Mr. Speaker, I will be splitting time with my colleague, the member for Medicine Hat.
Besides being probably two of the best looking members of parliament, my colleague for Medicine Hat and I have something else in common. We are probably the sweetest because we have the only homegrown sugar industry in Canada. I preface my remarks with those comments.
I would like to get into some of the details of Bill C-32, the free trade agreement with Costa Rica. The main concern I and many of my colleagues on all sides of the House have with the bill is the sugar aspect. The bill follows the free trade agreement with Chile which was signed in 1997 and the North American free trade agreement inked in 1994.
Our party supports free trade as a means of maintaining a healthy economy by providing jobs for Canadians and improving the standard of living in Canada. We also believe that free trade is good for developing nations and provides stability in those nations as well.
One of the stated purposes of Bill C-32 is to promote regional integration through an instrument that contributes to the establishment of the free trade area of the Americas, known as the FTAA. It could be the first of several of these agreements with the other countries of South and Central America, and that is part of some of the concerns we have. I will get to that later.
We in the official opposition feel it is important to establish good trade relationships with these countries to encourage economic, social and democratic growth. Eighty per cent of what Costa Rica exports to Canada, goods such as fruits, vegetables, coffee and coal, already enters our country free of duty.
Canadian producers are looking to expand their markets for goods in Costa Rica. These are products such as french fries, metal structures, along with fish, paper products, auto parts, plastics, wood and agricultural goods. Many of these items currently face high tariffs when exported to Costa Rica, even though the populace has expressed an interest in them and the products are not economically produced within their own borders. The proposed trade deal would change all that. The proposed trade deal would benefit Costa Ricans by providing them with greater access to the products they cannot currently afford or manufacture on their own.
In the year 2000 Canada exported $86 million in total trade to Costa Rica. In that same year we imported $183 million worth of goods from that country. The bill would ensure that Costa Rica maintains an open access to all our markets while opening Costa Rica's door to Canadian producers and their high quality specialized products. The proposed trade deal would benefit both countries in that way.
The Canadian Alliance promotes free trade and, I want to emphasize this, the joint elimination of tariffs with our trading partners. We have seen in the past, particularly in our grain and oilseed sector, where tariffs and support were reduced in Canada when our trading partners did not reciprocate and this put our producers at a disadvantage. We do not want that to happen particularly in the sugar industry.
In this respect, our party has one particular and significant concern with the bill. If the Costa Rica free trade agreement, as described in Bill C-32, is used as a template for other FTAA negotiations, especially the CA-4 countries, we feel the Canadian sugar industry will suffer and suffer greatly. Canada already has one of the most open sugar markets in the world. Our import tariff on raw sugar stands at zero and our tariff on refined sugar is only 8%, one of the very lowest in the world.
Canadian sugar producers such as Lantic and Rogers provide almost enough refined sugar to meet the domestic needs of all Canadians. U.S. and Latin American tariffs on sugar range from 50% to 160%.
The Canadian domestic sugar industry employs over 2,000 Canadians. This includes the sugar beet industry and growers in my part of the world, in southern Alberta, and the refinery workers across the country.
One threat to Canadian domestic sugar producers comes from the four Central American countries, the CA-4 countries: Guatemala, Nicaragua, El Salvador and Honduras, because of their refining capacity and the subsidies they receive from their governments.
Twelve per cent of Canada's refined sugar is made from the sugar beets that are grown in my area. This is the only region left in Canada that grows sugar beets for refining in Canada. The rest comes largely from imported cane sugar which is refined and a small amount of refined sugar imported from abroad.
The three cane sugar refineries are located in Vancouver, Montreal and Toronto. They employ many Canadians and have been providing our country with the highest quality of refined sugar for years.
The jobs and economic impact of the current sugar market situation are not limited to beet growers and refinery workers however. Canada's low sugar prices have attracted substantial investment in Canada's food and beverage industry. These industries provide thousands of jobs at bakeries, biscuit manufacturers, dairies, fruit and vegetable canneries, confectionery manufacturers and so on.
By generating demand for goods and services, the sugar industry also indirectly supports a number of other economic sectors, including agriculture, natural resources, packaging, industrial machinery and transportation.
The industry has concerns with the sugar aspect of the deal with Costa Rica because of the precedent it would set for upcoming negotiations with other Central American countries. The industry has closed two plants in Canada since 1997 reflecting the competitiveness in the Canadian market and limiting export opportunities. The industry has been forced to be efficient and globally competitive, and it has done that. The industry has changed to meet the new competition in the world. The sugar market is very competitive. We have very little access to the U.S. market, our closest trading partner. I know my colleague will expand on that somewhat. However the industry has changed and shaped itself. I know the investment in the plant in southern Alberta has been in the tens of millions of dollars. The growers themselves have invested in new equipment and new methods. The industry is in tune and has made the changes necessary to stay competitive.
Import competition from Central America and other countries in the hemisphere has grown dramatically in recent years, even with Canada's small tariff. If new regional trade deals lead to the removal of Canada's refined sugar tariff in advance of WTO trade liberalization, the Canadian sugar industry may suffer. It may not even survive if we get out too far ahead of the rest of our trading partners.
Our members on the House of Commons trade committee, who saw that the issue could be a precedent setting trade deal with the other CA-4 countries, worked with people in the industry and people on the government side of the House. It is funny that when we are dealing with a trade agreement we cannot really make amendments. We either agree with trade or we disagree with it.
However we thought if we did not change the text of the trade deal itself, but put in the preamble that there is a concern and that this trade deal should not be used as a pattern for the other CA-4 countries, then that would put most of what we feared could happen to rest. Costa Rica itself does not have the capacity at the moment to greatly harm our industry but the other countries in Central America do. We have assurance from the chairman of the subcommittee on international trade and others that this will be added to the preamble. That will allow us to support the bill and we will.
We must remember that the whole idea of free trade is to benefit both parties. If we are going to ensure that a vital industry in Canada remains viable, then we need to keep that in mind when we open up the other trade deals in the rest of Central America.
I wanted to make that point. We support free trade. We support what it does and how it helps nations around the world. We wanted to make sure that our concern about the sugar aspect of this was brought forward, and it has been. We feel fairly comfortable, if it is followed through as indicated, that those concerns will be put to rest. We look forward to further debate.