Thank you.
Mr. Parfait Aïhounhin, I'll ask you the same question: What do you think are the biggest opportunities for win-win agreements with Africa?
Evidence of meeting #30 for International Trade in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was business.
A video is available from Parliament.
Conservative
Jason Groleau Conservative Beauce, QC
Thank you.
Mr. Parfait Aïhounhin, I'll ask you the same question: What do you think are the biggest opportunities for win-win agreements with Africa?
Sègbédji Parfait Aïhounhin Chief Executive Officer, Chambre de commerce Québec-Afrique
They are in the agribusiness and agricultural technology sector; the energy sector, especially renewable energy; the digital sector; logistics; traceability; infrastructure and mining, to name a few.
The chamber of commerce did a study that led to the drafting of the strategic plan, and it was the high-value-added sectors that emerged.
Conservative
Chief Executive Officer, Chambre de commerce Québec-Afrique
Absolutely. That's the case in all the sectors I just mentioned.
If I take the agribusiness and agricultural technology sector as an example, Canada has strengths in agricultural technology, as well as in standards, finance, trade and export support. The same is true in all the other sectors, so the potential is there.
We at the chamber of commerce believe there needs to be a complete paradigm shift. It's important to move away from the traditional angle of buying and selling raw materials to instead coproduce things. I think the senator and Mr. Tétreault spoke to that very well.
Conservative
Jason Groleau Conservative Beauce, QC
I'm going to come back to you, Mr. Viel.
You talked about productivity and talent retention. Last month, the unemployment rate in Quebec was 2.6%. Do we have the capacity to produce? Are we able to be competitive in terms of labour? I say this because it seems to be a problem in your sector and, as you know, in mine, in Beauce.
President and Chief Executive Officer, Québec International
I'll echo the comments that were just made. It's important to target the right sectors. In the Quebec City region, we're fortunate to have many businesses involved in secondary and tertiary processing, which helps us deal with the situation we're experiencing because of the tariffs.
The other aspect concerns the entire services component we just talked about, such as the digital component.
The agricultural component is also key. In fact, we had a webinar with people from Africa yesterday morning. The questions, particularly from their side, were about how we can help them export products from the agri-food sector or other sectors. That's because for them, Canada and Quebec are markets they still need to get to know. We have to help one another to help our businesses go to Africa, and to help African businesses market their products in Canada. I'm also thinking of the example from the senator, who went to a country, brought back a product, processed it and helped reinvest in the community. These are win-win examples for both sides that enable us to go further.
We can think about how to import agri-food products, such as olive oil, from certain North African countries. The right players need to be put in contact. On both sides, we need to understand the regulations and limitations on how to bring products in and how to proceed.
It's important to support and help our people so that they succeed and they understand how business is possible on both sides. Putting people in contact is one of the objectives we want to pursue through our Rendez-vous d'affaires de la Francophonie de Québec in May.
Liberal
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you very much, Madam Chair.
Welcome to the witnesses.
Thank you for joining us again, Mr. Collins and Mr. Aïhounhin.
Mr. Viel, that was very interesting. You just mentioned Québec International. Earlier, you talked about the importance of understanding the markets. We heard from the senator and Mr. Tétreault about this. How would you implement tools specifically to help with understanding markets?
President and Chief Executive Officer, Québec International
There are a number of ways to approach this.
One of the first things that is often proposed is an explanation of how to do business in various countries. Several have been mentioned, so I won't pick out one in particular. We need to enable our businesses to have discussions with the country's authorities to fully understand how to interact, enter the country and do business there. The same has to be done for an entrepreneur from another country who wants to come here. It's a matter of fully understanding the workings and the processes.
A business that wants to sell a product or a service of some kind in a country has to make an initial decision: set up shop there, or look for a local partner that will become the distributor of its product. I'm just using those two examples, but the choice of legal structure is another factor that has to be considered afterward. How can the business create a subsidiary, in a given country, that will adapt from one country to another? The business can then decide to establish a home base. Earlier, the senator gave an example in which Cameroon or Côte d'Ivoire served as a base. In such a scenario, it's important to think about how the business will be able to sell to certain other countries on the continent. There are all these factors to take into account. There may also be tariff barriers between two countries. Businesses need to clearly understand how to set up their structures and how to go about doing things. From there, are they taking on a partner? How are they going to do that? How do they establish this bond of trust with the person who will become the company's representative in a country?
On our end, we often start by offering a seminar that will give people an initial understanding of the market and the organizations that can help them, both in Canada and, down the road, in the country in Africa.
We then often try to set up a trade mission so that people can actually visit the country, meet people and make initial contacts. It's about trying to develop that network. Whether in Africa or in other countries, you can't go to a country just once and hope for the best. Yes, it can happen, but developing interpersonal relationships and transactions is what will enable businesses to move forward to establish themselves and succeed.
Another aspect we could address involves calls for tenders. We touched on this earlier: This is another element that has to be clearly understood. There may be very specific needs in terms of construction or the development of various elements. That means it's important to fully understand and properly respond to the needs of a business or corporation.
There are a number of steps, but it's important to also take the time to go and see things. Even in other countries, sometimes people haven't adopted certain practices before arriving, which can create risks for the corporation.
Liberal
Linda Lapointe Liberal Rivière-des-Mille-Îles, QC
Thank you very much.
What would you improve about Export Development Canada and the government agencies? Also, what are your suggestions for the departments to work together?
I'll give you the floor, Mr. Viel, but I'd still like to hear the comments of the other two witnesses.
President and Chief Executive Officer, Québec International
I'll make a few comments. This was mentioned.
I think Export Development Canada is an important element, precisely for minimizing the risks for businesses that want to go to different countries, including those in Africa. That makes it important, because businesses have to be able to make sure that if, for example, they sell prefabricated homes in a given country tomorrow morning, they have a third party to ensure that they'll be paid, and so on. That's the first aspect.
The second aspect is the importance of having access to embassy or consulate staff to establish ties, gain a clear understanding and get help in terms of making connections and determining the way work will be done. If, tomorrow morning, a business is going to contact a department in a country, such as a mining department or a digital affairs department, it has to know how to work with that department and how to do business.
I was just with some young people from Laval University who are in the process of signing a training agreement—which also has an export component—with Gabon. It's important to know how to go about it and how to set up the process. All those things have to be well managed.
I have to say that we have often been very good at setting up agreements, but we also have to be very good at getting the full benefits. We don't have any with the continent, so it's up to the government to determine the best way forward. However, after that, we will also have to be very good at taking action so that our businesses can fully benefit from trade agreements.
I will stop there to allow others to speak as well.
Liberal
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
Thank you, Madam Chair.
I would also like to thank the witnesses for their opening remarks.
Mr. Aïhounhin, we started some discussions during your previous testimony. We had time to finish some questions. However, let's continue.
I have a technical question first. You often mention the strategic plan. However, it didn't turn up when my team did a quick search on your website. Where can we find it?
Chief Executive Officer, Chambre de commerce Québec-Afrique
We developed the strategic plan. We're currently redoing the website, so that's why you didn't find it there. I can send you a copy.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
I think it could be of interest to all committee members.
Let us now go back to what you discussed in your testimony and in some of the exchanges last time: the issue of traceability. You talked about 90% traceability. First, remind us why this is important. Second, tell us whether it's realistic, because we know that in some supply chains, informal work is often quite significant.
Chief Executive Officer, Chambre de commerce Québec-Afrique
Thank you for your very relevant question.
If I may, I'll return to the issue of facilitation tools before coming back to traceability.
The facilitation tools exist, including commercial financing from Export Development Canada, Investissement Québec, Québec International and CanExport SMEs.
However, we at the Chamber of Commerce think these tools need to be strengthened. In addition, there needs to be support for certification and standards, which leads to the issue of traceability. Here, the standards are quite high and few companies in Africa have access to these international standards. If we want to do business with companies in Africa, we need certification support.
We also need to strengthen logistical support and shorten transit times. If there is no traceability on what is produced or processed in Africa, once it arrives at customs, customs officers are forced to remove the goods from the container and check the contents one by one. That's what happens. If the goods are traced, they can scan a QR code and get all the information on them, such as where the seed was planted, where it was produced and where it was processed. Traceability is therefore becoming a central issue in the trade that will be conducted.
The other thing that needs to be strengthened is information about markets and risks. I'll leave it at that in terms of facilitation tools.
Now, let's go back to the question you asked about traceability. [Technical difficulty—Editor] of trade.
Our strategic plan has four pillars. The first is a collaborative traceability platform. It uses harmonization to connect African and Quebec producers, processors and distributors. The platform will serve as a tool for strategic monitoring, logistical follow-up and regulatory compliance. In doing so, it will strengthen many aspects of international trade between Canada and Africa.
There are already ongoing activities, as Carl Viel from Quebec International said. Meetings are being held to promote that. However, a commercial platform, where businesses can find each other and do business directly without a lot of intermediaries, will encourage trade and reduce the time it takes to transit through customs.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
Madam Chair, I'd like to know how much time I have left.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot—Acton, QC
Thank you, Madam Chair.
Mr. Aïhounhin, thank you for your answer.
I understand that it's realistic, but on condition that it be aligned with new technologies, such as the QR code you mentioned. Otherwise, it's unfeasible.
Chief Executive Officer, Chambre de commerce Québec-Afrique
Yes. That's why, in my remarks earlier, I said that what the Chamber of Commerce is proposing is no longer a way to buy raw materials and process them, but rather co-production throughout the chain. The smiling curve features research, development, assembly, sales and distribution. Throughout the production chain, we will have to think about co-production.
In his remarks before ours, Mr. Tétreault said that we need to position ourselves differently. The other players on the ground, such as China, Russia and the United States, have their own approaches and methods.
How can we gain more markets? What is the language that current African leaders are using? If we listen and follow African geopolitics a little, we'll see. I think Senator Gerba mentioned this: Africa is nationalizing. If we want to go and work with Africans, we have to think like them, hence the proposal we are making. You have to co-produce.
Consequently, we need to put in place the tools required for co-production, train companies to adopt this way of thinking and penetrate the African markets available to us. Canada has the cachet in various sectors required to move forward with Africa. Therefore, it is up to Canada to position itself better.
Liberal
The Chair Liberal Judy Sgro
Thank you very much, Mr. Aïhounhin. I apologize, but I have to interrupt and get on to the next member.
Mr. McKenzie, go ahead, please.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Thank you, Madam Chair.
There are so many levels to trade and so many different parts that must all work together. I'm going to ask Mr. Collins if he might be in a position to comment specifically about the African continental free trade area.
Could you update the committee on what is happening with the efforts taking place in Africa? Specifically, did they present an opportunity for Canada to plug in? Is that one of the routes the federal government, the Government of Canada, can take to create what I referred to in the first panel as the “umbrella” under which much trade activity must in fact take place?
David Collins Professor, International Economic Law, As an Individual
Thank you very much, Mr. McKenzie. I'm so pleased that you asked me that. I was hoping to work in a comment on the African continental free trade agreement. Now you've given me the opportunity.
This is an amazing development that's unfolded over Africa in the last few years. It's the largest free trade agreement by number of countries, and probably coming close by population, but GDP not so much. I think it's an enormous opportunity, to answer your question.
Just to be clear, the continental free trade agreement is only a free trade agreement. It's not a customs union—not yet. It doesn't negotiate trade agreements as a bloc. I suspect that in the coming years—let's say decades—Africa will probably turn into a customs union. Maybe that's my wishful thinking, but I wouldn't be surprised if the African countries did indeed develop a unified trade policy vis-à-vis the rest of the world.
Until that happens, Canada can't really negotiate directly with the African continental free trade agreement. However, that doesn't mean it can't take advantage of the collective approach the continent is taking on things like the harmonization of standards and things like non-trade barriers.
Canada cannot participate directly in the secretariat as an observer of the African continental free trade agreement, but it can participate informally in the committees with respect to capacity building, technical assistance and helping African countries perhaps achieve the same level of harmonization in Canada by using its experience doing this with its trade partners. I definitely think that this is a very valuable opportunity. It's a wonderful thing for the rest of the world, and it's especially a good thing for Africans.
To follow up on a point made by one of the earlier speakers, if a Canadian business wants to invest in a particular African country with a view to accessing other countries around Africa to have, let's say, an integrated supply chain, it will have to deal with all of the internal African trade barriers. In light of the African continental free trade agreement, these barriers should come down. Even if they're not completely down—and by no means are they completely down; there are some there, especially customs issues at borders—this would be a way of identifying what the barriers are, and then work can be done in tandem with African countries to bring them down and help harmonize them. It's very much a valuable opportunity.
Conservative
David McKenzie Conservative Calgary Signal Hill, AB
Sir, to follow up on this, there are other nations around the world that wish to exert influence in Africa. China is one. To the extent that they are there now and have influence, it would seem to me that the lending of technical expertise, as you're describing, not only plays to Canadian strengths but allows us to be in that area, to be developing relationships and, frankly, to be assisting African economic development in the various member countries.
Does that help us to push back against some of the influence efforts of other countries whose purity may not be what ours is?
Professor, International Economic Law, As an Individual
Yes, very much so. I like the way you phrased that diplomatically. I think you used words that are similar to what I would have said.
I don't think Canada should position itself confrontationally vis-à-vis China in Africa, but I think you're right to suggest that perhaps the Chinese presence in Africa has been a somewhat exploitative one. It's one in which a dependency has been generated.
Now, let's not undermine the vast infrastructure contributions that Chinese companies have made in Africa. They have been enormous, and I wouldn't purport to suggest that Canada could rival what China has done in those areas, but Canadian businesses can achieve other developments, such as capacity, training and technical expertise, in certain more specific industries. Canada can add a value or ethically driven investment that's more sustainable and more focused on the long term for long-term gain, training Africans to do things themselves rather than this somewhat one-sided arrangement that China has done. This is precisely the way it could be done—certainly not infrastructure, but technologically focused in specific sectors.