SINT Committee Meeting

SUB-COMMITTEE ON INTERNATIONAL TRADE, TRADE DISPUTES AND INVESTMENT OF THE STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

SOUS-COMITÉ DU COMMERCE, DES DIFFÉRENDS COMMERCIAUX ET DES INVESTISSEMENTS INTERNATIONAUX DU COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, February 9, 2000

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[English]

The Chair (Ms. Sarmite Bulte (Parkdale—High Park, Lib.)): Ladies and gentlemen, I would like to call this meeting to order.

Before we welcome the officials from the department, we would like to do a little bit of housekeeping. Before the Christmas break, we had agreed to conduct a study on Canada-Europe trade, and we did not at that time have quorum to officially pass that motion.

So you have two motions in front of you. One is that the Sub-Committee on International Trade, Trade Disputes and Investment undertake a study on Canada's economic relations with Europe.

Are there any questions on that motion? All in favour?

[Translation]

A Voice: I would like a recorded vote to be held, please.

[English]

The Chair: Okay, a recorded vote.

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(Motion agreed to: yeas 5; nays 0)

The Chair: The second motion is that members and two staff of the Sub-Committee on International Trade, Trade Disputes and Investment be authorized to travel to London, Paris, Berlin, Rome, Brussels, and Geneva from May 1 to May 12, 2000 in relation to the study on Canada's economic relations with Europe.

Mr. Deepak Obhrai (Calgary East, Ref.): That's interfering with my golf game, you know.

I think you have excess members, and I think each member from each party should be the one to go, instead of the whole committee. Cost is a factor here. That would be my recommendation.

The Chair: Any other comments? Mr. Shepherd.

Mr. Alex Shepherd (Durham, Lib.): If I understand his point, is that one member from each party?

Mr. Deepak Obhrai: Yes.

Mr. Alex Shepherd: That doesn't reflect the representation in the House of Commons.

Mr. Deepak Obhrai: Doesn't reflect the what?

Mr. Alex Shepherd: The representation in the House of Commons. There should be more members from the government party.

Mr. Deepak Obhrai: Well, at the end of the day the cost is a factor here. What I'm feeling is that one member from each party would be reflective of the cost, being fiscally responsible here. It would still be the same.

Mr. Alex Shepherd: Well, if you wanted to be as fiscal as possible, why wouldn't you have one member from the governing party and only one member from the opposition, or something of that mathematics?

Mr. Deepak Obhrai: That's fine too, yes.

Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.): Deepak, do you want one from each party?

Mr. Deepak Obhrai: Actually, I was not looking at the factor. I mean, for this trip we are not discussing or voting on anything. We're just going on a study trip. So what I'm saying is that instead of eight people going on this trip, we should have four people going on this trip.

The Chair: Colleagues, if I can just clarify, before we even travel this is the first step, to get our budget into the main committee, which will then go to the Board of Internal Economy. So nothing is for sure at this time.

Right now what we're putting in a budget for is for all of the committee members to travel, plus two staff.

While I understand, Mr. Obhrai, where you're coming from, I think it's very important that we do propose to the Standing Committee on Foreign Affairs and International Trade that there will be times to argue how many should go. If we don't at this point at least move forward with the travel funds, it won't happen at all. I mean, we may be stymied completely at the Board of Internal Economy.

Our study is not dependent on whether we travel or not. This would be an added benefit to the committee if we should travel. I appreciate your point.

Any other questions?

Mr. Deepak Obhrai: I agree with you, but I'm still going to say that we should have four people travel.

An hon. member: Question.

The Chair: A recorded vote, Monsieur Marceau?

The resolution is that eight members and two staff of the subcommittee—the full committee—travel.

(Motion agreed to: yeas 4; nays 1)

The Chair: Thank you to our witnesses for your patience and indulgence. We're absolutely delighted to have you here today as we officially start our study on Canada-Europe economic relations.

We have with us today witnesses from the Department of Foreign Affairs and International Trade, and also Statistics Canada and the Department of Finance. Welcome, gentlemen. Thank you very much for coming.

Who will begin? Monsieur Côté, please.

[Translation]

Mr. Bertin Côté (Assistant Deputy Minister, Europe, Middle East and North Africa, Department of Foreign Affairs and International Trade Canada): Madam Chair, members of the committee,

[English]

we are delighted by the subcommittee's decision to undertake this study of Canada's economic relations with Europe.

[Translation]

I am personally very pleased about that because it must be acknowledged that the importance of Europe to Canada is sometimes underestimated, both for trade and investment.

Of course, this relation with Europe is not comparable to the one we have with the United States, which almost constitutes a natural extension of our national market. But Europe is nevertheless the first overseas destination for Canadian exports and, after the United States, the first source of investments in Canada.

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With your permission, I would like to do a quick overview of the main elements which characterize trade and investment between Canada and Europe, and which will allow us to clarify certain points or certain misunderstandings and to highlight certain prejudices and clear them up.

The first of these misconceptions is that Canada's trade with Europe is in a state of stagnation at this time, or even that it has regressed over the years. I must say, Madam Chair and members, that our exports to Europe at this time are worth close to $20 billion. Over the past five years exports have increased on the average by $1 billion per year. This is a considerable sum, and I don't think, consequently, thus that we can talk about stagnation or regression.

As the slide on the screen shows, over the past 10 years, Europe has accounted for over 40% of the growth of Canadian exports wide—if you exclude the United States, of course. As we indicated in the dark green area, 42.2% of our exports during this growth period, which covers nine years, from 1990 to 1998, were to Europe. This represents twice the growth of our exports to the countries that are commonly known as the Asiatic Tigers. This slide clearly illustrates the importance of trade with Europe for Canada very well.

This trade is being done by businesses that are located in regions and sectors of key importance for our country and the workers concerned. Since you will find more detailed information in the notes that we sent you, I won't say anymore about this.

A growing number of Canadian exporters are interested in Europe. Our statistics reveal that 55% of the clients in our embassies in Europe are new to this market. This is the highest percentage of new clients in all of the foreign markets we have. There are an increasing number of Canadian businesses that are interested in doing trade with Europe.

Some will say that in spite of everything, our market share is decreasing and that we are increasingly less important to Europe. This is in part true, but you have to look at the context, which is that of NAFTA on the Canadian side and the European Union in Europe. We have two free trade zones, which greatly encourages the concentration of trade within those zones.

[English]

Now a brief word on investment.

Investment has become the highlight of the development of our economic relations with Europe. Almost a third of non-U.S. foreign investment in Canada comes from Europe. There are 3,500 European subsidiaries in Canada, which have created thousands and thousands of jobs. Of the top ten investment source countries, seven are European.

On that basis, this will explain to you why we have initiated a program of corporate calls abroad in Europe, which has more than doubled in its delivery over the past five years. These are visits by our deputy ministers, investment champions, or by our ambassadors to major potential European investors, where the message that is passed in a few words is that NAFTA is the market and Canada is the place. For this year, 285 of these calls have been planned.

The more surprising aspect of investment is the fact that Canadian companies are now investing as much in Europe as Europeans are investing here in Canada. The stock of Canadian investment in Europe is now reaching almost $50 billion, which represents more than 20% of direct Canadian investment abroad.

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[Translation]

Once again, I won't go into all of the details since they are already contained in your notes. I would however like to emphasize that we have put in place a strategy in order to continue to develop this trade and this investment. I could summarize this strategy in a few words by saying that it is first and foremost a business plan to identify products and outlets in Europe.

We also devote a great deal of effort to burnishing our image. Canada is an ideal country, with its forests, mountains and fishing, but that is not all there is in Canada. That is the message we are trying to convey to the Europeans.

We also try to use our resources in the best possible way, by, among other things, sharing the costs we have with the private sector. We also try to concentrate our efforts where we can make a difference and add value.

[English]

I'll conclude with a brief word on the institutional framework for our relations with Europe.

In Europe you have a number of countries, and within that group of countries you have the European Union. The European Union is a reality we have to live with. Today it is 15 countries, but who knows, by 2010 it may be 30 countries. This is changing constantly. This is an evolving situation, and we have to catch up with this and keep up with it. So we have been very careful over the years to develop our relationship with the European Union as an entity.

We have already in place an elaborate structure of corporation mechanisms, starting with semi-annual summits at the level of the Prime Minister, with the participation of ministers of trade. We have a joint cooperation committee that meets every year, which has a trade and investment subcommittee attached to it that also meets once or twice a year.

To this we have added what is called an EU-Canada trade initiative. This was launched here in Ottawa a year ago at the summit that took place in December 1998. This is probably better known as ECTI, and Mr. Carrière will elaborate briefly on this, if necessary. This is a mechanism that we use to try to improve our access to the European Union market.

We also established the Canada-Europe business round table last June in Brussels. This is sort of an advisory group of business representatives on both sides of the Atlantic who have an interest in the development and improvement of their relationship.

Finally, we also have various mechanisms at the level of the member states of the European Union. We have an action plan with France. We have one with the United Kingdom. We have one with Italy. We also have various economic commissions with other countries, such as Russia or Ukraine, and these provide for regular meetings among ministers of trade and senior officials.

In a nutshell—I know we are pressed for time—this is the context of our relations with Europe, and we welcome the interest of the subcommittee in seeing how we can best develop this potential that exists.

Thank you, madame.

[Translation]

Thank you, Madam Chair.

The Chair: Thank you, Mr. Côté.

[English]

Our next witness is Mr. Carrière.

[Translation]

Mr. Claude Carrière (Director General, General Trade Policy, Department of Foreign Affairs and International Trade Canada): Thank you very much, Madam Chair. Since I have already given you a copy of my presentation and since we have very little time, I will summarize it. In that way you will have more time to ask us questions if you wish.

Mr. Côté has already given you a detailed picture of relations overall. My presentation will discuss the daily aspect of the bilateral trade relation, i.e. the management of irritants.

I want just to touch on the leadership role of the European Union in the management of the multilateral trading system, a role that is as important—and some would say even more important—than that played by the United States. Following the failure of WTO meeting in Seattle, the European Union is showing leadership in seeking a broad short-term consensus to address the concerns of developing countries, and in the longer term, to launch a new round of negotiations with the WTO.

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Canada is committed to the effort to set up an effective multilateral trading system, and so we are seeking to maintain a close dialogue with the Commission on these issues. The existing structures, whether semi-annual Summits or meetings under the Canada-European Union Trade Initiative, provide the opportunity for such a dialogue and are an excellent complement to other plurilateral meetings in the context of the Quad, meetings with the OECD and non-official meetings held with the WTO.

On a strictly bilateral basis, the relationship is good but there are some problems and irritants, some of which have been ongoing for some time.

There are currently three active before the WTO Dispute Settlement System: they concern asbestos, pharmaceutical products and automobiles. A fourth that of hormone-treated beef, is closed at the moment. You will find information about these issues in the notes that I gave you. There are also other matters that we are attempting to settle through discussion and negotiations; they concern softwood lumber, wheat and genetically modified products, as well as wine and spirits.

In the case of softwood lumber, we are attempting to solve a problem involving phytosanitary regulations that has reduced our lumber exports by more than $400 million since 1993. We are seeking to find a way of meeting European requirements in order to put an end to this curtailment of our lumber trade. We are studying all possible options that might help us to settle this issue and get this trade going again.

You know as well as we do that the issue of genetically modified products is very controversial. Because of the paralysis that afflicts the regulatory system in Europe, we are having problems with our canola exports to Europe. We have engaged in dialogue at the technical level with the European Commission to attempt to settle that issue, but we are aware that it will only be solved in the long term and that there is no miracle solution in the short term.

In the case of the wines and spirits sector, we are attempting to negotiate access for our quality wines to European markets as quickly as possible. We are ready to discuss matters of appellation d'origine, designations, which Europeans have been raising for a number of years. Negotiations began last fall and will resume next month. We hope to be able to settle this problem as quickly as possible.

Lastly, I would like to discuss the Canada-European Union Trade Initiative, which aims to facilitate exchanges by several means, among others by discussing matters of co-operation in the regulatory area. We don't expect results in the short term in this area because of the complexity of the issues and the need to have in-depth exchanges among experts. We hope that this dialogue will lead to better understanding and will help us to avoid problems and irritants in the future.

In brief, Madam Chair, relations are good, but we still have quite a bit of work to do to solve existing problems.

I will be happy to answer your questions.

[English]

The Chair: Thank you very much, Monsieur Carrière.

I believe they are half-hour bells, so we can still continue.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): It should be fine until between 4:10 and 4:15.

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The Chair: Okay.

I'm sorry, gentlemen, but those are the constraints we have. But we would appreciate it if you would continue with your presentations.

Next is Mr. Dodds from Statistics Canada.

Mr. David Dodds (Director, International Trade Division, Statistics Canada): Thank you, Madam Chair.

Ladies and gentlemen, you have a copy of my presentation with you, I hope. Mr. Côté has covered some of the things I was going to mention, so I'll just go through it quickly.

The first set of statistics on page 2 covers the total current account with Europe. It includes investments and good and services. As you can see, the deficit has been growing and has nearly tripled since the early 1980s, mainly due to the deficit in investments and particularly the interest payments, which, as I say, Mr. Côté partly covered earlier.

If you go on to the next page, in what we normally think of as trade, which is the goods and services, again there has been a steady decrease since the early 1980s, mainly due to the deficit in the merchandise trade balance with the Europeans. The services balance remained relatively stable over that 20-year period.

There has been an increase in the deficit for transportation services, mostly importers using European ships and airlines to bring goods in and also passengers using European airlines.

But that has been offset to a large extent by management and insurance services. That involves typically affiliates of European companies providing management services and insurance to the parent company. The insurance is not life insurance. I thought it would be life insurance. I thought it would be people immigrating from Europe in the 1950s and 1960s and then claiming life insurance. But it's not life insurance. It's other forms of insurance. We haven't had time to look to see what it is. My speculation is that it may have something to do with the ice storm and insurance claims because of that, but we haven't yet checked that out.

If you move to the goods trade balance, you can see that in the early 1980s we started with a trade surplus of $4.1 billion in 1980, which then dropped to a $7.5 million deficit in 1998. Obviously the growth in imports has been far stronger than the growth in exports. The growth in imports from the EU has been growing faster than the growth in exports to the EU.

It may come as no surprise to you to learn that the official Canadian view of trade with the Europeans, using the figures provided by Statistics Canada, is different from the European view of trade with Canada as represented by the Euro statistics. There are a number of reasons why that is, and I can go into them later if you like. As part of the arrangement with the Europeans, at the instigation of our colleagues from DFAIT and with partial funding from them too, we have worked on a reconciliation to try to explain the reasons there are large differences between the numbers. So that work is ongoing. We had hoped to have the results published by the end of the year, but we couldn't agree with the Europeans on a specific date. So we hope those results will be published very soon and will be available to the committee for review.

If you look at the balance on page 8, you'll see that the EU share of our total exports is diminishing, largely because of the increase in exports to the U.S. It's the elephant-mouse syndrome.

If you ignore our exports to the U.S., which is the vast majority of them and they tend to dwarf any analysis, you can see that the EU share of exports relative to countries other than the U.S.A. is stable. In other words, if you ignore the exports to the U.S. and look at our exports to all of the other countries, the proportion of those going to the EU has been relatively stable over the 20-year period.

Of the main products exported to the European Union, the largest one at the moment is pulp and paper. The others I've listed on page 11. It's interesting to see that they are certainly highly manufactured goods, and to some extent they are high-tech goods. The highest seven represent about 50% of the total exports to the EU. Also, I found it interesting that the product with the fastest growth in the last few years, from $0.5 billion in 1994 to $1.5 billion in 1998, has been aircraft and parts, particularly the regional jets, which are very popular.

• 1600

If we look at the imports, again it's much the same picture. If you look at the proportion of total imports, it has been relatively stable since 1980. If you exclude the United States, then our imports from the European Union have actually increased. The market share has increased from just under 30% to 36% in 1988.

On page 15 there's a list of the main goods imported from the European Union. The top six represent about 44% of all the imports from the European Union. Again, what I found interesting is that the product with the fastest growth in the last few years, from 1994 to 1998, has been aircraft, going from $0.3 billion in 1994 to $2.5 billion in 1998.

It's interesting that the product with the fastest growth in the last few years in terms of exports to the EU and imports from the EU has been aircraft. I presume they smile and wave at each other as they cross the mid-Atlantic. The imports, of course, were for the renewal of the Canadian aircraft fleet that started in 1994. The reason is that there are different types of aircraft for different markets. Ours has been typically the Airbus coming into Canada and the regional jets going out of Canada. It happens to be that the fastest-growing product has been the same thing for exports and imports.

The final two or three graphs show the perspective of imports for the Europeans. The percentage of imports coming from Canada, as shown on page 16, is diminishing. That's the total imports. Part of that is due, of course, to the fact that there's a difference if we regard the European Union as the sum of 15 countries or if we would rather view the European Union as an entity by itself. The graphs on pages 15 and 16 show the total imports of the 15 countries, and obviously the vast majority of those imports come from each other, from within the European Union. Certainly compared to that, Canada has been losing its market share. If you look at the very last graph, what we've done is show the European Union as an entity, and then the share of imports into the EU represented by Canada has decreased from just over 2.5% to a little over 1.5% in that 20-year period. So the last three are just to show the difference between comparing the European Union as a total of 15 or the European Union as an entity with a fence around it.

Maybe I should stop there.

The Chair: Thank you, Mr. Dodds.

Mr. Collins-Williams, perhaps you could give us your presentation.

Mr. Terry Collins-Williams (Director, International Trade Policy Division, Department of Finance Canada): I don't have a prepared statement. I simply note that we work closely with our colleagues in Foreign Affairs and International Trade, particularly in the resolution of a number of the disputes Mr. Carrière referred to. I'd be pleased to answer any questions particularly related to our own import policies, the tariff, anti-dumping countervail, as well as financial services.

The Chair: Thank you very much, gentlemen.

We'll move very quickly in order to have one quick question from everyone. Mr. Obhrai.

Mr. Deepak Obhrai: Thank you.

From your brief and whatever you have indicated and from the study the Senate has done, it is clearly identified that we do have a problem. Our trade with Europe has gone down. I see some of your figures over there indicate that our trade officials actually have gone down. Do I understand that right? This is not my question. I'm just checking the figures.

Mr. Bertin Côté: No, trade is not going down.

Mr. Deepak Obhrai: No, the trade officials. According to the human resources chart here, you are indicating that your resources have gone down. Your trade commissioners have gone down from 65 to 52, I see here. Is that right?

Mr. Bertin Côté: All our resources all over the world have gone down.

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Mr. Deepak Obhrai: So it's a Senate committee that came out, went over there, and must have given recommendations on all that.

What exactly is your department doing about it? I'm asking for concrete issues here. You already had one House of Parliament go out to Europe, come back, do the study, and identify key areas. So what's...

Mr. Bertin Côté: Well, we've been through the report of the Senate committee. There is nothing in the report that contradicts the actions that our department has undertaken in recent years or months. In fact this is all in line with what we are doing. There are a couple of recommendations. One in particular I would say is a new approach, where it is suggested that maybe we should start thinking about free trade between Canada and the European Union. This is an issue that is evidently there, and it has been raised with the Europeans.

Mr. Deepak Obhrai: The European trade commissioner said no to that issue.

Mr. Bertin Côté: No, the commissioner responsible for trade, Monsieur Lamy, did not say no to that issue. He said that if there is a business case, he's prepared to look at it. He said that privately to Minister Pettigrew, and he said that publicly as well to representatives of the business community.

Mr. Deepak Obhrai: I thought he said something to the tune that they didn't want the other world countries, third world countries, to be excluded from all the free trade.

Mr. Bertin Côté: What he said was that their initial reaction is that between developed countries there may not necessarily be a need for free trade, because in fact the tariffs between developed countries are already very low. What you have to negotiate are non-tariff barriers, and those are better done in a multilateral context. That was a first impression. He then said that if there is a business case, he is prepared to look into it. So we are trying now to determine whether or not there is actually a business case. In fact the work of your subcommittee, madame, could be most helpful to us in terms of determining whether or not there is a case.

The Chair: Thank you.

Because we have only seven minutes left, everybody can have a quick question, beginning with Monsieur Marceau.

[Translation]

Mr. Richard Marceau (Charlesbourg, BQ): It's too bad, because I would have a lot of questions to ask. Fortunately, you have some good graphs. I have a simple question. Mr. Côté, you are a deputy minister. How many territorial deputy ministers are there in your department?

Mr. Bertin Côté: There are three geographical assistant deputy ministers. I am responsible for Europe, North Africa and the Middle East. My colleague is responsible for Africa and the Pacific, and a third is responsible for all of our hemisphere, that is the United States and Latin America.

Mr. Richard Marceau: Very well. On the first line in the list of "talking points", you say that the European market is the most important, after the American one. My question is along the same lines as the one put by Mr. Obhrai, which surprised me a little. Do you not think that to ensure that the necessary resources are there, there should be a full time deputy minister who would deal strictly with Europe? I know that you don't have a choice, but if had one... I see some of my colleagues smiling in the back.

Mr. Bertin Côté: Allow me to add that I am not alone in doing the work on these files. We also have a chief trade commission, an assistant deputy minister who is responsible for the promotion of trade and investment, Mr. Clark, who is in fact to appear before this subcommittee within the next few days, I believe. So, we also have the support of all of his sector, as well as an assistant deputy minister who is responsible for political trade issues.

Mr. Richard Marceau: So, you are telling me that you have all the people you need. Do I understand you correctly?

Mr. Bertin Côté: In operational terms, we can function effectively. Of course if you ask me whether I could do more if I were given more resources, the answer is yes. That's normal.

Mr. Richard Marceau: Very well. One last question, Madam Chair. Mr. Côté, in your first graph, you refer to a source of export growth other than the United States. Of course, it's impressive to see that the European Union is at 42.2%. Would it be possible to provide us with the same graph but with the words after the comma removed, that is to say by deleting "other than the United States", and add the United States? I am curious about the growth of Canadian exports to the European Union, but also to the United States. I would like to compare them. Would that be possible?

Mr. Bertin Côté: We can certainly provide you with that graph. I don't have it here. But to give you some idea of what it would look like, I could say that the growth of our exports to the United States in one year is greater than our total trade with the European Union.

Mr. Richard Marceau: I see.

Mr. Bertin Côté: So, you already have some idea of what the graph would look like.

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Mr. Richard Marceau: It's important to know that because the committee will always take into account the exceptional importance of our trade with the United States.

Mr. Bertin Côté: Quite so.

Mr. Richard Marceau: Thank you.

[English]

The Chair: You can provide us with that.

Mr. Bertin Côté: Yes, we will.

The Chair: Thank you.

Mr. Shepherd, then Mr. Calder.

Mr. Alex Shepherd: Mr. Côté, just to get us off on the right track, your presentation talked about increasing trade with Europe. I'm trying to square that with Mr. Dodds' presentation. I think the essential difference is the way in which you get your increases by showing absolute dollars—is that correct?—as opposed to percentage trade with those countries. In other words, trade all over the world has been increasing.

I guess the direct question I would have for you is what the relevancy of your presentation is.

Mr. Bertin Côté: What I was trying to demonstrate is that, unlike what we hear often, trade with Europe is not decreasing. Trade with Europe is increasing.

Mr. Alex Shepherd: But not in relative terms. There it's decreasing.

Mr. Bertin Côté: If you look at the numbers that we have here, most of the numbers are over a twenty-year period. I choose more recent periods. I look at five years, and I look at ten years in some cases. In five years, we have increased.

The point I made—and I made it quite clearly—was that in terms of proportion, if you look at our relative share of their market, we have been losing ground. That's clear. They are doing more trade internally, just as we are doing more trade with NAFTA countries. That came up quite clearly in the statistics issued by Statistics Canada. We are more oriented towards our own domestic market, and so are the Europeans. Our trade with the United States has increased substantially; therefore the proportion of our trade with Europe is decreasing because of this.

Mr. Alex Shepherd: I guess the essence is that we have two different presentations, and the question then becomes what the important statistic is. Isn't the important statistic the relative percentage of a country's trade with Canada, as opposed to using absolute numbers? Absolute numbers really don't tell us very much, do they?

Mr. Bertin Côté: Given the numbers that we are talking about, with an increase of $1 billion a year and total trade of $20 billion, we are talking about substantial numbers. These numbers are responsible for employment in Canada; they are responsible for many jobs. That's really what the relative importance of this trade is. It's the same on the investment side.

The Chair: Mr. Calder, very quickly.

Mr. Murray Calder: Actually, Madam Chair, we still have about another four minutes that we can burn here.

The Chair: Nine minutes? Okay, thank you. That's all right.

Mr. Murray Calder: I'm interested in two questions here. One, the Eurodollar over there has not been the success that they thought it would be. Why? And where are we on the issue of GMOs? That issue is obviously restricting agriculture and is costing us hundreds of millions of dollars in exports.

Mr. Terry Collins-Williams: On the issue of the Eurodollar, I think it would be premature to reach a conclusion that the value of the Eurodollar and its exchange rate vis-à-vis with other currencies is a sign of a lack of success. When it first came on the market, there was a burst of enthusiasm for it. It may have been slightly overvalued. Since then, relative to other currencies, U.S. growth has been stronger than the growth in Europe and obviously stronger than that in Asian countries, which went through their financial crisis. In the last several months, some of the Asian countries have been showing considerable resilience in recovery, and their exchange rates are reflecting that.

I wouldn't draw the conclusion that the Eurodollar and the issue of the Eurodollar has not been a success. At the very least, that would be premature.

Mr. Claude Carrière: The question of GMOs is a particularly delicate and controversial issue. There are some GMO varieties—of canola, for example—that have been approved in Europe, but in the past several years the system has in fact stopped approvals in Europe and we have lost a considerable market.

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We are attempting to resolve this through discussion at the regulatory level between scientists and experts in the area in order to examine our respective approval procedures, to make comparisons, and to attempt to understand better the different approval systems in order to remove some of these blockages. Frankly, though, we will not be able to succeed in the short term in this area. We are continuing to work, but we see this as a long-term project as opposed to a short-term one.

Mr. Murray Calder: Thank you.

The Chair: Thank you.

Mr. Speller.

Mr. Bob Speller: No, I'm fine. I work with these guys.

The Chair: Okay, then just before we conclude, I have a quick question, but I know we're running out of time.

I understanding the European Union and Mexico have now concluded a free trade agreement. How is that going to affect us? Are we worried, and what are we going to do about this agreement that has been reached with the Mexicans?

Mr. Claude Carrière: We only received a final version of the agreement yesterday. Only the Spanish version has been made available, so we are still looking for an English version. We will be analysing it. We will be looking at the various chapters and will be looking specifically at areas in which we compete both with Europe in Mexico and with Mexico in Europe. But at this point it's too early to say.

The Chair: Perhaps before we conclude our study, then, you can come back once you've conducted your analysis and you can give us an update.

Thank you very much, gentlemen, colleagues. The meeting is adjourned.