Mr. Chair, it is my pleasure to rise in the House this evening to speak to a key objective being sought by Canada in our negotiations with the European Union towards a comprehensive economic and trade agreement, namely ensuring real, effective market access for Canadian exports to the European Union. As the minister said this afternoon in response to a question, the focus of this agreement is jobs and prosperity.
In May 2009, Canada and the European Union announced the launch of negotiations towards a comprehensive economic trade agreement, also known as CETA. Based on the results of a 2009 joint scoping exercise, Canada and the EU developed a broad and ambitious negotiating agenda that would include a variety of topics from trade and investment to sustainable development.
CETA also marks the first international trade agreement where the provinces and territories will participate in the negotiations. Officials in Canada and Europe have indicated that provincial and territorial support is crucial to the success of the agreement.
Negotiations are continuing at a fast pace and are expected to be completed by the end of 2011. Negotiations are being undertaken both in Europe and, of course, in Canada.
The successful negotiation of a high-quality ambitious trade agreement remains a key priority for the Canadian government as the EU is the world's top single market, with a population of nearly 500 million and a gross domestic product of more than $19 trillion in 2009. In addition, the EU is the second largest trading partner in goods and services and the second largest source destination for foreign direct investment.
As CETA negotiations cover a broad range of areas, it could result in an agreement that is both broader and deeper than the North American Free Trade Agreement, NAFTA, Canada's most comprehensive free trade agreement to date.
Almost all of the speakers here tonight are members of the international trade committee. I am not. I am here to express my interest as the president of the Canada-Europe Parliamentary Association.
Given the importance of this agreement, the Canada-Europe Parliamentary Association has made significant efforts to remain abreast of CETA negotiations as well as engage with members of the European Parliament. These discussions have taken place in Europe and, more particularly, the Council of Europe in Strasbourg. We also met with members of the European Parliament here in Ottawa about a month ago. We are satisfied that negotiations are going well. Indeed, the European Parliament passed a resolution in May 2010 where it expressed support for the ongoing CETA negotiations.
Eliminating tariffs and creating rules of origin that enable Canadian goods to qualify for preferential tariff treatment are essential to gain effective and improved market access. I understand that good progress has been made on both, although more remains to be done.
On tariffs, negotiators have exchanged conditional initial offers on goods that would have 90% of all tariffs go to duty free immediately upon the implementation of the agreement. The second round of offers is being prepared over the next few months on both sides to see tariff eliminations being made even more ambitious.
On the rules of origin, Canadian negotiators are making steady progress towards an outcome that would take into account the integration of Canadian production into North American and global supply and production chains.
However, eliminating the tariffs and getting the right rules of origin are only half the equation. As tariffs come down, regulatory barriers take on greater importance in the ability of exporters to get their products into other markets. Thus, addressing and preventing regulatory barriers is the other half of the equation. Of course, this is easier said than done, particularly since the European Union represents perhaps the most complex regulatory environment in the world.
Effectively dealing with regulatory barriers hinges on: preventing or avoiding their establishment; reducing to the greatest extent possible the impact of those regulatory barriers that are put in place; and, ensuring the right mix of rules and procedures to enable us to efficiently and conclusively address them.
These elements, or outcomes, of effective market access form the basis of Canada's negotiating approach to multiple chapters in the agreement affecting trade in goods, including those related to technical barriers to trade and regulatory co-operation.
Collaborative efforts between the European Union and Canadian regulators toward compatible regulatory approaches are the key to avoiding or preventing regulatory barriers. Our negotiations will build on existing regulatory co-operation between Canada and the EU and will seek to improve it by increasing its visibility by making it clear that regulatory co-operation is a priority between Canada and the European Union.
Generally speaking, regulatory co-operation is forward looking and while it can help to erode differences and facilitate compatible regulatory approaches, it will not necessary prevent all trade irritants. Seeking to improve the compatibility of European and Canadian standards is also a key to preventing regulatory barriers.
Currently, although Canada and the EU both rely heavily on international standards, we both maintain our own regional and national standards. For the EU this is necessary to facilitate the European single market, while for Canada this is necessary to maintain the integrated nature of the North American market. Bridging this gap will be challenging, but we know it is important to our exporters who face increased costs due to differing standards which, nevertheless, have the same intent and desired outcome underpinning their purpose.
Enhancing transparency in the regulatory development process is another important element in avoiding regulatory barriers. Through provisions addressing technical barriers to trade, we can take greater strides to ensure exporters and employees on both sides of the Atlantic do not get sideswiped by technicalities which have the effect of restricting trade.
Other mechanisms are necessary to tackle regulatory trade irritants. For this reason, to ensure both parties continue to enjoy the benefits of real market access, Canada envisions establishing a solid and responsive institutional framework in the agreement to effectively deal with instances of unjustified barriers or deviations from the obligations of the agreement.
It is important that both Canada and the European Union have a forum where concerns related to the bilateral commercial relationship can be raised and addressed in an efficient, rapid and transparent manner. This will be particularly important to address any technical barriers that might arise in the future.
Finally, to ensure the enduring value of the entire package, we are seeking an effective and efficient dispute settlement mechanism. While dispute settlement is always a last recourse, it is inevitable that concerns will arise that cannot be resolved through consultations. When this is the case, we will need a mechanism that allows us to resolve differences between us quickly and efficiently, allowing manufacturers and traders to get on with their business.
Thus, at its very essence, Canada is seeking significant, effective and enduring market access gains for its manufacturers and exporters. These gains will be enhanced by closer co-operation between our regulators and backstopped by a more robust trade policy implementation regime and an effective and timely dispute settlement process in a comprehensive economic and trade agreement with the European Union.
To put this in plain language, achieving real and effective market access in these negotiations will mean getting reasonable and practical solutions to the current barriers faced by the Canadian exporters and proactively dealing with future issues through greater co-operation. This will translate into opportunities and jobs for Canadians. That is why our government is moving toward a truly comprehensive free trade agreement with the European Union.