Good morning.
I would like to thank the members of the Standing Committee on International Trade for the opportunity to share my views on non-tariff barriers in international trade agreements.
For nearly two years, I have been the Vice-President, Policy and International for the Canadian Chamber of Commerce. We represent more than 400 members, including local, provincial and territorial chambers of commerce, and about 100 member associations, for a total of 200,000 businesses.
I will make most of my remarks in English, but I will answer questions in French if I am asked in that language.
Madam Chair, I have been involved in international trade discussions from private sector, government and industry perspectives for more than 25 years. I will limit my comments today to a more strategic level, as I am not a specialized trade lawyer with deep technical experience.
That said, many companies we represent are facing specific issues in different countries, and we have informed our members they can make written submissions to you for this study.
As committee members are aware, non-tariff barriers are obstacles to trade that are not in the form of tariffs. Common examples are quotas, technical regulations and licensing requirements. These barriers can be challenging for businesses, and I do not believe they will ever totally be eliminated. There are often legitimate reasons for technical regulations and licensing requirements, and businesses constantly manage them. What we seek is that these regulatory requirements not become discriminatory trade barriers.
I recently participated virtually in a panel that was organized in Brussels by the Canada EU Trade and Investment Association. I learned that under CETA, regulatory co-operation has been key to solving disputes. CETA represents a third-generation trade agreement, one that aims to create deep economic and trade links by focusing on barriers to trade beyond tariffs.
CETA has a complex system of regulatory co-operation with a long list of dialogues and committees dealing with specific areas of regulatory co-operation, as well as a general regulatory co-operation forum. I am not a specialist, but I learned that a number of disputes are being solved through these mechanisms. I was told that often the EU regulatory authorities simply need to better understand how the Canadian product is meeting the goals of the EU regulation, if not the letter of the law or the way the law has been applied in the past.
That said, we should not be naive. Sometimes these non-tariff barriers are largely an excuse to try to keep Canadian goods out of a market. When that is the case, Canada needs to expend political capital to push for barriers to be lifted.
This political capital does not always need to be at the highest level. We do not want our bilateral relationships to be hostage to specific disputes. However, our trade commissioners need to constantly push to call out when non-tariff barriers are being used unfairly, and work to ensure regulatory authorities prioritize meetings with Canadian regulators who are able to explain how our products meet the spirit of local requirements, taking away any excuses that may be used by local regulators to prevent market access.
Dispute settlement mechanisms can often also be a key factor when seeking redress. Sometimes what regulators need is an external referee who takes the burden of decision-making off their shoulders. It is easy for a regulator to be captured by local industry interests, and it can be very strategic for Canada to obtain dispute settlement mechanisms in our trade agreements.
The success of dispute settlement mechanisms in investment protection is well established. I can underline, from my Latin American experience, that dispute settlement mechanisms are essential when governments change and new administrations seek to overlook the commitments made by their predecessors. This principle can be usefully applied to regulatory disputes.
I would like to end my comments by noting that we are living in difficult times with respect to the international commitments of various countries. Think of Russia's illegal invasion of Ukraine or the challenge to the international rules-based order posed by the Chinese government.
Unfortunately, even the United States, the leader of the international system set up in the post-war era, refuses to fully implement decisions that are unfavourable to it. A recent example is the decision of the panel established under the Canada-U.S.-Mexico Agreement on the domestic origin of cars. Another example is the United States' use of the so-called national security test to defend its steel and aluminum tariffs at the World Trade Organization.
While these examples underscore the magnitude of the challenge, Canada must do its utmost to protect the international trading system of today and develop the international trading system of the future. We will do so in part by finding solutions to non-tariff barriers.
I commend the members of the Committee for taking the initiative of studying the issue, with a view to proposing possible solutions.
Thank you.