Mr. Speaker, I am quite happy to engage in the debate today on Bill C-55. It is actually a happy event. It is a trade agreement and my party, the Liberal Party, is in the normal flow of events very supportive of trade and has been for all 140-some odd years of our country's existence.
Before I get into remarks on this actual trade bill, a related matter has to do with what we can call ratification. I recall when the current government took office there was some talk, in fact I believe there was a statement, that the government would be submitting international treaties to the House for some informal ratification. It certainly was not a formal statutory required ratification, but I am not too sure whether the government has forgotten about that or whether it is going to live up to its commitment or not.
However, in this particular case, the treaty that has been entered into by Canada requires legislation that has to come to the House in any event, so there certainly is not a practical need for any kind of an informal or specific ratification. I wanted to put on the record that the announcement by the government that it would embark on this ratification mechanism was quite a significant change in the parliamentary process.
I will give credit to the government for that. We have not yet seen the fruits of that announcement. It has not played out the way we believed it would, however, I want to remind the government that it did make the commitment and while government officials in the Department of Foreign Affairs and International Trade are probably squirming with that commitment, that is the way I believe the House is headed and the government has certainly reflected that in its announcement. I encourage the government to live up to its commitment.
Now, I will revert to this trade bill. As previous speakers have said, this is a new trade agreement which Canada has entered into with four European countries. It is a happy event with the trading stars of five countries coming into alignment with all of the countries potentially benefiting from the freer trade and access provided for in this treaty.
There is something actually quite grand happening in Europe which most of us and the world are aware of. But after some thousand years of conflict and fighting, killing, burning, looting, shifting of borders, and tribal inter-tribal conflicts, Europe, after the last war, came together and decided to form a union, and to adopt mechanisms which would pre-empt and get rid of this sordid history of war and conflict. It is succeeding beyond the dreams of most people who lived through the horrors of the first half of the 20th century.
The European Union has adopted models for trade, international relations, monetary and fiscal matters, criminal law, the environment, and certainly succeeding in making the EU a new focus for global presence. I was going to use the word “power”, but there is more going here than just that. The EU is certainly a focal point for economic and political leadership in the world. Recently, at a meeting Europe of course is grappling with what we sometimes call multiculturalism. We can see dozens and dozens of cultures and languages in Europe, not so much coming together, but living together, interspersing, accommodating and flowering, and that is all happening in Europe now, as much as it is happening in Canada. In fact, I heard the Europeans refer to the Canadian model of multiculturalism when they were looking for a kind of a road map as to how to handle many of their internal issues involving culture, language, religion, heritage and preserving these things.
The European Union has approximately 20 to 30 countries and it is a market of about half a billion people. The EU and the countries we are dealing with here is a part of the world that is highly educated and very well off. The point I want to make is that the four countries we are dealing with are not in the EU. They are interspersed throughout the geography of the European Union but they are not actually members. For their own reasons they are not a part of the European Union. Those four countries are Norway, Liechtenstein, Switzerland and Iceland.
Those particular countries, while they may each individually seem small, are actually a fairly significant group of traders with Canada. As I said, my party is usually very keen to endorse, support and promote improved trading relationships around the world, and I know the current government is following a similar policy.
We are a big exporting country. We would like to have access to as many world markets as we can gain access to. I should say that in this particular set of circumstances as we enter into this trade agreement and change our domestic laws to align with the treaty, and they are minor adjustments, not major ones, but as we do this, one of the issues we do not have in this particular trade agreement is the potential problem of having a trade agreement with a country that has a labour force that is very inexpensive and has low labour wage rates. We do not have that issue here because these European countries all have fairly standard European level wage rate structures.
If we were doing a trade agreement with a country that had very low labour wage rates, organized labour and labour generally here in Canada would have some concerns. Those types of arrangements often involve significant adjustments in the marketplace with one country making use of the relatively valuable low wage labour rates in the other party to the treaty. In this case, those adjustments are not present. The labour wage rates are pretty typical and similar to those in Canada.
Some people will wonder what we are really dealing with here. We are talking theory; we are talking some money, but what are we talking about when we are talking about trade with these countries.
In this particular case Canada exports to these four countries which call themselves the European Free Trade Association. This is what we in Canada sell to them: pharmaceuticals, copper, nickel, machinery, precious stones, metals, medical devices, aluminum, aerospace products, pulp and paper, organic chemicals, autos and auto parts, art and antiques. That is a pretty eclectic list. What do we buy from them? Not the same type of things. We buy specific types of mineral fuels, pharmaceuticals, chemicals, machinery, medical and optical instruments, clocks and all those expensive watches that we see in the jewellery stores at the malls. A lot of those come from these countries in Europe.
We have a great trading relationship. In 2007 we sold to them about $5.1 billion worth of merchandise trade and they sold to us approximately $7.4 billion of merchandise trade. There is lots of other trade going on as well in agricultural goods and in services.
There is investment moving around. In 2006 Canada invested $8.4 billion in these countries and the four of them invested $15.6 billion in Canada. There is a fairly healthy foreign direct investment movement going on here. I think Canadians should be aware of that. Our entrepreneurs and our investors do not only invest in Canada, but Canada now is a capital exporting nation. We invest in businesses, places and countries all over the world. That may scare some people, but many of us have pension plans and I think it should be reassuring that Canada's investments now span the world, at least the investments of individuals and of our pension plans, and on a global scale, our pension plans are looking rather large.
There are some highlights that I want to mention for the record. There are special provisions in this trade agreement. Do not forget that this agreement has been negotiated and there were some Canadian interests that needed to be recognized in the agreement, just as there were interests of these four countries that had to be recognized.
The first one has to do with agriculture. As we all know, Canada has a fairly robust system of supply management for many agricultural products. We think this has served our country well, domestically and internationally. There is some debate about some components of our supply management system here in Canada, but generally, I think the agricultural community believes that it has served us well.
When we enter into a trade agreement such as this, it is necessary to take some steps to protect the supply management system we have here, because supply management is not total unrestricted free internal trade; it is a supply managed pricing and supply. The countries with which we trade want to know, are we really free traders with the market governing freely or do we have a supply management system. In this particular treaty, for those countries themselves that have some supply management mechanisms as well, we have recognized the Canadian supply management system in agriculture and it will carry on unimpaired by the provisions of this trade agreement. That should be good news that makes entering into the treaty a lot easier.
The second is in terms of shipbuilding. Canada's shipbuilding industry has been under pressure economically for many years now. Many members of the House ensure that their remarks and their work in Parliament are calculated to support and sustain the shipbuilding industry where it carries on in Canada.
This treaty, therefore, had to be adapted to ensure that our Canadian shipbuilding industry was reasonably protected. The means chosen for that involves tariffication, putting tariffs on ships that would come into Canada from these countries. I am sure that Liechtenstein does not have much of a shipbuilding industry, being landlocked in the European Alps, but I know that Norway does and I think Iceland does.
We have created a very long period of tariffication for different types of ships, which runs 10 to 15 years. For 10 to 15 years after this treaty is put in place there will be protective tariffs for the Canadian shipbuilding industry. At the end of 10 or 15 years, however, those tariffs must come to an end. They will be tapered off. Our Canadian shipbuilding industry must compete with these other countries, but there is 10 to 15 years of adjustment. That is good news for our shipbuilding industry.
The third component that was added is a component one finds often in trade agreements like this. It is called a snap back provision. I believe that in most treaties it is invoked unilaterally. It is there to protect areas of the domestic market where there is a serious threat by the import of a foreign product.
Where there is a threat, perhaps by very low predatory pricing or dumping of a product from outside Canada in Canada, Canada would have the ability under this agreement to adopt the snap back provision which would reimpose a tariff. We have to keep in mind that this is a free trade agreement where there are no tariffs. If there were a dumping situation and a serious threat to a Canadian industry, Canada could reimpose a tariff up to the level of what is called most favoured nation. That tariff would be reimposed to protect, for a period of time, against the unanticipated threat from this offshore dumped product, merchandise, whatever it might be.
Those are the three specific provisions. In retrospect, it looks like this trade agreement was actually quite easily reached. However, let the record show that it took 10 years to put it together. Negotiations on this trade agreement began in 1998 and were completed in 2007, and we are now moving to implement the completed treaty.
In the view of this particular member and my party, on balance this trade agreement is a keeper. It is a good one. It will serve our country well. It will serve the four countries of the European Free Trade Association well. Our trade showing will undoubtedly increase and improve. Exports, jobs, and prosperity in all the countries will undoubtedly improve.
We are planning to vote in favour of the bill.