Mr. Chair, it is my pleasure tonight to address the House on the issue of the Canada-EU trade agreement.
A lot of my colleagues are going to be fairly technical in what they talk about, but one of the things I have noticed in working in my constituency and on the international trade committee is that, with the fundamental case for trade, everyone gets out there and most people are in favour of it, but then they are not quite sure what free trade is or why it should be supported.
Tonight I am going to use the majority of my time to actually deal with the basic case for free trade, economics 101 or why we should have free trade; and then I am going to deal with a couple of specific issues that critics of trade agreements have raised.
I want to start with a quote from the esteemed economist, Adam Smith. In Wealth of Nations, he states:
In every country it always is, and must be, the interest of the great body of the people, to buy whatever they want of those who sell it cheapest. The proposition is so very manifest, that it seems ridiculous to take any pains to prove it; nor could it ever have been called in question, had not the interested sophistry of merchants and manufacturers confounded the common sense of mankind.
What we are doing tonight by arguing in favour of a Canada-European free trade agreement, arguing in favour of generalized free trade, is arguing for lower prices for consumers, a benefit often overlooked when we discuss trade agreements.
We discuss what the good is for agriculture exporters, what the good is for manufacturers, what the good is for specific interests. But our job, our duty as members of Parliament, is to stand up for the common good of the entire country. Every single Canadian, all 33 million plus of us, are consumers.
This is what free trade does. It helps to lower the cost of goods for Canadians. It helps us access the cheapest, best-quality products throughout the world without any encumbrances. So the reason that we fundamentally push hard for free trade is very simple: it helps bring down cost for consumers; it helps make more goods available at a better price.
The classic illustration that is sometimes given, very simply, is for sweaters. One can buy a sweater for $30, and once a free trade agreement is implemented, all of a sudden the price drops to $25. At this point, consumers can then spend the extra $5; they can go and buy something else.
The opponents of free trade will argue, “What if that $25 goes out to another country, outside of Canada? Does Canada not lose the $25 that was spent on the sweater that was imported?”
Let us think about this for a moment. I take my $25 Canadian, I pay a merchant for the item, and the $25 gets shipped overseas. What does the English, French, or Japanese business, and so on, do with $25 Canadian? The only thing they can do with Canadian dollars is, really, buy something that ends up coming back to Canada. It is intricate and it works back and forth. There are exchange markets, and so on, but fundamentally, what works for individuals works for countries.
Trade works, and as we lower the cost of goods and services for Canadians, our economy becomes more productive. We can produce more goods and services with less effort. That is the whole fundamental basis of trade. That is why we push for it.
One way of thinking about it is as an individual. Let us think of what an individual does, such as a farmer. A farmer who grows his crops does not make his combine and tractors. He does not manufacture them by hand. We know what the state of agriculture was 1,000 years ago when people were forced to make their own implements by hand. The farmer has specialized, and Canadian farmers are absolutely the best in the world at producing crops of canola, grain and things of that nature. However, they have specialized; and in just the same way, business has specialized and nations have specialized.
So the goal of trade is very simply this: to lower the cost and to increase the trade. At the end of the day, every export we send out brings back an import. Of course, if we do not pay for it, if we run up extensive debts, just as with an individual, there is a problem. If we actually pay our debts and do not spend all our time borrowing money that we have no intention of paying back someday, we will have balanced trade through tourism and other investments, things of that nature.
Free trade is the specialization of labour. It works. It raises the standard of living, and it brings an increase in productivity, which makes us wealthy.
Let me deal with particularly two elements of criticism that have come into this trade agreement from certain elements or special interests in this country and have been, in general, criticisms of trade agreements that we have had with others.
The first is the case for protection of foreign private property, a foreign investment. It has gone under various names and usually the critics will talk about investor states, and so on, but fundamentally what we are looking for is protection of foreign investment, the same protection that we ask for Canadian investors when they go abroad and put their money into another country. We do it, and most people think we do it to protect foreign investors. We actually do it to protect our own economy, and let me explain why.
I have a friend who is a very successful businessman, a very shrewd gentleman who lives in Calgary, Alberta. He started an oil sands company with some partners and sold it off to some American investors. The company had some technology. The technology was incredibly useful for another country in the world; in fact, it fit its needs for production of oil precisely. The country made him a very good offer and it could have been very profitable if he had been allowed to keep his profits in that country.
It is a country that has a known reputation for expropriating foreign assets in Latin America and he rather wisely decided that he was not going to invest his money in that country because it was dangerous and risky and the president there might expropriate. That did not damage him. He took his funds and invested them somewhere else and he is busy making money in the Alberta oil patch and in other international investments.
The country involved, whose oil production is plummeting, lost because of that technology. If it had had investor provisions for foreign investors, that country would have gained. It is for the same reason that we must insist that foreigners have investment protection in Canada, that the rule of law be respected. That does not mean that foreign investors can have special privileges; it means that they receive the same treatment under the rule of law as Canadians would.
The protection of private property, which is going to be included, or should be included in all Canadian trade agreements, is very important because it protects our economy and helps us to grow. It is for our interest that we do this and not just for the foreign investors.
The other thing I wish to deal with and note tonight is some criticisms that we are opening up our government-level procurement at the municipal and provincial levels. This is again in our interest. Just as I stated earlier, it is in the interest of all Canadians to have lower costs so that we can then go out and make more purchases with the money we have saved. That applies, too, for government. It allows us to lower taxes and to grow the economy in general.
It is very interesting to note that as Canadians we get very upset when our companies are denied the ability to enter into contracts with local procurement in other states. I think of a situation that has recently been in the news, of Franklin, Ohio, which denied a Canadian company the ability to win a furniture contract. As the lowest bidder, the company would have done it and it would have benefited. So we must look to have the same protections for others as we seek for ourselves, for the same reason that free trade is good.
Let me restate. Free trade is good. We do it to raise the standard of living, which has been proven over again with the Canada-U.S. trade agreement, the NAFTA and throughout history. Trading nations are prosperous nations. This is a good agreement, and we should back it.
