Mr. Speaker, I thank the hon. member for Calgary East for allowing me to share his time. I am pleased to rise on behalf of the people of Surrey Central to participate in the debate on Bill C-32 regarding the proposed free trade agreement between Canada and Costa Rica.
The free trade agreement implementation act tries to lay out the terms for a free trade agreement between our two countries by gradually eliminating trade barriers in goods and services. The bill follows the free trade agreement with Chile in 1997 as well as NAFTA in 1994. One of its stated purposes is to promote regional integration through an instrument that contributes to the establishment of the free trade area of the Americas, commonly called FTAA. It could be the first of several of these agreements with the other countries of South and Central America.
Eighty per cent of what Costa Rica already exports to Canada enters Canada duty free. Already our bilateral trade with Costa Rica has had an annual growth of 6% in the last five years with a 7% increase in exports and a 5% increase in imports. The agreement would further accelerate that growth. Canada is looking to expand its market for goods and services, many of which currently face high tariffs when exported to Costa Rica.
Costa Rica is not the problem, but the main risk is if this provision is extended to the CA-4 countries, Guatemala, Nicaragua, El Salvador and Honduras. That is where I see a threat because of their refining capacity and because of the subsidies given by the governments in those countries. The domestic sugar industry has been asked to make representation at the House of Commons committee and to offer amendments to the proposed legislation.
After the bill was debated in committee some of our concerns were addressed. I opposed the bill at second reading. I commend some of the improvements made at committee because of the pressure from the official opposition, the Canadian Alliance members.
The bill now appears to support the Canadian Alliance policy regarding free trade. Reduction of tariffs should be done in stages, in step with other countries and not unilaterally. Canada reduced its tariffs prematurely on grain and this created many problems, as all of us know.
There is a concern that the government is putting our sugar industry at risk in order to reduce completely unjustified high Costa Rican tariffs on french fries and selected other exports.
We have one of the most open sugar markets in the world, with an import tariff on raw sugar at just zero and a tariff on refined sugar at only 8%. United States and Latin American tariffs on sugar range from 50% to 160%. For our domestic needs Canada produces enough refined sugar. In terms of exports, our only really viable market is the United States, which imposes strict quotas of 12,000 tonnes of sugar per year.
Other countries like Costa Rica hit us with very hefty tariffs when we export sugar to their countries. For example, Guatemala has a 160% tariff on sugar imports.
Canada currently has three sugar refineries to process raw sugar which, by the way, is down from seven 20 years ago. The Canadian domestic sugar industry employs about 2,000 Canadians. A 111 year old company, Rogers Sugar, in B.C., supports the livelihoods of 650 people and stands a chance that it will lose under this agreement.
As a footnote to the debate, the people of British Columbia have already been hurt through the government's bungling of softwood lumber, tomato dumping, the mining industry, fisheries, tourism, the film industry and some others.
Also losing may be some 450 farmers producing 140,000 tonnes of sugar each year, and we know that our farmers are already in desperate shape.
Rogers Sugar currently injects close to $100 million into the Canadian economy through its operations in Vancouver and Taber, Alberta, providing high quality employment to their employees. Some people from my constituency are employed there as well.
Costa Rica does not currently use refined sugar so there is no possible benefit to Canada on this score.
There are some concerns that this agreement may stifle the operation of market forces by giving Costa Rica more access to Canada than Canada gets to Costa Rica. Trade should not only be free but also fair.
As we all know, a balanced free trade agreement usually helps to raise the standard of living for both partners through increased competitiveness and lower prices. Free trade, when done right, leads to lower prices for consumers. Who benefits? It is the consumer who benefits. Free trade must provide our firms with a level playing field in bilateral trading relationships with Costa Rica. Markets work best where government intervenes least. When the government does intervene, it must try to promote fairness and look at the whole web of Canada's trade relations with other countries. We cannot afford to be shortsighted. We must look at the big picture.
As I mentioned, though, the agreement does more than open the door for the exchange of goods and services with Costa Rica. It may act as a model for the whole FTAA framework. Regional trade agreements such as the FTAA should not conflict with our WTO agreements.
Despite the bill hurting our sugar industry somewhat, this agreement seems to be a step forward on several other levels. It includes some side agreements on the environment and labour. It demonstrates that free trade agreements can be negotiated between larger and smaller economies.
Canada has about $500 million invested in Costa Rica. The improved access that we hope to gain with this FTA will give Canadian businesses an edge over foreign competitors who do not have preferential access to the Costa Rican market. We are getting access to the market. This market access will benefit about 90% of Canada's current agriculture and agrifood exports, so that is a big benefit.
Also, Canada exports goods and services of close to 45% of our GDP, which is almost half of our GDP. This is a high proportion in comparison to our major trading partners, so our success in international trade is important to sustain our Canadian economy, particularly during this time. Many SMEs, small and medium sized enterprises, in Canada depend on trade and the foreign market for their success and growth.
Therefore I look forward to the bill and I will be supporting Bill C-32 at this stage.