Mr. Speaker, I will be sharing my time with the Parliamentary Secretary to the Minister for International Cooperation.
Agriculture and agrifood trade accounts for approximately one-third of the balance of trade of all goods and services in Canada. A very important part of that balance of trade comes from an excellent bilateral trading relationship with the United States.
In 2001 Canada's agrifood exports to the U.S. were worth over $16.5 billion, which was 17% higher than the year before, and represented over 62% of the value of all of our agrifood exports.
Canada also imported $12.3 billion in agrifood products from the U.S. last year compared to just under $11 billion in the year 2000.
Canada-U.S. agricultural trade is a good news story. The vast majority of trade in agrifood products between our two countries occurs on a smooth and continuous basis.
Canada and the U.S. recognize the importance of a good trading relationship which benefits agricultural sectors in both countries. To assist in maintaining this relationship, Canada and the United States established the consultative committee on agriculture in 1999 as a follow up to a bilateral record of understanding, an ROU, reached the year before. The purpose of the committee is to monitor the implementation of specific items outlined in the ROU action plan, as well as to provide a forum for Canadian trade and agriculture officials to periodically review issues affecting bilateral agriculture trade. This mechanism serves as an important early warning system to help identify and resolve issues before they become full fledged disputes.
The Canada-U.S. consultative committee on agriculture achieved a great deal in its first two years of operation. Many of the items identified in the initial action plan were addressed and resolved, and other issues were taken up by a group as they emerged as potential trade irritants.
During 2001 the committee developed a renewed action plan that would help to provide more concise direction to its future activities. The action plan was endorsed by Canada's Minister for Agriculture and Agri-Food and the U.S. secretary of agriculture on May 3 this year.
This is not to say, however, that the agrifood trading relationship between Canada and the U.S. is completely devoid of any problems. For example, Canada, along with many other countries, is very disappointed in the direction of the U.S. farm bill, known as the farm security and rural investment act, 2002.
Along with many other countries, including the EU members, Australia, Mexico, India, Brazil, China and South Africa, just to name a few, our government has raised our concerns and frustrations at the highest levels of the American administration. The Prime Minister raised them with President Bush, and ministers have expressed our concerns to their U.S. counterparts throughout the legislative process.
Further, the Canada-U.S. interparliamentary group was able to raise it concerns earlier this month during its annual meeting in Newport, Rhode Island, a group in which the Alliance member from Vancouver North Island participated.
In particular, we Liberals are concerned about the increase in trade distorting support as well as a provision for retail level country of origin labelling for meat, produce, fish and seafood that becomes mandatory in 2004, and will have a significant and detrimental impact on Canadian manufacturers and exporters.
We are also concerned about the establishment of a new marketing loan program for dry peas, lentils and small chick peas which has the potential to cause long term market distortions for these crops.
We are also working on a number of fronts to pursue Canadian interests in the face of this legislation.
First, this legislation, and the high levels of domestic support by other countries such as the EU, underscore the importance of achieving fundamental agriculture reform. In the Doha declaration, WTO members undertook to achieve substantial reduction in trade distorting domestic support in the WTO agriculture negotiations. I know that the Minister for International Trade and this government are committed to achieving that objective.
Second, the government is working with other countries, such as other Cairns Group members, to press the U.S. to regain its leadership role which was so instrumental in achieving the launch of WTO negotiations. For example, on May 15 the Cairns Group issued a statement that expressed deep regret over the farm law and called on the U.S. to renew its commitment to global agricultural trade reform at the WTO agriculture negotiations. Many countries reiterated these concerns about the act at an OECD ministerial meeting in Paris the following day and repeated the call for U.S. leadership.
Third, the Liberal government is continuing a detailed analysis of the act and will be monitoring the implementation of the legislation extremely carefully to ensure that the U.S. conforms fully with its international trade obligations. We are also in touch with other trading partners on this and sharing information.
On this side of the House we are committed to working closely with the industry and provinces as we proceed on these various fronts. That was strikingly clear last Friday when the Minister of Agriculture and Agri-Food, the minister responsible for the Canadian Wheat Board, the Minister for International Trade and the Minister of Finance all met with provincial and farm group representatives to discuss the future of the industry in western Canada.
We will also work with our U.S. allies with respect to the country of origin labelling provision to ensure that Canadian trade interests are not compromised.
We recently emerged from a U.S. investigation which refuted allegations by U.S. wheat growers that Canada is underpricing or overdelivering on quality in its exports of wheat to the U.S. It is worth pointing out that in announcing its decision, the U.S. trade representative rejected requests from the domestic industry to impose tariff rate quotas on Canadian wheat entering that country. This would have been a flagrant violation of U.S. international trade obligations, a point that the U.S. administration recognized.
Nevertheless, the U.S. trade representative has indicated that the U.S. may request WTO consultations or prepare a possible countervail/anti-dumping case. We have consistently made the point that our wheat exports are market driven and respond to the demand in the U.S. for a consistent, high quality product. Canadian wheat is traded fairly and the operations of the Canadian Wheat Board are in full compliance with all of Canada's international trade obligations. The Government of Canada will continue to defend the interests of this important sector.
In spite of these very important issues, we should not overlook the fact that there are many examples of the excellent co-operation that takes place every day to keep very large volumes of product flowing unencumbered across our shared border. Canada and the U.S. work together on many agriculture and agrifood trade issues, including everything from biotechnology issues to food safety, to customs procedures, and will continue to do so in recognition of the very important trade benefits that each country enjoys.
Before I finish, I would like to say just how naive I believe the opposition is being by proposing that the farm bill is a policy directed at Canadian producers and the fault of the Canadian government. This was a move to protect political interests in the U.S. during an election year. It is a destructive step backwards in global trade liberalization and no amount of lobbying from a conservative President Fox in Mexico or a close friend and ally, Prime Minister Tony Blair, was going to persuade the American congress and senate otherwise.
I would also like to comment on the opposition's poorly thought out suggestion that offsetting trade injury measures should be implemented. Canada is a key beneficiary of the rules based trading system under the WTO and NAFTA. If we believe that a trading partner has violated its trade obligations and injured our domestic interests we have recourse to WTO or NAFTA dispute settlement mechanisms.This is what a rules based system provides. Seven in ten Canadians think that Canada should follow established trade rules. In contrast, any targeted assistance to a domestic sector could be countervailable and would invite a trade action against Canadian interests.
