Madam Chair, tonight I want to talk about trade. I come from the riding of Niagara West—Glanbrook. We are close to the U.S. border and certainly a lot of our manufacturers, flower growers and a number of other businesses have tried to over the years sell into the U.S. market and they have been very successful until recently with the economic downturn. One of the challenges we have is finding markets, finding places for some of those products.
What I believe we have done as a government, which is important, is that we have looked for an opportunity to try to open up those markets. Some parties will fundamentally be against free trade agreements. There has never been a free trade agreement that some parties have ever found that they could support. However, as a business person and someone who understands the need to access different markets, I think this is crucial, and some of the markets and some of the deals we have done, whether it be with Panama, Colombia or now with the European Union in particular, which is why we are here tonight to have this take note debate, are of critical importance.
If we are going to expand trade, which means that we are going to create jobs here at home, we are going to need to continue to expand markets. Quite frankly, the economy has been tough the last couple of years and we all understand that. The challenge with that is if we have people buying fewer goods and services, whether it be the U.S. or other countries, we have to find other ways and other markets where we are able to do that.
I am thankful for this opportunity to speak on this take note debate tonight on the ongoing negotiations with the European Union. The European Union is our second largest trade and investment partner with enormous potential for growth. I know the numbers have been talked about tonight, but we export some $44.3 billion. We import some $54 billion from the EU right now. Direct foreign investment in Canada is $163.7 billion and investment abroad from Canadian companies into the European Union is $148.9 billion. With an $18 trillion market, there is certainly a great opportunity for our Canadian companies to compete.
Certainly over the course of testimony over the last little while, we have heard from companies like SNC-Lavalin, which is a great Canadian company that is trying to build on its success in the market, and other companies that are trying to expand.
My colleague, the hon. Minister of International Trade, elaborated on the many gains for Canada in such an agreement. I certainly echo his words in noting that the successful conclusion of these negotiations is a priority for this government and is part of our commitment to build the future economic security and prosperity of Canada.
I would like to take a few moments to highlight a significant component of the agreement, government procurement and its role in setting the overall level of ambition for the agreement as a whole. For the European Union, expanded access to Canadian government procurement markets is its number one priority. In assessing the potential for increased trade between our two sides, the European Union identified government procurement, particularly at the provincial and territorial level, as an area for significant growth in our current levels of trade.
Since 1996, both Canada and the European Union have had commitments to each other on government procurement under the World Trade Organization Agreement on Government Procurement. In addition, Canada has procurement commitments with the United States under NAFTA and the recently concluded Canada-U.S. Agreement on Government Procurement, which our government reached to secure for Canadians, businesses and workers, the only exemption from buy American rules in the world, as well as under free trade agreements with Chile and Peru.
As the commitments between Canada and the European Union under the World Trade Organization Agreement on Government Procurement are currently limited, there is considerable benefit in building upon these existing commitments and expanding into new areas.
In particular, the European Union is seeking broad coverage at the federal, provincial and municipal level, including coverage of crown corporations and expanded coverage in the utilities sector.
Given the importance the European Union has placed on government procurement in the negotiations, the government is committed to achieving ambitious commitments in this area in order to make gains in other areas of importance to Canada and ultimately to successfully conclude these negotiations. At the same time, the outcome must be balanced. Where the EU has flexibilities and limits on the extent of openness in its government procurement, we will be matching these.
Negotiating an ambitious agreement requires extensive consultation. We have been closely collaborating with industry groups, all federal departments and agencies, and crown corporations, some of whom are considering international procurement commitments for the first time, as well as provinces and territories that are also breaking new ground with this agreement.
At the federal level, consultations are being undertaken with more than 100 departments and agencies and all 48 crown corporations. Support from these groups is vital to both achieving the level of ambition required in this chapter and also to demonstrating federal leadership in our commitment to the agreement.
Federal leadership and ambition is also important to our ongoing work with the provinces and territories. Provinces and territories have shown tremendous engagement in these negotiations, forming part of the Canadian delegation in the negotiations and working within their respective jurisdictions to build support and secure ambitious outcomes. The involvement of provinces and territories is crucial to the success of these negotiations.
I want to add that the trade committee travelled to the European Union to discuss with its colleagues on the trade committee in the EU, as well as a couple of the member states. This was a concern that they had. They wanted to make sure that our provinces, territories and municipalities were engaged, and this is certainly something our government has noted and has been involved with them from the outset.
The involvement of the provinces and territories is crucial, as I said before, to the success of these negotiations. Before launching the negotiations last year, the European Union pressed for assurances that provinces and territories would fully support the negotiations and would make binding commitments in areas that fall wholly or partially under their jurisdiction, most notably in government procurement.
In working with the provinces and territories to develop commitments regarding their procurement markets, there are important precedents, which serve as a basis for these negotiations. Provinces and territories have a number of internal trade arrangements, which establish similar rules and procedures for the area of government procurement, such as the Agreement on Internal Trade, the New West Partnership agreement between the western provinces, the Atlantic Procurement Agreement and the Trade and Cooperation Agreement Between Ontario and Quebec. In addition, Ontario and Quebec each have a procurement agreement with the State of New York.
Most recently, in February of this year, our Conservative government reached an agreement with the United States on government procurement, which included commitments for certain provincial and territorial procurements. This resulted in provinces and territories taking on international procurement commitments for the first time.
While some of these commitments have been offered to other countries, including the European Union, under the WTO Agreement on Government Procurement, the commitments being sought by the European Union under our bilateral negotiations are broader.
Provinces and territories have made significant progress in the course of these fast-paced negotiations. The continued support and commitment from all provinces and territories remains essential to the successful negotiation of a high-quality and ambitious agreement with the EU.
While the European Union is seeking the expanded commitments of government procurement in these negotiations, Canada's procurement markets are already generally open and transparent in practice. In fact, European firms are already winning large contracts at both the federal and sub-federal levels.
Generally, government bodies at all levels of government abide by a core set of principles in their procurement policies and practices. These include competition, in order to foster efficiency of public spending, and transparency, which ensures the contracting activities are open, fair and honest. It also includes equal treatment of potential suppliers, in ensuring they are subject to the same conditions, and accountability, to ensure that mechanisms are available to address any concerns.
Indeed, at the federal level, the government has a legislated a commitment to these principles, which secure value for money for Canadian taxpayers through the Financial Administration Act. By applying these principles and opening a wider range of procurement markets to a new trading partner, Canada is ensuring that taxpayers will receive greater value for money while also providing a more fair and transparent environment for business in Canada.
The agreement will also guarantee the same treatment for Canadian suppliers in EU procurement markets.
According to the European Commission, the European procurement market is estimated at 1.7 trillion euros or about 2.25 trillion Canadian dollars. That is 16% of the EU's gross domestic product. Despite the size of this market, many Canadian firms operating in Europe have indicated they face barriers in accessing and securing procurement contracts due to lack of transparency or insufficient knowledge of European procurement procedures.
This agreement will help establish clear rules and expand coverage of procurement markets for both Canadian and European suppliers and will provide access to various resolution mechanisms should concerns arise in the future. It will also serve to ensure greater transparency and fairness in procurement processes. The government's objective is to provide Canadian and European companies with secure and predictable access to procurement markets at all levels of government on both sides.
In order to benefit from such opportunities and to secure an equally ambitious outcome for the EU in this and other areas of importance to Canada, we are committed to achieving ambitious and comprehensive commitments to government procurement.
We have made significant progress thus far in this government procurement, and we are now in the final stages of preparing the initial exchange of offers. While many entities and jurisdictions have shown incredible initiative and flexibility in preparations toward Canada's offer, there is some distance to go.
In closing, I want to urge all members to support Canada's ongoing free trade negotiations with the EU. Encouraging provinces and territories to be ambitious in their offers of government procurement, rather than the knee-jerk protectionist inclinations of free trade naysayers, will inevitably lead to even more ambitious outcomes for Canadian exporters and employees in the European market.
