Mr. Speaker, thank you for the opportunity to speak today on the Canada-European Free Trade Association free trade agreement implementation act.
First, I want to inform the House that I support this bill, because in my mind it improves access for Canadian businesses and strengthens our future in the European market. Right now, as I think everyone is aware, the vast majority of our exports go to the United States. It is not a major issue, but it serves as a platform in that the total bilateral trade between our country and the four countries represented by the European Free Trade Association, I believe, is approximately $12 billion. Larger than that, in my view at least, it represents a platform to provide us possible access into the European Union with future dialogue and discussions in the months and years to come. I certainly will be supporting this bill when it comes to a vote.
The agreement places Canada on an equal footing with competitors that already have free trade agreements with the European Free Trade Association. These countries include Mexico, Chile, South Korea and of course the European Union. These countries, the names of which are very familiar to us, are trade competitors of ours. Going forward it puts the country of Canada on an equal footing with these other countries, among others, in trading with this bloc of four northern European countries.
Although I support the bill and will be voting in favour of it, it is my position that the bill should be referred to the House of Commons Standing Committee on International Trade so that the committee can review the agreement again to ensure that the bill complies with the committee's report, which was tabled earlier this year in the House. The free trade agreement went to committee first. In my view, it is the right agreement and one which, in the long run, is a must for the Canadian economy.
There are concerns. I have listened to some of the debate regarding this particular legislation. The concerns raised have to do with shipbuilding and supply management. If we look at the provisions of the legislation, these are not totally taken into consideration but they are certainly considered. That is why it is so important for the legislation to go to the standing committee, so that these concerns can be taken into consideration before the bill comes back to the House for final adjudication.
This is a long-standing matter. It did not start last month. I believe it was 10 years ago that the negotiations got under way with this bloc of four countries, with the hope that a free trade agreement would be reached. For different reasons, I suppose, things did not go as quickly or as smoothly as first thought and the negotiations have been ongoing. However, I am glad to see that 10 years after negotiations started, we have in the House legislation which approves the free trade agreement.
I would suggest the majority of members in the House appreciate and understand the value of trade partners such as these four countries. It is my understanding that this bloc of four countries, if not the highest, has one of the highest GDP per capita in the entire world. It is a bloc of countries that this country should be trading with and trading with more often. It is a natural fit and I look forward to its implementation.
When we enter into these free trade agreements, I can appreciate the work, effort, time and energy that goes into them on behalf of all the players involved because a lot of different sectors have to be taken into consideration. In cases such as this, not everyone gets the same advantages and we have to look at all the sectors. The sector of biggest concern and the one which has been raised with all members of Parliament is the shipbuilding sector. The second sector that warrants special consideration is the agricultural sector.
On the shipbuilding sector, I have read over the agreement. It certainly provides what I consider to be fairly equitable terms. It provides a 15 year phase-in of the quotas for the sensitive sectors and 10 years in other sectors, which I think is equitable. I believe it is fair.
On the agricultural sector, from my reading and my understanding of the agreement, Canada's agricultural sector, insofar as this bloc of countries is concerned, will certainly be a winner. This agreement does protect the supply management regime in Canada. I have not read anything in the materials which would lead me to believe that the dairy farmers of Canada have any concerns with this free trade agreement.
The agreement would eliminate duties on non-agricultural goods and selected agricultural products, giving Canadian exporters better access to Canada's fifth largest export destination. As I said, right now bilateral trade is approximately $12 billion. I believe the four northern European countries involved in this association have a surplus. Canada imports approximately $7 billion from that particular bloc of countries and we export to them approximately $5 billion.
On the other hand, the direct foreign investment from the European Free Trade Association is quite substantially more. Those countries have invested substantially more in this country than we have in them. I believe that in the long run the agreement should increase trade in all five countries and it also should enhance direct foreign investment going both ways.
At the end of the day I see this as a win-win situation, although we certainly have to be very careful in negotiating these agreements and certainly as parliamentarians we have to be careful in approving them. I do see it being beneficial to our primary and our manufacturing industries.
The agreement would eliminate all European Free Trade Association tariffs on Canadian industrial exports. Some of the key ones that are included, and these are areas that are so important, are forest products, pulp and paper products, manufactured housing, aluminum, cosmetics, and motor vehicles. Forest products is one that I see has tremendous potential.
There is a substantial amount of trade right now in these sectors. I hope with the signing of this agreement that these sectors will increase the amount of trade going from Canada to these four countries involved, especially our forest industry.
As a result of the problems that are being experienced in the United States, these sectors are experiencing considerable difficulty right across Canada from coast to coast. For us to allow our products to go to Europe rather than to the United States provides more flexibility and more opportunities for our Canadian forestry industry. In that regard, it is a good situation.
The agreement would also provide improved access for specific Canadian agricultural products, including frozen foods, selected beverages, durum wheat, canola oil, honey, and various fruits and vegetables.
This whole agricultural free trade issue is an issue that is debated in the House every week and almost every day. We see the subsidies that other countries are involved with and sometimes we just have to shake our heads.
Last week, the U.S. farm bill was passed both in Congress and in the Senate. I know it was vetoed by President Bush, but I understand the votes are there for an override of that veto, if it has not been done already. I believe the total budget for that bill is $317 billion and a lot of that goes into subsidies for U.S. agricultural sectors.
Again, we have to wonder where free trade in agricultural products is going. When we hear what is going on in France and other European countries not covered by this agreement, we have to wonder whether free trade in agricultural products will ever be reached in our lifetime. We do not seem to be making any progress. In fact, I would suggest that we are taking steps backwards in this regard. However, this agreement is a step forward and I think it will certainly help our agricultural industry.
That leads to another issue on why it is important for Canada to perhaps be more aggressive in some of these bilateral trade agreements. We went through a period after the North American Free Trade Agreement when perhaps the country was not as aggressive as it should have been in pursuing these opportunities. At the same time, we had the negotiations going on with the Doha round of the World Trade Organization. That went on for four to six years.
We were all at somewhat different stages of the negotiations. We were optimistic that something would come out of those negotiations, but I think that at this stage of the game we are all just shaking our heads. We may not like to say it, but it looks as if the Doha round is dead. I do not see anything positive.
I have not heard anything positive coming out of those negotiations over the last 18 months which would assure me that there would be an agreement in the immediate future. I may be wrong on that statement, but certainly I have not heard, read or seen anything that would lead me to have any sort of a confidence that things are proceedings in a direction that would be beneficial to Canada in those negotiations.
For that reason, it is so important for this country to pursue other bilateral free trade agreements with other countries, especially this bloc of four northern European countries. There are some negotiations at the advanced stages.
I know that an agreement has been or is almost concluded with Colombia and also one with the country of Panama. Some of these issues are a little more controversial. In the Colombian agreement, an issue has been raised concerning human rights in that particular country. Our committee has been to Colombia on that particular issue. That has not come to the House yet.
However, this agreement is free from any of that discussion at all. As I say, there are no distortions with these European countries and it should be a clean agreement going forward. The biggest issue, of course, is the one I raised previously and that is the shipbuilding industry vis-à-vis the country of Norway.
That sets out some of the reasons why I am supporting the legislation. Again, it is important for another reason, which I mentioned briefly earlier in my comments. I believe it is so important to start the platform, the dialogue and the discussions with the European Union. That is going to be much more complicated. We are into some pretty heavy sectors there, especially in the agricultural sector where there are subsidies. That certainly will not be a one-month negotiation. It will be a long term negotiation, but it is a negotiation and a discussion that I think should start sooner rather than later.
It is important for our economy to build relationships with other countries if a deal can be done. If a deal can be done, a deal should be worked out and concluded. Again, sometimes we are not as big as we think we are. We are a big country but we have a small population and we have to pursue other markets. We have a very strong relationship with the United States of America and the vast majority of our trade heads south, but we always have to be pursuing other opportunities on the world stage, especially for our agricultural producers.
This agreement recognizes Canada's unique position as an agricultural leader, as it provides specific rules dealing with processed agricultural products. For items in that grouping, such as cocoa and confectionery sugar, the tariff rate will be reduced from 6% to 0% immediately upon the entering into force of the agreement.
This is good for the economy. As everyone in the House is aware, Canada has a strong agricultural industry and these new markets will present a reinvigoration of opportunities and partnerships for many of these particular sectors.
As I said previously, protected under this agreement are the supply management regime that we enjoy in Canada and the buy Canada government procurement programs as well.
To conclude, it is my submission that this is excellent for Canada's interests in Europe and a further step in our partnership with the four countries. However, as I said, it should be re-examined by the Standing Committee on International Trade to ensure that the bill and the previous agreement are in sync and that Canada's best interests are included in this agreement.