Mr. Speaker, I rise today in support of Bill C-46, An Act to implement the Free Trade Agreement between Canada and the Republic of Panama, the Agreement on the Environment between Canada and the Republic of Panama and the Agreement on Labour Cooperation between Canada and the Republic of Panama. The Liberal Party will be supporting the bill.
I would like to raise a couple of concerns about the government's lack of action on increasing U.S. protectionism and its failure to seize trade opportunities with Indian recently, China, South Korea and other countries. I will also raise concerns about the lack of a tax treaty.
Canada is now experiencing the first trade deficits it has seen in 30 years. Indeed, the country set a trade deficit record in July of $2.7 billion. The government's priorities are concerning. Rather than pursue east-west bilateral or multilateral trade opportunities with growing economies such as India and China, the government is focused on trade agreements with smaller nations, representing a small fraction of our trade. It focuses on a misguided crime and justice agenda, which does little to stimulate the economy or to create jobs.
The Liberal Party supports the principle of free trade. Canada is a trade-dependent nation. Eighty per cent of its economy depends on access to foreign markets for Canadian exports. Liberals support initiatives that create jobs and improve market access for Canadian businesses.
In 2008 Panama had one of the highest real GDP growth rates in the Americas at almost 11%. Despite the global economic downturn, Panama posted a positive growth in 2009 at 2.4%, a trend that is expected to continue throughout 2010 and 2011.
The expansion of the Panama Canal is currently under way and is slated to be completed by 2014 at a projected cost of $5.3 billion. The expansion is expected to generate opportunities for Canadian companies in such areas as infrastructure and construction, as well as the environment and heavy engineering, consulting services, capital projects, human capital development and construction materials.
Like the Canada-Chile and Canada-Costa Rica free trade agreements, the North American Free Trade Agreement and the free trade agreement with Jordan, the Canada-Panama free trade agreement would include side agreements on labour co-operation and the environment.
The Canada-Panama labour co-operation agreement recognizes the obligations of both countries under the International Labour Organization's Declaration on Fundamental Principles and Rights at Work, which requires both countries to ensure that laws, regulations and national practices protect the following rights: the right to freedom of association; the right to collective bargaining; the abolition of child labour; the elimination of forced labour; and the elimination of discrimination.
The Canada-Panama labour co-operation agreement and the agreement on the environment would include complaints and dispute resolution processes that would enable members of the public to request an investigation into the perceived failures of Canada or Panama to comply with these agreements.
Yes, Panama is a relatively small economy, as I mentioned. In 2009 Canada exported only $90 million of goods to that country. Yet it is a relatively stable country that has made significant progress in recent years in terms of development and democracy, which Canada is well-placed to continue to encourage.
In spite of the global economic downturn, Panama's GDP grew at almost 11% in 2008, one of the highest in the Americas, and is forecast at almost 6% in 2010. In 2009 bilateral trade between the two countries totalled $132 million, Canadian exports making up $91 million of that and imports $40.7 million.
Primary Canadian exports to Panama include machinery, vehicles, electronic equipment, pharmaceutical equipment and frozen potato products. Canadian service exports include financial services, engineering, information and communication technology services. Merchandise imports from Panama include precious stones and metals, mainly gold, fruits, such as bananas, nuts, fish and other seafood products.
The existing Panama Canal, vital for the international trading system, is undergoing a massive expansion, with completion slated for 2014. The $5.3 billion expansion is already generating business opportunities for Canadian companies. Canada will immediately eliminate over 99% of its tariffs on current imports from Panama should this proceed.
The free trade agreement also addresses non-tariff barriers by adopting measures to ensure non-discriminatory treatment of imported goods and promoting good regulatory practices, transparency and the use of international standards.
On the matter of a tax agreement, my party has some concerns that nothing has been undertaken. The concerns reflect the lack of a tax treaty. Neither a DTA, which is a double taxation agreement, or a TIEA, a tax information exchange agreement, has been signed with Panama. However, the Liberal Party will support this bill on the basis that a tax agreement will ultimately be achieved between our two countries. We will not put the benefits of free trade on hold while we wait for either a DTA or a TIEA. We believe a delay would take away the clear competitive advantage that a free trade deal would give Canadian businesses and farmers given the lack of free trade that currently exists between Panama and the United States.
At this point I wish to highlight some real concerns about the Conservative government's approach to international trade. We are losing the concept of free trade with our biggest trading partner to the south, the United States. When the recession hit, the U.S. government responded with protectionism in putting forth its buy American policies and tighter rules and regulations. The Conservative government initially stood by watching as if it did not know what had hit it. It engaged in photo ops in Washington, not realizing that the battle needed to be fought across all states at the state level.
By the time a so-called exemption was worked out, which itself required significant concessions by Canadian provinces, the protectionism in the United States had already hurt Canadian businesses, costing real Canadian jobs. The exemption only covered 37 states, a great example of how it is not just Washington that must be engaged.
Despite our vociferous efforts to get the Conservative government to engage much more forcefully at the state level, the government did not seem to understand either the whats of the negative effects on Canadian business or the hows of fixing the problem, and here we are again. The United States is threatening more protectionist legislation with its foreign manufacturers legal accountability act, which, although not technically aimed at Canada, would significantly hurt many Canadian businesses and affect many Canadian jobs.
I also want to use this opportunity in the debate on the merits of free trade to encourage the government to do much more in its dealings with China, South Korea and others. I acknowledge the announcement and production of the report last week between Canada and India, and I am encouraged that this is moving in the right direction.
I urge the government to capitalize on the extraordinary growth and scale that presents such fantastic opportunities for so many Canadians here and around the world, an economy that is growing at an incredible rate.
There are incredible investment opportunities being made in infrastructure, water, sewage treatment and public transit. We have been told repeatedly by the Chinese people that they are looking for green technology, for forestry products and for investments in the financial services industries. There are tremendous opportunities for trade in educational services, in co-operation and engagement not just at the Canada-China level but provincially and municipally as well.
We in the Liberal Party have stressed and will continue to stress the importance of Canada in the world. In support of this, we have proposed the concept of global networks. We say that the older, simpler concept of trade and commerce on its own, of simple export and import of goods and services, should be expanded to include all kinds of engagement on all levels, such as education, culture and environmental co-operation, a much greater engagement, a much broader engagement and exchange of people and ideas.
I look forward to this bill moving along as quickly as possible while formalizing a solidified tax treaty. In doing so, I intend to give my full support to the bill and I urge all hon. members to do the same.