Madam Speaker, it is a pleasure to rise today to speak to Bill C-24, the free trade agreement between Canada and Peru.
The Liberal Party recognizes the importance of free trade and the opportunity to create jobs and prosperity not only for Canadians but for our trade partners. Particularly, during this global economic downturn, it is important that we not only work to expand our free trade relationships but we fight protectionist tendencies, whether it is from U.S. congressmen or senators or from Europeans.
Around the world there is a tremendous fear of protectionism. We saw what happened in the 1930s, going back to the Smoot-Hawley tariff act in the United States, which turned a recession into a full-fledged depression, as we saw responses from around the world and retaliatory actions against U.S. protectionism. Thankfully, the international community and the G20 have been quite consistent in acting and speaking against protectionist measures. We hope that wisdom will last but we have to be vigilant and vigorous in our opposition of protectionist measures.
We are a trade-dependent nation. We have a small, open economy. It is troubling that under the Conservative government we have the first trade deficit that Canada has seen in over 30 years. It is ominous that as a small, open economy that depends on external trade for our prosperity and jobs, in fact, today we are buying more as a country than we are selling. We are facing a weakened global economy and we must broaden our trading relationships. We must seek out new trading opportunities.
Canada's reliance on trade with the U.S., particularly with the United States having been hit the hardest during this economic downturn, demonstrates to us that we need to diversify our trading relationships during not just these difficult times but on an ongoing basis so that we are not as vulnerable or reliant on one market for the future. The U.S. is an important market to us, we all recognize that, and we need to continue to deepen and strengthen our trading relationship with the U.S., but we need to diversify dramatically our trading relationships so that we are not as dependent.
Countries like China, India and Brazil are critically important. My colleague, the Parliamentary Secretary to the Minister of International Trade, just mentioned that China has become Canada's second largest trading partner. He asked who could have imagined that just a few years ago. In fact, the Liberal government and Prime Ministers Chrétien and Martin saw this coming.
The Liberal government worked very hard to deepen our trading relationship and friendship with China, a friendship that goes back to Dr. Bethune and Pierre Trudeau. Pierre Trudeau and Richard Nixon agreed on almost nothing but the one thing they did agree on was the importance of opening up China. They were right then. The opening up of China in terms of economic trade and relationships has increased our capacity to influence the Chinese on issues of human rights and freedom, and market liberalization.
In fact, economic engagement can strengthen our capacity to influence other countries and our trading partners on issues of rights, labour and the environment. We have seen that occur around the world where we choose to use our economic relationship to actually enhance our capacity to influence other issues.
I will be speaking about the Chinese relationship a little more in my remarks, but on the issue at hand, Canada's free trade agreement with Peru, we in the Liberal Party believe very strongly that there are opportunities for Canada in deepening our trade relationship with Peru. We believe we also have a responsibility as a Parliament to evaluate these trade agreements on an individual basis at the committee level and to study them thoroughly in a multi-partisan and, to as much of an extent as possible, a non-partisan basis to ensure that the benefits exist for Canada.
With this in mind, the Liberal Party will vote in favour of Bill C-24 at second reading so that the Canada-Peru free trade agreement can receive a careful examination in committee. We want to hear from Canadian stakeholders. We will support this free trade agreement beyond committee stage if we believe that it is, on balance, a good deal for Canadians.
We recognize and believe in the principles behind free trade in terms of providing enhanced prosperity for our citizens and for economies like Peru, but we recognize as well that there is a significant economic risk to Canada if we do not pursue free trade agreements with countries like Peru.
Peru has been aggressive in pursuing bilateral free trade agreements with a number of countries. Since 2005, Peru has concluded free trade agreements with the U.S., Chile, Thailand, the Mercosur nations, that is Argentina, Brazil Paraguay and Uruguay, and Singapore.
Peru's FTA with the United States, Canada's largest trading partner, has been approved by the U.S. Congress and came into force on February 1 of this year. Now that the U.S. FTA with Peru is in place, some American exporters enjoy a comparative advantage over Canadian exporters in the Peruvian market. For example, U.S. wheat exports now receive duty-free treatment in Peru. Canadian wheat exports on the other hand continue to face a 17% tariff.
Clearly, Canadian wheat producers are now at a disadvantage in this market compared to American competitors and wheat comprises 38% of Canada's total exports to Peru. Therefore, we could say, tongue in cheek, that not having a free trade agreement with Peru goes against the grain for Canadian interests. We need to work to close this gap with the U.S., not just for our wheat producers but in other sectors as well.
In terms of the Canada-Peru FTA, the merchandise trade between Canada and Peru was about $2.8 billion in 2008. Canadian merchandise imports from Peru were about $2.5 billion last year. Our exports to Peru totalled about $400 million in 2008. This is an 18% increase over 2007.
There is a significant growth opportunity for Canadian exporters in Peru, particularly in the supply of mining and hydroelectric transmission equipment, particularly good areas for Canadian expertise.
Peru currently maintains tariffs of 4% to 12% on Canadian exports of machinery and equipment, paper, oil, plastics and rubber. Eliminating these tariffs will help enhance Canadian competitiveness and protect and expand Canadian jobs.
There are also opportunities for Canada's financial sector in Peru. The Bank of Nova Scotia is, in fact, the third largest bank in Peru. It sees great market potential in expanding its presence in the Peruvian market.
By increasing Canada's access to foreign markets, we can help Canadian companies grow and create jobs, both here in Canada and in developing economies like Peru.
In terms of our financial sector, particularly given the relative strength of our Canadian banks and financial institutions relative to their international competitors, that stripe that is accentuated and amplified today during this global financial crisis, there is tremendous opportunity to focus on our financial sector as an area of comparative advantage where we can deepen our relationships, expand our financial sector in some of these emerging economies and capitalize on the comparative advantage that has been the strength of our Canadian financial sector.
Examining the FTA agreement that Canada signed with Peru on May 29, we see that it does protect supply management. We need to support and defend supply management for what it is. It is simply a system that ensures Canadian farmers are paid a reasonable price for what they produce, a market-based system that ensures Canadian farmers are paid fairly for their products. It is not a trade subsidy from the government. We need to counter the arguments against supply management that define it for what it is not. Often the critics of supply management define is as some sort of government subsidy. It is not. It is simply a sound pricing mechanism to ensure Canadian farmers are paid a reasonable price.
The Peru FTA also includes side agreements on labour cooperation and the environment. The agreement also contains provisions on corporate social responsibility. Both the labour cooperation agreement and the agreement on the environment include a complaints and dispute resolution process. This allows any member of the general public in Canada or Peru to request an investigation if they believe that either Canada or Peru is not living up to its commitments in this agreement.
The labour cooperation agreement also enables an independent review panel to fine the offending country up to $15 million annually if the agreement's provisions are violated.
We will work with Canadian stakeholders and experts at the committee stage to determine whether these side agreements and provisions are robust enough. We will act to make sure this FTA is good on balance for Canada. We will continue to believe that diversifying our trade relations is an important way for Canada to move forward as part of a global economic recovery.
I believe very strongly that Canada's multiculturalism can actually help us diversify our trade relationships, that our multicultural communities represent natural bridges to some of the fastest growing economies in the world. We should be capitalizing on the strength of our multicultural communities and not only consider multiculturalism as a successful social policy here in Canada, but view it for what it is today.
At a time of global economic change, multiculturalism is in fact not just a social policy today. It is an economic driver, if we harness it and if we work with the entrepreneurial leaders. Some of the most successful entrepreneurs in Canada are leaders in Canada's multicultural communities. We need to harness that multicultural entrepreneurialism and build natural bridges to these fast-growing economies.
With the Canada-Peru FTA, the Liberal Party will ensure that this is a good deal for Canada. We will continue to emphasize the need for Canada to diversify its trading relationships and we will continue to highlight training opportunities around the world.
Let me return to the issue of Canada-China trade. There are immense opportunities for Canada in the important emerging market of China. Despite concerns over the global economic downturn, China's real GDP is still expected to grow at 6% in 2009 and 7% in 2010. The Chinese government is targeting even higher figures. Regardless, these are impressive numbers compared to either Canada's or other industrialized economies where we see a shrinkage of GDP during this time of economic downturn.
The Chinese government has announced a stimulus package worth $725 billion, investments in infrastructure, transportation, environmental and energy infrastructure, a need for the commodities that Canada produces and a need for the technologies that Canada has developed and can continue to develop. For instance, in clean energy, China has a remarkable need for clean energy and for clean energy technologies. We should be deepening our relationships with China, India and Brazil to help these countries get the energy solutions they need, the technologies they need and the energy they need and at the same time protect the planet against climate change.
As the Chinese government moves forward in its commitment to improve air, soil and water quality and produce cleaner energy, China will demand and need more clean energy and green technologies. Canada can become China's clean energy and green technologies partner, as a global leader in this field. However, in China the state has a strong influence on economic activity, so Canadian businesses cannot realize these opportunities absent of a strong relationship between the Canadian and Chinese governments.
After three years of damaging Canada's relationships with China, it appears that the Conservative government is finally recognizing that the Chinese economy and the Chinese economic opportunity is important to Canada, and that relationships matter.
On Saturday in The Globe and Mail, Jeffrey Simpson said in his column:
Finally, if belatedly, the Conservatives are coming to terms with the reality of China, not the rather one-dimensional view they developed in opposition and brought with them into government. They are arriving at the elementary conclusion that had long ago dawned on all sentient observers in the world: China is hugely important.
Mr. Simpson goes on to say “the puerile partisanship of Conservative politics and their stunning ignorance of the world” has damaged the relationship between Canada and China.
The fact is it is absolutely essential that we have a strong relationship between Canada and China, both in terms of the economic opportunities that trade between Canada and China represents for both our countries and in terms of our capacity to influence Chinese human rights.
We should ask ourselves this. Did Canada have more influence over Chinese human rights three years ago, when we had a strong relationship between the Government of Canada and the government of China, or today when that relationship is in tatters?
The fact is it is self-evidence to anybody who is paying attention, including the stakeholders, the labour organizations and the business leaders, who are telling us we have lost ground over the last three years in China due to a very ideological and narrow perspective of the Prime Minister to China. We need to reverse that.
In the recent weeks the government has demonstrated a change in tone, but the Prime Minister has still not visited China. He has still not, at the top, demonstrated an absolute commitment to deepening and strengthening that relationship, to undoing some of the damage he has wrought on the Canadian-Chinese relationship over the last three years.
Our exports over the last two years barely kept pace with China's import growth. The U.S., on the other hand, has grown its export trade with China by 60% in the last two years, far outpacing China's import growth. Australia exports five times as much to China as we do. The Australian prime minister, Kevin Rudd, understands the importance of the Chinese economy. Prime Minister Rudd actually speaks Mandarin. We cannot even get our Prime Minister to go to China, yet the prime minister of Australia has learned Mandarin to help deepen the relationship.
The trade minister has recently been to China to re-announce some trade offices that were planned by the previous Liberal government. That is not enough. The government, any Canadian government, should be aggressively pursuing and deepening our trade relationship and expanding our opportunities with China. Canada should be aggressively pursuing a consistent agenda of trade liberalization around the world. As a trade-dependent nation, free trade is ultimately in Canada's best interests.
Canadians can compete and succeed globally given the opportunity. We do not need protectionism to defend Canadian jobs or to develop and protect Canadian prosperity. We need opportunities. The Canadian business community and Canadian entrepreneurs have every capacity to compete and succeed. We need to work with them, as partners in progress, to diversify Canada's trading relationships, to focus on Canada's comparative advantages in energy, in financial services and in commodities where we can deepen our trade relationships with some of these countries that need clean energy technologies, that need stronger financial services and strong financial institutions, that need our commodities to build their infrastructure.
We have every capacity as a nation to be a global leader in these sectors and to turn this economic crisis into a time of opportunity for Canada as we move forward. However, it requires consistency, which means that when we treat human rights and trade in one part of the world one way, we have to apply the same principles elsewhere.
The government has said, in terms of Colombia, Peru and other emerging economies, that economic engagement strengthens our capacity to influence their human rights. I agree with that. However, I wish and I want, as a Canadian citizen, for my government to apply that same principle to countries like China, particularly China, which represents such a tremendous opportunity for Canadians and for the Chinese people as we move forward in progress and building a stronger global economy.
