Mr. Speaker, I am pleased to have this opportunity to rise before the House today to speak to Bill C-13, legislation that would allow Canada to ratify the World Trade Organization's Agreement on Trade Facilitation, or TFA for short.
I would like to begin by thanking the Standing Committee on International Trade for its prompt and thorough review of Bill C-13 at the committee stage. Business associations appeared before the committee and raised a specific concern regarding a clause of the bill. I understand that the concern was rightfully addressed by the committee members through collaboration among themselves and with the business association in question, and they did this through an amendment, so I congratulate them.
I would also like to thank the hon. members opposite for recognizing the benefits of the TFA, and as a result, supporting this important piece of legislation.
The bill before us needs to be passed in a timely manner to allow Canada to implement our commitments under the TFA. As the first multilateral trade agreement concluded since the creation of the WTO more than two decades ago, the TFA is a monumental achievement for the global trading system. At its core, the agreement is about better, freer, and more open trade.
The world's developing and least-developed countries would particularly benefit from its trade-facilitation provisions, as would small and medium-sized enterprises in Canada and around the world.
Trade facilitation is essential for export competitiveness. The benefits of making it easier for goods to flow across borders are especially important in today's trading landscape, in which global production with value chains requires inputs and materials to clear customs in a timely fashion.
Some 95% of all companies worldwide are SMEs, and they, in particular, would benefit from the opening and easing of these kinds of restrictions.
Similarly, these businesses account for roughly half of the world's GDP and 70% of jobs globally when SMEs in formal and informal sectors are taken into account. However, gaining access to new markets is particularly difficult for SMEs and developing countries, which are disproportionately affected by trade costs.
Small businesses are less equipped and do not have the same resources as their larger competitors for dealing with heavy-handed and complex customs procedures. Related costs can be huge. In fact, a delay of just one day at the border can add 1% to the cost of a shipment.
Expediting release processes and customs clearance operations at international borders is therefore crucial to international trade. That is where the trade facilitation agreement comes in.
The TFA will help boost global trade by implementing measures to expedite the movement, release, and clearance of goods at the border. It also includes provisions to promote closer co-operation among the various border services.
For exporting companies, the TFA will reduce the cost of trade activities on the international scene by ensuring faster, simpler, and more predictable cross-border trade.
For governments, the improvements brought about by the TFA will reduce the potential for corruption and reinforce the process for collecting tariff revenues, particularly in developing economies.
Creating the best conditions for international trade for developing countries is not just a worthy cause. It also comes with tangible economic benefits.
In fact, the WTO estimates that full implementation of the TFA could boost global merchandise exports by up to $1 trillion, including the up to $730 billion in export opportunities it will accrue to developing countries. The TFA should encourage trade between developing countries.
Trade costs for WTO members will decrease by an average of 14%, including an average of nearly 17% for least-developed countries.
Lowering trade costs for developing countries can increase trade, improve economic growth, and reduce poverty.
Here in Canada, less red tape on exports would help Canadian businesses, particularly SMEs, to export products to the fast-growing markets of Asia, Africa, and Latin America.
The TFA clearly represents a winning situation for Canada and the global trading community. Considering the benefits of the TFA for developed countries and developing countries alike, it is not surprising that the reaction from Canadian and foreign stakeholders has been beyond positive. The Business Council of Canada, the Canadian Chamber of Commerce, Canadian Manufacturers & Exporters, a great number of agriculture and agrifood associations, as well as the B20, a coalition of leaders from 25 countries, all agree that the TFA should be implemented quickly.
Canada is a trading nation with an export economy. Trade currently represents 60% of Canada's annual gross domestic product, and one in five jobs is dependent on exports. We know that trade helps to improve people's standard of living and stimulates prosperity.
Trade helps companies grow, succeed, be innovative, and be competitive. In turn, this creates good paying jobs for the middle class and those working hard to join it. But we want to grow trade the right way. We want to ensure that all segments of society can benefit from global economic opportunities. That is why our government is promoting inclusive and sustainable economic growth in Canada and around the world as part of its progressive trade agenda.
Ratifying the TFA is an important part of these efforts. The agreement would cut red tape at the border and help Canadian businesses as well as those in developing nations to take better advantage of global trading opportunities. In addition, through our active participation in WTO initiatives like this one, we underscore our support for stronger and more predictable international trade rules, as well as the multilateral instrument that is the WTO.
The TFA will not enter into force until two-thirds of WTO members have ratified it. As of today, more than 90 WTO members have ratified the agreement, including all of Canada's major trading partners. Only 16 more are needed. Canada is the only G7 country that has not yet ratified the TFA. We are also one of only four G20 countries that have not yet ratified it. Canada committed at last month's G20 leaders summit to ratify the TFA by the end of 2016. Canada should do its part to bring the TFA into force as soon as possible.
The Standing Committee on International Trade has completed its exhaustive review of Bill C-13. In my view, Bill C-13 is ready for consideration by the Senate. I urge my hon. colleagues to vote in favour of the bill today so that work to promptly enact this legislation can continue. Members' support for the bill before the House will allow Canada to ratify the TFA and join our international partners in making trade freer, easier, and more predictable.