CIIT Committee Meeting

    I call the meeting to order.

     Good morning, everyone. I'm glad everybody made it. What an icy morning it is out there. I hear we had some casualties.

    What a dedicated committee, getting here even when they have accidents on the way. Is everybody okay now?

    We have a very busy morning. We're honoured today to have our Minister of International Trade, Minister Champagne. Thank you for your good work. We didn't know you were a doctor.

    Well, I'm no doctor. I'm just a good Samaritan, I guess.

    You're a man of many talents. Anyway, good job.

    Welcome, sir. You've been here before and you know the protocol.

    You have the floor, sir.

    Thank you very much, Chair and committee members.

    Let me apologize for being late. I'm quite happy to extend the meeting by whatever time that I was late. Obviously, the health and safety of our members is paramount, and I certainly wanted to make sure we could all be here this morning.

    I also want to thank the committee. Yesterday I had the chance to again read the report that was produced on the trans-Pacific partnership from the year of work that you all did across Canada. I refreshed my memory yesterday by reading it again. I want to say thank you, because you spent a good part of the year criss-crossing the country, hearing from Canadians on the issue. Thank you.

    If you'll allow me, Chair, I'll do brief remarks, as is customary, and then obviously engage with members on topics.

    Thank you for for giving me the opportunity to update the committee on the trade initiatives undertaken by our government in Asia—including the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership, CPTPP—and on our exploratory talks with China to establish a potential agreement. Lately, I had an opportunity to discuss those same issues with the Standing Senate Committee on Foreign Affairs and International Trade.

    The increase in trade between Canada and large fast-growing markets in the Asia-Pacific region is a priority for the Government of Canada. So I'm happy to be able to discuss with you the government's progress in that area.

    Allow me first to introduce the department representatives joining me today. These people have made a significant contribution to our recent achievements.

    First, we have Tim Sargent, Deputy Minister of International Trade. We also have Bruce Christie, Associate Assistant Deputy Minister of Trade, Policy and Negotiations and Lead Negotiator of the CPTPP, as well as Kendal Hembroff, Director of the Trade Policy and Negotiations Division for Asia and Assistant Lead Negotiator of the CPTPP.

    Canada is looking to conclude trade agreements that promote the interests of the middle class and create opportunities for exporters and well-paid jobs for the country. That is our main priority, and we will work on negotiating in the best interest of all Canadians.

    For a trading nation like Canada, raising the standards of living for our middle class depends on robust international trade. That means support for rules-based order and the institutions that underpin it, as well as more high-quality trade and investment agreements between Canada and its partners around the world.

    Canada has shown that it is ready to stand up for Canadians and defend our interests in order to get the best deal for Canada, because these deals have a lasting impact on our nation. Moreover, a progressive trade agenda opens more doors, raises standards, and positions the middle class for success.

    We are the most diverse and open country on earth. A progressive trade agenda reflects not only our economic values but our social values as well. When global investors look to position their future investments and capital, they want stability and predictability. I'll put it to you, members, that's Canada. When the talent pool of tomorrow's economy seeks a place to build their business, they want diversity, openness, and all the creativity that comes from a society that embraces and encourages both. That's Canada.

     The progressive trade agenda is not only the right thing to do, but the smart thing to do economically. Trade is a march to the top, not a race to the bottom. Canada is leading that charge, and while that takes more effort, it will pay economic dividends for the middle class for decades to come.

    That is why, in September 2016, Canada and China announced the launch of exploratory talks to strike a potential agreement. So far, the two countries have held four series of talks. Canada and China continue to engage in dialogue in order to assess the scope of a potential comprehensive trade agreement.

    In conjunction with exploratory talks, the Government of Canada held public consultations, between March and June 2017, on potentially concluding an agreement with China. More than 600 stakeholders and partners expressed their views. As a general rule, Canadians said they felt that an agreement presented both benefits and challenges.

    Businesses mostly feel that an agreement could provide an opportunity to improve access to the Chinese market, and they have identified certain challenges they would like to address in the process, including non-tariff barriers in areas such as intellectual property. Some civil society groups, unions and Canadian individuals pointed out the importance of addressing challenges such as labour and the environment in the talks with China.

    In line with our government's commitment to transparency, a public report summarizing the point of view expressed during the public consultations was released, in November 2017. That is a first for Canada's trade consultations.

     During Prime Minister Trudeau's visit to China last December, Canada and China committed to continuing exploratory talks to ensure potential negotiations are based on a shared understanding of the issues to be negotiated as well as the scope and level of ambition of those negotiations.

    Canada is committed to taking the time required to make sure any future decision on whether to launch free trade negotiations with China is in the best interest of all Canadians. Should we pursue economic engagement with China, we will do so by creating more opportunities for the middle class. Progressive trade means that trade benefits all Canadians, puts people first, and reflects our standards and, very importantly, our values. We remain committed to building a stronger and more comprehensive relationship between Canada and China, based on a regular and frank dialogue, but we will take the time needed to ensure we get this right.

    I wish to talk to you about the recently concluded comprehensive and progressive agreement for the trans-Pacific partnership, otherwise known as the CPTPP.

    On January 23, Canada and 10 other countries concluded negotiations for a new agreement in Tokyo, Japan. Asia-Pacific is an important region and a priority market for Canada, and Canada is pleased to be part of the CPTPP, a trading bloc that represents 495 million people, with a combined GDP of almost $14 trillion. Canada has been intensely engaged in the new CPTPP from the first meetings of officials in May 2017 and has proposed suspensions and changes to secure better terms for Canadians. Our position on the CPTPP has been underpinned by extensive consultations with Canadians.

    The Government of Canada conducted two sets of comprehensive public consultations with Canadians to seek their views on the original TPP consultation, initiated in November 2015, and a potential new agreement among the remaining TPP members without the United States of America. Collectively, since November 2015, the government has held approximately 250 interactions with over 650 stakeholders, including business and non-business associations, civil society organizations, think tanks, academics, indigenous groups, youth, and the general public.

    The CPTPP incorporates, by reference, the provisions of the original Trans-Pacific Partnership agreement and will suspend 22 provisions once it goes into force. The suspensions cover a range of areas, including important provisions on intellectual property that were a source of concern for Canadian stakeholders.

    Canada was also able to maintain its ability to adopt cultural policies, especially in the digital world, and has concluded important bilateral arrangements in the automotive sector with Japan, Malaysia and Australia.

    In addition, the CPTPP contributes to Canada's progressive trade program in a number of areas, including labour, the environment, small and medium-sized businesses, transparency and anti-corruption.

    That agreement is Canada's first free trade agreement that includes binding chapters on labour and the environment.

     The CPTPP also contains a development chapter wherein the parties affirm their commitment to promoting and strengthening a trade environment that seeks to improve welfare, reduce poverty, and raise living standards, as well as focusing on women and economic growth, highlighting the importance of women being able to fully access the benefits and opportunities created by this agreement.

    Once the CPTPP enters into force, it will become one of the largest free trade agreements in the world. In the area of goods, market access gains under the CPTPP will be significant, especially in CPTPP countries where Canada does not currently have free trade agreements and where tariffs remain high.

    Gains from the CPTPP will benefit a wide range of sectors across all provinces in Canada, including financial services, fish and seafood, forestry, agriculture and agrifood, and metals and minerals. Our exporters and investors will benefit from more transparent and predictable market access, and potential gains from the CPTPP will increase as new countries seek to join the agreement.

    This agreement will benefit Canada not only economically and commercially but also strategically, by allowing Canada to diversify our trade and by providing a platform to influence future trade rules in the very important Asia-Pacific region.

    Mr. Chair, I'll now be happy to take questions from committee members.

    Thank you, Minister.

    Committee members, if you look at your agendas, you'll see that this is our big anniversary. We hit 100 today, 100 meetings since the 42nd Parliament, so congratulations. I think we almost have 10 studies under our belt. That's good work, all.

    Minister, before the meeting I had a chat with the Canadian Cattlemen's Association. They are very supportive, of course, of our trade negotiations and agreements. They were also very complimentary on the previous government and the work that they did.

    Their comment to me was that once things are signed, it's very important that we move quickly—aggressively, I guess—because among the other 11 members, there are a lot of cattle producers, beef producers. Their sense is that it's important to get our foot in the door and stake our claim quickly. I don't know if you have any quick comments on that before I move over to the other MPs.

    Well, Mr. Chair, thank you.

    I would like to thank the Canadian Cattlemen's Association. They've been with me in pretty much every city where I've been negotiating trade agreements. It's always a pleasure to have them with us.

    They are quite right, Mr. Chair. I mean, one of the benefits of what Canada has achieved is the first-mover advantage. We know that in these markets, in the configuration of the CPTPP, Canada will have first-mover advantage in one of the very important markets for them, which is Japan. Therefore, we are going to proceed.

    As you know, the signature date had been set for March 8, in Santiago, Chile. Following that, we will proceed, obviously, with ratification. The ratification process under the CPTPP requires six countries to ratify it, 50% of those that are signatory to the agreement. We understand the importance for the Canadian Cattlemen's Association. We will proceed diligently with your help, the help of the House of Commons, and obviously that of the Senate.

    Thank you, sir.

    We're going to move right to the MPs for the rest.

    The Conservatives are up first, for five minutes. Mr. Allison, you have the floor.

    Thank you, Mr. Chair.

    Thank you, Minister, for being here today.

    To our officials, thanks for the great work that you do. I know that we are very proud of how you represent us on the world stage.

    I have a very quick question—so many questions, so little time.

    You're going to give some of us a technical briefing today of the CPTPP. My question is, when is the full text going to be available for the public?

    It will be as soon as possible. You know these agreements very well, and their process. There needs to be legal scrum, and translation. We are proceeding diligently, but our aim, as we've said before.... You know, transparency and openness have been key. Thanks for the work of this committee as well, when you consulted Canadians.

    We'll make it available as soon as possible.

     That's very definitive. Thank you.

    In regard to Chinese steel, before I arrived here, the committee did a study and made some recommendations. Can you tell us any of the tangible steps your government is taking to deal with the whole issue of Chinese steel dumping? Obviously, it's an irritant with the U.S. as well. I just want to know what kinds of things you guys are up to.

    It is a very important situation. Obviously, as you know, Canada is co-operating with other countries in the world through the WTO, and we will continue to collaborate.

    I think part of the solution is certainly in the international arena with the WTO, making sure that Canada joins its voice with those of other countries. I would also say that being part of these agreements, which provide....

     If you allow me to just step back a minute, when the U.S. decided to withdraw from that about 12 months ago, the trade ministers met in Lima, Peru, about 10 months ago. Part of the question, just to get to your point, was, where do we go from here? Is everyone going back home, or do we all collectively believe that having a rules-based system, with mechanisms to enforce fair trade rules in the region, would be beneficial to our countries? We came to that conclusion.

     To answer, we will continue at the WTO, but I also think that agreements like the CPTPP are providing a framework wherein Canada can have influence as the second-largest economy currently in the trading bloc.

    Thanks.

    My question now is about China. You talk about progressive deals. Obviously, I won't get into what's different with this CPTPP versus the one we did. I may leave that to some of my colleagues.

     We talk about China. There are clearly human rights issues. Clearly the country is challenged by any kind of progressive rules or things like that. They manipulate their currency. They subsidize their industries. They dump steel. John Chang, a winery owner—and I know your government has been seized with this—from my area is presently being held against his will on trumped-up charges.

     You start to talk about a deal with China, and I think we understand that it's important. Our agriculture markets want access. These are important things. What is the government prepared to do on the other side to make sure that reviews are done on a number of different things? Trade is one thing, but how are we going to protect Canadian businesses on the other side, when clearly this country is not prepared to follow any rules, certainly not any rules that we would normally play by in North America as a free society?

    This is a very important question, and I'm quite happy....

    I would say it's doing what we're doing now. As you may have seen last time in Beijing, we're not rushing into anything. We've been pretty clear that we would engage with China with our eyes wide open, on our timetable and according to our principles. You've seen that. We have said that we will continue to have exploratory discussions as to whether we should have a trade agreement with China.

     I would say to you that the items you mentioned are very important to Canadians. I think Canadians expect us to open markets, but not at the expense of the environment, not at the expense of labour rights, and not at the expense of making sure women and men have an equal chance in trade. That's why, when we come to these negotiations, as I think you've seen, the CPTPP is a fair trade agreement with an enforceable labour and environment chapter. We also have a chapter on governance. We have a chapter on small and medium-sized businesses.

    I guess my point to you is that we're not rushing into anything. We want to make sure we have the right basis. That's why we took more than a year. As you know, we had four rounds of officials discussing the content of what should be discussed with our Chinese counterparts. Again, we were engaging when we were in China recently and we are still engaging now, but on the basis, as I said, of eyes wide open, on our timetable, and with clear principles as far as the Canadian side is concerned.

    Thanks.

    Thank you for your work on the files, and all your colleagues. You've been very helpful.

    Thank you, gentlemen.

    We're going to move over to Madam Lapointe for the Liberals for five minutes.

    Go ahead.

    Welcome, Minister, ladies and gentlemen, public servants. I'm happy to have you with us today.

    You are already familiar with my riding, which you have visited. It is located in a northern suburb of Montreal, and it is home to many businesses in the aerospace industry, as well as agrifood processing companies. There are also automotive parts companies, but also many maple and apple producers.

    I would like to be able to tell my constituents what business opportunities will be available to small and medium-sized businesses in the new agreement that has been signed, the CPTPP.

    Thank you for your question.

    I really enjoyed visiting your riding and I hope to go back.

    You talked about the aerospace sector and the farming sector. Those industries will benefit from this agreement. In an agreement like the CPTPP, it is important to reduce tariff barriers. Some signatory countries are currently imposing high tariff barriers, and that reduces our export opportunities. You talk about maple syrup, but there are also seafood, pork and beef products, which are very important markets. This agreement will enable us to reduce tariff barriers to facilitate access to markets.

    The next step—I'm also saying this to the chair of the committee—will be to work together to promote these agreements. Success is not just about concluding agreements, since agreements have to lead to opportunities, jobs and economic prosperity for Canadians.

    The reduction of tariffs, which were among the highest, will certainly help us export more. As parliamentarians, we have a role to play in all our ridings. We have to promote these agreements, so that our small and medium-sized businesses, among others, can benefit from new tariffs and the regulatory framework we have implemented to facilitate exports.

    Thank you.

    I have two other questions for you. The first is about the exemption of cultural products. At some point, the CPTPP discussions stalled in that respect. As you know, that is an important issue for my riding. I would like you to tell us a bit more about it.

    Thank you.

    This is an important issue. The committee members will realize that Canada's negotiators stood their ground, be it in Da Nang or throughout the process, to improve the existing agreement.

    You talked about culture. For Canada's cultural industry, we managed to get protection that will help us invest in culture, preserve it and promote it. This is an extremely important issue. I have to thank the Prime Minister for that. Canadians know that we fought every step of the way to preserve this very important sector. The same goes for the automotive sector, where we made substantial gains in terms of access to Japanese, Malaysian and Australian markets.

    This shows that Canada does not want to conclude any old agreement. We have an agreement that benefits Canada. We are ready to stand up and say that it's not yet time to move forward and that we must continue negotiating. That is what we did in Da Nang and over the past few weeks, until the Prime Minister announced that we would sign an agreement.

    Thank you. That's very important in my riding.

    You talked about Malaysia. I assume you know that the committee will be going to Asia next week and visiting Malaysia, Thailand and Singapore. What do you suggest we look at specifically for international agreements?

    I'm happy that the committee is going to Asia-Pacific, which is a very important region. It accounts for 14% of the global economy, or nearly $500 billion only in the region. I was going to say the CPTPP region, but the committee is well aware that we have also launched exploratory discussions with ASEAN, China and India, which I visited recently.

    In my humble opinion, it would be worthwhile for the committee to look at non-tariff barriers. Around the world, we see that tariffs are being reduced, but we have to keep an eye on non-tariff barriers. Finally, what matters to Canadian business owners is having access to markets. I would like to say to the members of the committee that our department has launched an initiative that is sort of similar to an emergency response team to look into non-tariff barriers.

    If Canadians note any non-tariff barriers, they can go to a website and report it to the department. Within 24 hours, the agents will know what the request or comment was. Then they will check in trade agreements what provisions apply and will notify the individual who made the request.

    That is how we are trying eliminate non-tariff barriers under our agreements, but also to acquire the information we need to negotiate future agreements. We have to be very aware of non-tariff barriers. This is inspired by best practices around the world. I wanted to ensure, as did the deputy minister, to reduce non-tariff barriers and provide Canadian business owners with an opportunity to inform us, so that we can stand up for them in those areas.

    Thank you.

     Thank you. We're going to move over to the NDP now.

    Ms. Ramsey, you have the floor for five minutes.

    Good morning, Minister.

    I'm pleased to hear that you have read our report. That means, then, that you're aware of the information that over 50,000 Canadians wrote to us and that over 90% of them opposed the TPP during our study. We had a Tufts University study that said 58,000 jobs would be lost in Canada under the TPP. Really, there were some warnings to us, including from the government's own economic impact analysis, which showed 0.2% growth by 2036, which by all accounts is quite negligible. I think that in signing the TPP, you've successfully pitted Canadians against one another across this country, and that's a shame.

    I will tell you that we recognize that there are pieces of the TPP that are important to certain sectors. However, as you know, I'm an an auto worker—I represent a region in southwestern Ontario that was blindsided by the signing of the TPP—and auto workers and auto companies like the Canadian Vehicle Manufacturers' Association, the Automotive Parts Manufacturers' Association, and Unifor are united in opposition to the TPP. We're at a disadvantage, of course, because none of us have seen the TPP in its current iteration, except for those present here. There have been distinct calls from those groups to be able to be privy to that information. I can tell you that people in southwestern Ontario are in shock, and they're very nervous about their jobs.

    I wonder if you can please speak to what you see in the CPTPP that will counter the losses of jobs, in particular with regard to the auto sector.

    I'm very happy to have your question, because the day after we announced we would be signing, I was in Oakville, Burlington, and Hamilton having round tables with people.

    You didn't quite make it down to Windsor. I know that you couldn't make it.

    It was because of the time schedule.

    We of course would welcome you at any point. I know you couldn't make it.

    I'm more than happy. I have had a discussion with CVMA. Yesterday I was with probably 10 to 15 people from the auto sector on a conference call. We've been engaging with each other in understanding.

    One of the things you will see in your report—

    With all due respect, though, Minister, around the TPP, I don't believe that's the case. I believe that you spent time with them over the NAFTA round. Many of them said there was no inkling that this was coming and that they were blindsided by it.

    Mr. Chair, with respect, I would say that if you talk to the COOs of the various companies—I was with some just recently, and I was on the phone with many of them over the course of the discussions—you will find, I'm happy to say, that one of the things—and you will recall it in the letter from CVMA—was about market access. Yesterday we spent 51 minutes talking about market access in some of these markets. I understand the concerns. The auto sector is an important one. We want to invest in the auto sector. One of the things that they were asking us about was market access.

    One of the things we've achieved today is the greatest market access to the Japanese market. What we've achieved is to remove the non-tariff trade barrier with respect to safety in Japan. This is more than we ever got in the history of the auto sector in Canada. We not only got that, but we got in the side letter, which is going to be made available as soon as possible—

    We'll see that at one o'clock. I think we'll see part of that technical briefing.

    We will also have a dispute settlement process, which is distinct to that, with snap-back provisions—

    I'm sorry; I don't want to cut you off, but I have a really limited amount of time. I do need to move on, because I would like to ask about the dairy sector as well.

    With the market being open with supply management, there was a promise of $4.3 billion from the Conservative government, which was part of the original negotiations. Will you be offering that compensation package to dairy as well?

    Let me finish on the auto sector. Allow me to say that I think we've achieved the greatest market access for the auto sector in Canada. One of the things that even the unions would tell you is that we stood up for them and we got a better deal.

    Now with respect to dairy—

    We'll find out at one o'clock.

    Could you just hold on, Minister?

    Ms. Ramsey, I know you want to get a whole bunch of questions in. Maybe if you ask all the questions, then he can answer them. That way we're not having this cut-off. I don't think you're getting good use of your time when everything is going the way it is.

    I think I'm getting good use of my time. I appreciate that, Chair. Thank you. I have no—

    Let the minister finish the answer before you jump in on another question.

    You have the floor, sir.

    The dairy sector is also an important discussion we had, because two days later I met with about 30 representatives of the SM5, the supply-managed five, across the country, and we had discussions about the impact and the next steps. I met with the chair of the Dairy Farmers of Canada. To let you know, he lives about 10 minutes from my own house. I am as committed as anyone. I represent a rural riding and I have him about 10 minutes from where I live.

    I engage—

     I'm sorry, but will the compensation package come?

    What I can say is that we have decided, with the Dairy Farmers of Canada and the rest of the SM5, to first discuss the impact that the TPP can have. With the new configuration, people need to spend time to understand the impact. We're discussing next steps.

    So that's a maybe.

    Your time is pretty well up, but there won't be time for another question. We're going to have to move over to the Liberals for five minutes.

    Go ahead, Mr. Dhaliwal.

    Thank you, Mr. Chair.

    Minister, welcome, and thank you to the officials.

    Minister, you mentioned a Canada-China trade agreement. You were there, and the Prime Minister was there.

    Has any progress been made since then, and how do you foresee moving forward? Do you see a positive or a negative outcome?

    Well, we keep engaging with the Chinese officials with respect to possible future trade negotiations. We're still in exploratory talks. We're engaging at the official level and have been engaging with counterparts in China as well.

    As I said, we want to do that. These agreements will be with us for decades, so it's not about next Monday or Tuesday or next Friday; it's about the next few decades.

    What I was saying in answering a previous question is that it's fairly important for me to start with the right basis. We're doing that with eyes wide open, understanding that Canadians see the opportunities but also see challenges. We're doing that on our own timetable and in accordance with our values.

    We're obviously going to keep engaging with our Chinese counterparts, and the discussion is ongoing.

    You mentioned emerging markets, and India is another emerging market. The Prime Minister is heading there tomorrow or the day after with a delegation, and you've been there many times.

    Could you tell us what progress has been made? Prime Minister Modi was here as well. There were some MOUs signed by the previous government.

    Can you tell us about the progress and the Prime Minister's visit to India?

    India is probably the country that I've been to most often since I became Minister of International Trade. It's a reflection of the importance of our relationship. As you know, we have about 1.4 million Canadians of Indian origin. Our bilateral trade is about $8 billion. I've been saying to my Indian counterpart that I think there's scope for more trade between Canada and India.

    As you know, pulses are our biggest export, about 30%—more than $1 billion—so we've been engaging on that. The last time I was there, I think it was in November, we led our largest trade delegation. We had about 130 people with us. We met 11 ministers in India, both at the federal and state level.

    We're going to continue. The relationship is certainly good. We want to see more investment. We want to see more trade. That's why I think the Prime Minister's visit is timely in building these relationships. As we diversify—and the imperative of diversification is clear to Canadians—India is a very interesting market.

    Minister, you mentioned pulses as a big business going to India. Recently I have had many calls from the transport industry and people from the west about issues they are facing moving forward. Things have slowed down.

    Are you making any progress on that front?

    It's an issue that is paramount to me, Minister of Agriculture MacAulay, every minister of this government, and I would think every member of Parliament, for that matter. When 30% of your trade is pulses or canola, we have to make sure....

    When I had the joint committee meeting with Minister Prabhu, the minister of trade for India, I made sure that this was front and centre. If my memory serves me well, we also had a representative of Pulse Canada. I wanted to give them access to the Indian minister to express that Canada wants to be part of India's food security. On our side, we need predictability and stability for our farmers.

    We have been discussing long-term solutions, but rest assured that this is top of my mind and top of our agenda. Every time we have the opportunity to engage with civil society, business leaders, and with government leaders in India, we restate how interested we are in our bilateral relationship.

    Obviously we need to address some of these irritants, because they are very meaningful to our farmers in Canada.

    Minister, we are studying the CPTPP now, and the human rights issue has been raised during those proceedings.

     Could you tell us—?

    Human rights is a key element of our foreign policy and our trade policy. When it comes to our trade policy, one way we're doing that is, for example, to promote gender. Canada is the first G7 nation to have a gender chapter in one of its trade agreements. We were the second country in the world, the first G7, and this was in our trade agreement with Chile. In the CPTPP, we have an enforceable labour chapter and an enforceable environment chapter. As I said, I think Canadians, those who are watching us, want us to have a broad-based trade agenda, but not at the expense of the environment, of labour rights.

    In many places around the world where I have been, I say trade is a march to the top, not a race to the bottom. Every time Canada is at the table, we're trying to raise standards. You cannot do trade the way we used to do it. Trade needs to benefit everyone, and we need to look at win-win situations. Just as we're doing in NAFTA, we're trying to do that in all our trade agreements.

     Thank you, sir.

    Thank you, Mr. Dhaliwal.

    We might have time for another round. We're going to start with the Liberals.

    Ms. Ludwig, you have the floor. How are you feeling? Are you okay?

    I'm great.

    You're tough.

    I won't be running anytime soon.

    You're from New Brunswick. You've got to be tough.

    Go ahead.

    Thank you.

    Thank you for your help this morning, Minister. It was well beyond the call of duty. Previous witnesses who have attended the committee have talked about CETA and TPP as the gold standards for trade agreements, so I wanted to thank you and your team for all the work on those agreements.

    One of the things we heard recently from a witness was that if we're looking at scaling up our capacity for trade, perhaps we should focus on the sectors with high growth potential and be very targeted. I'm wondering what your thoughts are on targeting trade versus broadly approaching trade among our SMEs.

    Committee members will know that as I took this mandate, what's paramount for me, and I think Canadians, is trade diversification. We know that more than 70% of our exports are currently going to the United States. The U.S. will always remain our largest trading partner because of our geography and the size of the economy, but at the same time, last year, on the 21st of September, we opened up the European market to Canadians, a market of more than 500 million people and $3.2 trillion of public procurement. As we did that, we looked east because we understand that Asia-Pacific is growing. We know the economy is moving in that direction, and we want to position Canada.

    What I was saying on CPTPP is that it's not just a trade agreement; this is about making sure that Canada is front and centre to develop the terms of trade in a region with countries like Australia, New Zealand, Singapore, and Japan. You want Canada to be there, obviously, to frame the discussion.

    For example, under the CPTPP, we'll have an accession clause, which means Canada will need to consent for anyone else to join or for the agreement to be amended. Being front and centre, being among the first, gives us first mover advantage. We talked about the agricultural sector. I think, to your question, we're also looking south. We have initiatives with the Pacific Alliance, which is Colombia, Chile, Peru, and Mexico. We're also having discussions with Mercosur, which is Argentina, Brazil, Paraguay, and Uruguay.

    I think what you're talking about is a diversification agenda, which means allowing small and medium-sized businesses to access these markets. Canada represents 0.5% of the world population and about 2.5% of global trade. For us, opening up new markets not only ensures our current prosperity, but prosperity over decades. When you look at these agreements—and I understand some concerns that have been raised—you need to look at what the economy is today and what the economy is going to be in five, 10, 20, 30 years from now, and put Canada in a position where we will be part of these large trading blocs.

    Thank you.

    I represent a coastal riding, so fish and seafood are important components of our economy in New Brunswick. Why is it important that we have, as you've said, a very whole-of-government approach, a coordinated approach, to trade in terms of environment and climate change, fisheries and oceans, or the examples of investments in the oceans protection plan and clean technology? How does all that work together if you're trying to explain building and scaling up trade to the average person?

    You can certainly look at the seafood industry opening up the market, for example, in Europe, where tariffs, which were sometimes up to 25%, are going down to 0% over time. I think shrimp went from 10% or 9% to 0% on the 21st of September. Lobster, which is one of our primary exports, is going down over three years from about 20%, depending on whether it's frozen or transformed, to about 0%. It's the same thing when you look at markets like Japan, with the CPTPP. The reality is that I think the export market....

    First, you're becoming more competitive. When I did a tour of Atlantic Canada last summer and parts of Quebec that are involved in the fisheries, I could see, with the transformers and the fishers, that this is a game-changer for them, because obviously with tariffs going down, you open up new markets and you become more competitive.

    Certainly that's true in the European market. Japan is one of the largest importers of seafood in the world, so when the CPTPP comes into force, it will give a competitive advantage, because if you are tariff-free that obviously makes your product far more attractive for export.

    However, as we do that, to your point—I sat down at round tables with communities there—we also need to think about the infrastructure we need for that, because it implies logistics and investments in our trade corridors. I think Mr. Garneau has an initiative about trade corridors, because you're opening up new markets and obviously you need to work to get your product to market. E-commerce is playing a big part in that. I was with some of the biggest platforms.

    I think the chair is asking me to leave it there.

     Yes, thank you. The time is up.

    We're going to move over to the Conservatives.

    Mr. Hoback, you have the floor.

    Thank you, Chair.

    Thank you, Minister, Deputy Minister, and staff for being here this morning.

    I met with three of our trade commissioners in Tokyo the same week you were there, and I got to enjoy the snow. I will say this: those three commissioners were impressive. They knew their stuff. We had great discussions on the potential for Canada trading through the Asian trading blocs in Japan, and I think they're excited to see this signed, because they see lots of opportunity. They commented on how well the pork producers have done in marketing their pork in Japan and around the Asia-Pacific through Japan. I look forward to seeing beef and other products moving through TPP.

    This is where I come to my question. It's so crucial that we get this agreement through the House as quickly as possible. Do you have any idea when it will actually come into the House for us to get it through second reading and get it into this committee?

    I'd like to think the committee has done so much study on this topic—both in the previous government and this government, plus the Senate has had many discussions on it—that outside of maybe looking at the side agreements that you've added, since the existing agreement is much the same, we can maybe just add one or two meetings for that and put it through the committee and get it out so that it can be implemented and we can be one of the first six countries to ratify it and move forward.

    Can you give us an idea on the timing, because it's very important?

    First of all, you mentioned beef and pork in Japan. Thank you for that.

    I just wanted to say that I'm having a round table today with the ambassador of Japan and a number of people about trade between Canada and Japan to make sure that we benefit from these agreements.

    As you know, the signing is in March. You're quite right that the Senate, the House, and many people have studied that agreement. After we come back from the summer, we should be in a position to bring that—

    We won't see it until after the summer? There's no chance we could have it in here this spring?

    We are going to be doing that as soon as possible. I'm just mindful of the timetable. With your help, I think we can get that to the House as quickly as possible. However, at the same time I want to be realistic in terms of the timetable with respect to signing. As you know, there are a numbers of processes that need to take place. Trust me: we are as committed as you are with the official opposition to work this through the Senate. That's why I appeared in front of the Senate—

    I'm concerned, because once six countries ratify it and other countries move forward, they do have the ability to approve who comes in and who doesn't come in without our actually having ratified it. In this situation somebody could come into the agreement, and then we'd better hurry up and ratify it because they're going to make a decision without us.

    I would say no, that's not exactly the case. No one can join the CPTPP until the initial members have ratified it. The accession clause will not allow other countries to join until the agreement comes into force. You would need the consent of all the agreement signatories in order to amend the terms of the agreement or approve any new members.

    There are six members.

    The signatories would be the 11 countries. Eleven countries will be signing in March, and ratification needs six countries. We are protected at the time of signing.

    We did allow market access for dairy in this agreement, even though the U.S. is out of it. We haven't publicly discussed what the compensation for the dairy producers is going to be. There was a pre-established compensation figure when we were in government because of that market access. That access hasn't changed. Even though the Americans are not shipping milk or dairy products, New Zealand would love to get into this market.

    First of all, who's in charge of negotiating the compensation with dairy, or with supply management, I should say? Is it you? Is it the Minister of Agriculture? When will those terms be released to the public so that we can see exactly how they're going to be compensated with?

    What I've been doing with the dairy sector, in conjunction with Minister of Agriculture MacAulay, is meet with them in order to first understand the impact.

    You said rightly that the U.S. is not there. Quotas have been increasing. There were numbers in the original agreement, but production has also increased.

    What we're doing now.... You may have seen that they were here this week. I met with the president last week. We are in ongoing discussions with them about first understanding the impact on the sector, and second about next steps. We're still very much meeting with our officials and their officials to try to understand the impact. As you said, and rightly so, there are discussions around whether you can ship fresh products. However, I would say that I'm very pleased to see that we are working diligently with them.

     I don't mean to cut you off, but he's very tight on time.

    You have half a minute, so a quick question, Randy, and a quick answer, Minister.

    In your speech you talked about using the TPP to set the rules for trade in Asia. We've talked about the best way to go about doing an agreement with China. I know my beef producers and grain producers want to see trade increase with China, but they want good, enforceable rules. Do you not think it would be better to get a good, enforceable trade agreement using the TPP as the platform, rather than doing a bilateral agreement on our own, under which it's tough to enforce the rules on non-tariff trade barriers?

     The only thing I can say on that is that a number of countries have expressed a desire to join the CPTPP. You may have heard about Korea. I have even heard about the U.K. wanting to join the CPTPP. I think the negotiation or discussion we have with China is on a separate track.

    We want to get, obviously, to the signing and ratification of the CPTPP. What I can tell you is that we have a broad-based agenda when it comes to this region, but I think for the time being my understanding of the discussions that have been going on with the trade minister on the CPTPP is that people are trying to get to signatures and ratification, and then look at what other countries could join.

    As I said, a number of them have already publicly expressed a potential desire to join that group.

     Do you have reports...?

    Oh, no, Mr. Hoback; sorry. You're at six minutes now. We're going to move over to the Liberals.

    Mr. Peterson, you're starting off.

    Thank you, Mr. Chair.

     Minister, thank you for joining us today.

As you know, we did tour the TPP across Canada. There was a lot of support for it, and some concerns. A lot of the concerns related to two issues, I think. They were the IP and ISDS. It seems to me that both of those provisions are improved in CPTPP.

Can you elaborate on those improvements and how they make this a better deal?

    Thank you very much.

    This is one of the things I wish I could have answered to Ms. Ramsey before. The IP was one of the crucial things I think we've achieved for Canada. As you know, the innovators and interpreters were really concerned by the terms that were in the original text of the TPP. You may have seen the op-ed from Jim Balsillie. What we were successful in—and I think this is very much a Canadian initiative—was to suspend a number of provisions of the 22 that relate to IP, namely in copyright extension and patent extension as well. This gives a better outcome for all the interpreters and innovators across Canada. I think it is very much thanks to Canada pushing the envelope that we got a much better deal for industry.

    The other thing you mentioned, ISDS, is the same thing. We were able to push back and seek suspension to make sure we could regulate in Canada's best interests, obviously, but also that ISDS would not be applying to certain decisions taken under the Invest in Canada Act, protecting our ability to enforce this act the way we deem fit for Canada. I think at the same time we struck the right balance, protecting our investors who want to be in these markets and at the same time protecting our own right to regulate in the best interest of Canadians. I think these are two significant achievements.

    The market access in the auto sector is one that's significant as well. I would just use that to complement the answer I gave to Ms. Ramsey. My understanding is that for the first time in Japan's history, they have given the largest market access and they have provided Canada with an enforceable mechanism through a side letter. Not only did they do that, but we want it to be evergreen, so we have a most-favoured-nation clause in it. That means if Japan were ever to give preferential market access on better terms to any country, such as the United States or Europe, it would apply automatically to Canada. That's an evergreen by which we wanted to make sure we would always be in the best possible position.

    On IP and ISDS, I think we've achieved great things for Canadians.

    Thank you for that.

    Mr. Chairman, I'm going to share my time with Mr. Fonseca so that he can get his question in.

    Thank you, Mr. Peterson and Mr. Chair.

    Minister, thank you very much. I'm going to bring us from Asia over to South America. I had the opportunity and the pleasure to be with you last week at the TSX. We had the opportunity to meet with stakeholders. You spoke and you presented. Those stakeholders were talking about the Mercosur countries and the Pacific Alliance and the opportunities we have there. We had mining, infrastructure, financial services, etc. What are you looking for to formalize an agreement with the Pacific Alliance and perhaps the Mercosur countries?

     You're right that last week we had a round table. I would include that we had people from the auto sector quite significantly in the room as well to look at opportunities for the sector in opening up markets.

    As for the Pacific Alliance, as members would know, Canada was asked to join with associate member status, and this we achieved along with New Zealand, Singapore, and Australia, which basically advances the position of Canada when it comes to the Pacific Alliance. Although we have free trade agreements with each and every country, this is about removing non-tariff trade barriers and engaging further with these countries.

    When it comes to Mercosur, the interesting thing is that governments in Argentina and Brazil—those are huge economies, obviously—and Uruguay and Paraguay have been asking Canada to restart these discussions. What we're doing, which I think is the proper step, as I said, is that Canada is not rushing into anything, despite my colleagues being eager for Canada to engage. I said that the first thing we need to do is to talk to stakeholders. We want to engage with stakeholders to understand the benefits, and if there are some concerns, to address them up front so we can take all that into consideration.

    What we did at the TSX last week, and what we will be doing, is engaging with stakeholders to understand whether and how this would be in their best interests. We received almost unanimously positive feedback at the table. While understanding that there are some concerns about non-tariff trade barriers, people saw that this agreement should be a mechanism to remove them and facilitate trade and mobility to allow people to sell services and goods in very big markets in South America.

    Thank you, Mr. Fonseca.

    It looks as though we have time for two more MPs, if it's okay with the minister.

    Yes, Chair. I was late, so I'm quite happy to stay.

    We're going to go to the Conservatives now. Mr. Carrie, you have the floor.

    Thank you very much, Mr. Chair.

    Minister, thank you for being here.

    One of the things you said was that the most important issue with these agreements is these non-tariff barriers, and I think I and many people agree with you.

    You also mentioned that you're not rushing into anything, and I'm going to push back on you on that a little bit. As you know, the Senate is now doing their hearings on the marijuana legalization, and we're finding major issues with it domestically. In other words, the science isn't there. How do we determine impairment?

    As you know, there are three international treaties that Canada has signed onto—and Canada's signature means something, or at least it has meant something—in which we agreed to ban marijuana. Now Canada will be withdrawing, and I think the responsible, proactive thing, if you weren't rushing, would have been to give notice that we would be withdrawing from these treaties.

    We've had Canadian companies in front of this committee that were concerned that how you have not managed the marijuana file could become a non-tariff barrier for these companies, particularly with major trading partners that have issues with marijuana being legal. I'm talking about the United States and Mexico, and you mentioned Japan and China. Basically, what I'm going to ask you today is to put on the record what your government's plan is. Have you updated our major trading partners on your plan to manage the marijuana file, and can you guarantee Canadian companies that this not going to be a non-tariff barrier that's going to thicken the border?

    Thank you for the question. It's an important question.

    I'm sure that the member would appreciate that this would be best addressed by my colleague Minister Freeland of Foreign Affairs, who has a responsibility with treaty obligations. What I can say is that we are engaging broadly in our diversification agenda.

    You were mentioning non-tariff trade barriers. This is something, I must say to this committee, that I take very seriously. As you said, tariffs are going down. I've been engaging also with stakeholders about not only non-tariff trade barriers but, for example, the role of data in future trade agreements to make sure that data is properly addressed in trade agreements. We understand that data is probably going to be one of the most—

    Excuse me, Minister. We're not talking about data. I understand that Minister Freeland might be the best person to discuss this, but we are the international trade committee here. Obviously I would assume that she has updated you and kept you briefed, so maybe you could just explain if you have brought this up with any of our major trading partners and maybe give a specific example.

    We've had Canadians stopped at the American border just by admitting that they've used marijuana in the past, and they've been turned back. We have literally—I think you know the numbers—$750 billion per year going across that border, which is significant. To not address this issue would be seen as very irresponsible.

    How about a specific question on inadvertent exposure? If Canadians are inadvertently exposed to marijuana through edibles, which our government's planning to legalize soon as well, is there going to be random testing at the American border? Have you brought any of these issues up with the United States, our major trading partner?

     As the member would certainly appreciate, all of these issues have been considered. There are many ministers who have been involved, such as the Minister of Public Safety, for example, and Minister Freeland. We are engaging with stakeholders. We are making sure that Canada's position is well understood, not only domestically but internationally.

    What I can say when it comes to international trade is that we are eager to deal with any and all irritants that come to our attention. That's why I recently created this task force to make sure that there would be notification of non-tariff trade barriers so that they would be addressed and we can respond properly.

    If there are any other trade irritants that you see, if you bring them to our attention, we'll make sure that we investigate them under our trade agreements.

    Minister, I am bringing it to your attention. We've had Canadian companies here who are concerned about it. We don't see a plan from your government. From your statements, I think I can clarify that you don't have a plan. You haven't addressed it with our major trading partners. There is no certainty out there that this issue will not become a non-tariff barrier, which as you stated at the outset is the most important thing that you have to deal with, so it's very disappointing to hear that.

    There's less than five months, Minister, before your own deadline. Hopefully you pay attention to what the Senate is doing and see if you can address this proactively for Canadian companies and not rush into it.

    I have a quick question on the rules of origin. It seems that the CPTPP and NAFTA are going in different directions. Could you consolidate that?

    I believe that with the North American Free Trade Agreement, Mr. Trump wants to raise North American content. The TPP appears to lower content—

    Mr. Carrie, your time is up, but the Minister could give a very quick answer.

    I would be happy to.

    With respect, I would say that we do have a plan, Chair. I was trying to bring the question and the comments of the member into the context of international trade, in telling him that we are looking at all non-tariff trade barriers and that the Minister of Foreign Affairs as well as a number of members of cabinet have been addressing and considering the questions that he raised. We do have a plan.

    With respect to international trade and the rules of origin, you don't need to take it from me. You can take it from our chief negotiator, Steve Verheul, who has said that with respect to rules of origin, the CPTPP and NAFTA are on separate tracks.

    From the discussion I had with representatives of the industry, they understand very well that in order to sell in the North American market, they'll have to meet the threshold that will be established under NAFTA, and that we are working together. People understand that they are very much engaged. We have consultations, as you would expect, with the industry throughout the negotiations. We have been quite clear that those are separate tracks.

    That's why it is so important in CPTPP to make sure that we have bilateral letters, side letters, with Australia and Malaysia in order to get market access. We know that with Canadian content alone, we cannot meet the 45% threshold, so we need to make sure that we have bilateral letters with Malaysia and Australia in order to be able to sell Canadian vehicles in these markets.

    Thank you, Minister.

    We're going to wrap up with the NDP. Ms. Ramsey, you have three minutes.

    In light of a large portion of the debate and speeches yesterday that were given around the rights of indigenous people to self-determination, I'd like to ask, with regard to the TPP specifically, whether indigenous people have given free, informed, and prior consent to sign the TPP.

    I was pleased to see in the report that you've consulted representatives of first nations and that they have given testimony. I think this is an important part. As an open and transparent government, we are always looking at engaging with first nations to make sure that these trade agreements serve them, as well as serving every other Canadian in the nation.

    That's different from their giving free, informed, and prior consent. Consultation is quite different from that.

    In a true nation-to-nation relationship with self-determination of indigenous people, have you received their free, informed, and prior consent to sign the TPP?

    What I can say, Mr. Chair, is that I've been hearing for more than a year through the committee and throughout the 40,000 or 50,000—

    We've heard from indigenous people that they were not happy with the deal and that they would see a charter challenge in it. I just have to ask again: have you received that consent from indigenous people?

    Mr. Chair I'm happy to answer, if I can have a chance to answer.

    Go ahead, sir.

    Yes or no?

    Do you want me to answer, Chair, or to just listen to the question?

    Yes, make an answer. Go ahead, sir. You have the floor.

    What I was saying is that we have consulted widely through the 40,000 or 50,000 feedback interactions we received from Canadians.

    We are committed to the first nations. The Prime Minister yesterday made it very clear. I understand that at this committee as well, as I read in the report just yesterday, they had an opportunity to give feedback. We will continue to engage, because they're an important part of our Canada, and we want to make sure that these trade agreements work for everyone.

    You can ask the first nations that I've been talking to about potentially having a first nations trade mission in the world. I engage with them to make sure that they would have access to these trade markets and that we could open new markets for them.

     I'll have to take that as a no.

     The question I have for you now is about a study commissioned by Global Affairs Canada and conducted by the Centre for the Study of Living Standards. They came up with a really startling number about trade with China. They found that trade with China was responsible for the loss of 105,000 manufacturing jobs in Canada between 2001 and 2011. Is this a concern to your department?

    I'm sure Ms. Ramsay would be happy, Mr. Chair, that we're not rushing into anything when it comes to China. We are taking our time. As I said, we are doing that with our eyes wide open. We're consulting with nations that already have free trade agreements with China, understanding that tariffs may come down and understanding what the non-tariff trade barriers are. Some members mentioned state-owned enterprises.

     We have the best team on the ground for making sure that we understand all of that. That's why, Mr. Chair, we did not rush the last time we were in Beijing. There were some reports about that, and we said, “No, we want to make sure that we start on a strong footing and that both sides understand what we want to discuss.” The progressive elements are important. We're going to do it on our timetable. It's certainly in line with Canadian values.

    Thank you. That wraps up the time.

    Go ahead, Mr. Carrie.

    If I could intercede for just a minute, Mr. Chair, the minister did say that he has a plan for addressing marijuana, that the government has a plan for that, and I was just wondering if he could provide it to the committee, because we have less than five months and Canadian business needs certainty.

    I think the minister and his staff heard the question. We'll leave it at that.

    I'm sure the members will see that Canada has a plan to deal with marijuana.

    We'll leave it there.

     We've had a very active meeting this morning. Thank you very much, Minister.

    Thank you very much.

    You always make time to come here. Let's keep going.

     We're going to suspend for a couple of minutes to go in camera.

    [Proceedings continue in camera]