FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, February 11, 1999

• 0909

[English]

The Chairman (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Members, I call this meeting to order. Let's get started. This morning we're going to talk about agriculture and services.

• 0910

We have with us Mr. Paul Martin, who is the director of the Multilateral Trade Policy Division, to talk about agriculture, and John Gero, who has come before us on various other occasions to talk about services.

We're going to start with Mr. Martin. Mr. Carrière, you're in the agriculture business too. You look agricultural this morning. I don't know about that blue shirt with the white collar, that's maybe a little fancy. That's a gentleman farmer from Sussex.

Before I ask Mr. Martin to begin, I just want to give members of the committee a heads-up about March 10. As a follow-up to the nuclear report, we are going to bring up to Ottawa a group of Americans, very high-profile Americans. They'll be led by Bob McNamara, the former Secretary of Defense of the United States; General Lee Butler, who you will recall wrote a letter in the committee report; and General Goodpaster. They're going to be here on March 10. We're going to arrange a joint meeting, I think perhaps with the Senate foreign affairs committee.

These gentlemen have been good enough to say they're going to come up here and say they think our report is a very good report, and they urge NATO and the United States government to have a serious look at it. I think this will be very helpful for our report, and it will be helpful to the minister, when he goes into discussions with other countries, to realize that people of that profile have that opinion.

Madame Debien?

[Translation]

Ms. Maud Debien (Laval East, BQ): How many will there be?

The Chairman: Mr. McNamara will be accompanied by Generals Goodpaster and Butler.

[English]

[Editor's Note: Inaudible]

Mr. Charlie Penson (Peace River, Ref.): —

The Chairman: The one we met when we were in Washington? No. Well, he's welcome to come if he wants, but I don't think he would subscribe to the views of these gentlemen.

Mr. Charlie Penson: I thought maybe for some balance, Mr. Chairman.

The Chairman: We'll invite Mr. Mills to come. He's a good counterpoint on that. He's always invited.

Mr. Martin, are you going to lead off?

Mr. Paul Martin (Director, Multilateral Trade Policy Division, Market and Industry Services Branch, Department of Agriculture and Agri-Food Canada): Thank you, Mr. Chairman. I've made available to the clerks some copies of the slides to which I'll be speaking this morning, so I hope they've been made available to members of the committee.

The subject is the agricultural negotiations that form part of the built-in agenda for WTO negotiations from 1999. The presentation I'm going to give you this morning is basically one that we've developed to explain the process of developing a Canadian negotiating position and some of the issues that we foresee arising in the agriculture negotiations to Canadian agriculture and agri-food industry people.

I propose to go very quickly through that presentation and leave time for discussion, if you so desire.

Basically, the situation is that the WTO, the Uruguay Round agreement on agriculture, contains a commitment to begin negotiations by the end of 1999. It is apparent now that the decision to begin those negotiations and the mandate for negotiations will be taken by WTO ministers at their meeting in Seattle November 30 to December 3.

We expect the ministerial decision to launch negotiations will include a deadline, and the idea that's being talked about now is a three-year negotiation.

The agreement on agriculture contains a commitment to negotiate, and as John Gero is going to explain later, so does the agreement on services. It's of interest to the agricultural community that there is also the possibility, as this committee is aware, of a broader negotiation.

In particular, two agreements that touch a lot on agricultural trade—the agreements on sanitary and phytosanitary measures, and the agreement on technical barriers to trade—are not part of the agricultural negotiations per se, but they have an enormous influence on agricultural trade.

• 0915

We've been telling industry that we know there will be negotiations on agriculture. We're not sure how broad the other negotiations are going to be, but clearly there are some concerns out there in the industry about some of these measures that are not directly covered by the agreement on agriculture.

The objectives of the 1999 negotiations are built into the agreement on agriculture itself. We're supposed to negotiate to continue the further reform of international agricultural trade through substantial and progressive reductions in support and protection. This is a negotiation toward further liberalization. It's excluded from the outset from being a negotiation about going backwards.

On the process of preparing for this negotiation, I'll talk about it on two tracks. There's an international component and a domestic component. Internationally, the WTO committee on agriculture has an informal process called the analysis and information exchange process. Essentially, it's a series of informal meetings of the WTO committee on agriculture, at which countries can put forward what are called, in WTO language, non-papers. On the distinction between a non-paper and a paper, both are written on paper, but a non-paper is something that can't be attributed to anybody as a position.

Countries put forward non-papers about subjects they have identified in looking at the implementation of the Uruguay Round as subjects that need to be discussed in the upcoming negotiations. That process has been going on for more than a year now. There have been some 45 or so papers exchanged, and we're starting to get a pretty good idea of some of the issues countries feel will be on the table in 1999.

The analysis and information exchange process has that rather awkward name because it's not supposed to be a preparatory process for negotiations, but simply a matter of setting out issues we will need to look at. The distinction is because a number of countries are very leery about beginning agricultural negotiations before they have to. They insisted on a very neutral fact-based process, and by and large the analysis and information exchange process has gone that way. It's been a good exchange of views about the situation in agricultural trade without getting into a lot of positioning.

I believe you had a discussion on Tuesday on the process in the WTO general council in preparing the recommendations for the Seattle ministerial meeting. One of those recommendations will deal with the agricultural negotiations. We anticipate that as the analysis and information exchange has raised issues, the next phase will be to make sure they are covered by the negotiating mandate ministers will consider in the agricultural area.

On the domestic side, federal and provincial agricultural ministers first talked about what kind of position Canada might want to take at the 1999 negotiations at their July 1996 annual meeting. It was decided at that time that there was no point in Canada putting forward a negotiating position that far in advance for a negotiation that will begin at the end of 1999. The time between 1996 and 1999 provided an opportunity for us to have a profound reflection among the Canadian industry about what Canada's agricultural trade interests are. What should we be pursuing in further negotiations?

• 0920

So we have been encouraging industry to have this kind of discussion and reflection among themselves and to talk with us. We've been trying to provide as much information as we can about developments in Geneva, about what's happening in this analysis and information exchange process. We've been encouraging the industry to discuss these developments among themselves.

The response has been very positive. The agriculture and agri-food industry across the board is very interested in these negotiations. There have been a number of conferences about Canada's interests in the agriculture negotiations. Among them, one was organized by Saskatchewan Wheat Pool and the University of Saskatchewan in October 1997. The UPA and the ministère de l'Agriculture et de l'Alimentation du Québec organized one in Montreal in November 1998. An Alberta industry trade group organized one in Red Deer in November 1998 as well. There's one today actually in the Atlantic provinces, organized by industry in the Atlantic provinces. There's one planned in B.C. on March 9, 1999. Instead of having one big conference, Ontario has had a series of seminars where industry people get together to talk about what issues are coming up and where their interests lie.

This has been very positive from our point of view. I think the Canadian industry is much more aware of these negotiations and what their interests are than industry in a number of other countries. The result of that is going to be an ability for Canada to put forward a much more reflected position as we go into the negotiations.

There has also been quite a bit of industry discussion with the government. The Standing Committee on Agriculture and Agri-Food held a series of take-note hearings to which industry groups were invited to put forward their views on the negotiations and their interests in the trading system. Minister Vanclief has been holding bilateral meetings with industry groups to go into perhaps with more detail their interests with them.

Finally, the department, together with provincial departments, is hosting a federal-provincial industry conference here in Ottawa from April 18 to 20, 1999. Basically the idea is to bring together a broad cross-section of industry representatives and ask them some pointed questions about what kinds of interests they want us to pursue in the negotiations, what kinds of positions they want us to take, and for federal and provincial governments to listen carefully to the discussion that results.

Once that conference is done, basically the next step we would foresee is a discussion among federal and provincial ministers in July 1999 based on what we've heard at the conference and what we've heard throughout this consultation process. The federal and provincial ministers can discuss the kind of position the provinces would advise the federal government to take.

Finally, the federal government needs to make a decision about an initial negotiating position. We think that's going to be necessary—

• 0925

The Chairman: I'm getting a little nervous because we have to get through two sessions this morning and we haven't got to what I would call the substantive part of this yet; we've just heard about what we're going to do without hearing about the essence of it. I'm telling you that you have five minutes left to get through this because then we have to wrap up this session by around 10.05 a.m. so we can get to services.

Mr. Paul Martin: My apologies. I hadn't realized we were on such a tight timeline.

The Chairman: We are, and there are some members who want to ask some questions too.

Mr. Paul Martin: Let me highlight very quickly then the areas in which we see some substantive issues in the negotiations for Canada.

Domestic Support. Basically the issue in the Uruguay Round was to identify trade-distorting domestic support, and reduce it, and non-trade distorting domestic support. Essentially the issue in the negotiations is how well that has worked. How well have we identified non-trade-distorting domestic support? How effectively have we reduced domestic support that distorts trade?

On the issue of export subsidies, Canada set out to seek the elimination of export subsidies in the Uruguay Round. We didn't achieve that. We achieved reductions of 36% in the amount of money spent on export subsidies and 21% in volumes of export subsidies. There's a consensus I think in the Canadian industry that we would like to see export subsidies eliminated. The questions are, how do you go about doing it and can we actually get to that objective this time? There will be a big issue about how export subsidies are defined such that export credit and food aid and market development programs are not used to circumvent export subsidy disciplines.

Finally, on the issue of market access, I think the key thing here is that there's a large part of the Canadian agriculture and agri-food industry that's very export oriented and wants to expand Canada's access to foreign markets as much as possible. However, there are some industries within the agri-food sector that are sensitive to imports. The kind of position Canada will take on market access issues is something I know the industry is spending an awful lot of time coming up with. The objective of course is to come up with the unified credible negotiating position that actually meets the needs of the agri-food sector as a whole.

If you like, Mr. Chairman, I'll stop right there. My apologies for having gone on.

The Chairman: Okay. We do have your other items. We can perhaps get to those things from questions.

We'll go straight to questions. So far I have Mr. Penson, Ms. Beaumier, and Mr. Sauvageau on my list.

Mr. Charlie Penson: Thank you, Mr. Chairman.

Good morning, gentlemen. I would like to start by saying that I think Canada, more than a lot of other countries, has realized the benefits of trade and investment liberalization. We've realized it and have actually benefited by it to a great degree. But there's one important sector where we have not been able to make significant progress.

As everybody knows—but I want to get it on record—in 1993, after the Uruguay Round, there was a modest start for agriculture. It was a modest start with the expectation that this round that we're going to be engaged in this next year would make some significant progress. Representing an agricultural constituency and coming from western Canada, where grains, oilseeds, and beef, are all looking for market access, and being restricted largely in the European Community, it's causing a tremendous amount of distress. Of course, we're back into the subsidy business again by federal and provincial governments as a result of that stress.

It seems to me that we have created these kinds of expectations. We need to deliver.

Mr. Martin, when you talk about getting rid of export subsidies, domestic support, and all of that, we still have some problems here in Canada that haven't been addressed as well in terms of market access for our competitors. I think that hurts us in terms of a credible position. My question to you is, given the intransigence in the industry... Agriculture is not just one component alone. It's a very complicated industry, as I'm sure you know. There are a lot of competing interests. But there's one sector that has not benefited by trade liberalization because it hasn't been there, and it seems to me that at some point Canada is going to have to make a decision on what position we're putting forward in order to have a credible position.

• 0930

This credible position doesn't only affect us in agriculture, it affects us in our entire trade relationship, when we look at gaining access for services or more reduction in industrial tariffs, international competition policy. I think our position has to be credible, as Canada has been in the past for 50 years. We have to continue that and harness this giant of agriculture and bring some sanity to it in terms of trade rules.

We have to have a credible position going in. I guess my question is, how do you think you're going to achieve that?

Mr. Paul Martin: Basically, I agree with you. We have to have a credible position going in. More to the point, I think everybody in the agriculture and agri-food sector will agree with you. That's the key. The industry is aware of the fact that we have to have a credible position and we have to have a unified position.

That's going to require some creative thinking on their part as well as ours, but they're aware of the need for doing that and they're aware of the fact that Canada gains from an effective rule-based international trading system in agriculture, as in other areas, perhaps even more so in agriculture since we're so heavily dependent on world markets for agricultural trade. So I think we will come up with that position. I can't tell you what it's going to be.

Mr. Charlie Penson: Okay. That's a fair comment. But having attended some of the agriculture committee hearings and having been at the conference in Saskatoon, I heard very different points of view on what Canada's position should be. Grains, oilseeds, the beef sector, which are largely subsidy- and tariff-free, are looking for market access. The supply management sector want to hold the line and keep the tariffs.

So it seems to me we have two polarized positions, and at some point the Government of Canada has to take a position one way or the other. I would suggest to you that it has to be a position in favour of further liberalization, even if that means liberalization in Canada, because otherwise we're not credible at these talks.

Mr. Paul Martin: Is that a question?

The Chairman: I think it's a statement that has been made around this table for probably the last 25 years, and before our time, and it may go on after our time. But that's the problem, all right.

M. Sauvageau.

[Translation]

Mr. Benoît Sauvageau (Repentigny, BQ): Messrs. Martin and Carrière, good morning. I don't dare to pretend to be in a position to tell you what stand Canada should take during the coming negotiations. As your presentation had more to do with the negotiating process, I'll look at that aspect.

During the last few weeks, the Agriculture Committee has examined the stand we should take in the area of agriculture during our negotiations with the WTO countries. You've certainly been following the work of this committee which, so I understand, is to table its report soon. Could we use this study so as not to have to redo on our own all the work that's already been done on agriculture? Will the report the Agriculture Committee will be taking on WTO negotiations be tabling allow us to put paid to that chapter or at least to half of it? How will we be able to use this report to avoid any overlapping of studies and other work on the same subject?

My second question has to do with problems of perception. The WTO, the MAI and the international non-governmental organizations tend to have a very bad reputation and draw a very bad press. The MAI was a very good example where the international community, rationally or not, managed to kill a project under negotiation.

• 0935

You say that consultations have been held with groups, industry representatives and so on and I believe those consultations are being done properly. In your opinion, how can we avoid the threat represented by those groups opposed to any negotiation with the WTO?

How can we publicly account for the negotiations and consultations underway? You'll probably tell me that we can consult Internet but I must tell you that I'm not an expert. Maybe 7% of the population knows how to do that and consults it. I'm talking about those who are always whining. Is there any way to make accessible to the general public information concerning those negotiations and consultations so that, a year from now or toward the end of 1999, we won't find ourselves faced with a hue and cry of protestation? The past might be a harbinger of the future on that. Do you have any marketing trick up your sleeve?

[English]

Mr. Paul Martin: To comment on the notion of unpopularity of WTO, I think that's less the case among the agriculture community than it is perhaps in some other sectors of society. The reality is that Canada is an agricultural exporter from a long way back, and we've been competing against extremely unfair trade circumstances in the international community.

I think everyone in the sector realizes that if we want to bring some sort of control on agricultural superpowers like the European Community and the United States, we're not going to do it by having Canada go there and talk to them bilaterally; we're going to have to have an international system of rules. I think the international system of rules is something that is widely recognized as being of high value to all parts of the Canadian agri-food system.

Mr. Carrière wants to say something about the more general process.

[Translation]

Mr. Claude Carrière (Director, Customs and Market Access Division, Department of Foreign Affairs and International Trade): Mr. Sauvageau, your question touches upon aspects that go beyond the area of agriculture. Earlier this week, Minister Marchi signalled his intention, that of the Department as well as that of the government to draw lessons from the MAI experience. He also intends to start providing information more quickly, inviting all Canadians as well as interested groups to tell him what objectives they would like to see us pursue during those negotiations and also listen to them.

The hearings of the committee are part of this strategy. We're also looking at the possibility of having consultations with non- governmental organizations as well as with society at large in its broadest sense later on this spring.

Through those different mechanisms, we want to make sure that the information is available and that we'll also be able to undertake a dialogue with the stakeholders on what our objectives should be during those negotiations, whether for agriculture or other areas.

Mr. Benoît Sauvageau: How could this committee use the report that the Agriculture Committee will be tabling? You've no doubt been following the agriculture file as well as the WTO one.

Mr. Claude Carrière: Yes, we do follow what goes on during those committee meetings.

Mr. Benoît Sauvageau: Have they completed the examination of agriculture and negotiations with the WTO or have they only examined part of it or only one chapter?

Mr. Claude Carrière: To my knowledge, they've not yet finished their work.

Mr. Benoît Sauvageau: Fine.

Mr. Claude Carrière: To my knowledge, they're hoping to finish soon. They haven't tabled their report yet. We assume there will be discussions between committees.

Mr. Benoît Sauvageau: You assume and hope. Thank you.

The Chairman: Are you done, Mr. Sauvageau?

Mr. Benoît Sauvageau: Yes.

Ms. Maud Debien: Does he have any time left?

Mr. Benoît Sauvageau: I'm willing to share it.

The Chairman: We'll get back to you, if you don't mind, after Ms. Beaumier's turn. Do you want me to put your name on the list, Ms. Debien?

Ms. Maud Debien: Yes.

The Chairman: Ms. Beaumier.

• 0940

[English]

Ms. Colleen Beaumier (Brampton West—Mississauga, Lib.): Thank you.

These issues are so very complex that I want Mr. Sauvageau to know that I have learned to use the Internet—

The Chairman: Uh-oh.

Ms. Colleen Beaumier: Well, I sort of know how to use the Internet, and that's why I have questions today. If I knew how to use it really well, I would have the answers as well.

I'm looking at issues for Canada in domestic support and in biotechnology. What I noticed on the Internet the other day was that the European Community has said Canada is falling short in its food safety testing. We have an agreement that if we test the food, Europe and any of our exporters—and I think that may be under the MRA... I'm wondering how we can continue—this is just one tiny aspect—to go on and on without really having the support systems here.

I know you're the traders and the trade negotiators, and that agriculture itself is just a division in which you're negotiating, but how do we deal with these kinds of issues if we make these agreements, yet we are not meeting our standards for food safety? How can we tell Canadians that we can go into this trade agreement with the certainty that our products are going to pass all of the requirements? That's one area. Additionally, would that be considered an export subsidy? You can get into cost recovery, and it's all very complicated. With us advancing like this, the question I have is how we can be so sure that we're going to be able to be competitive in that area.

Mr. Paul Martin: To answer the question to which I know the answer first, it's recognized in the agreement on agriculture that government service is to provide for food safety and food inspection services. They are a so-called green subsidy. They comprise something that is not considered trade-distorting. They are general government services to the agricultural sector. The more fundamental question, or the question behind that, is whether or not we can be sure we can deliver the quality product if we negotiate access to markets. I don't use the Internet enough to know what the Europeans actually said about our food inspection system.

Ms. Colleen Beaumier: Food testing has been going down increasingly since 1990.

Mr. Paul Martin: I know the department, the Canadian Food Inspection Agency, is committed to having a system in place that delivers safe, high-quality food for Canadians. I don't want to be here trying to speak for them, but I think the responsibility falls on us to be in a position to say that our food is safe. That's not just for export markets, because I think Canadians have those concerns as well.

Ms. Colleen Beaumier: It's a simple question on a very complicated issue, I know.

The Chairman: You will agree with the tenor of the question, though. If the phytosanitary standards are not met, this will then be the new trade barrier that will be set up. This was evidenced in the beef hormone case and all those others. So we have to make sure we're—

Mr. Paul Martin: Yes, it's absolutely the case that we need to make sure there are no unjustified sanitary and phytosanitary barriers stopping our products. We have to make very sure, not just for the export business but because we eat this stuff ourselves. We have to make sure the stuff we're producing and putting on the market is safe, quality food. That goes well beyond trade negotiations.

Mrs. Sheila Finestone (Mount Royal, Lib.): May I ask a supplementary question on that?

The Chairman: Yes, if you're quick, because Madame Debien has been very generous.

Mrs. Sheila Finestone: A novice on the Internet knows there's a question about the safety of the food produced in Canada, which I think is a very serious allegation. Is it an allegation? Is there any basis for the observation? Why isn't the Internet monitored, and why isn't it immediately responded to? You don't leave a rumour like that on the Internet if it's not founded. I want to know, Mr. Martin, why you or your staff is not monitoring what's being said on the Internet.

The Chairman: I don't know whether Mr. Martin can answer that or not.

Ms. Colleen Beaumier: The thing is, it's based on our decreasing—

• 0945

The Chairman: Can you answer that question?

Mr. Paul Martin: This is going to sound like a bureaucratic answer, but the answer is that the CFIA probably is monitoring stories about food safety on the Internet. We try to monitor the things about trade policy that go by on the Internet.

Mrs. Sheila Finestone: Do you talk to each other?

Mr. Paul Martin: We do talk to each other, and I'm sorry, but I haven't actually heard that—

Mrs. Sheila Finestone: Mr. Chairman, with all due respect and with great cordiality, if we're going to head into an international meeting this year to try to move towards Canada's advantage—or at least the industry's best interests—I would suggest that it is ludicrous that something that might block this best interests process, and is of a serious nature both to Canadians as well as internationally, isn't known to the traders who are doing the negotiations.

Mr. Charlie Penson: Mr. Chairman, if we're going to have a debate, I would like to get in on it. It's something I'd like to enter.

Mrs. Sheila Finestone: Maybe I'm on an opposition bench right at the moment, but it really strikes me as odd.

The Chairman: There's merit in the position, but the point is that I don't know to what extent Mr. Martin can answer.

Mrs. Sheila Finestone: He's the trader.

The Chairman: We know the Europeans have been alleging this. We know there was the beef hormone case in which they alleged that our beef was full of cancer—

Mr. Charlie Penson: And they lost.

The Chairman: —and they lost that allegation in a WTO panel.

Every time I've gone before the people in the European Parliament, there have always been these allegations spinning around over there, whether they're about leghold traps, the treatment of food, or anything else.

Mr. Charlie Penson: They're non-tariff barriers. That's what they are.

The Chairman: They can be non-tariff barriers if they're illegitimate. Mrs. Beaumier's point is that if they're legitimate, they're not non-tariff barriers and they're of serious concern to Canadian consumers.

I think it's a good point, and I think we can mark it down as something we'll have to follow up. I don't think we can get any further with these witnesses on it, though, particularly since Mr. Martin admits that he didn't read the Internet—and this is a scary development in this committee.

[Translation]

Ms. Debien, what did you find on the Internet this morning?

Ms. Maud Debien: I'd like to give a bit of an explanation to Ms. Finestone about what she finds so terrible with that situation. In my opinion, the European Community is very protectionist in the area of agriculture and what she's saying stems exactly from those protectionist measures. It's a bargaining position. It doesn't mean it's true, but it has always been thus. For them, it's a way of defending their market. That's my personal evaluation of the situation.

It's maddening to see them tarnishing Canada's reputation, but that's simply part of the bargaining process.

The Chairman: Could I add a little comment?

Ms. Maud Debien: Yes.

The Chairman: That's why Canada wants to have clear and specific rules—

Ms. Maud Debien: That's it.

The Chairman: —and a system for resolving differences that will allow us to objectively test those allegations.

Ms. Maud Debien: Exactly.

The Chairman: That's where the problem lies. Anybody can say anything. That's why it would be useful to set up a legal system that would allow us to test that and win or lose based—

Ms. Maud Debien: On objective criteria.

The Chairman: —on objective criteria, and not subjective ones.

Ms. Maud Debien: The document Mr. Martin gave us has a lot of technical language. You talk about open subsidies, blue subsidies and so forth. I'd like to know if, in the working document that was prepared for us, any notice was given in the section on agriculture to this slightly technical terminology which is a bit less familiar to us. As agriculture will be the subject of a rather essential debate during bargaining sessions, I think it's important for us to be well informed, terminologically speaking, about the meaning of all those words.

The Chairman: If you don't mind answering.

Mr. Daniel Dupras (Committee Researcher): I'll check, Ms. Debien, if that request has already been answered. If it's not the case, I'll find a solution.

Ms. Maud Debien: Fine.

The Chairman: You want us to demystify all that a little, Ms. Debien.

Ms. Maud Debien: As we worked very hard on that, and as this question is the main object of the discussions with the WTO, it's important to know what's going on with the vocabulary.

I'd like to put one last question. We're talking about the stakes for Canada, domestic support and subsidies for exports. I understand full well what export subsidies are, but I'd like to know what the expression "domestic support" means, concretely.

• 0950

Mr. Paul Martin: It's any manner of direct subsidy for Canadian farmers, including payments to producers, price support,—

Ms. Maud Debien: Oh!

Mr. Paul Martin: —prices set at a level higher than the market price. These subsidies are transfers that distort the markets. The latter are part of the shady area while the other transfers that don't have that effect are part of the green and blue categories. I won't explain in detail at this point because it's a bit complicated. Anyway, it's a matter between the Europeans and the Americans. When we're talking about domestic support, we're talking about subsidies that don't focus on exports.

Ms. Maud Debien: Fine.

At the beginning of your statement, you said there were subjects not covered by the agreement on agriculture. We have a certain number of subjects here; which are those that are not covered? Will those matters not covered by the agriculture agreement become so?

Mr. Paul Martin: The agreement on agriculture focusses on export subsidies, domestic support for farmers and access to markets for agricultural products. Any question outside of that is covered by other agreements in the WTO system but is not targeted directly by...

Ms. Maud Debien: What do you mean by "any other matter outside of that"? Give me an example.

Mr. Paul Martin: Matters of health and plant health, technical obstacles, rules for all trading businesses...

Ms. Maud Debien: Fine, I understand. Thank you.

[English]

Mrs. Sheila Finestone: You'll explain it to me afterwards, right?

The Chairman: Mr. Assadourian, and then Mr. Penson.

Mr. Sarkis Assadourian (Brampton Centre, Lib.): Thank you very much.

My question is general in nature. On interprovincial trade policies or interprovincial trade barriers, how much difficulty do they present to you when you negotiate with WTO or when you prepare yourself beforehand? How do you manage that aspect of negotiations?

Mr. Paul Martin: Basically, the WTO is concerned with the conditions that Canada imposes on imports from other countries. What we have in terms of relationships between the provinces only comes up tangentially if the effect of some interprovincial trade barrier is that imports are somehow being treated in a way that a trading partner dislikes. Basically, though, it's not something we'd spend a lot of time talking about in international trade negotiations. It's considered an internal Canadian matter. How we treat the imports at the border is really the issue.

Mr. Sarkis Assadourian: Further to the argument earlier, let's talk about the health and safety inspection of food. I would think that each and every province has different standards for its safety inspections, different limitations or what have you. When you put on the tariff, how does it correspond or relate to provincial needs, say Ontario versus Nova Scotia or B.C.? Do they have no relation whatsoever?

Mr. Paul Martin: The standard that applies to products imported into Canada is the federal standard, which is applied by the Canadian Food Inspection Agency. The standard that applies to any product moving between provinces is that same federal standard. There may be situations in which different standards apply within provinces, but they would be outside federal jurisdiction. That leads us into a sort of complicated discussion of whether the provincial treatment might be more favourable than treatment for a product that moves between provinces. That depends very much on the details of exactly what standard is being applied. But what happens at the border is that there's a Canadian national standard.

Mr. Sarkis Assadourian: When they come, there's just a general standard for the whole of Canada.

Mr. Paul Martin: Yes.

Mr. Sarkis Assadourian: Thank you.

The Chairman: It's your turn, Mr. Penson.

• 0955

Mr. Charlie Penson: Mr. Martin, you're aware of the Cairns Group, which was active in the Uruguay Round, especially in the agricultural area. Canada belongs to that Cairns Group, and basically it's a group that has a common interest in trying to get further trade liberalization.

It seems to me we need to be making some effort to include the United States in that. That may sound strange, but the reasoning for it is that the European Union has a social policy, probably ingrained for a very long time because they were short of food during a couple of world wars, where last year they subsidized their agriculture producers something like $60 billion.

The United States is not to that degree, but it seems to me that a lot of the subsidies are in response to the European Union social policy. The United States and Canada don't want to be frozen out of markets; therefore, they have to subsidize their farmers. I'm wondering if there isn't some good reason—and I guess I'm asking you whether your department has talked to the United States department of agriculture to try to explore some common interest to join the Cairns Group to help us break down what essentially I believe are the biggest problems, and that's the European Union barriers.

Mr. Paul Martin: Basically, the Cairns Group arose because of a trade war between the U.S. and Europe. Strategically I think it's the interest of the Cairns Group to not be on one side of that war or the other but to be the innocent parties, if you like, that suffered the consequences. That's the basic origin of why the United States is not in the Cairns Group.

The fact of the matter is that the United States has some interests in common with the Cairns Group, and the Cairns Group meets quite regularly with the U.S. to talk about those interests. In particular, the interest in getting rid of export subsidies, something the U.S. has publicly announced as their objective, coincides very well with the Cairns Group objective and, incidentally, with the Canadian objective. Yes, we are actively exploring ways that we can work together to pursue that.

The Chairman: I have a couple of questions. Then we'll go to Mr. Sauvageau.

You said, and I think you put it well, that to have a credible position...you're trying to work out what is the credible position. As Mr. Penson said, how do we deal with, at least on the face of it, extraordinary inconsistency by dealing with supply management on the one hand and free market access needs of the west on the other, which tends to be a regional discussion in the country as well as a discussion of one's different agricultural producers? Obviously, it's very important for us to find this.

Obviously, we had the same discussion in the Uruguay Round. My recollection is that we had the same discussion in what was originally the Nixon Round and in whatever it became—I forget—the Tokyo Round. So this discussion is not exactly an old one.

Do you have any confidence that between now and next November you're going to be able to come up with some significant breakthrough that will mean we will have a new, fresh, and better solution to this problem in our negotiations, or are we just going to go into it with the same position we've always gone in? That would by my first question.

The next question is, since we're interested in the United States, what about the American areas where they have closed markets like sugar, where they're just as protectionist as anybody else in the world? Do you have a list for the committee? Since we're always hearing about the great free traders and they never talk about where they're protecting themselves, could you give us a list of the American protected markets? I know sugar is notorious, and I understand peanuts as well, not that peanuts are going to interest us in Canada very much, but there are a few sacred cows down there that might be helpful for us to know more about on the committee.

The third thing would be this. We heard the other day a somewhat disturbing point, which was that if in fact we're going to attack subsidies, the developing countries, some of which are food-dependent and import-dependent, want to see the subsidy system continue because it means that consumers in rich countries, like Europe and other places, are subsidizing their consumption of food. They may have some very legitimate concern about the ending of the subsidy system, and since they consist of more than the vast majority of the countries in the WTO, this could be a problem for us if we're attacking that thing. I don't know whether it is or not, but it was brought up.

I'd be interested in your comments on those three issues.

• 1000

Mr. Paul Martin: In terms of a negotiating position, the situation is that at the end of the Uruguay Round we wound up converting non-tariff barriers all around the world into tariff equivalents, and there were tariff quotas applied to those products for which there were tariff equivalents.

The Chairman: At the end of article 11, the famous article 11.

Mr. Paul Martin: At the end of article 11, but the end of the variable levy in the European Community and the end of section 22, import controls in the United States.

The upshot of that is that our exporters face tariff quotas in a number of export markets and they also face these over-quota tariffs. I think it's quite likely that we'll find agreement among Canadian industry that liberalizing, expanding, and making more transparent those tariff quotas will improve market access for exporters and is something our importers are prepared to contemplate.

The Chairman: Are these what are called TRQs?

Mr. Paul Martin: Yes, that's correct.

Now obviously I'm not in a position to say that's going to be our position, but I can see that kind of discussion is going on among importers and exporters. So the upshot is that there's a possibility of some very common interests, even on the issue of market access among the interests within the Canadian agrifood sector.

Let me also say that it's not a regional issue, exactly. There are industries in eastern Canada, in particular pork and red meats, that are interested in export markets and are affected by foreign trade barriers.

In terms of the U.S. protectionism, we can provide you a list of products on which the U.S. has high tariffs and tariff quotas. I think that would answer the question. That's easily done.

In terms of the relationship between subsidies and—

The Chairman: If you could give us the state-level subsidies as well, because it's the states... I don't know, you must have all that. I'm sure our researchers probably could get it.

Mr. Charlie Penson: They actually told me that they have that.

Mr. Paul Martin: I know the agriculture committee has asked for information on state-level subsidies. I will find out what was provided for them.

The Chairman: Yes. If you could get it, we would like the same information as the agriculture committee.

Mr. Paul Martin: Okay.

The Chairman: We want parity here.

Mr. Paul Martin: Now, in terms of subsidies providing benefits to food-importing developing countries, I guess there are two tendencies. There are some developing countries that see low international prices as being to their advantage, because they import a lot of their food, and they're concerned about what happens if world prices rise, as they should do if export subsidies are eliminated. On the other hand, I would say there's a much larger group of developing countries that are agricultural producers, either for their own exports or to feed themselves.

Essentially, the question you're asking is whether a developing country is better off if its farmers are facing heavily subsidized competition from rich taxpayers in Europe and North America, or are they better off if prices are higher and their farmers respond to that?

The Chairman: They have to trade off within their system.

Mr. Paul Martin: The balance of judgment, certainly among countries in the Cairns Group, which are 15 countries of which 12 are developing countries, is that they're better off if subsidies go away and they can respond to the real world market situation.

The Chairman: Thank you. That's helpful.

[Translation]

Mr. Sauvageau, is your question rather brief? We should be getting on to the matter of services.

Mr. Benoît Sauvageau: I think I heard that there was a complaint against Canada about milk production. Is that true?

Mr. Paul Martin: Yes, it's true.

• 1005

Mr. Benoît Sauvageau: Who made it and what process was used?

Mr. Paul Martin: The USA and New Zealand.

Mr. Benoît Sauvageau: Is it recent?

Mr. Paul Martin: The complaint was made in March 1998.

Mr. Benoît Sauvageau: Fine.

Mr. Paul Martin: The complaint was made to the special WTO group that handed in its interim report to the parties to the matter to get their comments. That's the stage we're at and we are now preparing our answer in co-operation with the provinces and the milk industry. If we manage to meet the deadline, the final report of the special group should be ready by April 9.

Mr. Benoît Sauvageau: What was the substance of the complaint?

Mr. Paul Martin: Canadian milk producers were being accused of selling their milk for different prices based on the market where the final product would be sold. For example, milk is allegedly sold for less if it's to be used for making cheese for the export market rather than the Canadian one. The USA and New Zealand allege this is the same as an export subsidy. That was the substance of the problem.

[English]

Mr. Charlie Penson: The preliminary decision is out?

Mr. Paul Martin: No, the preliminary decision is not out. The preliminary decision has been—

Mr. Charlie Penson: It has been leaked.

Mr. Paul Martin: —given to parties for their comments before a final decision is made.

The Chairman: Okay. So it's not official until the final decision, which you expect sometime in April.

Mr. Paul Martin: It's not a decision until the final decision.

The Chairman: But this is the problem we heard from I think the pizza manufacturers. They say that the cheese goes to the United States, gets put on pizzas, comes back here and competes, or whatever.

Okay, thank you very much, Mr. Martin and Mr. Carrière. It was very helpful.

Monsieur Gero, let's move into services.

A voice: I want a brain transplant.

The Chairman: Let's move. We've got about 50 minutes, and services is complicated. We've got Mr. Gero, so let's get going.

Mr. Gero.

Mr. John Gero (Director General, Trade Policy Bureau II, Services, Investment and Intellectual Property, Department of Foreign Affairs and International Trade): Thank you, Mr. Chairman.

Mr. Chairman and honourable members, let me begin by introducing two of my colleagues: Mr. Rob Ready, who's the director of international investment and services policy of Industry Canada; and Mr. Gilles Gauthier, acting chief, trade services investment at the Department of Finance.

I'm pleased to be with you today. I will talk about trade in services and the negotiations on trade in services, which will begin in the World Trade Organization next year and which have already begun in the context of the free trade area of the Americas.

We are distributing two background documents for this meeting. Unfortunately, we need to improve our ability to communicate with you. We transmitted them electronically to the committee yesterday so you'd have it for bedtime reading last night. Unfortunately, I understand they didn't make it to you. We will try to work on a better coordination in that regard.

• 1010

The first of these documents is something that we have informally referred to as the GATS primer, the GATS is the General Agreement on Trade in Services. It provides a brief overview of that agreement that is part of the larger Uruguay Round set of agreements.

The second is a very brief issues paper that covers a wide range of micro and macro issues associated with services. I think it's all together in one package, both in English and in French.

I do not intend to repeat to you today all of the points in these documents, but I do want to highlight some of the major issues.

The Chairman: Mr. Gero said he was only able to get the second document ready this morning. It's not here yet, but it's coming.

Mr. John Gero: It's still coming?

The Chairman: Yes, it's coming.

Mr. John Gero: I thought it was here already. Oh, yes, and the speech is the third document. So that is true, you do have a third one as well. I apologize.

Mrs. Sheila Finestone: This is your speech, but where's the third one?

Mr. John Gero: The third is behind the GATS primer, which is a short issues paper. You have the GATS primer in both English and French, and attached to that is the issues paper.

Mrs. Sheila Finestone: Thank you very much.

The Chairman: That's going to define for us whether a movie is a good or a service, is that it?

Mr. John Gero: That's certainly one of the issues, that's right.

The Chairman: I said it's going to define it; it's going to tell us the answer.

Mr. John Gero: No, it's going to ask you questions that you need to respond to so that you will answer the questions for us.

The Chairman: Well, I'm telling you that you're in trouble because Mrs. Beaumier is now on the Internet, and we know that's a service.

Ms. Colleen Beaumier: That's right.

Mr. John Gero: Some of it is a service.

This discussion we're having today is the beginning of a process of consultations that the government is undertaking in order to assist us in developing the Canadian position for the upcoming negotiations on trade in services. As Minister Marchi indicated when he met with you earlier this week, the process of consultation is vital to the development of a Canadian position. I would like to explain why these negotiations are important and of potential benefit to Canadians, and I certainly look forward to your ultimate report in order to assist us in our consideration of issues that will form part of the negotiations.

Services are the fastest growing segment of world trade. On a balance-of-payments basis, world trade in commercial services in 1997 accounted for around one-fifth of world exports for goods and services and amounted to over $1 trillion U.S. Canada's share of this trade was about $40 billion Canadian in exports. Canadian exports of services have been increasing. They have increased at an average annual growth rate of about 10% in the commercial services sector between 1992 and 1997, while Canadian exports of other services like travel, transportation, and government services grew at an average rate of 9% over the same period. As you can see, then, they're very important engines of economic growth. In Canada, the services industry has contributed to the creation of 90% of Canada's new jobs and represents over 72% of the total employment in Canada.

While the United States is the principal market for Canadian services, as is the case for goods, Canadian services exports are much more diversified. In 1996, for example, Brazil, Sweden, Taiwan, Mexico, the Middle East, and, collectively, the ASEAN countries were in fact the fastest growing export markets for Canada.

Many Canadian service firms are active exporters. In order for them to be able to continue to expand their export activities, these businesses require the additional certainty that results from the development of international rules in trade in services. This certainty is especially important as, unlike international trade and goods, the barriers affecting trade in services rarely take the form of tariffs and other border measures. For example, tariffs, which pose barriers to goods on exports, are relatively transparent. The additional costs they impose on exporters can be factored into an export decision by a Canadian firm.

• 1015

Barriers for trade in services, however, are often much less visible. For example, barriers can be applied to prevent a foreign service provider from entering a foreign market. As well, even after a foreign service provider has entered the market, other types of barriers might exist. Restrictions on the ability of foreign firms to deliver their services to foreign consumers can include restrictions on their ability to establish operations in a foreign market; regulations that are not clear, that change without warning, or are not administered in a uniform manner; or entry requirements that limit the ability of foreign individuals to enter the market to provide their services.

Until recently, with the development of the NAFTA and the WTO GATS agreement, international rules on trade in services affecting the majority of service sectors did not exist. The potential for further increases in international trade in services has been limited by the absence of such rules. As a trading nation, Canada is interested in developing open and more secure conditions for international trade in services. The development and application of these rules to improve and secure access for Canadian service providers has been one of our longstanding trade policy objectives.

The negotiations on services will include over 130 members in the WTO and 34 members in the free trade area of the Americas. They will affect a wide spectrum of service sectors.

[Translation]

The members countries of the GATS have made commitments with a view to liberalizing access to their markets by listing those sectors for which they made commitments. Thus, there is always a possibility of trying to get extra commitments from our trade partners.

If we want to strengthen Canada's bargaining power, we need your help to define those interests that are specific to Canadian service providers on foreign markets. The experience gained by those Canadian services businesses that export for those markets is essential. For example, we must know which foreign markets Canadian service industries are interested in, how those industries usually do business on those markets, what obstacles Canadian service businesses have found in their way and what form those barriers take.

By looking at the barriers to the penetration of our services on export markets, we must also become more familiar with those elements of the Canadian services regime that will probably become the target of demands for flexibility coming from foreign service providers wishing to broaden their access to the Canadian market. Which delicate aspects of our own regulations are the ones that should be maintained?

[English]

Given the nature of trade in services, domestic regulations clearly play an important role in increasing or limiting the ability of foreign service firms to provide their services in an export market. Many of the barriers affecting trade in services are related to qualifications requirements and procedures, technical standards, and licensing arrangements. These measures can reduce market access in many ways, not only by being applied differently to a foreign firm than they are to a domestic one, but also by not being applied in a transparent manner. While the regulations and standards are often in place for specific domestic reasons, it is important to ensure that these requirements are based on objective and transparent criteria and are not more burdensome than necessary in order to achieve the regulatory objective.

In many markets, these standards and regulations are developed and administered by departments and are levels of government and regulatory bodies other than those directly involved in international trade. Given the division of responsibilities under the Canadian Constitution, federal as well as provincial policies may act as barriers to foreign service providers.

• 1020

We will need to learn the principal regulatory measures that affect the export of Canadian services. Are some regulations more prevalent or restrictive than others? How do these measures adversely affect the business of Canadian service firms?

Domestically, we may need to consider whether or not there are better ways of regulating services to minimize the trade-distorting effects while still meeting the underlying objectives of the regulations. Close cooperation and coordination with domestic regulators will be very important. Are there areas in the Canadian marketplace in which foreign firms may have an interest in requesting liberalization of certain Canadian laws, regulations or other measures in order to provide greater market access for foreign service providers? Are there certain areas in which we can allow greater access for foreign service providers without significant effects on Canadian firms?

Services, of course, can be delivered through several means. The services can be mailed, sent electronically, or otherwise transported across the border—although sometimes the electronic sending part doesn't actually work, but we're working on that too. Consumers can travel across a national border to consume a service. Examples include, of course, tourists or students. That's consumption abroad. A service provider can establish a foreign-based firm to supply the services to the foreign market. That is commercial presence. Or an individual, either alone or as an employee of a service provider, can travel to another country to deliver a service. That's the presence of a natural person. All of these are important in the context of trade in services.

We need to understand the most common or most effective means of delivering the service, through establishing a commercial presence in a foreign market, by electronic means, by movement of persons—all of that. For specific service sectors, is this likely to change? How important is it to Canadian firms in these sectors to have freedom of choice of the manner in which they deliver the services.

As an aside, we were talking a little bit about electronic commerce. What the issue of electronic commerce does is really look at the definitional questions that were raised by the chair. Among other things, it really blurs the distinction between what constitutes consumption abroad and what constitutes a cross-border provision of a service. If I go on the Internet, tune in to a service provider in the United States, and am sent whatever service it is over the Internet, am I going abroad to consume that service, or is the service being provided to Canadians? There are some very important areas that we need to clarify here.

For example, suppose a bank sets up a web page in the United States and offers loans to Canadians. I avail myself of that service in the United States or I deposit money in that bank from Canada. Can this bank even legally do that, or is it actually supplying a service without getting all of the regulatory approvals required under Canadian banking regulations? These are some very complicated issues that we're going to have to work our way through.

If the movement of people is important for the delivery of Canadian services, who within a firm, generally speaking, needs to travel to a foreign market? The management or the supervisory staff? Are we aware of a foreign interest in changing any limitations that Canada may have in this area?

[Translation]

With the upcoming WTO negotiations on services, we'll be looking at whether rules should be established to govern the granting of the subsidies to national service providers as well as for setting up safeguard mechanisms. These are technical and complex matters in the context of providing services. Moreover, even though some mechanisms have been set up for the trade of goods, nothing yet exists for the trade of services. One must understand the concerns of Canadians in this regard.

[English]

Finally, let me turn to another problem. Statistics on services are generally not as detailed as those on trade in goods. The Canadian service database is relatively good, but it requires work. Furthermore, it is difficult to determine market access opportunities on the basis of statistics. How important to the Canadian service sector is the availability of services trade data? How are these data used by Canadians services firms? More importantly, how do we better understand our real interests if the statistics data are limited?

• 1025

Mr. Chairman, I have tried to whet your appetite for the upcoming services discussions with Canadians. There are important issues to be debated and resolved, and my colleagues and I will be happy to answer any questions that you or your members may have. Thank you.

The Chairman: Thank you, Mr. Gero. That was a very helpful presentation.

Could I pick up on your last point about the statistics on services? It seems to me that it's something we have heard for years in this committee. In fact, for the very reasons you pointed out, our statistical understanding of services is very vague to say the least. If a lawyer phones from Toronto to Chicago and does something on the phone, and he then sends the bill to the American company's Toronto subsidiary that he has been talking to, in a way he has exported a service and in a way he hasn't. There is no statistical way that you're going to be able to measure millions and millions of transactions like that. They happen every day in a market as integrated as the one we have with the United States. Do you have any confidence in these figures?

Mrs. Sheila Finestone: Why do you want to?

The Chairman: Because we get into—

Mrs. Sheila Finestone: Basically, Bill, the question is the extent to which you want your life regulated by rules and other procedures.

The Chairman: No, I don't want my life regulated. However, if Canada is a significant exporter of services, we want to know what we're exporting.

Some people will say that if an American comes to Ottawa, lives in a hotel here for a week, and spends $2,000, that's a service that has been exported because we've earned foreign exchange from that person. If we don't define what these things are, we don't know what we're doing in terms of these negotiations that we're entering. We're going into these negotiations and trying to find rules for services, but we don't understand them, nor do we understand the numbers involved.

You said at the beginning that we export $40 billion in services. I just wonder how confident you are about the accuracy of that number.

Mr. John Gero: That's a good question, so let me explain a number of things.

Chances are that the number is understated, but there are three issues. One is a question of definitions and trying to define service sectors. How do you define them? One can define what a widget is and one can therefore take statistics on widgets and know them. Service sectors are a little more difficult to define. Even when talking about telecommunications services, for example, one understands it when there is exchange between phone companies. But what happens if that telephone service is being provided by an Internet service provider over the Internet? Is that also telephone service? There are a number of definitional questions.

Secondly, of course, there are ability-to-count questions. If a widget goes across the border, chances are that there is a customs declaration. The customs guards can check. If required, they can do samplings by counting the trucks coming across in order to get at the accuracy. As you rightly said, it's much more difficult in the services field. A lawyer phones up somebody in the United States and bills him in the United States. That's much more difficult to count physically, so you do it on the basis of surveys. Surveys, however, are only as good as the people filling them in. So that's the second problem.

Thirdly, to answer the question about why we need to know these things, we need to be able to measure the impact of what it is we're doing. In the context of negotiations, if I'm going to move a tariff on a particular good from 10% to 8%, it's relatively easy to ask about what I'm giving up measure-wise and what I should therefore expect back in equal trade. In the services context, that becomes a lot more difficult if we don't have good statistics on the impact of services. That's why it's vital.

I don't know how much you wish to go into this, of course. Fortunately, Canada has Statistics Canada, which is one of the foremost statistics agencies in the world, so we're better off in a lot of respects than the rest of the world is. If you're interested in having Statistics Canada come in to explain things about trade in services and the statistical problems involved, I'm sure that could be arranged.

The Chairman: We might, because these matters become huge issues politically. When we deal with our American colleagues, they're always saying we have a trade balance with them. On the current account balance, though, we don't. When we go down to meet our congressional colleagues, my experience with them is that their statistics are terrible. They'll say there was a $1 billion trade balance in your favour last month, and three months later it will be totally thrown out the window because they will get a whole new set of figures that make it all impossible.

• 1030

So these statistics, it seems to me, are not only important in terms of helping the negotiators understand what rules to create, but they have a political dimension to them, because people are always pointing fingers and saying, who's winning and who's losing in the trade game. If we don't know what we're trading, we don't know whether we're winning or losing and what we're delivering to our citizens.

So I think it is very important, but I don't expect you to have an answer for it, because I know that other countries that we travel around and talk to are struggling with this as well.

Take architects, for example. I talked to an architect the other day. They don't take plans across borders anymore. They send them by electronic means. You mentioned the Middle East. How do you know how many architects in Toronto are punching a button and sending plans for airports off to the Middle East? You don't have a clue whether it's a half a billion dollars or whatever, except for through these surveys you're talking about. Is that right?

Mr. John Gero: There are various ways. Of course, there are the surveys. I trust my friends in the Department of Finance to be willing to pick it up in the context of payments he may be receiving in that regard.

The Chairman: But does the tax audit feed back into our statistics in terms of—

Mr. John Gero: Not necessarily the tax audit, but certainly revenue figures do feed into the macro figures of balance of payments and those kinds of figures. It's an easier estimation at a macro level, in larger terms such as in balance of payments terms and the flows that creates. Unfortunately, in a trade context, one really needs to have them at a micro level too to be able to know what is going on. That's where it becomes more important.

The Chairman: Thank you. That's helpful.

Mr. John Gero: But you should be aware that this is an issue we're working on. Domestically there is a whole series of working groups with Statistics Canada and industries involved in defining more clearly the services statistics. In all the various international organizations, be it the OECD or the United Nations or the WTO, one is looking at services statistics, but one needs to be aware that there are certain limitations on our knowledge base.

The Chairman: Thank you.

Mr. Penson.

Mr. Charlie Penson: Thank you, Mr. Chairman. This is an interesting area because it has a tremendous potential for us, I think, as the panel has already identified, in terms of growth. I think Canadians are good in a number of areas that are basic to providing service around the world; services that are required and wanted in other countries. But the question is, what sectors of the service industry have experienced difficulties? Which ones, and what are those difficulties? If you can help us there in order to invite those people to attend our hearings and explain them more fully, it would be helpful. My understanding is that engineering is one of those that does experience some difficulty getting access.

The Chairman: SNC Lavalin? That type of thing?

Mr. Charlie Penson: I know that in general engineering is experiencing some difficulty. So that would be helpful if the department has knowledge of sectors that we should invite specifically to the committee.

The other area you've already identified, but which is a real thorn in our side, is our own problem right here at home: interprovincial trade barriers. There was some movement the other day in the social union where we got some trade-off in terms of mobility, in terms of health care and labour, that was long overdue. But we have a long way to go there. In fact, when we had a study of the small and medium-sized enterprises right here at this committee a few years ago, one of the biggest areas they identified as a problem in doing business in terms of trying to expand their business into an international one is that you can't get the sort of size you need in Canada to launch off into international business because they're restricted by trade barriers.

An example of that is right in my own riding of Peace River. There is the absurd story of a local fellow who works for the Alberta government and has become quite an amateur historian. He's written several books about Mackenzie when he went to the Pacific through our area. He decided to take a group of senior citizens on a tour of the Alberta and British Columbia Peace River block, where this took place. He rented a van, had 10 people in his van, and was driving into British Columbia from Alberta. He stopped at the border because it says all trucks and vans have to report to the vehicle inspection station, and he was restricted from going into B.C. because he didn't have a licence to do this.

Mrs. Sheila Finestone: Excuse me, what border?

Mr. Charlie Penson: He went in to talk to them for over an hour at the station. They said okay, I guess we'll let you go, but we are going to restrict you to one stop in Dawson Creek, which was 20 miles down the road, and then you have to turn around and come home.

• 1035

That's the kind of thing we face in this country. It's absolutely absurd. If we can't get our own act together, how are we going to resolve problems with access to international situations?

The Chairman: You try to take a case of whiskey across a provincial border and you'll find out what border patrols are all about.

Ms. Colleen Beaumier: What do you mean across the provincial border?

The Chairman: It's true. It's against the law to do it. It's against the law for you, as an individual, to get into your car and drive a case of whiskey across any border across Canada. And by the way, if you want to know, it's a federal law. So if we should do something about it, maybe we should look to ourselves.

Mrs. Sheila Finestone: Excuse me, but who is going to stop your car?

The Chairman: You don't think they'd do it?

Mrs. Sheila Finestone: It's never happened.

I only get tickets for speeding.

[Translation]

Mr. Benoît Sauvageau: Ms. Finestone, it happened in Quebec during the Société des alcools strike. People going to buy their liquor in Ontario were being arrested.

[English]

Mr. Charlie Penson: In any case, we've heard these stories, Mr. Chairman. Even at the SME committee, we heard these stories.

[Translation]

Mr. Benoît Sauvageau: Yes, but it wasn't prohibited and it wasn't stealing.

[English]

Mr. Charlie Penson: One company that talked to us at the SME hearings said they'd moved operations out of Ontario into Michigan. They could now do business into Canada more easily than they could from Ontario selling across provincial borders. That's the kind of thing we face that has to be resolved.

I'm not asking for an answer, but it seems to me that one of the biggest problems we face is getting our own act together here at home.

Mr. John Gero: Very much so. Let me take both your questions.

Virtually in every service sector Canadian industry has run into problems. You mentioned one set of professional services, but it's across the board in professional services in the context of the regulations every country has in certifying their ability to do work in other countries. They exist here in Canada too, and I'll get back to that in the second question.

It exists in financial services, the ability of our banks, our insurance companies, to be able to work abroad. It exists in construction service providers, and so forth. I think it's prevalent in virtually every service sector one looks at. And you're right, in reverse, we ourselves have a complication in the context of our own constitutional makeup, because a lot of the services are regulated by provinces, not by the federal government.

The one you mentioned presumably has to do with motor vehicle regulations, which are provincial responsibilities. They may be in the context of a transportation safety regulation or what have you, or it could simply be a question of insurance of buses carrying people commercially. In a number of contexts, we all know of situations on the construction services side.

That's why, as I underlined to you here, that we in the services area in particular will have to work very closely with our provincial counterparts, because a lot of the Canadian instruments used in the context of regulation, be it for consumer protection or safety, are all in provincial hands. To the extent that we're going to be involving those in a trade negotiation, we have to have all the provincial regulators and the provincial governments on board in what we're going to do in the context of the negotiations.

Mr. Charlie Penson: I'd just like to ask you a question. In regard to the NAFTA, where our professional people are allowed to work in the United States on specific projects, that does not apply to people who are not professionals unless they have five years' experience. Is there any movement there to try to change that? That also is a restriction that is hurting the ability of some of our Canadians to work on a site-specific project.

Mr. John Gero: There are a number of issues in the context of the temporary movement of personnel, both in the context of NAFTA and the WTO. To the extent that we would wish to change those, we would have to reopen the NAFTA in that context, to negotiate better access. So far, we're not in a position to start reopening the NAFTA, but hopefully we'll get at some of those same temporary entry issues in the WTO negotiations or in the context of the FTAA.

[Translation]

The Chairman: Mr. Sauvageau.

Mr. Benoît Sauvageau: Thank you, Mr. Gero. In Quebec, we put a hypothetical solution on the table concerning the interprovincial trade problem with a view to simplifying it as it is often said it's easier to trade between countries than between provinces. But we'll talk about that a little later.

I'm interested in the services problem. First, if we want to regulate the services sector, how will we find a definition of what this sector is? Secondly, how would we control intra-firm services?

• 1040

Mr. Graham mentioned law firms. Some of them have 18 offices in different countries. SNC-Lavalin and Bombardier have seen the number of their offices multiply all around the world. Yes, one can think about controlling the services sector, but you also have to take intra-firm services into account.

Will banking services also be included in those services under discussion? We know that huge distinctions must be made in the area of banking services. Will information services, including the Internet, that we've talked about, also be part of this? How would we be able to ensure control?

In the area of services, you have extremes; just think about banking services, information processing services and consulting engineers. Should those different services be treated separately or should they all be grouped under the services umbrella?

Let's not forget that some services, like securities, are mainly provincial in nature. Are there any links from province to province like with the Commission des valeurs mobilières du Québec, for example? There are certainly other examples in other provinces.

Mr. John Gero: As soon as we undertake these negotiations, all services in all sectors will be on the table. The methodology still remains to be defined.

As you know, within the context of the GATS, we've established many protocols for the different sectors such as one for telecommunications and another for financial services. It's too early to know whether there will be sectoral or general negotiations. However, I believe those two approaches will be used to solve problems specific to each sector. I believe our colleagues from the Department of Finance would be shocked if architects and banks were to be governed by the same rules. We'll settle the methodology question in the coming months.

Mr. Benoît Sauvageau: Will the matter of intra-firm controls be settled in the context of sectoral negotiations?

Mr. John Gero: I believe this problem is similar to what is found in the context of a manufacturing industry. There are always intra-firm transactions and they have to be settled within the same context just as you regulate transactions between two firms dealing at arm's length.

Mr. Benoît Sauvageau: Fine. How would you look at a service that comes under provincial jurisdiction?

Mr. John Gero: That would doubtless require discussion involving ourselves and the provinces. The federal government does not have the right to take a position without consulting the provinces first.

Mr. Benoît Sauvageau: Fine. Thank you.

[English]

The Vice-Chair (Ms. Colleen Beaumier (Brampton West—Mississauga, Lib.)): Thank you.

Mrs. Finestone.

Mrs. Sheila Finestone: Thank you very much.

I must say I am just listening and learning, but there are a few things I have to understand before I can learn.

We established a cultural protection under the free trade agreement, under NAFTA, so we defined... Don't laugh, it's a big problem—2001, okay. So is it a cultural good or is it a cultural service? I know the chair asked that question, but I ask this specifically. How do you negotiate a reduction in a barrier?

For example, film distribution in India was discussed with me in 1994, 1995, and 1996 when I was in India, and we were never able to pull a deal because there was some form of barrier that didn't allow us to distribute and show Canadian-made films, but we could show National Film Board films, which I found a little peculiar. Aren't those Canadian made?

We never got to signing a deal, which was to be an exchange. India is a huge producer of films—I think there are 365 feature films a year, as opposed to about five or six in Canada and about 100 worldwide. So there's a wonderful market for Canadian goods, Canadian service. If you go to a movie, is that a service? What if you buy or rent a film? How does it work? What's the problem with negotiating such a bilateral accord versus a multilateral definition and control over a cultural product? Is that product a good or a service?

• 1045

Mr. John Gero: You've touched on some of the questions that I hope you, in your consultations with Canadians, will answer for me.

But let me give you the dynamics of some of this. A film can be both a product and a service, in the context that if you put it on a reel and—as in the old days—took that reel, put it in the back of your Chevy station wagon and the distributor took it from rural cinema to rural cinema, when that film crossed the border, it was clearly a good. In fact, the GATT agreement has a specific article dating back to 1948 about film as a good.

On the other hand, the production of film and the distribution of film are services in that regard. I'm not familiar with the negotiations we had with India, for example, but in a lot of countries there are a number of restrictions on the ability to distribute film, including Canada, of course, in that regard. So that's a restriction on the services side because the service is the distribution of that film.

You're also right that there's a major issue in the context of what's a good and what's a service, and it hits particularly in the cultural sector. Let me give you an example. I go to the store and buy myself a CD, which is in a nice little plastic box and was hopefully manufactured in Canada. But let's say this is a classical record brought in from Europe. It's clearly a trade in a good. That CD and the music on it is a good.

Suppose that instead of going to my music store I go into my computer—totally aside from the barber shop, because that's a different issue, which is broadcasting to the public—go to the Internet and hit a web page that says if I send them my credit card number they will send me electronically the same music I just bought on a CD. It comes winging in over the telephone wires and I download it onto the hard disk in my computer. Whether I even download it from the computer's hard disk to an actual diskette or not is a different issue. But even if it stays in my computer, given the fact that there's now sort of stereophonic sound and loudspeakers, etc.—and I can certainly plug my computer into my stereo set—if I now start playing that music, have I in fact bought a good or a service via the Internet?

Mrs. Sheila Finestone: It sounds to me like I bought a headache.

Mr. John Gero: Hopefully not. Hopefully you got some wonderful music that will alleviate your headache.

So these are very real problems we'll have to come to grips with in trying to define what's a good and what's a service.

It runs into the same thing in a broadcasting sense. The broadcaster puts a show on the air through a satellite and you download it on your TV set. In the current context, that's a service. Suppose, instead of doing that, he does it the old fashioned way and puts that show on a cassette and ships that cassette across the border. He's now trading in a good.

These are all very complicated issues, and we need to figure out what our own domestic interests are, how to try to define them, and where our interests are in being able to do that.

Mrs. Sheila Finestone: I'm not going to pursue that because I think the battle over the distributor... You talked about the difference between distribution and purchase and carry, etc. I think the distribution rules in Canada are certainly not in our favour, and we should do something about access and distribution, which is marketing and distribution.

On page 10 of your presentation, which I found very interesting, you talk about statistical data that are limited. We have four major research councils that we support as a federal government, and Stats Canada would be a fifth arm, in the sense of research potential.

To what extent do you, in doing your research and in trying to look for some answers, deal with Stats Canada? Where do your interests manifest themselves? Do you use the services found and the research potential we support in any one of our research councils, such as SSHRCC?

• 1050

Mr. John Gero: We use everything that's available to us. Clearly, in the statistical analysis, Statistics Canada takes the lead, but they have regular research projects with some of the research institutions, but not just the research institutions.

There are working groups with Canadian industry. For example, on tourism statistics there's been an ongoing working group with academic associations and the Canadian Tourism Association to try to find better ways of gathering statistics and get a clearer definition of what should be included in those statistics, and so forth.

[Editor's Note:Inaudible]

Mrs. Sheila Finestone: ...come under services?

Mr. John Gero: Health services are another aspect. That's a different sector. Absolutely.

Mrs. Sheila Finestone: Is health services one of the fields that will be on the negotiating table?

Mr. John Gero: We've always taken the view that as far as we're concerned we want to have absolute maximum freedom to do what we want in the health sector. I presume we will have the same instruction in these negotiations.

Mrs. Sheila Finestone: We will have to bring some kind of bill into the House of Commons to handle bulk water, which I can remember having very serious discussions about in 1988, 1989, and 1990. Now we're at the point where we have to bring in a specific bill to say we're not exporting and we are protecting our interests in bulk water. Will we have to do the same thing when it comes to the other areas?

Are these questions you're asking us to look for...

Mr. Charlie Penson: I'd like an answer, Mr. Chairman.

Mrs. Sheila Finestone: So would I.

The Chairman: I don't think it's fair to ask Mr. Gero that question.

Mrs. Sheila Finestone: I want to know if that is an area that's up for...

Mr. John Gero: Hopefully, in part of your own discussions, and in the context of your ultimate report, these are the kinds of answers you will provide for the negotiators as to what the Canadian position should be and how the government should handle it. That's the purpose of the consultations you will have and we will have as well.

The Chairman: It's going to be interesting. Thank you.

Mrs. Sheila Finestone: Thank you, Chairman. I don't think I want to sit on this committee.

The Chairman: There is unlimited scope for ingenious approaches.

Mrs. Sheila Finestone: Do they use a jigsaw puzzle model and keep filling the holes with different shapes? How do they do it?

The Chairman: No, I think the model is more like a seven-layer chess game, with them all going on at the same time at different layers, and you're trying to keep your eyes on all the pieces at once. I think it's more like that.

Mr. John Gero: If it were only just seven layers.

The Chairman: Yes, that's true because there are 130 countries, so there are many chess boards.

Madame Debien.

[Translation]

Ms. Maud Debien: I put a question like this to your colleagues yesterday. I'd like to know if, at present, there are negotiations ongoing with the provinces concerning services and all the other matters we've discussed here this morning with a view to future bargaining sessions. We know these negotiations will have an impact on the provinces.

Mr. John Gero: There are two different kinds of consultation. We have regular consultation with the provinces within the context of international negotiations and we have set up a federal- provincial trade committee that has monthly discussions. Besides that, Industry Canada has negotiations concerning domestic trade that have more to do with interprovincial trade barriers.

Ms. Maud Debien: You haven't answered my question. Canada is preparing to take part in WTO negotiations where there will be major discussions on services. We know they're important because a lot of things remain vague. Right now, there's not even a definition of what a service is. I'd like to know whether the provinces are now being consulted prior to these WTO negotiations.

Mr. John Gero: Of course, and this is the responsibility of the committee on trade.

Ms. Maud Debien: It's the committee on trade.

Mr. John Gero: Exactly.

Ms. Maud Debien: Fine. Thank you.

[English]

Mr. John Gero: That's very helpful. We have something similar called the C-trade, which is a committee on trade. The federal officials and provincial officials regularly go through the international trade agenda and work together to come to a common Canadian position.

• 1055

That's vital to us, because as I said earlier, a number of these areas are provincial jurisdiction. Therefore, if as a Canadian negotiator one goes to the table to negotiate with the United States on some of these issues, you have to have the provinces familiar with the issues, knowing what the Canadian position is, to help determine the Canadian consensus.

Mrs. Sheila Finestone: How would you—

Mr. John Gero: In fact, Madam Finestone, that's just an official meeting. There is an annual meeting of ministers as well. Next week there will be a meeting of federal and provincial trade ministers. That's part of the annual meeting they have to go over this kind of agenda.

Mrs. Sheila Finestone: Mr. Chairman, it begs the question for me. We've got, as you pointed out, multiple-level undertakings going on, and there is a request, I think a legitimate request and I presume heartfelt, that we would enable some kind of an enlightened suggestion as to how the process should go. I don't feel very enlightened when I even think about this project. Notwithstanding, we have a responsibility. We've got to know, first, who our guests feel would be important to interview or to meet with. Secondly, I get a sense of the level of questioning they would like. But I think we need a little bit more on the specific kinds of areas that are the real problem areas.

The Chairman: I think that's true. But if I may just suggest in terms of the way we're trying to balance this and what we're trying to do, obviously these are the very general sessions. So we're trying to get into very difficult problems. Hopefully by the time we travel across the country and meet Canadians and hear from different groups, that will start to crystallize in our minds the specifics of people's problems and we'll be able to turn our attention to that.

This is Services 101, if you want to call it that. We'll get into more specifics as we travel across the country. But if we don't have this kind of general background, it seems to me we won't be able to digest the information very well.

Mrs. Sheila Finestone: I still go back to my question, because you can be the most intelligent person in the world—and I put you in that category, amongst those—but if you don't know the issue, how can you ask the proper questions?

The Chairman: Right. Well, we're hoping—

Mrs. Sheila Finestone: Therefore, I think we need to know where the gaps are and where the issues are, as far as they're concerned, that might be on the table.

The Chairman: Right. Mr. Gero.

Mr. John Gero: What we tried to do, in the context of this presentation, is present to you some of the general questions. What I think you will find, if you ask some of these questions of some of the witnesses who will appear after us—some of the industry representatives and other Canadians—is that their response to the general questions about what they are interested in and what they think the Canadian problems are will very quickly get you into a much more detailed kind of focus. What we wanted to make sure is that you hear that from Canadian interlocutors so that they identify the problems directly to you, because frankly, there may be even some that we miss in that context, and that's the purpose of these consultations.

I can certainly say to you and go through, for example—well, in the legal professional services context, when we're talking about accreditation, there's a particular problem in the European Union that we're going to have to resolve as part of this negotiation. There may be others. And when you talk to a “legal representative” who may appear in front of you and ask him the question, what are the barriers your association runs into, he will give you that specificity.

The Chairman: Mr. Penson has a quick follow-up question, and then we've got to clear this room.

Mr. Charlie Penson: It's basically on the same topic. On page 4 of your presentation on the GATS, in the last paragraph, you say:

A new series of GATS negotiations is set to begin in the year 2000. Over the coming months, the Canadian Government will be consulting Canadians...

Are you talking about our committee or, more than that, that your department will be consulting?

Mr. John Gero: More than that. This committee is a chief forum for consultation. But at the same time we have the sectoral advisory group on international trade, which has a very specific group on services, with whom we've already met and have started to raise some of the same kinds of questions we've raised with you. Of course, we are, on a regular basis, in a much more micro fashion, having discussions with different interest groups. For example, the other day we had a meeting with all the professional service associations in Canada—architects, engineers, lawyers, etc.—to start talking to them about—

• 1100

Mrs. Sheila Finestone: Nurses?

Mr. John Gero: Were nurses there?

A voice: No.

Mr. John Gero: Health care providers weren't there.

Mrs. Sheila Finestone: I ask as a point of information. They're recruiting them by the hundreds in the United States.

The Chairman: We're not doing health care. I mean, this is a problem. It's very clear that the policy of this country—and you'll remember the MAI debate and everything—is leaving health care providers out; they are not going to be part of an international trade deal.

The problem is going to be defining differences. If you provide a computer service to a hospital or food in a hospital, it may be a service provision, which will be international. But if you're going to provide nurses and doctors, that's going to remain provincially and federally regulated. That's clearly our policy on that.

Mr. Charlie Penson: Mr. Chairman, I take issue with that.

Mrs. Sheila Finestone: I'm very satisfied.

Mr. Charlie Penson: Well, let's just get to that aspect of it. If we're looking for access for our Canadian workers, professional or otherwise, into international markets, what's wrong with trying to find access for health care providers? Canadians can have a lot to offer in terms of supplying services in other countries. We don't just look at it in terms of what's available internally, but we want access for all our professional people, and it seems to me to that extent it's important to have health care as part of that.

The Chairman: Yes. Maybe I'll let Mr. Gero...

Mrs. Sheila Finestone: I'm sorry for raising it.

The Chairman: But it seems to me the problem there is who is going to have the right to establish the standards. Quebec doesn't mind if someone wants to move up from New England to either practise medicine or provide a nursing service. They may welcome them if they're needed. But it's got to be Quebec and Canada that determine the standards that will determine whether they're acceptable or not. Have a look at the whole European Union. That's the whole discussion over there. It's an enormous debate. Can a doctor pick up from a provincial place in, say, Greece and move off and open a Harley Street practice as a brain surgeon in London? No.

Mr. Charlie Penson: That's the same for all professionals.

The Chairman: But who regulates it, and how, is the debate and that's what we're here to learn about, figure out how we can do it in the best interests of Canadians.

Mrs. Sheila Finestone: It's the same thing for a chartered accountant, or a psychologist or a psychiatrist or a podiatrist.

Mr. Charlie Penson: Can I just finish up on the question I asked Mr. Gero? My understanding is your department is going to continue to meet with the industry groups. I would hope we would have a chance to talk again to you in regard to what you're learning so that we're on the same wavelength going down.

So we'll need them back at some point.

The Chairman: I think so, yes. I think we should go across the country, and then maybe when we come back have a wrap-up, with the same officials we met with at the beginning—

Mr. Charlie Penson: Exactly.

The Chairman: —to make sure we're going down the right track.

[Translation]

Ms. Debien.

Ms. Maud Debien: Mr. Chairman, I don't know if the request I'm about to make is acceptable. It's only a point of information and strictly a request.

Right now we're talking about the WTO, the World Trade Organization. If we're at the WTO today, it's because there were negotiations before this. I think I understand that all this started with the GATT. There were also the Tokyo and Uruguay rounds of negotiations.

Would it be possible for someone to come here, maybe for half an hour or so, to give us a brief history of all this since the very beginnings and explain how we've wound up today with the WTO? What were the stakes with GATT? What results did we obtain? What were the stakes during the following rounds of bargaining? What was grafted on? Was added on? Could we be given a very condensed version of what has led us to the WTO, this situation that's the result of many previous negotiations?

As these discussions and this report are very important, to my mind, for Canada and the other provinces, I think it would be very helpful. I personally feel at a bit of a loss and I'd like to know more. I'd really like to read through this pile but I wonder if I'll find all that information. We must examine this matter rather quickly during the coming weeks and hear all kinds of witnesses who will be telling about this, that and the other thing. That's why I'd like to have someone come before us to give us the background of the situation and explain what the stakes were each time, what the results of the negotiations were, what the stakes were during the following round, their results, what was added on and so on.

• 1105

Basically, I'm looking for a briefing session that could help us understand why we've wound up with the WTO, today. I don't know if this would answer the needs for information my colleagues have, but it would answer mine. If you tell me that my colleagues are perfectly knowledgeable about all that, that they know the whole process and goings on very well, that they're familiar with these questions, well, then, I'll take my book and go and read it somewhere else and try to find information on my own. But if this does respond to a need my colleagues have, it seems to me it could be worth it to spend a half hour or three quarters of an hour with someone versed in things pedagogical, not psychological: a good teacher.

The Chairman: Mr. Klassen has already tried to do that.

Ms. Maud Debien: You might do it yourself, Mr. Chairman.

The Chairman: Talking about things pedagogical, that's the subject I thought for years at university.

Ms. Maud Debien: Then why don't you do it?

The Chairman: I can assure you that it would take far more than half an hour to review the history of all these international agreements that are of enormous complexity.

Ms. Maud Debien: But we could at least be broadly apprised of what the major stakes may be. For example, we were given a sheet about the stakes in agriculture.

The Chairman: We could give the members of the committee a summary of all the stages, if you wish.

Ms. Maud Debien: The stages, the stakes, the results obtained, the following rounds of negotiations and so on.

The Chairman: Agreed, we'll prepare that kind of document. I think that if you're not aware of history, then you can't understand the problems that will face us in the future.

Ms. Maud Debien: That's exactly it.

The Chairman: You have to know your history.

[English]

Mrs. Sheila Finestone: That's why I repeated that I needed a brain transplant. I wouldn't keep too much, just a little bit.

The Chairman: You can have the whole of the GATT part, believe you me.

Mrs. Sheila Finestone: I don't want the whole; I just want—

The Chairman: It's very interesting, about how the United States scuppered the original thing, and you can learn all about world politics and how nasty it all is. But we know it.

We're going to have to adjourn this one, though.

Thank you very much, Mr. Gero. That was a very helpful introduction to this very complicated issue.

By the way, members, the trade subcommittee is to meet here now. They were to meet in room 701, but they're meeting here.

This meeting is adjourned.