I am thankful for the opportunity to speak to the trans-Pacific partnership, the largest trade agreement in the world, one in which Canada can show leadership. I have always believed that Canada must be a leader, not a laggard, on trade.
Why trade, we have to ask ourselves. I think most Canadians understand that Canada is one of the great trading nations of the world. We operate today in a globalized trading environment, a globalized marketplace. Whether one believes in globalization or not, no one is going to be able to turn back the hands of time on globalization. It is a fact that Canada needs to adapt.
If we were going to promote trade, the first place we would want to do that, of course, is under the World Trade Organization, which is the pre-eminent forum in the world for rules-based trade. However, with the rise of emerging economies, there has been a significant shift in the economic balance within the global economy. Emerging economies are flexing their muscles and it has become much more difficult to actually make headway in establishing new rules for trade at the World Trade Organization.
As that organization has become somewhat comatose and unable or unwilling to move forward with new rules to adapt to a rapidly evolving global trade environment, Canada has to seek new ways of promoting its trade interests around the world. How do we do that? There are a number of different ways. We can certainly negotiate bilateral trade agreements and investment agreements. We have done that with many countries around the world.
We can get involved in plurilateral negotiations, and Canada is involved in those as well. There are three that I am thinking of specifically. One is the environmental goods agreement, where like-minded, willing partners are negotiating a global agreement on services, technology, and environmental goods.
We also get involved in regional trade negotiations. If we are not going to make headway in the short or medium-term at the World Trade Organization, the best to do this is to bring together like-minded trade and investment partners and negotiate an agreement that not only eliminates tariffs on goods but also many of the non-tariff barriers behind the borders, the ones that frustrate our exporters so much. That is essentially what the trans-Pacific partnership would do.
What is the trans-Pacific partnership? It is 12 like-minded partners. It is not only Canada. The United States and Mexico are NAFTA partners. Our free trade partners, Peru and Chile, are members of that partnership. Then there are countries that we do not have free trade agreements with, which are now part of the TPP, countries like Australia, New Zealand, Malaysia, Brunei, Vietnam, and I would be remiss if I did not actually mention the third largest economy in the world, Japan.
This agreement is truly the largest trade agreement of its kind in the world. It represents somewhere in the order of 800 million consumers and somewhere around $29 trillion of the global economy. Canada needs to be part of this. What Conservatives are suggesting to the government is that rather than hiding behind the skirts of further lengthy consultations, the government should now declare its support for the TPP. That is what this motion would do.
Just to be very clear, I would like to repeat, for the information of not only members in the House but the many viewers who are watching these proceedings. This is what the motion would do. It states that the House agree with the following:
The Liberal government has gone out of its way to try to proclaim its bona fides on trade. Its record is quite poor. Members may recall that over 13 years under the Chrétien and Martin governments it got virtually nothing done on the trade file.
It was only in 2006 that our former Conservative government embarked upon the most ambitious trade agenda Canada had ever seen. We not only embarked upon that plan, we actually executed on that plan. Over a short period of less than 10 years, our Conservative government was able to conclude negotiations on trade agreements with an astonishing 46 different countries. The previous Liberal government’s record was three small trade agreements. We got left far behind within the global trading environment. Under our government, of course, we caught up very rapidly, but we are not finished.
The torch has been passed to the Liberal government. It has claimed that it is a supporter of free trade and it is a supporter of trade agreements, but let us see it stand up in this House to support this agreement.
One of the reasons why it is important Canada be part of the TPP is that if we are not part of this, our North American trading preferences with our NAFTA partners, Mexico and the U.S. will very rapidly be undermined. Right now, we have highly-integrated supply chains across our borders, where we trade freely among ourselves. That is a platform, also, for us exporting goods to the rest of the world, because not only do we compete with the United States and Mexico, we also do business together. When we look at the auto industry, there are parts within the typical car that comes off the assembly line that have crossed our Canada-U.S. border-Canada-Mexico border more than seven times. So, we can see how these parts, these manufacturing inputs, flow across borders seamlessly to create prosperity for our country and for our NAFTA partners.
If we are not part of the TPP, very quickly, it will be the United States and Mexico that pick up many of our trade opportunities within the Asia-Pacific region. We will lose out. We will also see our investment preferences disappear very rapidly.
Think about it. If Canada is not part of the TPP but the United States and Mexico are, and Mexico already has a trade agreement with the EU, the United States will very quickly have one under TIFA, think of where investment would flow? Someone making a decision to, say, invest in the auto industry is going to invest in a jurisdiction that has the best access, free trade access, to markets around the world. So, the United States and Mexico would have access to the European Union; they have access within the North American marketplace, under NAFTA; and they have access, now, to the Asia-Pacific region. Canada would not have that kind of broad access.
Where is investment going to flow? Not to Canada.
There is a huge risk of Canada being on the outside, looking in, seeing its trade opportunities rapidly eroded around the world, seeing our investment advantages rapidly eroded.
Let me give an example of where this happened and why Canada has to be so assertive in staying ahead of the curve when it comes to trade.
Members may recall that the United States, the European Union, and Canada were all negotiating a free trade agreement with South Korea. We were doing it at the same time. Then something happened in Canada. We had the BSE crisis, which hit our cattle and beef industry. South Korea and countries around the world closed their markets to us, temporarily, until we could assure them that our beef was safe, that it was healthy to eat. Then those markets opened, except for two markets: Taiwan and South Korea. South Korea said, “No, we don’t think that your beef is safe to eat“. It was wrong. Ours is the best beef in the world. However, South Korea, for its own purposes, probably protectionist purposes, chose not to open up the market. So, we had to take it to the World Trade Organization and we had a dispute settlement. At the end of the day, of course, Canada won, but in the meantime, we lost a couple of years in negotiations on a broader trade agreement, and the European Union and the U.S. got their deals in place. Those deals were in effect in 2012.
In the subsequent year, when Canada did not have a trade agreement with South Korea, but the EU and the U.S. did, Canada lost $1.5 billion worth of exports in South Korea. That is the cost we pay when we do not actively negotiate open markets around the world for Canadian exporters and for Canadian manufacturers.
That is the risk that the Liberal government takes by not declaring its support for the trans-Pacific partnership. We want to stay ahead of the curve. We want to be leaders, not laggards on trade. That is our reputation over the last 10 years. Very quickly, we see that reputation waning under the new Liberal government.
We have had strong support from stakeholders across Canada. When we were in government, we worked very closely with the provinces and territories to make sure they understood what it was we were negotiating in the TPP, to make sure they understood the benefits to each one of their provinces and territories.
We also consulted broadly with stakeholder groups and industry organizations across the country. Overwhelmingly, they supported Canada being part of a TPP. Overwhelmingly, they supported the outcome of the TPP when it was finally announced, so much so that even the supply managed sector, which many had said are going to go to the barricades on the TPP, that they are going to hate this agreement because we are providing some marginal extra access to the Canadian marketplace for products such as chicken, eggs, turkeys, hatching eggs and dairy, they would not like this deal.
At the end of the day, when we actually announced it, and we had provided them with assurances that this was not going to decimate their industry, they saw the deal in front of them and said that the Conservative government actually negotiated a pretty darn good deal. The access was limited to very small amounts coming across the border, in addition to what access they already had.
In fact, I have spoken to those organizations since, and they will very quietly admit that the agreement actually ended up being much better than they had expected, that we had done a phenomenal job of negotiating an outcome that services their industry interests.
Members may recall that we were not only able to minimize the impacts on those industries, but we also provided two packages, one was a compensation package to compensate those industries for any loss in quota value suffered as a result of opening the market a little more for those products. The industries embraced that.
By the way, the compensation that we announced, which we believed was fair, which those industries embraced fully, that compensation package is now in doubt under this new Liberal government, which has always stood up and said that it supports supply management.
The Minister of Agriculture and Agri-Food, almost daily in this House, is asked about supply management and about compensation. He stands up and says that they strongly support supply management, but the government actually will not commit to the compensation package that was negotiated as part of the TPP outcome.
The same thing is true on mitigation measures. Our American friends are very good at exploiting loopholes in our trade laws. They could not get large amounts of chicken broilers into Canada, so what they would do is create sauce packs. The World Trade Organization rules in our NAFTA agreement are not 100% clear on whether sauce packs are included or are prohibited. The Americans would send these sauce packs across the border, circumventing the spirit of our custom controls.
There are many other loopholes that our friends to the south were exploiting. We said to the industry that we were going to do everything we could to plug those loopholes. We came up with a package, a set of promises that we were going to undertake to address those challenges.
No sooner had the new Liberal government been elected, then it was questioning whether, in fact, it would actually be implementing those mitigation measures. Again, the industry, the supply managed five are very upset. They will not get assurances on the compensation package, and the federal government has not been moving forward with actually addressing the mitigation measures that had been promised to them.
The Prime Minister has boasted that his government is a champion of trade. Over the last six months, sadly, we have seen virtually no progress, no clear pronouncement on whether the Liberals support the TPP. In fact, I have been looking for any new trade agreements that the Liberals have started negotiating, and there are not any that I can tell. I am looking for new international investment treaties that the Liberals might be negotiating; I am not aware of any. So where is this claim of being champions of trade?
What the Liberals have done is they have sent a chill into our Canadian investment market and into the international investment market. They have increased taxes on Canadians. They refuse to reduce the taxes on small businesses in Canada, breaking an election promise. What they have done is added more red tape and even yesterday in this House I spoke about how the current Liberal government and a private member are trying to impose additional red tape on our small businesses. What is the result? Despite the low dollar, our exports have lagged terribly.
In fact, I have the most recent statistics from the Minister of International Trade’s own department. In January, exports were $35 billion. That is just exports to the U.S. In February, those went down $2 billion. In March, those exports went down $2.5 billion. It is a terrible record over the last six months for the current Liberal government.
We know that the Prime Minister has been hobnobbing with President Obama. We know that the Minister of International Trade has been travelling all over the United States, going on talk shows—embarrassing herself there—and talking supposedly about trade. If her performance is any indicator, Canadians would be well served if she actually stayed at home and focused on the work that has to be done here to promote our trade interests because she is not getting the job done internationally. There is a tremendous failure on the part of the current Liberal government to actually live up to its promises on trade.
Beyond that, when we look at some of the other challenges facing Canada around the world, we see that we cannot count on a low dollar to sustain our competitiveness. We have to ensure we continue to open up markets all around the world. Let me say this. For the Liberals to wait for the U.S. to ratify TPP is an abject abdication of their responsibility to be leaders not laggards in trade. What we are doing is calling upon the current Liberal government to move forward and to boldly pronounce at the Three Amigos Summit on June 29 that Canada will be supporting the TPP. President Obama has done that. The Americans have already said they support the TPP.
Here we are as Canadians, and our government just will not tell Canadians where it stands. Can members imagine the leadership we could show by standing up and saying that we believe trade is good for Canada; that we believe open markets around the world are good for Canada; that we support this largest trade agreement of its kind in the world and we are part of it; and, that we are setting the rules for 21st century trade within the Asia-Pacific region? Would that not be an amazing pronouncement to make?
Right now, it is not looking good on the Liberal side when it comes to trade, with declining trade performance and declining investment performance. This is one thing we can do to actually generate this thing that is perhaps the most significant driver of economic prosperity in Canada.
It is no longer appropriate for the current Liberal government to hide behind the skirts of consultations. There were comprehensive consultations that took place before the agreement was signed. There have been comprehensive consultations that have taken place post-TPP being concluded. It is time to step up and let the world know, let Canadians know, and let our partners and allies know where we stand on trade.
What would this achieve? It would assist the U.S. in its own ongoing work of ratifying the agreement; it would restore waning public confidence in the Liberal government’s commitment to a robust trade agenda; and, it would restore Canada’s reputation as a trustworthy global leader on trade, not a laggard.
I am very pleased to be able to promote this agreement. It would be a transformational agreement for Canadians and for exporters. It would also be a transformational agreement for Canada’s consumers, who would benefit from lower prices because of the elimination of tariffs.
I strongly encourage the Liberal government to step up, speak to this agreement, and say, “Yes, we support the TPP”.
Mr. David Lametti (Parliamentary Secretary to the Minister of International Trade, Lib.):
Mr. Speaker, I thank the hon. member for his comments and for his work on international trade over the years. While he was minister, did he have consultations with civil society groups and other groups who have now come out and opposed the TPP? They seem to be telling us that they were never consulted on any of this.
Hon. Ed Fast:
Mr. Speaker, that is simply not true. In fact, before Canada ever embarks upon trade negotiations or investment agreements and negotiations agreements we post our intentions in the Canada Gazette which is a public statement that we are inviting input into the consultation process. There is not one Canadian who was prevented from submitting his or her views on the TPP or any other trade agreement that Canada has ever negotiated.
However, I also travelled across the country. I have met with so many organizations that are on both sides of this issue. There is a small group of Canadians that are ideologically opposed to trade. We understand that and they have a voice. They have an opportunity to submit to government their concerns. At the same time, across Canada industries and industry organizations overwhelmingly supported Canada being part of the TPP and supported the outcome when we announced it
Mr. Don Davies (Vancouver Kingsway, NDP):
Mr. Speaker, I would like to congratulate my hon. colleague on his speech. He was a very hard-working minister of trade I know he is a fervent proponent of free trade agreements.
There are a number of different perspectives on trade though, one of them is a defensive one. Some argue that if the U.S. and Mexico ratify the TPP, then Canada would have little choice but to do so, particularly because it would give preferential access to our competitors to the Japanese market. On the other hand, a recent economic study has come out that estimated that 10 years after the TPP were to come into force that Canada’s economy would be only 0.28% larger than without it, in other words, only about $5 billion worth of economic activity in a $1.8 trillion economy.
When my colleague was minister, his government announced that it would have to pay $4.3 billion in compensation to the agricultural and auto sectors which would obviously be damaged by this agreement or they would not pay the money. Could he tell us if he thinks that $5 billion of economic activity 10 years out compared to $4.3 billion of compensation paid out is really that much of an advantage considering the job losses that the TPP has been estimated to cost Canada?
Hon. Ed Fast:
Mr. Speaker, I do not know what study the member is referring to, but I suspect it is probably the Canadian Centre for Policy Alternatives. There are some very left-leaning organizations out there that are virulently opposed to trade, ideologically opposed to trade.
Studies that have been done by, for example, the Peterson Institute which the member knows, has estimated that the benefits to Canada once the agreement is fully implemented on an annual basis, is somewhere between $9 billion and $10 billion. The Fraser Institute has come out with a study which apparently says that the benefits to Canada from the TPP are even greater than that. So I do not know what study the member is referring to.
We rely on well respected, unbiased think tanks which do this kind of work, review exactly what the benefits are, and come up with a realistic assessment of what Canada stands to gain. They are very clear that Canada will be a big winner under the TPP.
Mr. Larry Maguire (Brandon—Souris, CPC):
Mr. Speaker, I thank my colleague for the work that he has done to position Canada in a better position in regard to our GDP because of the trade opportunities that will come about by signing the TPP and the hard work that he did to get it to the point where we were able to get it before the Canadian Parliament. I applaud him for encouraging the government to move quicker on this.
He indicated that there were many trade barriers and lots of trade tariffs that are in place. I am wondering if he could name a couple particularly in relation to beef in some of the areas in world. In relation to the last questioner, I appreciate all questions coming from members of the House, but it is the old glass is half empty versus half full approach and I think that he has always been one who has seen the full glass in relation to trade and the benefits for our country. Could he comment as well on the fact that this is a $27 trillion economy on an annual basis that we will be looking at?
Hon. Ed Fast:
Mr. Speaker, it is actually $29 trillion. This agreement is so significant because it represents close to 40% of global trade. Can members imagine Canada being on the outside looking in and how much that would cost us?
With respect to the question about these non-tariff barriers. Often we refer to them as SPS, sanitary and phytosanitary standards, that are applied, for example, in the food and agriculture industries. Every country around the world establishes standards, rules and regulations for the quality and the health of their food products. We want to ensure that what we eat is healthy. However, those standards and rules can be manipulated to act as protectionist measures. Therefore, they are not applied for the purposes for which they were first created, they are applied in a way that discriminates against foreign products. Free trade is all about not discriminating against foreign products. The beef industry is one that suffered greatly when the door to South Korea was closed. It was our Conservative government that moved forward and opened that market again, and now we have the free export of beef into that marketplace. Our cattle and beef folks are very happy with those deals, and also with the TPP, where we are opening up huge markets within the Asia-Pacific region.
Ms. Elizabeth May (Saanich—Gulf Islands, GP):
Mr. Speaker, the hon. member is remembering the record of the previous Conservative government with I am not quite sure if they are rose-coloured glasses or what hallucinogens are involved in thinking that was a great record for trade. Negotiating lots of country deals that then failed to deliver for Canada is not a great record. Passing in secret an order in council that binds Canada until the year 2045 so that the People’s Republic of China can bring arbitration cases against Canada without the benefit of debate in this place is not a great record. With respect to the deal with Korea, within months Korea put an embargo on Canadian beef.
My question to the member is this. Why on earth would the Canadian Parliament want to ratify a deal when the leading contenders for the White House have said that they do not like the TPP?
Hon. Ed Fast:
Mr. Speaker, I think everyone in this House understands the member’s orientation on trade and investment. She is opposed to it. She always has been and always will be.
With respect to the member’s comments on investment treaties, the reason we signed an investment treaty with China was to protect Canadian companies when they invest in China. I have a clear example of where a Canadian company has invested in China. A mining company invested a lot of money in prospecting and exploring, and it finally hit a motherlode. It was a gold find. After it had done that, it applied for a production permit. Can members guess what happened to that Canadian company? The local and state governments said that they preferred to have local Chinese companies and would not issue it a production licence. They are still working on that. That is exactly the kind of case we want to protect Canadians against so that if there is a dispute like that it is lifted into the international context where there is an international arbitration by arbitrators who are fair and impartial and who will make a decision that is fair and protects the interests of Canadians when billions and billions of dollars are invested in a foreign marketplace.
Sadly, this member does not get it.
Mr. Lloyd Longfield (Guelph, Lib.):
Mr. Speaker, I find it ironic that with the number of trade deals that the hon. member has mentioned our trade balance went from a $54 billion surplus under the Liberals to a $13 billion deficit under the trade deals that have been signed. Perhaps the hon. member could comment on the importance of international relationships between countries and businesses to actually promote trade versus having photo ops to sign trade deals.
Hon. Ed Fast:
Mr. Speaker, the Liberals and the Prime Minister would know all about photo ops.
What is the bottom line when we open up new markets around the world for Canadian exports, trade and investments? What is the measure we are looking for? It is job creation. Who led the G7 in job creation over the 10 years that this Conservative government was in power? We did. We led the world in job creation because trade creates jobs, and the more we open up opportunities for Canada to trade, the more jobs we will create.
Earlier I quoted in my comments the appalling record on exports under the current Liberal government. Over six months there has been a precipitous decline in Canadian exports abroad. What is the trade minister doing? She is spending time appearing on the Bill Maher show and embarrassing Canadians. That is not the way to do it. A lot of work was done under our Conservative government. We work all around the world, and our record proves that.