximize opportunities and benefits for Canadians under our existing agreements.

That last point requires two points of explanation.

First, not all trade deals have brought export benefit to Canada's beef industry. The committee is likely aware of some of our disappointments and challenges with CETA.

Second, FTAs do not automatically grow our exports. Labour shortages on farm and in our beef plants make it difficult to maintain current production, never mind expand it. As well, Canada's beef herd today is 20% smaller than the peak in 2005.

We need to maximize the benefit from our trade policy agreements and require supportive policies in other areas, such as labour.

The front-of-pack labelling initiative at Health Canada is another policy that works at cross-purposes to our trade objectives. At the same time that we're working to grow our international exports, Health Canada seems determined to attach warning labels on single-ingredient whole foods, like lean ground beef, domestically. That policy damages our reputation both at home and abroad.

NCFA would—

[The Chair, Liberal, Judy Sgro]

I'm sorry to interrupt. Thank you very much for your comments, Mr. Vander Ploeg.

We will go to Mr. Baldinelli for six minutes, please.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair.

Thank you to the witnesses for being here—those who could be. It's so nice to have witnesses here in person. Thank you for taking that time and for being with all of us.

Two witnesses shared similar thoughts: Ms. Whitley from the Canadian Canola Growers Association, and Ms. Jackson from the Cattlemen's Association.

You raised the whole notion of a kind of specialized multidisciplinary office being established in addition to the trade services that are already provided there. Do you think there are enough technical resources in the region to help grow market access opportunities in Asia?

[Fawn Jackson]

I can start and then go over to canola.

We think there has been a hollowing out of the amount of technical expertise within the region. We want to have an office that would be able to build on the capacity within our consulates. We think that having that technical trade expertise that is able to work with existing offices as well as with industry will help us to more proactively address the issues that are coming fast and furious at us.

When we were talking about this earlier this year, ahead of the budget, we had an example that was happening in the beef industry. We had a case of an animal disease that shut down three markets for us. We needed to have those markets opened as quickly as possible. They never should have closed in the first place, so we think that we need more technical expertise.

We see that the future is going to be rocky. Let's get these people on the ground before we're really in the middle of it.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Ms. Whitley, would you like to add to that?

[Janelle Whitley]

Sure. Dave, who's also in the room, might want to add something as well.

From our perspective, I think we're looking at rounding out the current capacity. The trade commissioner service has some great resources and capacity on the ground, but from our experience, they tend to be focused more on market promotion, development and putting in business connections in the region or country.

We're looking at an office that would have the plant health specialists on the ground, animal veterinarians, people who can specialize in the regulatory and political environment. It's really trying to help our exporters understand the environment they're selling into in order to proactively prevent a market access issue from occurring. However, in the event that there is one, you want to make sure that the right people—information, collaboration and connection between industry and government—are already in place, so it doesn't take hold and ultimately impact our trade flows.

[Dave Carey]

To echo that, but in closing, I'd say it's about being proactive. An ounce of prevention is worth a pound of cure. If we can get away from trade irritants before they become something, and have an expert on the ground who can walk local regulators through why it's not a concern and how Canada has already addressed an issue, it will go a long way. It won't be attention grabbing, but it will be something that facilitates trade and market access before it becomes a trade dispute or irritant.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

The trade associations all discussed the need for diversification as an important component and reason for entering into these agreements with Indonesia and ASEAN countries.

I also found it interesting that the National Cattle Feeders' Association talked about some of the challenges being labour shortages and size of beef herd, for example.

My question is for all of you. For each of your sectors, what would be your top trade challenge in exporting to ASEAN countries and other Indo-Pacific countries?

[Dave Carey]

It's non-tariff trade barriers, one hundred per cent. Canola has a 90% export crop valued at $13.7 billion. It's not so much tariffs anymore; it's non-tariff trade barriers, the way they treat biotechnology, a lack of science-based equivalency and a lack of understanding phytosanitary issues and when and where they should be applied. Those would be canola's biggest issues.