International Trade Committee on June 1st, 2023

[Gregory Kolz]

I'll ask my colleague Émilie to provide that response.

[Émilie Bergeron]

Thank you.

Yes, our main goal is to ensure we create this environment, which is science-based and predictable, in Canada and abroad. We believe that we, in Canada, bring technologies and innovations that growers are using, and we want to make sure these growers have access to international markets. As you heard before, the Canola Council, Pulse Canada, and Cereals Canada all use our technologies and need to export.

The work we're doing domestically in creating that science-based, predictable environment.... We want to bring it outside to make sure access to Canadian agricultural products is not blocked in the importing market because of measures that are not based in science, such as the one we discussed today—the MRLs in the EU.

[Wilson Miao, Liberal, Richmond Centre, BC]

What are the potential future trends or developments in the realm of NTBs for CropLife Canada and related industries?

[Émilie Bergeron]

We are seeing a lot of NTBs growing now for pesticides and pesticide approval systems deferred from one country to another. We see pesticides that have been approved here in Canada as being safe by Health Canada—which is setting very high, science-based standards—that are not being approved in other countries sometimes. That makes it technically challenging for growers using our products safely here in Canada to export. We see a broad range of new measures on pesticides.

We also see continued challenges in the approval of biotechnology crops in exporting markets. In China and Europe, it could take up to 10 or 12 years before they approve safe and effective technologies that have been approved here in Canada. This is preventing growers in Canada from accessing and using these safe technologies.

If not growing, we see these barriers sometimes expanding to other markets outside of the major ones.

[Gregory Kolz]

I would also suggest that the science, for instance, that's being assessed by the Europeans is the same science we are seeing assessed here. The distinction is that the decision-making process and the politicization of that process are also hampering our efforts.

It is not that the facts and the data are significantly different. It is the way it's being applied, or not, depending on the jurisdiction.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you.

Is there anything that hasn't been discussed today in the context of NTBs that you or anyone on the floor would like to share with the committee?

Go ahead, Mr. Kolz.

[Gregory Kolz]

I would suggest that here in Canada, we also have our own circumstances where we need to rely on science perhaps more effectively than we are, whether it's a pause on MRLs domestically and/or other circumstances where we have very solid data and the departments, in many cases, are advocating in conjunction with the data they have. However, as is often the case, there are sometimes political considerations that weigh in on the decision-making process.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go on to Mr. Savard-Tremblay for two and a half minutes, please.

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

Thank you, Madam Chair.

This time, I will turn to Mr. Kolz and Ms. Bergeron.

I know that, in the end, you are advocating for a science-based reduction of non-tariff barriers, which is not an easy task.

However, we have heard from witnesses who have really talked to us about products that are produced abroad in ecocidal and truly deplorable conditions.

Should we not consider creating barriers ourselves for certain products? Actually, I prefer not to say “non-tariff barriers” because I'm afraid that label will be used everywhere. We must nevertheless retain the right to legislate because, when you say that it is science-based, science is there in a certain way, as well.

I'm thinking of palm oil, for example. We have heard a lot of testimony about how this product is produced in India and Indonesia, and it's absolutely terrible.

Should we ourselves be looking at retaining the right to legislate? I'm not necessarily talking about responding to one barrier with another barrier.

[Émilie Bergeron]

Yes. The right to legislate is extremely important and is part of the rights that are codified in the agreements. For example, this right is recognized in the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. That is a basic principle of trade agreements.

What we are saying is that this right must be framed so that measures would be based on science. That is what enables international trade to flourish, and that is what enables our producers here, Quebeckers and Canadians, to export their goods.

This right does exist, but it is constrained by science. Any regulatory measure must be based on science and a risk analysis.

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

I think you talked about countries that allegedly use sanitary and phytosanitary measures that are not based on science. Can you name some countries in particular?

[Émilie Bergeron]

I was talking about Europe, with the maximum residue limit, or MRL.

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

You're talking about a pan-European measure, the European Union, not one country or another.

[Émilie Bergeron]

Yes. This measure has been adopted by the European Commission and will be implemented. If this measure is implemented in 2026, as expected, it will be complicated for Canadian exporters to continue exporting to Europe and the rest of the world.

That is why we are asking the WTO to intervene. It is important that Canada, as an international leader in defending science-based measures, take a strong position and tell Europe that these measures must be based on science and on compliance with sanitary and phytosanitary agreements.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We'll go to Mr. Cannings for two and a half minutes.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'm going to turn to Mr. Allam again. You were talking about partnerships in conjunction with FTAs and how important they are. I'd like to give you some more time to talk about that.

You also mentioned—and I think it was as an example of one of these—U.K. and Oklahoma. It would seem to suggest that it would make a lot of sense for Canada to have partnerships with individual states, considering how important the United States is to our trade.

[Omar Allam]

I believe the U.K. is progressing in this respect, and Canada could follow suit with various states at a bilateral level in that respect to advance respective interests.

Our provinces also have interests internationally, and they pursue agreements as well as different types of partnership arrangements, in addition to having boots on the ground that complement federal boots on the ground in different international markets. When it comes to the economic partnership arrangements, I think what we're classically seeing is that free trade agreements are in vogue, and there's less attention on these economic arrangements or trade models.

What you need to look at is what the political, social and commercial objectives are, and then break down the type of partnership. Is it going to be an investment relationship, a trade relationship or strategic co-operation based on different sectors of the economy? You break that up and, from there, you look at the agreement type. You structure that based on the various interests. What are the key benefits to Canada versus something that another market will want from us? Where do we find common ground, but where do we also have leverage whereby we can seek concessions in different areas to advance Canadian commercial interests, but also to push levers on scientific co-operation, whether it's agriculture...? You name it.

From there, you can then look at the governance model. I think this is critical, because when you look at the governance structure and the roles and responsibilities.... I kept on hearing a frequent footprint in various markets or a back-and-forth in a given economy, so it's high-level visits and having frequent interactions. You're then forcing the relationship to advance in a way whereby you're having frequent and regular dialogue at the highest level. You have that political leverage and the political relationship that is there, but you also have roles and responsibilities whereby various officials at different levels are interacting with one another at a technical level and they're forced to the table, where there's even just that ability to have....

I have to stop.

[The Chair, Liberal, Judy Sgro]

I'm sorry. I have to cut you off. We still have two members who want to get a few questions in.

It's over to Mr. Carrie, please, for five minutes.

[Colin Carrie, Conservative, Oshawa, ON]

Thank you, Madam Chair.

My first question is to Mr. Dade. Coming from out west, I wanted to talk a bit about the energy sector. Recently, we had opportunities to export clean Canadian LNG to Germany but, in particular, out west to Japan. I believe Japan is our third-largest trading partner.

Coming from Oshawa, we have a bit of a trade deficit that I always hear about with automobiles. I always thought the energy sector would be a way of balancing that trade. However, when you listen to people in that business, they're almost saying that Canada is putting non-tariff barriers on itself, because of political reasons or environmental regulatory reasons.

Mr. Allam mentioned we have a lack of capital here, and we're sending a message that we have liquefied natural gas. I believe the Americans have 11 export opportunities, and Mexico is even looking to export to Japan, even though it doesn't have the resources we have.

I was wondering if you could comment on what we can do for our international reputation, because we're seen to not be getting these investments that we need. You mentioned infrastructure. We used to be in the top 10 and now we're down to—what?—32 or something like that. We're not getting pipelines, mines or any of these excellent infrastructure projects built, so if you could, please comment on that.

If we have time, Madam Sun, maybe you could comment a bit. You talked about political leadership. Mr. Dade mentioned that the United States gave a clear rules base to China. Australia's done it, but you haven't really talked too much about Brazil. I was wondering what we could learn from Brazil.

Let me stop talking.

Mr. Dade, if you could, please address the internal non-tariff barriers that seem to give Canada a bit of a problem getting some of our products around the world.

[Carlo Dade]

Okay. I'll try to be quicker.

Internal barriers, yes, they hinder us. The internal trade issues in Canada are well known. They hit the GDP. They also affect our ability to make products together in Canada to export abroad. That's something we don't think about with internal trade. It makes us less competitive as an exporting nation.

We export LNG to Asia. We export quite a bit. As you mentioned, Mexico has four Pacific coast LNG projects that are FID. Mexico doesn't produce enough gas for its internal consumption, yet it's building plants to export. Where is that gas coming from? It's coming from the U.S. How does the U.S. have so much gas that it can afford to meet domestic consumption and export gas to Mexico for it to export? It's Canadian gas entering the U.S. market. We're dodging GHG emissions in Canada, but we simply ship them down to the U.S. We haven't stopped the increase in GHG emissions. We've just aided and abetted the Americans and the Mexicans to profit.

This is an example of a political decision. Trade policy is political. The decisions with whom to trade are made by the private sector. You do not determine the success of a trade agreement. You do not determine whether that trade grows or diminishes. The private sector does. The policies that enable it are under your control. The LNG issue is a great example of political decisions. The MRL decisions in Europe are also political issues.

You can have all the science in the world, but if people believe that GMOs are harmful, good luck getting GMOs in, even if you have the science. You're not going to win every battle based on science, so you have to be careful about the application and set your expectations as to where you can win and where you're just going to lose.

Good luck trying to get cotton or sugar to the U.S. in that regard, despite the science and other evidence. It's political.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Dade.

Next, we have Mr. Arya for five minutes, please. You're the last speaker.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair. I do have a question for Mr. Dade.

I would like to come back to the issue of the provincial trade restrictions we have among the provinces later. I'll also come back to your comment that the private sector decides where to trade, how to trade, etc. I can give an example. The steel and aluminum sectors, now fully owned by foreign entities, do not export at all outside of the North American market. There's been no capacity increase in both of these sectors for the last 15 to 20 years. All of the agreements we have been signing with CETA, CPTPP, etc., the private sector companies are not using.

You mentioned the WTO. It was quite interesting regarding the fundamental differences. One country wants to follow the letter of the law, and other countries just want to use the spirit of the law. Do you think the WTO will still be relevant in the decreasing globalization scenario?

[Carlo Dade]

I do. The main question there is the ability to accommodate the Chinese model of economic governance. There's great work out of MIT. I'm blanking on the economist, but it's looking at how the WTO can remain relevant in terms of incorporating China. There's room to be hopeful. I can get the work to the committee members if they want.

[Chandra Arya, Liberal, Nepean, ON]

I'm sorry. I have to interrupt, because my time is limited.

Exactly. That's because of the role the WTO plays in China's entry into the international order of trade. The recent announcement by the American national security adviser said the WTO is important, but it has major challenges.

For the last five years, the United States has stopped being appointed to the appellate body. That has come to a standstill for five full years. The United States emphasizes that bilateral economic partnerships with certain countries or with a region or block of countries are much more important than the WTO. Again, do you think the WTO will play a major role?

[Carlo Dade]

I don't know if I can say “major.” The larger issue, more so than the U.S., is the incorporation of China. That's longer. The logjam with the U.S. can be broken. China requires structural change, fundamental change and rethinking.

Again, the WTO continues to work. You've had countries that have taken initial decisions and agreed to abide by them without going through. Don't think that it's completely hopeless and gone. Your question as to a major role, or will it just have this...whenever countries happen to decide they'll take the first ruling? I don't know. The larger question is China and how we accommodate the Chinese model in the global trading system.