That, in the opinion of the House, given the importance of trade to Canadian jobs and long-term growth, as well as the government’s commitment to strengthen ties within North America and the Asia-Pacific region: (a) growing protectionism threatens the global economy; (b) the Trans-Pacific Partnership is the best opportunity to strengthen the multilateral trading system and develop rules that protect Canada’s economic interests; (c) the government should send a strong signal to Canadian businesses and its closest allies that it supports international commerce; (d) Canada’s position on the Trans-Pacific Partnership should not depend on political developments in the United States; (e) the government should stop prolonging consultations on this important agreement; and (f) the government should declare Canada’s final position on the Trans-Pacific Partnership in time for the North American Leaders’ Summit in Ottawa on June 29, 2016.
Mr. Speaker, I appreciate the opportunity to speak to the trans-Pacific partnership, the largest trade agreement in the world, one in which Canada can show leadership. I have always believed that Canada must be a leader, not a laggard, on trade.
Why trade? We have to ask ourselves that question. I think most Canadians understand that Canada is one of the great trading nations of the world. We operate today in a globalized trading environment, a globalized marketplace. Whether one believes in globalization or not, no one is going to be able to turn back the hands of time on globalization. It is a fact and Canada needs to adapt.
If we were going to promote trade, the first place we would want to do that of course is under the World Trade Organization, which is the pre-eminent forum in the world for rules-based trade. However, with the rise of emerging economies, there has been a significant shift in the economic balance within the global economy. Emerging economies are flexing their muscles and it has become much more difficult to actually make headway in establishing new rules for trade at the World Trade Organization.
As that organization has become somewhat comatose and unable or unwilling to move forward with new rules to adapt to a rapidly evolving global trade environment, Canada has to seek new ways of promoting its trade interests around the world. How do we do that? There are a number of different ways.
We can certainly negotiate bilateral trade agreements and investment agreements. We have done that with many countries around the world.
We can get involved in plurilateral negotiations. Canada is involved in those as well. There are three I am thinking of specifically. One is the environmental goods agreement, where like-minded willing partners are negotiating a global agreement on services, technology, and environmental goods.
We can also get involved in regional trade negotiations. If we are not going to make headway in the short term or medium term at the World Trade Organization, the best way to do this is to bring together like-minded trade partners and like-minded investment partners and negotiate an agreement that not only eliminates tariffs on goods, but also eliminates many of the non-tariff barriers behind the borders, the ones that frustrate our exporters so much. That is essentially what the trans-Pacific partnership would do.
What is the trans-Pacific partnership? It is 12 like-minded partners. It is not only Canada. It is the United States and Mexico, our NAFTA partners. Our free trade partners, Peru and Chile, are members of that partnership. Then there are countries that we do not have free trade agreements with which are now part of the TPP, countries like Australia, New Zealand, Malaysia, Brunei, Vietnam, and I would be remiss if I did not mention the third largest economy in the world, Japan.
This agreement is truly the largest trade agreement of its kind in the world. It represents somewhere in the order of 800 million consumers and somewhere around $29 trillion of the global economy. Canada needs to be part of this. What we are suggesting to the government is that rather than hiding behind the skirts of further lengthy consultations, the government should now stand up and declare its support for the TPP. That is what this motion does.
Just to be very clear, I would like to repeat the motion for the information of not only members in the House but also the many viewers who are watching these proceedings. The motion states in part:
(a) growing protectionism threatens the global economy; (b) the Trans-Pacific Partnership is the best opportunity to strengthen the multilateral trading system and develop rules that protect Canada’s economic interests; (c) the [Liberal] government should send a strong signal to Canadian businesses and its closest allies that it supports international commerce; (d) Canada’s position on the Trans-Pacific Partnership should not depend on political developments in the United States; (e) the [Liberal] government should stop prolonging consultations on this important agreement; and (f) the [Liberal] government should declare Canada’s final position on the Trans-Pacific Partnership in time for the North American Leaders’ Summit in Ottawa on June 29, 2016.
The Liberal government has gone out of its way to try to proclaim its bona fides on trade. The Liberals' record is quite poor. Members may recall that over 13 years under the Chrétien and Martin governments, they got virtually nothing done on the trade file.
It was only in 2006 that our former Conservative government embarked upon the most ambitious trade agenda Canada had ever seen. We not only embarked upon that plan, but we actually executed on that plan. Over a short period of less than 10 years, our Conservative government was able to conclude negotiations on trade agreements with an astonishing 46 different countries. The previous Liberal government's record was three small trade agreements. We got left far behind within the global trading environment. Under our government, of course, we caught up very rapidly, but we are not finished.
Now the torch has been passed to the Liberal government. The Liberals have claimed that they are supporters of free trade and supporters of trade agreements, but let us see them stand up in this House and support this agreement.
One of the reasons it is important Canada be part of the TPP is that if we are not part of it, our North American trading preferences with our NAFTA partners, Mexico and the U.S., will very rapidly be undermined. Right now we have highly integrated supply chains across our borders, where we trade freely among ourselves. That is a platform also for us exporting goods to the rest of the world, because not only do we compete with the United States and Mexico, but we also do business together. When we look at the auto industry, in the typical car that comes off the assembly line, there are parts that have crossed the Canada-U.S. border and the Mexico border more than seven times. We can see how these parts, these manufacturing inputs, flow across borders seamlessly to create prosperity for our country and for our NAFTA partners.
If we are not part of the TPP, very quickly it will be the United States and Mexico that pick up many of our trade opportunities within the Asia-Pacific region. We will lose out. We will also see our investment preferences disappear very rapidly.
Think about it. If Canada is not part of the TPP, but the United States and Mexico are, and Mexico already has a trade agreement with the EU, and the United States will very quickly have one under TTIP, think of where investment would flow. Someone making a decision to, say, invest in the auto industry is going to invest in a jurisdiction that has the best access, free trade access, to markets around the world. The United States and Mexico would have access to the European Union. They have access within the North American marketplace under NAFTA. They have access now to the Asia-Pacific region. Canada would not have that kind of broad access.
Where is investment going to flow? Not to Canada. There is a huge risk of Canada being on the outside looking in, seeing its trade opportunities rapidly eroded around the world, seeing our investment advantages rapidly eroded. Let me give an example of where this happened and why Canada has to be so assertive in staying ahead of the curve when it comes to trade.
Members may recall that the United States, the European Union, and Canada were all negotiating a free trade agreement with South Korea. We were doing it at the same time. Then something happened in Canada. We had the BSE crisis, which hit our cattle and beef industry. South Korea and countries around the world closed their markets to us temporarily, until we could assure them that our beef was safe, that it was healthy to eat. Then those markets opened, except for two markets, Taiwan and South Korea. South Korea said, “No, we don't think that your beef is safe to eat“. It was wrong. Ours is the best beef in the world. However, South Korea, for its own purposes, probably protectionist purposes, chose not to open up the market, so we had to take it to the World Trade Organization and we had to do dispute settlement.
At the end of the day, of course, Canada won, but in the meantime, we lost a couple of years in negotiations on a broader trade agreement. Of course, the European Union and the U.S. got their deals in place. Those deals were in effect in 2012.
In the subsequent year, when Canada did not have a trade agreement with South Korea, but the EU and the U.S. did, Canada lost 1.5 billion dollars' worth of exports in South Korea. That is the cost we pay when we do not actively negotiate open markets around the world for Canadian exporters and for Canadian manufacturers.
That is the risk that the Liberal government takes by not declaring its support for the trans-Pacific partnership. We want to stay ahead of the curve. We want to be leaders not laggards on trade. That is our reputation over the last 10 years. Very quickly, we see that reputation waning under the new Liberal government.
We have had strong support from stakeholders across Canada. When we were in government, we worked very closely with the provinces and territories to make sure they understood what it was we were negotiating in the TPP, to make sure they understood the benefits to each one of their provinces and territories.
We also consulted broadly with stakeholder groups and industry organizations across the country. Overwhelmingly, they supported Canada being part of the TPP. Overwhelmingly, they supported the outcome of the TPP when it was finally announced, even the supply managed sector, which many had said were going to go to the barricades on the TPP, that they were going to hate this agreement because we were providing some marginal extra access to the Canadian marketplace for products such as chicken, eggs, turkeys, hatching eggs, and dairy.
At the end of the day, when we announced it, and we had provided them with assurances that this was not going to decimate their industry, they saw the deal in front of them and said that the Conservative government actually negotiated a pretty darn good deal. The access was limited to very small amounts coming across the border, in addition to what access they already had. In fact, I have spoken to those organizations since, and they will very quietly admit that the agreement actually ended up being much better than they had expected, and that we had done a phenomenal job of negotiating an outcome that services their industry interests.
Members may recall that we were not only able to minimize the impacts on those industries, but we also provided two packages. One of those was a compensation package to compensate those industries for any loss in quota value suffered as a result of opening the market a little more for those products. The industries embraced that.
By the way, the compensation that we announced, which we believed was fair and which those industries embraced fully, is now in doubt under this new Liberal government, which has always stood up and said that it supports supply management. The Minister of Agriculture, almost daily in the House, is asked about supply management and about compensation. He stands up and says that they strongly support supply management, but the government will not actually commit to the compensation package that was negotiated as part of the TPP outcome.
The same thing is true on mitigation measures. Our American friends are very good at exploiting loopholes in our trade laws. For example, they could not get large amounts of broilers, chicken, into Canada, so what they would do is create sauce packs. The World Trade Organization rules in our NAFTA agreement are not 100% clear on whether sauce packs are included or are prohibited. The Americans would send these sauce packs across the border, circumventing the spirit of our custom controls.
There are many other loopholes that our friends to the south were exploiting. We said to the industry that we were going to do everything we could to plug those loopholes. We came up with a package, a set of promises that we were going to undertake to address those challenges.
No sooner had the new Liberal government been elected, then it was questioning whether, in fact, it would be implementing those mitigation measures. Again, the industry, the supply managed five are very upset. They will not get assurances on the compensation package, and the federal government has not been moving forward with addressing the mitigation measures that had been promised to them.
The Prime Minister has boasted that his government is a champion of trade. Over the last six months, sadly, we have seen virtually no progress, no clear pronouncement on whether the Liberals support the TPP. In fact, I have been looking for any new trade agreements that the Liberals have started negotiating, and there are not any that I can tell. I am looking for new international investment treaties that the Liberals might be negotiating; I am not aware of any. Where is this claim of being champions of trade?
What the Liberals have done is they have sent a chill into our Canadian investment market and into the international investment market. They have increased taxes on Canadians. They refuse to reduce the taxes on small businesses in Canada, breaking an election promise. What they have done is add more red tape. Even yesterday in the House I spoke about how the current Liberal government and a private member are trying to impose additional red tape on our small businesses. What is the result? Despite the low dollar, our exports have lagged terribly.
In fact, I have the most recent statistics from the Minister of International Trade's own department. In January, exports were $35 billion. That is just exports to the U.S. In February, those went down $2 billion. In March, those exports went down $2.5 billion. It is a terrible record over the last six months for the current Liberal government.
We know that the Prime Minister has been hobnobbing with President Obama. We know that the Minister of International Trade has been travelling all over the United States, going on talk shows—embarrassing herself there—and talking supposedly about trade. If her performance is any indicator, Canadians would be well served if she actually stayed at home and focused on the work that has to be done here to promote our trade interests because she is not getting the job done internationally. There is a tremendous failure on the part of the current Liberal government to live up to its promises on trade.
Beyond that, when we look at some of the other challenges facing Canada around the world, we see that we cannot count on a low dollar to sustain our competitiveness. We have to ensure we continue to open up markets all around the world. Let me say this. For the Liberals to wait for the U.S. to ratify TPP is an abject abdication of their responsibility to be leaders not laggards in trade. What we are doing is calling upon the current Liberal government to move forward and to boldly pronounce at the three amigos summit on June 29 that Canada will be supporting the TPP. President Obama has done that. The Americans have already said they support the TPP.
Here we are as Canadians, and our government just will not tell Canadians where it stands. Can members imagine the leadership we could show by standing up and saying that we believe trade is good for Canada; that we believe open markets around the world are good for Canada; that we support this largest trade agreement of its kind in the world and we are part of it; and, that we are setting the rules for 21st-century trade within the Asia-Pacific region? Would that not be an amazing pronouncement to make?
Right now, it is not looking good on the Liberal side when it comes to trade, with declining trade performance and declining investment performance. This is one thing we can do to actually generate this thing that is perhaps the most significant driver of economic prosperity in Canada.
It is no longer appropriate for the current Liberal government to hide behind the skirts of consultations. There were comprehensive consultations that took place before the agreement was signed. There have been comprehensive consultations that have taken place post-TPP being concluded. It is time to step up and let the world know, let Canadians know, and let our partners and allies know where we stand on trade.
What would this achieve? It would assist the U.S. in its own ongoing work of ratifying the agreement. It would restore waning public confidence in the Liberal government's commitment to a robust trade agenda, and it would restore Canada's reputation as a trustworthy global leader on trade, not a laggard.
I am very pleased to be able to promote this agreement. It would be a transformational agreement for Canadians and for exporters. It would also be a transformational agreement for Canada's consumers, who would benefit from lower prices because of the elimination of tariffs.
I strongly encourage the Liberal government to step up, speak to this agreement, and say, “Yes, we support the TPP.”