Madam Chair, I will begin by saying that although this is something we have been talking about for quite some time, it seems like it has been sort of on the periphery. We have never really engaged in a full-on debate about Canada-EU and the future that we have with it on this comprehensive free trade agreement.
I congratulate my colleague, the previous speaker, on a fine speech. He is the president of the Canada-Europe Parliamentary Association, an association on which I also serve. I have also served with him on several excursions to Europe. I will not go on about the discussions we have had with European parliamentarians. I think my colleague did that quite well, as have other colleagues in the House.
When I debate in this House, I always want to raise the bar on whatever new policy we are discussing or debating. I have never wanted to be one who opposes simply for the sake of opposing.
I will begin by saying that there are opportunities, not only for this country but for the riding that I represent and in Newfoundland and Labrador as a whole. There is an incredible amount of opportunities within this agreement that we need to engage in.
I am proud to see that all of us, even at this late hour, are engaging in this debate because it is a very important agreement that we must strive for but one that needs be thorough and one that needs to be debated thoroughly, which I hope we are able to do tonight.
I want to get into the nuts and bolts of this agreement as I want to talk about some of the foundations that have already been laid. Negotiations started around 2004. The discussion opened with many of the dignitaries from the European Union, Brussels and from Ottawa. Three negotiating rounds were held in 2005-06 covering issues such as regulatory co-operation and mutual recognition of professional qualifications, which is a major issue on this continent as part NAFTA and other trade agreements. It is a very important issue for most of us.
At that point we had failed to reach an agreement. However, we suspended negotiations in May 2006 pending the outcome of the Doha round of negotiations with the World Trade Organization. They were not as successful as we had hoped but at least we were able to lay down some of the markers that we were striving for and some of the achievements that we were hoping to make to open markets to our own talents and economies, in addition to receiving products that were cheaper and provided inputs to our own economy.
In many respects this is highly essential and it has been essential since 2004, as we continue with this under two governments of different political stripes.
The 2007, the EU-Canada summit in Berlin conducted a joint study to explore the expected costs and benefits of a closer economic partnership. The European Union started out enthusiastically and, from all accounts, continues to be enthusiastic about this deal. The EU will gain $18.6 billion in extra activity, so this is something it obviously believe in and is enthusiastic about.
Canada could experience a $13.1 billion annual increase in GDP. Annually, this additional economic activity represents a .08% increase in the European Union's GDP and a .77% in GDP or 1%, which may not sound like a lot but it certainly is in dollar value when it translates into jobs.
One of the reasons we call this the comprehensive agreement is because of the benefits. Those numbers, of course, benefit us because we have a smaller country. We are looking at the largest commercial market that stands in front of us in excess of 500 million people and countless numbers of opportunities in what I consider to be an advanced nation of the 27 nations of the European Union.
I want to get into some of the numbers but I also want to touch upon some of the issues that may be considered to be contentious and will certainly receive a lot of discussion over the next little while.
I want to talk about agriculture for just a moment. As we know, agriculture in this country is dear to our hearts as we are a country with some of the largest agricultural land in the world as we know it. As a result, it deserves a lot of attention. Over the past little while we have seen a lot of attention being focused on agricultural issues with any trade agreement regarding Europe and Canada. The European Union made an agreement with South Korea that also involved a lot of talk and discussion around agriculture.
The European Union has a heavily subsidized agricultural system. It is the common agricultural policy. It is heavily subsidized. I do not know if the House is aware of this, maybe it was discussed earlier, but half the EU budget is invested into its common agricultural policy. They hold it near and dear. We have seen protests in the streets of France and Germany when they made even the slightest change in agricultural policy and food safety as a result.
Canada's top imports from the EU include wine, beer, liqueurs and chocolate. I am sure there would be some debate as to whether that is a noble gesture or not, but nonetheless it represents a lot of commercial activity.
Canada's exports to the EU are dominated by primary agricultural products.
The pattern here is that a lot of the products that come into Canada from the European Union are value-added products or, obviously, products that have been processed, whereas the products going out have been less processed, have less value added.
I am assuming that under a comprehensive free trade agreement that element could change dramatically. Coming from Newfoundland and Labrador, that seems to be the emphasis in economic activity. Certainly when it comes to exports, we want to create more value in the products that we put out there. We just do not want to take a fish out of the water and send it on its way without it being worked upon. I say that because it adds value into the product. With processed goods that are transported, I do believe genuinely, like what happened with the United States and Mexico, we could add more value to our products in a far greater free trade regime that we could achieve with the 27 nations.
We certainly seem to be achieving that now with the other association in Europe and nations such as Iceland, Norway and so on and so forth.
We have exported $1.6 billion in bulk agricultural products to the EU but less than one-half as much, $603 million, is in processed foods. I hope that this is something that would change.
When it comes to agriculture and agri-food trade through regulatory barriers, this is one of the issues that I discovered when I went to England. The minister of finance of Great Britain of the day was talking about how some of the agricultural products had been banned from the United States, in other words, products from the United States coming in, and it was under the guise of public safety, public health. But some of the nations pointed out to them that some of the tough restrictions that they have on some of their products, especially when it comes to agriculture, are way too restrictive, overly restrictive, and that the remedies they put in place were overly prescriptive, to the point where they were obscure. The issue became obscurity. It became a trade policy. It became a protectionist measure as many other nations did that.
I hope that we set up a regime whereby these issues are dealt with quickly. We have a lot of exports going out, as I mentioned. If we were faced with some of these trade barriers, the regulatory barriers, that would not serve the best purpose of this particular pending deal by the end of 2011.
One of the models that we could use would be the World Trade Organization's Agreement on Technical Barriers to Trade. It is called the WTO TBT. Obviously some of the products out there have to be banned for reasons of public safety. We genuinely do not disagree with that. But when they skew it and when they take it and twist it in such a manner that it becomes a protectionist measure, then there has to be that measure to allow the oversight so that it does not happen and it becomes an efficient system, far more efficient than what many nations now deal with.
Also, I want to talk about the major elements of this particular deal and some of the issues, such as market access for agricultural products. Trade in services is going to be a huge amount of this. Up to 70% of the services back and forth deal with the services sector alone. There does not seem to be a lot of contention with this, but let us hope this moves much more smoothly than it has been.
Then there is government procurement. My colleague from Guelph brought this up earlier. From what I can gather, one of the major issues that allowed us to get to the table is when the Europeans were able to engage our governments at a sub-national level, as the provinces were brought on board. Most, if not all, the provinces signed on in the beginning, with the exception of my own province, but that has to do more with seals, and I will leave the seal hunt to another day. Nonetheless, the procurement one is actually an issue we really have to watch out for because in this particular situation some of the municipalities could be constrained to the point where they do not receive the flexibility they had before.