Mr. Speaker, I am pleased to join the debate on Bill C-13, which would ensure that Canada meets its obligations under the WTO's trade facilitation agreement. This is something that our party will fully support.
Our previous Conservative government concluded the trade facilitation agreement. We value whatever makes it easier for Canadian companies to conduct their business both here and abroad, because they are our country's best job creators. We value simplifying custom procedures and cutting red tape. We value expediting the release on clearance of goods and reducing the cost associated with processing. Trade must be predictable for Canadian businesses, and this is something that the WTO is good at and which the trade facilitation agreement furthers.
Canadian investors, importers and exporters, and especially small and medium-sized enterprises would greatly benefit from the passage of the bill. Our party will vote in favour of it, because Conservatives know that small and medium-sized businesses are the backbone of the Canadian economy. We saw it as our duty in government to give the support they needed to do business, not just within Canada but also internationally. We understood that our SMEs were doing very well, and Canada prospers when they do well.
International trade is vital to the Canadian economy. It represents more than 60% of our GDP, and one out of five jobs are linked to exports. Without international trade, there would be 3.3 million fewer jobs in Canada, meaning our unemployment rate would skyrocket to 25%. This is why it is absolutely vital that we support our business community. It is also why it is vital for Canada to look beyond the WTO to further our market access around the world.
Before the House rose for the summer, my colleague, the hon. member for Abbotsford, spoke during this debate and gave us a history of the agreement at the WTO. The trade facilitation agreement is part of the Bali package which is a group of outcomes that took about 15 years for well over 100 countries to negotiate, agree, and now to ratify in our respective legislative chambers. It is 15 years and counting, I should probably say, since over 20 countries have yet to pass this agreement after us.
While the timeline for accomplishing anything at the WTO is concerning, it does serve a purpose, the highest of which is the common set of rules it sets that govern international trade. The WTO holds countries to account when they are suspected and found guilty of breaking the rules, and Canada has certainly benefited from this oversight.
Take the softwood lumber dispute for example, or the United States' country-of-origin labelling requirements for beef and pork. Rulings on these issues by the WTO ensured Canada was able to hold the United States to account for its cross-border trade indiscretions and give us the moral authority to demand nothing less than favourable outcomes for the Canadian industry. However, 15 years is a tremendously long time to negotiate an agreement like this, which largely deals with measures with which our own customs regimes already comply.
My colleague, the hon. member for Battlefords—Lloydminster, also spoke earlier in this debate before the summer recess and alluded to some reasons of why the WTO was a difficult body in which to accomplish anything meaningful in a period of time. It is a large group of countries of very diverse interests and everyone has a veto. It is an organization that values and protects the free flow of goods around the world, but its limitations are evident. That is why the government should follow in the steps of its predecessor and continue to build on Canada's legacy as it supports job-creating industries by pursuing bilateral and smaller multilateral agreements that hold real promise for Canadian exporters and are achievable in the not too distant future.
I have in mind three things: the continuation of the global markets action plan, the ratification of the comprehensive economic and trade agreement with the European Union, and the ratification of the trans-Pacific partnership.
The global markets action plan, or GMAP for short, was a revolutionary yet simple way to think and go about doing international trade with the ultimate goal of nearly doubling the number of Canadian SMEs exporting to emerging markets from 11,000 to 21,000. To do this, the plan called for the government to concentrate its efforts on determining the markets that held the greatest promise for Canadian business by engaging in vigorous trade promotion and ambitious trade policy.
At the heart of GMAP was that it played to the strengths of the business community. A strength of GMAP itself was that it was methodically based on the insight of the businesses themselves that would be the government's partners in the plan.
In order to ensure that the program was built in a way that served Canadian SMEs best, our previous government created an advisory panel comprised of the Canadian Federation of Independent Business, Canaccord Genuity Group, the Canadian Agri-Food Trade Alliance, the Canadian Chamber of Commerce, the Canadian Council of Chief Executives, Alliance Grain Traders, Canadian Manufacturers & Exporters, Cenovus Energy, CGI Group and the University of Alberta.
Contrary to what the current government might think, it does not have a monopoly on the act of consulting. Perhaps the difference is that our previous government consulted in meaningful ways that gave those affected by a policy real input into its creation.
The results of the GMAP exercise with the identification of three party market types with engagement by Canadian officials in each of the countries identified as having potential for Canadian businesses, two of these market types target emerging markets.
As past chair of the Canadian ParlAmericas group, I was able to see first-hand what GMAP meant to Canadian business in trying to expand into the Americas.
When I went to Peru in the late 2000's, officials were talking about how the increase in wheat exports were happening there. It showed what happened when all of a sudden farmers were allowed to sell their grain, but also when there were trade agreements in place so they had bankability and knew exactly how to go about selling their grain into Peru and thus the exports approved drastically increased.
To my knowledge, the government has not expressed its intent to work toward growing the engagement of Canadian SMEs in emerging markets under GMAP, and it would be a shame for the government to let down those who actually do trade and export around the world. These are the same people who resoundingly endorsed GMAP. I look forward to hearing from the Minister of International Trade on her plans for this highly valued policy framework.
The second thing the government should do to help our exporters create jobs is ratify the comprehensive economic and trade agreement. This agreement is huge for Canadian exporters because it would give them access to over 500 million affluent customers ready to buy whatever Canada has to offer. It is estimated that CETA could help grow the Canadian economy by adding $12 billion annually to our GDP, which is the equivalent of 80,000 jobs or raising the average family's income by $1,000 annually.
It is imperative that the Liberal government get this agreement across the finish line, and to be frank I am concerned about its action on this file so far.
If reports out of Europe are to be believed, it looks like the agreement is coming apart at the seams and the actions of the government seem to corroborate this, first with the secret reopening of the negotiations to revise the section on investor-state dispute settlement to appeal more to some European interests, and now with the appointment of a new CETA envoy to help get it done. Both of these developments do not beget a lot of confidence within the Canadian business community, but I join with our exporters in hoping that the government meets its target to have the deal signed in October. Perhaps the good news out of Germany today that its chancellor has the necessary votes to proceed with the deal will be a sign of positive things to come for CETA.
The third thing that the government must to do to continue to build Canada's economy and create more jobs is join with our allies in preparing to ratify the trans-Pacific partnership this fall. The TPP is arguably the most important trade agreement of the 21st century. Indeed it is the largest free trade agreement in Canadian history as it would give our exporters access to 800 million customers from 11 different countries. Notably, it would grant us free trade access to the Japanese market which, as the world's third largest economy, is possibly the biggest advantage of the TPP.
The other large advantage of the TPP is that it is good and safe strategy for increased engagement with Asia because it sets the rules of engagement for that region. Increasing our business relationships in that part of the world is imperative for Canada so that we do not fall behind in the global marketplace. A report by the Asia-Pacific Foundation on Canada's Asia strategy says that by 2020, almost two billion people, 1.7 billion to be exact, or 54% of the world's middle class, are projected to spend almost $15 billion annually. That is 42% of the world's total consumption and Canada would be remiss to not prepare for the massive growth that is projected for Asia in the future.
China is undeniably a large part of increasing growth in Asia as a 2011 Asian Development Bank estimation suggests that China will contain about 20% of the world's middle class by 2030. It is also clear that what China demands, Canada has to offer, with our energy and agricultural resources being particularly in demand.
The TPP was developed with the express purpose in mind of some day bringing China into the fold of freer trade on our own terms, with our allies and the force of precedent on our side. Importantly, it treats issues that Canada should be wary of when looking to engage further with China.
Take for example the issue of China's state-owned enterprises. Now let me be clear. Our party does not disagree with foreign investment in Canadian industry. Quite the contrary, in fact. However, we do insist that it must occur under the right conditions. Following the purchase of Nexen by the China National Offshore Oil Company in 2012, the previous Conservative government announced a new policy consisting of two elements: limiting further acquisitions of oil sands assets by state-owned enterprises; and requiring additional scrutiny of acquisitions by state-owned enterprises in other sectors.
China has asked Canada to loosen these restrictions, which should be concerning for Canadian companies, which would face unfair competition within Canada as a result, in addition to other international companies that do business here under globally established laws and norms.
Chapter 17 of the TPP tackles the issue of state-owned enterprises as the partner countries agree to ensure that their SOEs operate on the basis of commercial considerations and act in a non-discriminatory manner when making purchases and sales. The chapter commits countries to fair competition and includes rules to generate better transparency with respect to government control over commercial state-owned enterprises. By ratifying the TPP before pursuing a free trade agreement with China, Canada will have some clout to ensure that we can achieve outcomes that do not infringe on fair competition within our own economy.
Another area that those pursuing a freer trade with China should be wary of is labour rights. Chapter 19 of the TPP deals with this head on as it contains enforceable commitments to protect and promote internationally recognized labour principles and rights. It ensures that TPP partner countries provide acceptable working conditions in terms of minimum wages, hours of work, and occupational health and safety, and includes commitments to ensuring that national laws and policies provide protection of these fundamental principles and rights.
Non-tariff barriers are also a concern when it comes to doing business with China. Canadian farmers know all too well about the damage non-tariff barriers can cause to our industry. Our canola farmers are still operating under an immense amount of uncertainty as to whether they will be able to continue to sell their crops into China. China has been threatening to block our canola exports, supposedly over concerns of blackleg, and it claims the matter can be resolved if Canadian exporters lower the amount of extraneous plant material in its shipments to below 1%. Our Canadian industry has been telling us that this ruling is not based on solid science and that the current limit of 2.5% is a number that already poses an extraordinarily low risk for blackleg transmission.
The increased time and cost that would have to go into preparing a shipment of canola to be sold in China with a dockage rate of less than 1% is prohibitive for Canadian farmers. Though the Prime Minister announced that the September 1 deadline for this new Chinese regulation had been delayed, this has done nothing the alleviate the future uncertainty for western Canadian canola farmers who are harvesting their co-ops right now as we speak.
Around 40%, or $2 billion, of Canada's canola seed exports go to China, so non-tariffs of this sort can have real consequences for our economy. China has been known to use regulatory barriers in the past to block other Canadian agricultural products, including beef, pork and biotech crops, whether to protect its domestic industry or to strengthen its negotiating position on other issues.
Chapter 7 of the TPP combats non-tariff barriers by affirming each country's rights and obligations under the WTO sanitary and phytosanitary Agreement and by establishing a series of new commitments regarding regionalization, equivalence and science-based analysis. Most important, it also provides increased transparency in the application of each country's SPS regulations, including a requirement that TPP countries notify others of all regulations that may have an effect on trade.
Indeed, the government should really consider the benefits of using the TPP as a springboard towards further trade with China, given the Canadian public's deeply divided sentiment on the matter. Polling numbers released by the Asia-Pacific Foundation to coincide with the Prime Minister's recent trip to China show that an equal number of Canadians both oppose and support a free trade agreement with China at 46% each. We know that those who are hesitant to support more engagement with China do so largely for concerns involving security, human rights and the rule of law. By ratifying the TPP before pursuing free trade with China, the government can begin to negotiate from a position of increased coordination among our allies in the Asia-Pacific region. They say there is safety in numbers, and the TPP means exactly that.
Beyond giving us access to the Japanese market and the tools it offers in preparing for further trade with China, the most compelling reason for ratifying the TPP this fall is that this is an agreement that Canadian businesses want. Our businesses create jobs in Canada and ratifying the TPP will help them create even more. Across the board, in every region of the country, we will find businesses that support increased trade in Asia through the TPP. Those who are supportive include companies in aerospace, agriculture, food processing, auto manufacturing, wine and spirits, fish and seafood, forestry, information technology, pharmaceuticals, medical technology, mining and extractives, financial services and transportation.
By ratifying the TPP, Canadian businesses would be the only G7 exporters to have free trade access to all of the U.S. and Americas, Europe and the Asia-Pacific continents. That is over 60% of the world's economy and every industry and region in Canada would have access to these customers. It is lost on me why the government is continuously delaying the ratification of the TPP.
Besides having Canadian industry tell them to get this deal done, Global Affairs Canada's own chief economist has found that joining the TPP would provide a net advantage to Canada by creating significant new export opportunities, particularly in Japan, while warning of the loss in opportunity Canada would suffer by staying out of the agreement. With the private sector and her own chief economist all touting the benefits of the TPP, it is a mystery as to why the Minister of International Trade continues to go out of her way to avoid ratifying this deal.
International trade is about jobs in Canada. The more markets we have to sell into, the more jobs are created here at home to satisfy the global demand for what Canada has to offer. With our economy losing some 110,000 jobs in June and July, and with the unemployment rate creeping up another tenth of a point in August to 7.0%, the government should be spending more time thinking about ways it can facilitate more trade for Canadian goods and services. It cannot afford not to.
This brings me back to Bill C-13. Canada must continue to work within the WTO framework and support the efforts there towards freer trade around the world. That is why I and my party will be voting in favour of the bill, because in doing so we vote in favour of the Canadian economy and Canadian jobs.
I would also urge the government to use this as an opportunity to seize the international trade file with more vigour than it has shown thus far. The government must be smart about its trade policy and only pursue those agreements that will benefit and create opportunity for those actually practising international trade and employing Canadians. Continuing the important work set out in the global markets action plan, getting CETA across the finish line, and ratifying the TPP before pursuing free trade talks with China will set our economy up for continued growth and prosperity through the years to come.
These are all things that I hope our trade minister gets and understands. As we look forward and look at what is going on in the Canadian economy, we have heard a lot of promises from the Liberal government, promises I think it intends to keep, at least I hope it does. We all remember the commercial with the Prime Minister going down the escalator, talking about how he had a plan for creating jobs here in Canada. That is very important, because we need to create jobs here in Canada.
However, the results have been somewhat lacklustre. They are not there. We have lost jobs here in Canada. Our inability to show a clear direction on what we are doing on the trade file has Canadian companies really confused about what their future holds.
A good example is that on TPP the Liberals are dragging their feet, waiting to see what happens in the U.S. However, when it comes to the Asian development bank, they go in headstrong, full steam ahead, with a commitment of close to $1 billion, with no agreement from our allies. The U.S. and Japan are telling us not to be a part of that. Looking at that consideration, Australia belongs to that bank and only gets 4% of the benefit.
There is no commitment for that $1 billion to be spent on any company that generates jobs here in Canada. It is doing what we should not be doing. What we should be doing is working with our allies on all fronts, setting up the proper tools and regulations.
It just creates inconsistency in how businesses are supposed to plan for the future. If we see a consistent message by their ratifying the TPP now, and a strong argument for CETA, and getting that done here in October, that would tell the business community here in Canada to invest. It tells the business community that it will have market access and not just in Europe but in Asia. That is pretty exciting. We will see job growth happening from that. We will see the benefit almost instantaneously.
Why the Liberals are hesitating on this file is beyond me, unless they just do not have a clear vision of what to do in the future.
I am going to conclude my remarks by saying that Bill C-13 is an interesting bill. It is something that should probably go through the House in a matter of 30 seconds. It is a no-brainer.
We are doing the stuff that is required in this bill already at the Canada Border Services Agency, so it is not like we are adding new expertise or new procedures and processes. We will be spending money in other countries to help them get up to the level of conduct that we expect, which is a good thing. As we improve their regulatory processes and combine them or harmonize them with Canadian processes, it makes it easier for our companies to do business in those countries.
I look forward to seeing this ratified and moving forward. I look forward to seeing legislation on TPP, hopefully this fall. I look forward to legislation on CETA so that we can get these trade deals done and move forward with things like the Pacific Alliance and other opportunities that await us in the trade file.
