Mr. Speaker, it is a great pleasure to rise in the House today in support of the legislation before us. Hon. members will know that CETA is the most progressive trade agreement that Canada has ever negotiated. It will help to further our economy, create well-paying jobs in Canada as well as in Europe, and support our efforts to strengthen the middle class, all the while ensuring that trade benefits everyone.
Canada's great friendship with the European Union goes back many years. In fact, Canada's formal relationship is the EU's oldest with any industrialized country, dating back to 1959, when we signed the agreement for co-operation in the peaceful uses of atomic energy. Of course, there are many cultural and people-to-people ties that date back for centuries and serve to underline our common history and many partnerships.
We have always been close partners, and not only because millions of Canadians, like me, trace their family roots back to Europe, but also because there is a palpable buzz among these communities. I was in Toronto on Friday evening at an Italian Canadian chamber of commerce event, in a room full of importers and exporters, people who have business ties with Europe. They were clearly very positive about the opportunities that this agreement would present.
Canada and Europe are united because our societies, economies, and systems of governance are founded on the same set of values, such as equality, freedom, and respect for all individuals in society, not to mention democracy. Canada and the EU co-operate on many crucial international issues, including climate change, democratic governance, and human rights, as well as international peace and security. In a world of shifting global power, the Canada–EU relationship and our common efforts are more important than ever. This is something I heard a great deal about while travelling in Europe to promote CETA.
The EU is also a very important economic partner, representing the world's second-largest economy, and Canada's second-largest trading partner after the United States. It is also the world's second-largest importing market for goods, with its annual imports alone worth more than all of Canada's GDP.
As well, the EU is a key market for global supply chains. It has more Fortune 500 companies than any other country in the world, including the United States. This significant access to global supply chains is an important avenue of opportunity for the global ambitions of many of Canada's small and medium-sized enterprises.
CETA would help Canadian businesses better access the EU market. It will deepen our long-standing relations. It will help to generate much-needed growth and jobs while fully upholding Canada and Europe's high standards in areas like food safety, environmental protection, and workers' rights. CETA will deliver benefits for consumers through lower prices and more choice, for workers, through more and better jobs related to exports, and for businesses, through reduced costs and tariffs.
Experts project that once CETA comes into force bilateral trade of goods and services will increase by more than 22%, which will stimulate job growth on both sides of the Atlantic. Canadian businesses will enjoy a first-mover advantage over their competitors from markets such as the United States, which has yet to conclude a trade agreement with the European Union. In fact, CETA and NAFTA combined give Canada preferential access to nearly half the global marketplace.
Once CETA comes into force it will cover almost every sector and aspect related to trade between Canada and the European Union. Roughly 98% of European Union tariff lines on Canadian merchandise will be duty-free as soon as the agreement comes into force, and an additional 1% will be cut over a seven-year phase-out period.
Eliminating duties under CETA will create better opportunities for countless Canadian exports to the EU, where duties remain high. Currently, Canadian exporters of fish and seafood pay duties as high as 25%. EU duties on wood are 8%, while duties on wood products, information technology, and communications technology can be as high as 14%.
Machinery and equipment are subject to tariffs of up to 8% when imported to the European Union. CETA will eliminate those tariffs. What is more, Canadian service providers will benefit from the greatest access the EU, the world’s largest importer of services, has ever provided in a trade agreement, as well as the most ambitious commitments on temporary entry the EU has ever provided.
Canada is one of the largest service exporters in the world. We exported nearly $16 billion-worth of services to the EU in 2015. CETA will ensure that Canadian service providers are able to compete on a level playing field with EU service providers and gain a competitive advantage over competitors from nations outside the European Union.
In addition to increased access to markets, CETA also contains many other important measures. It is the first bilateral agreement in which Canada has included a stand-alone chapter on regulatory co-operation. The provisions set out in that chapter are forward-looking and promote proactive co-operation.
Under a protocol on conformity assessment, Canadian manufacturers in some sectors will be able to test and certify their products in Canada for sale in the European Union. This is an important innovation that will save companies time and money and will be particularly profitable for small and medium-sized businesses.
CETA includes a detailed framework for the mutual recognition of professional qualifications, a key aspect of labour mobility. The provinces made a valuable contribution to the negotiations on a matter under their jurisdiction, as did my former professor, Pierre Marc Johnson, chief negotiator for Quebec.
CETA provisions on labour mobility will enable entrepreneurs from Canada and the European Union to travel abroad more easily. Business people on short-term visits, individuals transferred within a company, investors, contract service providers, and independent professionals will be able to do business in the EU more easily.
CETA also opens up government procurement opportunities in the European Union, a sector worth about $3.3 trillion. When CETA comes into force, Canadian companies will be able to provide goods and certain services to all levels of government in the EU, including the 28 European Union member states and thousands of government, regional, and local organizations.
CETA sets out a framework that will enable Canada and the European Union to make the most of their already strong investment ties, which are an important part of their economic relationship. In 2015, the known stock of Canadian direct investment in the EU was valued at $210 billion, which represented over 21% of known Canadian direct investment abroad.
That same year, the known stock of European direct investment in Canada reached $282 billion, or over 31% of its known direct investment abroad, in Canada.
CETA’s chapter on investment provides investors with greater certainty, stability, and protection for their investments, as well as greater access to their respective markets.
CETA includes provisions that facilitate the establishment of investments in order to protect investors from practices like discriminatory treatment, expropriation without compensation, and arbitrary and abusive conduct, and it ensures the free transfer of capital.
CETA obligations are backed by an investor dispute resolution mechanism that includes an appeal tribunal. When an investor files a complaint, the permanent and independent tribunal, as well as the appeal tribunal, if need be, will determine whether a government measure violates CETA's investment obligations and whether the investor suffered a loss as a result.
CETA holds great potential for businesses in both our respective territories. That is why our government has been working extremely hard to bring CETA into force as soon as possible.
While negotiations concluded in August 2014, our government has made enhancements to the agreement in order to strengthen and introduce progressive elements related to environmental protection, workers' rights, consumers' health and safety, and a government's right to regulate.
Prior to our making these changes, support for CETA in the centre left in Europe, which is essential to have CETA ratification in the European Parliament as well as the support of member states, such as Germany and France, was uncertain. Indeed, it was in jeopardy. Now that we have made those changes, the progressive leadership of those countries, as well as the progressive leadership in our country, is squarely behind it.
One of the most important things our government did right after taking office was to listen to the critics of CETA, both in Canada and in Europe, and to understand some of the legitimate concerns people had. We have worked with Canadians, including industry and civil society alike, and with our European Union partners to prove, with CETA, that a progressive trade policy is possible.
CETA will set the bar for trade agreements in the future, and it forms the cornerstone of our government's progressive trade agenda. This is an agenda that has linked the government's domestic policy focus on reducing inequality and enhancing inclusive growth. The idea is to ensure that trade policy makes a more meaningful contribution to this overall agenda and to ensure that trade is done in a way that Canadians can see, feel, and believe works for them.
This agreement clearly provides the advantages that our industries are seeking in expanding their footprints internationally, and does so in a fair and responsible manner that will benefit Canadian society as a whole. This is why it is important for Canada to implement CETA as soon as possible.