Mr. Speaker, it is certainly a pleasure to be able to speak for a few minutes this morning on Bill C-57 and to talk about world trade and the importance of world trade to Canada and to Canadians, in particular the men and women who work in the country's agriculture and agri-food sector.
The legislation we are discussing today will establish the new World Trade Organization or the WTO. It will incorporate the General Agreement on Tariffs and Trade, a sweeping 120-nation accord which was agreed to in principle in December last year and was approved by member countries last March or April in Morocco. The agreement and the WTO which will administer it offer great benefits for Canadians in the creation of jobs, wealth and the opening and securing of new and vital markets for the country's export commodities.
Canada is a nation that is dependent on trade, and we all know it. Nowhere is that more evident than in the agriculture and agri-food sector. In 1993 Canadian agri-food exports of $13.3 billion contributed a surplus of almost $3 billion to Canada's balance of trade, almost one-third of Canada's total merchandise trade balance. As former Liberal agriculture minister, Eugene Whelan, once noted, agriculture pays the bills.
At the same time Canada's share of the world agri-food market has declined since the early 1960s. In contrast the European union's share, particularly that of France and the Netherlands, has increased significantly. From Canada's per-
spective exports to Europe fell from $1.35 billion in 1981 to about three-quarters of a billion in 1993. At the same time our imports from the European union rose from about $400 million to almost $1 billion. This tells us that while the sector is doing well it must continue to do better.
Last year the industry and federal and provincial governments agreed on the goal of increasing Canada's agri-food exports by 50 per cent from $13 billion per year in 1993 to about $20 billion per year in 2000.
In July of this year the agriculture ministers reaffirmed that goal and added a further target of achieving a 3.5 per cent share of world agri-food trade. That is an objective in line with our historic share, but it will push the requirements to meet that to exports which will reach a value and total of about $23 billion.
In addition to steps that are being undertaken in Canada, the new WTO will have a large role to play in increasing our exports, increasing jobs and increasing prosperity. The World Trade Organization represents a significant step forward for the agriculture and agri-food sector. The agreement sets down for the first time ever clear rules for international trade of agricultural products.
The agreement represents a substantial reduction in trade distorting export subsidies, better trade rules for agriculture, and improved and more secure access to markets around the world for Canadian producers and processors. It will greatly assist Canadian producers and processors in their continuing efforts to develop new markets around the world. The new markets will be in addition to the Mexican and U.S. markets that we have obtained through NAFTA. New rules will apply equally to all countries and the specific exemptions of countries will be eliminated. This will allow Canadians to compete in a more predictable and fairer international trading environment.
What does it mean in real terms? The respected OECD or Organization for Economic Co-Operation and Development predicts that for all sectors, the total, the agreement will inject almost $8 billion into the Canadian economy by the year 2002. That is $8 billion into the pockets of working men and women across the country over the next eight years.
The government was elected to create jobs and wealth. That is why I am bullish on the WTO. I know some members, particularly those from Quebec, Ontario and Atlantic Canada, have some genuine concerns about just what sort of impact the agreement will have on the country's vital and prosperous supply managed sector, the dairy, egg and poultry sector.
Let me take this opportunity to assure the House that supply management will be able to continue to operate as an effective Canadian approach to producing and marketing dairy and poultry products. The agreement supports the continuation of the supply managed industry through two fronts. The first front is the import tariffs first announced in December 1993. They will maintain a high level of protection for the sector. It is true these levels will be reduced by a total of 15 per cent over the course of the next six years, but it will still afford producers and processors with the protection they require. The six-year phase in period will give them ample opportunity to make the necessary adjustments in order to compete and win in the new international marketplace.
Imports which will be coming in under the minimum access commitments will not unduly disrupt the Canadian market. For butter the access commitment will rise from about 1,900 tonnes to around 3,200 tonnes from the year 1995 to the year 2000, a five-year period. In the poultry area import access of chicken will continue to be governed by the CUSTA or the FTA. Access for turkey will rise slightly to about 5,600 tonnes by the year 2000 while egg access will also rise very slowly. It is unlikely there would be imports of dairy, poultry or egg products outside these access commitments since the tariff levels will make them uneconomical.
The government regards very seriously its commitment to the future and to the well-being of the supply managed sector. That is why on December 16, 1993 the federal and provincial agriculture ministers formed a small task force, headed by myself, to look into the specific implications for Canada's supply managed industries.
After consulting with all stakeholders the task force proposed that an industry ad hoc review committee in each case be established for each commodity group sector. These ad hoc committees have been meeting throughout the year, will be meeting over the fall, and will continue to meet to determine whether a consensus can be reached on orderly marketing frameworks for the future. The task force was scheduled to report to the federal-provincial ministers meeting in December. I can report the results are very promising, although they have been incredibly challenging and are not all completed yet. Successful conclusions will be reached in order to maintain the sustainability of our orderly marketing system to the benefit of the industry and to all Canadians.
The World Trade Organization also holds benefits for other sectors within the Canadian agricultural industry. Volumes of European union and United States wheat shipped with export subsidies will be reduced over the next six years by 40 per cent from the levels they are at present. The reductions in export subsidies for wheat, barley, vegetable oils and other grains are expected to significantly improve market prospects for Canadian grains and oilseeds in world markets.
The agreement offers good export potential for other commodities as well. Replacing import restrictions and levies with tariffs in the European union, Japan and Korea will result in additional export opportunities for beef, pork, malt and a range of processed food products. The inclusion of an agreement on intellectual property rights will offer protection for Canadian whisky and wine names. This is expected to improve the marketing of these products throughout the world.
Processed food and vegetables such as French fried potatoes, canned corn, frozen blueberries and raspberries, and other products such as honey, maple syrup and apples, will benefit from reduced tariff and non-tariff barriers notably in the European union and Japan. Special crops such as dried peas, beans, lentils, tobacco, mustard, canary seed and alfalfa will also benefit from improved access. For example, the European union will eliminate tariffs on lentils and white pea beans over the phase in period. Japan will reduce its tariffs on lentils by 36 per cent.
A framework of rules will reduce the misuse of technical measures as unjustified barriers to trade. Measures to protect human, animal and plant life or health, which measures were usually referred to as sanitary and phytosanitary measures, will be subject to clear disciplines. We will continue to have the right to establish the level of health protection that we consider appropriate in Canada. However, the measures any other country uses to achieve that level of protection must be based on a sound scientific approach.
As I mentioned earlier, the WTO will for the first time establish clear rules for international trade of agricultural products and eliminate heavy handed and unfair trade rules and restrictions. A good example is the U.S. and its use of the section 22, a trade measure it has used that has been featured prominently in recent Canada-United States bilateral relations.
When the World Trade Organization is implemented in 1995 the United States will have to give up its GATT waiver which allows it to take section 22 trade actions. Obviously there will continue to be disagreements in our large and mutually beneficial trade. We will deal with those on an individual basis as they arise. Thanks to the WTO a particularly onerous piece of trade protection such as section 22 will be a thing of the past.
As countries around the globe change to meet their WTO commitments, Canada too will have to make some adjustments in order to comply with the new world of international trade.
While the export subsidy provisions of the agreement will have an impact on the Western Grain Transportation Act, the Government of Canada has already been consulting with the sector to reform the WGTA. This consultation is designed to ensure that the WGTA better meets the needs of producers, industry and Canada's export customers and to bring it in line, along with other government programs and policies, with the new fiscal realities being faced by the government.
This consultation will ensure that affected stakeholders will have a vital role to play in crafting a made in Canada reform of the WGTA. Over the course of the next few months the Minister of Agriculture and Agri-Food will conclude these consultations with a view to being in a position to make an announcement early in 1995. The government is confident that these reforms can be implemented long before the World Trade Organization reduction provisions would take effect.
The world is changing and it is imperative that Canada change with it, lest we will be left behind. The WTO will usher in a new, vibrant and exciting period in international trade, a period where clear trade rules will replace unfair and discriminatory trade barriers, where Canadian products will be able to compete in markets around the world on their own merit and not be hobbled by the extra weight of trade restrictions, where Canadian producers, processors and exporters do not head for the end zone only to find that the goal posts have been moved.
As I said at the beginning, Canada is a trading nation. Much of its wealth depends on trade. Fully one in four jobs in this country are trade related. The agriculture sector, indeed all sectors, need the stability and the market certainty that the World Trade Organization has to offer.
Canadians are ready, willing and able to do the job. They simply require access to the proper tools with which to do that job. The WTO will provide them with the necessary tools to compete and to win the export markets, to further hone our competitive edge and to create jobs and prosperity for all Canadians. I think they deserve that chance.