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House of Commons Emblem

Standing Committee on International Trade


NUMBER 099 
l
1st SESSION 
l
42nd PARLIAMENT 

EVIDENCE

Tuesday, February 13, 2018

[Recorded by Electronic Apparatus]

(0855)

[English]

     Good morning again. Welcome, everybody, on this cold Ottawa February morning.
    Welcome to the Standing Committee on International Trade. My name is Mark Eyking, the chair. We have three parties on our committee: Liberals, Conservatives, and NDP.
    We are very fortunate to have the ambassadors and their supporting staff from four countries here with us here this morning.
    As everybody knows, we're doing a study of Canada and the Pacific Alliance countries, and the future trade agreement. This is probably our third or fourth meeting and today we're looking forward to hearing from the ambassadors.
    We usually only have five minutes for each presentation, but we're not going to be strict on that. We're going to allow the ambassadors or their support to say whatever they want and to be up front and clear in whatever they want to say. Then we'll just have dialogue with the MPs and we'll do one round.
    Mr. Marisio, go ahead, sir. You have the floor.
     Thank you very much, Mr. Chair. It's a pleasure to be here.

[Translation]

    Thank you very much for inviting us to give a presentation.

[English]

    For all of us it is very important to be here sharing with this committee.
     In my case, I will present the points of view of Chile on a potential agreement between Canada and the Pacific Alliance. If you will allow me, I will make my presentation in English. Then I'd be pleased to answer some questions in Spanish, if it's okay with you. I'm certain there will be many coincidences with my fellow ambassadors in this regard.
    As ambassador of Chile, I would like to say that we enjoy an excellent relationship with Canada. Politically we work very closely in many areas. In trade, Chile celebrated last year the 20th anniversary of a successful bilateral free trade agreement with Canada. At that time, we signed its modernization. For Chile, Canada ranks among the most important foreign investors in a crucial sector for our development, and that is mining.
    Why is it important that Canada reach an agreement with the Pacific Alliance when it already has free trade agreements with each one of its members? The bloc is a market of 225 million people. It represents 55% of Latin America's foreign trade and 44% of the region's foreign direct investment. If the alliance were a single country, it would be the eighth-largest economy in the world, with a combined GDP of over $2 trillion U.S. These figures help illustrate the size of the Pacific Alliance as a trade market and potential partner.
    The alliance brings together, as you can see, Chile, Mexico, Peru, and Colombia, which are all politically and economically stable countries within our region. It has been implemented in an agile and pragmatic fashion, building around common themes. This approach has allowed the alliance to grow beyond only trade. It now has technical groups working on education, tourism, people mobility, gender, environment, and labour, to name a few, seeking to coordinate this effort and taking advantage of existing synergies in these areas.
    From the trade standpoint, we believe the strategic perspectives of an agreement are advantageous. The four members of the Pacific Alliance and Canada can accumulate “origin”, a procedure that will facilitate the entrepreneurs of our countries to exchange product with tariff advantages, thus encouraging our insertion into the regional value chain. In addition, the trade negotiation process between the alliance and Canada presents a great opportunity to advance a certain homogenization of norms and to move forward jointly on the agenda trade issues that go beyond the tariff aspects.
    Nevertheless, there is another very important aspect. Today we're facing a complex moment at the international level. Both Chile and the Pacific Alliance are determined to demonstrate their commitment to economic trade opening and regional integration. In the Pacific Alliance we want to turn current challenges into opportunities, to build an international trading system based on clear rules and aimed at building resilient and sustainable societies. Chile believes that moving forward in creating legal frameworks through these regional agreements constitutes a higher and more strategic stage, since it creates a broader reference point to continue fostering greater integration and synergy among countries with common development ambitions.
     For our countries, it is difficult to demonstrate the benefit of this agreement only through economic figures. The result will not be seen in absolute terms because there is not only the tariff reduction, but the sum of several factors that the creation of an expanding space of integration brings, like the one we're building through this process.
    Furthermore, reaching an agreement with Canada—and also, with Australia, New Zealand, and Singapore—with the same type of negotiation, will take the bloc a step farther in fulfilling one of its fundamental objectives, which is to become an area of trade integration and projection to the Asia-Pacific. We have to be reminded that, just recently, South Korea has expressed formal interest in starting a dialogue with a view to achieving associate state status.
    In March 2017, the Pacific Alliance indicated its willingness to start trade negotiations with countries or blocs of the Asia-Pacific region, as long as they are translated into quality agreements with a high standard of trade disciplines and that they conclude in a short time. To date, we have had two negotiation rounds with Canada and Chile is prepared to host a third round from March 3 to March 9. Chile has aspired to an alliance, that is not only a framework for Latin America integration, but also opens the door to new agreements and new strategies to link us with other countries beyond our borders. These times require it and we are convinced that together, we're stronger and we will be more prosperous.
    Thank you.

(0900)

    We'll move over to the Embassy of Colombia. We have Mr. Vargas, the minister-counsellor.
    Go ahead, sir. You have the floor.
    Good morning, Mr. Chair and honourable members of the committee. Thank you for inviting the Embassy of Colombia to share our government's view on the potential agreement between Canada and the Pacific Alliance.
    As most of you know, the Pacific Alliance, after receiving statements of interest for deepening trade ties from Canada, New Zealand, Australia, and Singapore, is currently in the midst of negotiations that should lead to agreeing upon a series of FTAs that the Pacific Alliance will eventually have with each potential associate member.
    Indeed, the Pacific Alliance is a market of more than 220 million consumers and is the world's seventh-largest economic bloc. It accounts for 34% of the GDP of Latin America and the Caribbean, and concentrates 41% of the FDI in the region.
    The figures corresponding to Colombia speak for themselves. In 2017, bilateral trade amounted to $1.1 billion U.S., and Canadian investment in Colombia in 2016 was the largest by a foreign investor that year. In fact, Colombia's foreign investment in 2017 continued to increase for the seventh straight year.
    It is important to note that the objective of negotiations is the association of the candidates to the Pacific Alliance and that the Pacific Alliance mandate is not to divert from the framework of its integration mechanism and existing trade protocols. Having said that, I would like to briefly touch on how the Pacific Alliance, by expanding trade opportunities and promoting deep integration, brings benefits that are very much aligned with Canadian views and priorities.
    Let's start with gender. Since its creation in 2012, the Pacific Alliance has been committed to including gender as a crosscutting element, establishing a working group that incorporates gender in all the programs of the mechanism. For instance, under the trade promotion component, the alliance has a very successful businesswomen's forum as well as a community platform for female entrepreneurship.
    From the Colombian perspective, a benefit to be gained, for example, is the effective integration in global value chains. We consider that cumulation of origin in sectors like textiles and apparel would not only increase trade but would also provide more opportunities for women in targeted regions highly affected by the conflict in Colombia.
    With respect to environment, Canada and the Pacific Alliance members have advanced in domestic ratifications of the Paris Agreement. Canada is well known for its global leadership at home and abroad to fight climate change, which means that we all share the same concerns. This represents an opportunity to create a space for dialogue and debate on specific actions and strategies for regional economic integration in a sustainable way. Co-operation and lessons learned from Canada to embrace climate change will be beneficial for the region.
    There are other benefits for Canada. The Pacific Alliance has accomplished a very ambitious agenda in a very short time. In addition to tariff elimination, the alliance is moving towards financial integration, pension mobility, and fiscal transparency among the four countries. The creation of the Pacific Alliance venture capital fund facilitates financing for SMEs.
    In this context, existing Canadian co-operation is focused on strengthening the export capacity of SMEs, especially in the agriculture sector. From the Colombian point of view, Canada is already deeply involved in several initiatives that aim at helping market-driven co-operative development among farmer organizations. These initiatives promote governance, better opportunities, and higher income for small farmers, especially in communities and areas greatly affected by the conflict.
    To conclude, I would like to refer to a recurrent topic in discussions about Colombia. After more than four years of negotiations of a peace agreement, the Colombian government is putting an end to a 50-year conflict that caused 220,000 deaths, of which more than 80% were civilians. During the past 50 years, more than six million people were displaced, 25,000 were kidnapped, and 27,000 went missing.
    Although sometimes the news might not be encouraging, the final agreement signed with the FARC strengthens and improves the legislation and institutional efforts undertaken by the state to ensure the protection of human rights through public policy, reparation of victims, protection measures, and fight against impunity. In fact, Colombia's homicide rate is at a 40-year low.
    Thanks again for the opportunity to share this information with you.

(0905)

    Thank you, sir.
    We're going to move over to the Embassy of Peru, and we have Minister Molinari.
    Welcome, sir. You have the floor.
    Thank you for your kind invitation. It is a pleasure to be here to talk about a very important topic: the study of a potential agreement between Canada and the Pacific Alliance.
    Peru considers that the Pacific Alliance has to frame its efforts in compliance with the 2013 sustainable development goals in order to allow its members to efficiently immerse themselves in the globalized world. In this sense, the regional integrational mechanism's vision is to promote initiatives that combat poverty through strategies that favour economic growth and target various social needs like education, health, employment, climate change, and the protection of the environment, along with strengthening its international projection.
    The Pacific Alliance should make efforts to consolidate itself as a mechanism of integration that promotes commercial openness, growth, and competitiveness, as well as the protection of fundamental liberties. In this sense, Peru considers that the 2030 vision should have in mind four components.
    One, building an area of deep integration. The four liberties that seek this mechanism—goods, services, capital, and persons—should help position the Pacific Alliance as an active participant and a solid partner in the region, consolidating itself as an investment and commercial hub and as a mechanism integrated in the global economy. The Pacific Alliance exhibits distinctive characteristics, specially linked with the observance of rules and of international institutions, as well as compliance with the rule of law, democracy, respect for human rights, and, as stated in article 2 of the framework agreement, the separation of powers. The Pacific Alliance should generate confidence and advance its international reputation through the construction of strategic alliances with countries and regions that lead to economic and social development in the world.
    Two, a bridge to the Asia-Pacific. Taking advantage of the participation of its members in various integration schemes and their diverse geographical features, the Pacific Alliance aspires to become an important bridge—economic and commercial, cultural and political—between Latin America and the Asia-Pacific region through mechanisms of co-operation between regions.
    Three, international projection. The Pacific Alliance will promote tangible results in accordance with sustainable development goals. It is expected that it will provide pragmatic answers and solutions to world problems. In this sense, it will work in the design of mutually beneficial actions with new associate members and other global actors such as ASEAN the EU, and APEC, as well as with regional mechanisms that could help the alliance to attain its objectives.
    Four, a tool for increased well-being. The Pacific Alliance is focused on coordinating efforts that have a direct effect on civil society—attaining better social welfare and overcoming economic inequality. The Canadian economy, with its ample and diverse natural resources, has a structure similar to that of Peru, in which the mining, energy, and forestry industries stand out. Canada has been successful in transferring developments in these industries to other industries such as communications, energy, transport infrastructure, and financial services. Moreover, Canada is now positioned as one of Peru's major mining investors, distinguishing itself by the active participation of private companies in projects with a social development component, projects that are having a positive impact in our rural communities. In this context, the Pacific Alliance, and Peru in particular, can profit from Canada's experience in how to use natural resources as a stimulating agent of the economy.
    Canada is an active observer state that has a privileged relationship with the Pacific Alliance, backed by the Joint Declaration on a Partnership between Canada and the Members of the Pacific Alliance, signed in 2016, which established a specific agenda on co-operation. In that framework, a series of co-operative projects is being implemented, accounting for more than $18 million U.S. in areas like education and skills in extractive industries, small and medium-sized enterprises, and the environment.

(0910)

     The next step identified by the alliance to deepen its relations with this important partner has been the negotiation of a high-standard agreement that deepens commercial and economic relations between Canada and Pacific Alliance members. Such an agreement will allow Canada to become an associated state in the Pacific Alliance.
     Peru is a long-time partner of Canada, having a free trade agreement that entered into force in August 2009, among other important international conventions. Both countries are also part of those that have concluded the negotiations on TPP-11. These two agreements are a milestone in the integration process that the Pacific Alliance countries want to establish with Canada and with the rest of candidate countries that are interested in becoming associated states.
    In that sense, it was natural for the Pacific Alliance to reinforce areas where there is already co-operation with Canada and to search for new commercial opportunities and diversified markets. This is the added value that our countries wish to attain in the negotiations that are being held with Australia, Canada, New Zealand, and Singapore. Two rounds of negotiations have already been held in Cali, Colombia and Gold Coast, Australia, while the third is expected to be carried out in Santiago, Chile, and the fourth round in Ottawa.
    In these negotiations, Peru and its Pacific Alliance partners wish to build on the commercial agreements signed in order to reap tangible benefits for society as a whole.
    Apart from the commercial impact and the consolidation and projection of the Pacific Alliance as one of the most dynamic regions in the Asia Pacific, the relationship with its associate members will allow it to connect to four of the world's top 10 most innovative ecosystems in terms of science, technology, and innovation.
    In this process, communications with the private sector and civil society will be of great importance for the advancement of the negotiations between the Pacific Alliance and its associate states.
    Each free trade agreement constitutes an opportunity to improve, even for a country like Peru, which, as has been said, links its foreign policy with compliance to the 2030 sustainable development goals. In that sense, the negotiations with the candidate states are a tool that should contribute to fighting poverty; benefit the most vulnerable sectors within them, such as small and medium-sized enterprises, and indigenous people; and provide equal opportunities for women and men, among others.
    Thank you very much.
    Thank you, sir.
    We're going to move over now to the Embassy of Mexico, and we have His Excellency Ambassador Dionisio Pérez Jácome Friscione.
    Welcome, sir. Canada and Mexico are in very challenging and exciting times right now, dealing with trade, as you're well aware.
    Before you start, I would just like to say that we had a very good meeting in Washington with your chief negotiator for NAFTA, Kenneth Smith Ramos. He had a very good presentation with us, and we were on the same page, to say the least.
    As I said, our committee just finished up a study on NAFTA, but we're here to talk about the Pacific Alliance, and we welcome you very much. Thank you for taking time in your busy schedule to be here with your staff today.
    Sir, you have the floor.

(0915)

     Good morning to all of the distinguished members of this committee. On behalf of the Government of Mexico, I would like to begin by thanking the committee for the invitation to participate in today's hearing. Alongside my colleagues, I am delighted to be here with you in this honourable house, to share Mexico's vision regarding the Pacific Alliance, and the potential trade agreement between Canada and the bloc.
    Canada and Mexico are allies and close partners on many fronts. Our relationship continues to strengthen and enrich itself, year after year, not only through dialogue at the highest level but also in the day-to-day operations in which interactions between entrepreneurs, investors, tourists, students, retirees, scientists, and temporary workers have grown exponentially. In terms of trade, Mexico is Canada's third-largest partner, and we work closely with our Canadian friends in other fora, such as the North American Free Trade Agreement or the comprehensive and progressive trans-Pacific partnership.
    Since 2012, Canada has been actively working with the Pacific Alliance, first as an observer country with significant investments in sectors such as mining and energy, and now as one of the first nations to seek the status of associate state of this regional and strategic platform. In this regard, Mexico welcomes the negotiations between Canada and the Pacific Alliance, which will without doubt deepen our relationship and reaffirm our common interests, and the potential for an even greater economic complementarity and integration of our productive chains, further strengthening the international and regional regulatory frameworks in which we conduct business every day.
    Since its establishment, the Pacific Alliance has allowed for a successful regional integration of its member countries. The pragmatic spirit that guides the Pacific Alliance is one of the principles that have made it possible to achieve the objectives set, always by consensus, and with greater development and growth for member countries. This mechanism has progressively allowed us to consolidate a higher economic integration through four pillars.
    First is the free movement of goods and services, which has translated into the elimination of 92% of our customs tariffs and the establishment of provisions on financial, cross-border, and air services. Second is the free movement of capital, through which we strengthen the largest stock market in Latin America, known as MILA. Third is the free movement of people, eliminating visa requirements for tourists and business people, while promoting a mobility platform for students and academia. Fourth is a pillar on co-operation.
    The Pacific Alliance seeks integration beyond trade and investment. We collaborate in key common interest areas through technical groups on issues such as the environment and climate change; social development; science, technology, and innovation; and small and medium-sized enterprises. These aspects would certainly be enriched with a deeper involvement of Canada.
    The success of the Pacific Alliance is shown through the interest of the international community, with over 50 observer countries across the world. For Mexico, it is a priority to promote stronger ties with observer countries and other international organizations due to the potential they offer in the development of mutually beneficial co-operation projects.
    Chile, Colombia, Mexico, and Peru share democratic principles and values. We have a dynamic and globalized market that provides favourable conditions for businesses and investments to flourish. According to the World Bank's “doing business” indicators, in 2016 the Pacific Alliance member countries ranked the highest in the ease of doing business among Latin American and Caribbean nations.
    The countries of the Pacific Alliance represent a market of over 200 million consumers, with a combined GDP of approximately 39% for Latin America. It would represent the eighth-largest economy and the seventh-greatest export power worldwide, accounting for about half the total of Latin American exports. In this context, the negotiations currently taking place with Canada, Australia, New Zealand, and Singapore prove that the Pacific Alliance seeks to become a more diverse economic and trade integration platform, with special attention to one of the most dynamic regions in the world, Asia Pacific.
    The potential treaty between Canada and the Pacific Alliance would provide a more robust and updated framework for trade and investment and trade disciplines between our countries, as well as further the diversification of Canada's economic relations. Furthermore, it offers unique opportunities for Canadian companies to connect to larger supply chains in other regions of the world.

(0920)

     During early February, the second round of negotiations in Australia allowed our teams to move forward regarding market access for goods, services, and investment; public procurement; and temporary entry of business people, among other topics, including the willingness of all parties to work in regulatory co-operation to facilitate trade across different sectors.
    The Mexican government looks forward to continuing the productive meetings during the upcoming third round of negotiations in Santiago de Chile, and in Ottawa during May. It is our hope that sufficient progress will be achieved during these negotiations before this year's Pacific Alliance leaders summit, which will take place in Mexico towards the end of July, and to reach a successful agreement by the end of the year.
    Let me conclude by saying that it has been through its vast network of trade agreements that Mexico has reaffirmed its commitment towards free trade, productive integration, and the mobility of capital and people. Since Mexico's incorporation to the GATT in 1986, and subsequent trade agreements, we have experienced a very productive transformation of the economy which has convinced us that free trade is a great catalyst for growth.
    In our view, the advancement and growth of the Pacific Alliance is an important step in this direction. In this regard, we welcome Canada's decision to transit from a very active observer country to a candidate to become an associate state of the Pacific Alliance.

[Translation]

    Ladies and gentlemen, thank you for listening.
    Muchas gracias.

[English]

    Thank you, sir. Canadians are not only familiar with your Mexican goods. We're very familiar with your beaches and hospitality. That's another big factor we have going with each other.
    Without further ado, we're going to have dialogue with the MPs. I'm not going to be too strict with the time. If an ambassador has to finish up their thoughts, I'm going to let it go. Just keep in mind we try to get as many people as possible to get their questions in. I would like to wrap up probably in about 40 minutes.
    Mr. Allison, you have the floor.
    Thank you very much, Mr. Chair, and to our ambassadors, counsellors, and diplomats at the head of the table.
    I think as MPs we are afforded rare opportunities because of our jobs and our positions to see different things. One of the most memorable events for me was sitting on this trade committee back in 2008 and 2009, when we headed to Colombia. Our trade committee had a chance to meet with President Uribe at the time. We remember that you were trying to get a free trade deal. People were saying, “You have human rights issues.” ...“Should we do it or shouldn't we do it?”
    I remember sitting around a table with President Uribe, and his minister said, “Do you see these people here? There's not one in my cabinet who hasn't been affected by violence in FARC. It's so important that we get a free trade deal. We need Canada to move forward because we're trying to get a deal with the U.S., and the U.S. is not moving forward.”
    I remember at the same time there were troops showing up in Venezuela, at the border of Colombia; and the U.S. would say, “Listen, what can we get you? Can we get you military arms?” President Uribe said, “No. Get us a free trade deal. It's so important for us.”
    These moments burn into your head. I was there a year and a half ago, on foreign affairs, as you went through the peace process. Talk to us about how that process is going, how important trade is, and why it's important for us to continue to engage. It's great that eight or nine years later we're actually talking about how we can strengthen trade, not whether a country should be allowed into a deal because of what's going on. How important has that been to your country in terms of trying to diversify from the challenges you have had, and how does that relate to the peace process going forward?
    I'd like to begin by saying that perhaps the most important thing that this government has done in the area of human rights is the peace process with the FARC that began four years ago.
    President Santos, from the beginning of dialogue, put the victims at the heart of negotiations. That meant focusing on human rights and on individuals. For Colombia, the peace process was the first process in the world that began with looking at the victims, and a commission on truth. It lasted over 50 years and there were eight million victims.
    Sadly, we have the highest rates of land mines as well. Over 60,000 people have disappeared. Many statistics have put Colombia in a bad position on the international stage in the area of human rights.
    What is important to note is that Colombia's efforts in the area of human rights have focused on four aspects. The first is public policy. Colombia has had a human rights policy since 2014. It is for the period 2014 to 2034, the post-conflict period, where we'll be focusing on human rights. Human rights are included in the national development plan. The 32 ministries of Colombia have included human rights in their development planning, which means that efforts will be from the national to the municipal level.
    We have provided reparations to over 600,000 victims since 2013, and Colombia has made impressive efforts in the area of protection. It has increased the budget for protection for victims.
    Finally, there is the fight against impunity. Colombia is attempting to look at impunity for those who have violated human rights. In 2016-17, 50% of cases have gone through the justice ministry and the UN to improve investigation protocols. Of course, there is another 50% to clear up, but I think the conditions are there in Colombia. After 50 years of conflict, with deep social and economic wounds, this is an important advancement.
    I'd like to conclude by saying one more thing. Colombia, as you know, like Canada, joined the human rights process of the UN. Last year Colombia was the first non-European country of the 14 that have presented an action plan in the area of human rights.
    Just to mention an aspect that Colombia has looked at in this area, we have demonstrated to the international community that Colombia is doing things well, that it has the support of the UN for the ratification of the peace process, and that it has the support of the international community.
    As Dean Allison has said, today, eight years later, you want to explore the possibility of increasing trade between our two countries, so I think that's a good signal.
    Thank you.

(0925)

    Thank you, sir.
    We're going to move over to the Liberals now.
    Mr. Fonseca, you have the floor.
    I want to thank their excellencies and the representatives from the various Pacific Alliance countries who are here to speak to us today. Thank you very much.
    There is a lot of skepticism today around trade agreements; be it here in Canada, or around the world, especially from the public. We've made a concerted effort in Canada to consult in a wide and deep way with the public, with stakeholders, etc., to be able to find what is the best path forward.
    This is open to any of the presenters. Can you tell me what you have done in your countries to be able to inform your public, your stakeholders, the government in regard to a trade agreement like the Pacific Alliance?
Mr. Alejandro Marisio (Interpretation):
     I'd like to talk about what Chile has done in discussing this and putting it forward for the consideration of the business sector, civil society, and all stakeholders who have something to say in the agreements that Chile takes part in.
    Chile has 24 free trade agreements; that's over 60 economies with which Chile has open trade without tariffs and with nearly total liberalization. To reach this point, we've had to hold talks and we've had to listen; that's done regularly.
    It's not just the executive, the government does this. As with this committee, in Chile there are bodies within Parliament that need to provide their approval to agreements. Hearings are held, as is done here, but at the negotiating table when Chile participates, we talk about all the sectors that would be participating: civil society, the business sector, and the government entities as well. They provide their opinion throughout the whole negotiating process.
    With free trade agreements, in some areas there are more benefits than in others. Of course that's where we need to look at how we can protect or help the industries when it's necessary to redirect their capacities and efforts. Regarding the Pacific Alliance, as my colleague the ambassador for Mexico mentioned, it's an extraordinary tool. It has been very successful, not only because I'm speaking as the ambassador for Chile, but because it's clear that a free trade agreement with the existing market of the four countries of the Pacific Alliance is very beneficial. Now no one is opposed to it.
    The same thing happened with the TPP, which was called into question at the beginning. However, through these systems that I've described to you, Chile has gone forward with these agreements without any major opposition. We try to correct those cases where people could be more negatively affected in one area of the economy.
    Thank you.

(0930)

    I don't want to repeat what my colleague the ambassador for Chile has said. In the case of Mexico, with the Pacific Alliance, as with any other international trade agreements in which Mexico participates, consultations are led to hear points of view, opinions, areas of opportunity, and challenges at the government level and at the legislative level through specialized committees of the Senate and the House of Commons. There are forums as well with specialists so we can study these areas and have ongoing participation and communication with different stakeholders, including the private sector. They interact with the government and negotiators to be informed of advancements and challenges, to have the available information, and the best opportunities to present the best options.
    Thank you.
     We'll move over to the NDP now.
    Ms. Ramsey, you have the floor.
    Thank you, your excellencies, ministers, and diplomats, for being here today for this important conversation. I think what you are bringing forward today is a really critical piece to our study that we're doing on the Pacific Alliance.
    Something that was mentioned is labour. Certainly, working people have been discussed by previous witnesses who have come before this committee. The Canadian Labour Congress has been before this committee, and it presented to us that no positive labour changes have been implemented or effected thus far by free trade agreements. I know that labour is top of mind in the NAFTA negotiations right now, and I heard several of you mention it in your presentations today.
    For Canadians and our labour community, it's really about seeking a level playing field for working people. I wonder if you can speak to what you see in the Pacific Alliance agreement that would address this important issue for working people, and to any advancements that you've seen or that could be possible in this partnership for labour.
    I'll open it to everyone because I'd like to hear from everyone.

(0935)

    I'd like to highlight that we're talking about trade negotiations between the Pacific Alliance and Canada. The focus is on trade, but that doesn't mean that labour is not part of it. There are mechanisms like working groups. There's a working group within the Pacific Alliance on labour issues and on everything that has to do with improving labour standards for workers.
    In addition, Colombia and Canada have a bilateral dialogue, a complementary FTA, that seeks to increase communication to see how we can improve labour standards in the area of trade. I can't speak too much to this because currently there are negotiations under way between Canada and Colombia for an action plan, but I can say that co-operation between Canada and Colombia in the area of labour has been significant.
    Colombia has moved forward tremendously over the past four years. It has increased its budgets for inspections. It's much more efficient in imposing fines against companies that are not conducting proper hiring processes, and it's much better at recovering those fines. The justice department has set up a special working group, a task force, with protocols in order to fight against union violence in Colombia.
    Thank you very much.
    I'd like to add a comment.
    I'd like to highlight what Colombia has said. Peru has a labour co-operation agreement that it signed in 2009 as a complement to the free trade agreement between Peru and Canada. The goal of that agreement on labour was to increase the economic opportunities of the FTA by developing human resources, protecting the human rights of workers and the co-operation between workers, and increasing skills on an ongoing basis. The goal is also to ensure the basic rights of workers, to strengthen co-operation in the area of labour, and to move forward on international commitments on Peru's and Canada's parts. This agreement sets out periodic meetings of a council to discuss areas of common interest in the area of labour.
    Thank you.
     Do you have a comment?
    I'll be quick. I don't want to be repetitive of what my colleagues have mentioned. I will not refer to what Mexico has done since that was not the direct question.
    I would say that, in terms of the Pacific Alliance, the work has begun. There's a group on labour. We have a reference, for example, in TPP. It is an interesting reference that I'm sure will allow us to get to some of the issues in terms of labour rights, protection of rights, standards, and some of the issues that have been mentioned by my colleagues. We view it very positively. Certainly, whatever ends up being agreed on with regard to this topic will be beneficial to all the countries.
     Thank you.
     Madame Lapointe.

[Translation]

    Thank you, your Excellencies, and welcome.
    You said that you drew inspiration from the chapter on labour rights in the TPP. In the negotiations between the Pacific Alliance and Canada, are you looking to any specific agreements for guidance?

(0940)

[English]

     In the case of Mexico, we're convinced of the advantages of free trade. As I said in my presentation, since 1986 we've been part of GATT, and we've been building capacity and finding out more about free trade.
    In this round of negotiations, in terms of the modernization that we're seeing, and going through with the CPTPP, and all of the negotiating experience in the area of free trade, we're able to update our knowledge in different areas.
    We're looking at the different aspects that are necessary to negotiate in all areas. I wouldn't summarize this in just one or two agreements, but it's our general expertise, and our knowledge of free trade and confidence in it.
    We've been putting it forward in different negotiations. We have the Pacific Alliance and the CPTPP, but we're also negotiating with Europe to modernize our agreement. We're deepening our trade relations with countries like Brazil and Argentina. We have a full agenda in the area of trade diversification, and our negotiators are strengthening our capacity.

[Translation]

    Thank you.
    No one brought up e-commerce. The various agreements do address the issue, but no one brought it up. I would like to hear from each of you on the subject.

[English]

    E-trade, digital trade, was in my speech, but we took it out. Regarding digital trade, there isn't a committee on it as such, but there is a committee that has a digital agenda. If there are advancements in the working group, we're not aware of them yet. If it's a concern, we recognize, of course, that Colombia has worked with Canada to develop more tools, so we can develop this type of trade that has much less effect on the environment, and it's less costly. Through co-operation with groups in Ottawa, we've been able to develop trade. We could share details with this committee. I don't have them with me, but it is something that's being considered in the negotiations.
    I would add that, within the alliance, there's a one-ticket window for trade, and we're looking at how to make things digital, how to make transactions digital, and that's something that's worth noting.

[Translation]

    Thank you.
    I have another question for you. We talked about labour mobility, which has two sides. I know that many temporary workers from Pacific Alliance countries come to Canada to work for the summer. They are highly skilled workers. Afterwards, they go back to their countries.
    Is there a way to improve labour mobility? What could we do to make it a win-win for both sides, you as well as us?

(0945)

[English]

    I can share with you the experience we have in Mexico, which is a seasonal agricultural workers program that works very well. I think it complements the needs of both countries. It has been working for over 40 years, and we have now over 25,000 workers who come every year to Canada and return to Mexico every year.
    Besides that, going to the Pacific Alliance, what we are trying to do as a group is to allow for the mobility, again, to facilitate the mobility of people, which has proven to be beneficial in the case of Mexico. Something important is that if you look at statistics, the movement in the last three or four years of people from Peru, Colombia, and Chile into Mexico and vice versa, it has increased in a very important manner, which has opened up more opportunities for all of us.
Mr. Alejandro Marisio (Interpretation):
    With regard to labour mobility, as the Mexican ambassador said, with countries in the alliance and some other neighbouring countries, Chile has mechanisms that allow for the flow of temporary workers, and obviously this is something that interests us in the Pacific Alliance and specifically for Chile.
    We would like to be able to count on, for example, expert Canadian workers who can help us to build and design all sorts of solar energy or wind projects, which we're doing with experts from other parts of the world. If we could include them in our area of work with Canada, it would obviously be positive and that does need to be on the table.
    That ends our first round.
    We're going into our second round, and I'm going to try to keep you to three minutes. If you can just ask a question, and then that way we probably can allow all MPs to have a question in this round.
    So we're going to start off with three minutes. The member of Parliament can say a few things in a question, and we can move on to the next. We're going to start off with Mr. Peterson. You have the floor.
    Thank you, honourable guests, for being with us today. It's very much appreciated.
    I do have a couple of questions, but I think I might only have time for one, and it's going to centre on foreign direct investment. I think Canadian investments are almost $50 billion into Pacific Alliance nations.
    Do you, a) see us becoming part of the bloc, a way of increasing that direct investment and, b) flowing it in both directions, as opposed to there being more Canadian money flowing into your countries than vice versa?
    Consequential to that, is there a need for some sort of investor-state dispute mechanism in any agreement if there's a sophistication in the foreign direct investment that's flowing?
    That's one very big question, but I'd like to hear everyone's comments on that, if possible. Thank you.
    I'd like to answer the first part of the question, and if you don't mind, I'd like to ask my colleague to respond to the second part.
    Firstly, with regard to foreign direct investment, we see the potential for that to increase in both directions in the sectors we've discussed such as natural resources. There are also opportunities in more advanced areas connected to technology. That has already happened with countries that we have agreements with, so we see no reason why it wouldn't occur with the four countries that could associate with us here.
    Now with regard to ISDS, which is a bit more technical, I'd like to ask my colleague, who represents our economics branch, to speak.
    The first thing I'd like to say is that FTAs exist specifically to set rules, so that investors can feel more secure in sending their capital to other countries. With better regulation there can be more investment on both sides.
    Secondly, in the case of the Pacific Alliance, it's a living mechanism. We're accustomed to seeing these mechanisms in TPP or NAFTA or CETA, and there are methods that are going to be developed in the Pacific Alliance, including the parts about labour and investment protections.
    There isn't a mechanism such as ISDS, which you mentioned, but we think that in a future version of the Pacific Alliance, we could move towards the measures that are typical in FTAs. This is because the Pacific Alliance is a mixture between the aspects that we consider crucial to FTAs, such as tariffs, which in any case have already been lowered to almost non-existence, and then other areas, which we have moved forward a great deal in models such as CETA and the TPP.

(0950)

Mr. Alejandro Marisio (Interpretation):
    Mr. Chair, I'd like to add that when it comes to Chile, Canada has $20 billion in direct investment. It's the third-biggest investor in Chile, and the biggest one in the mining sector, as I mentioned.
    However, there are also significant amounts of investment in other sectors, such as electricity, water, the chemical industry, transportation, warehousing, and the finance sector.
    Recently, Scotiabank acquired a Spanish bank by investing $2.2 billion, which is 14% of the market share. Now Scotiabank will become the third-biggest private bank in Chile.
    Chile also has about $2 billion invested in Canada, specifically or largely in the service sector. We hope that an agreement between the Pacific Alliance and Canada will increase the amounts invested in both directions. It already exists in our bilateral agreement, but as my colleague mentioned, we hope to be able to coordinate things so that the alliance and Canada can have their mechanisms to protect investments.
    As for Colombia, we have an investment chapter in our bilateral agreement, but I'd also like to clarify one thing. In 2016, Canada was the biggest investor in Colombia for the first time in history. It invested over $2 billion in a major company through a fund. CDPQ has also invested in infrastructure. The Energy Management Corporation has also done so. Many provincial funds of almost all the provinces of Canada have invested in Colombia, which means that the business climate is good, and all the due diligence carried out by these various provincial funds has given excellent results. This shows that the business climate is currently very favourable with regard to what you mentioned about investment disputes.
    For Peru, I'd like to highlight the importance of Canadian investment in mining, and the very great importance of corporate social responsibility. Mining is a very important sector for both of our countries and constitutes a pillar of our trade relationships. We would like to increase our co-operation in these areas through the Pacific Alliance. We want to broaden these relationships. Investment in mining is very significant in Peru, and the presence of Scotiabank, once again, is very important.

(0955)

     Thank you very much.
    We'll now go to our special MP, Mr. Hoback, who is learning Spanish. We commend him for that—learning Spanish and speaking it in Saskatchewan.
    Buenos días. Bienvenido.
    Now I'll switch to English.
    Voices: Oh, oh!
    Mr. Randy Hoback: I was with Prime Minister Harper and Minister Fast in Cali when the negotiations there were ongoing. I remember us talking afterwards and being just so impressed with how the leaders were driving the agenda and how they were setting the stage to make this happen. It wasn't the bureaucrats; it was actually the leaders sitting around the table saying, “We need to do this for our people.”
    The other thing that impressed me, compared with what we're seeing in NAFTA today, is that you didn't look at it as, “What can I get out of the agreement?” It was, “What can we do together to make our region, our bloc, stronger?” I think that's such an impressive goal, because it will help your people in each of your countries. It will take your strengths and magnify them by four. I know that I wished at the time that we could have joined on and been the fifth player, but there were some other issues there. I really look forward to us actually getting closer now as we move forward.
    The other thing I always say is that a trade agreement should always be fluid. It should always be progressing and moving forward. This definitely will do that here for Canada and for the Pacific Alliance countries.
    My question is with regard to MILA and the TSX. How do you see these two functions working together? I know that you brought your exchanges together in the Pacific Alliance countries, and I'm kind of curious to know how that's going. The TSX is the mining venture. All the mining capital is raised in the TSX. It's distributed around the world. A lot of it comes into your country. How do you see that coming together, being stronger, and working for the region if we move forward?
    Let me go first.
    In the case of Mexico, the way we are working with MILA is that obviously each exchange....
    [Witness speaks in Spanish with interpretation, as follows:]
    Each stock exchange continues to be independent, working in their own country, but they have decided to operate jointly. They did not fuse into a single entity but they do operate jointly so that businesses can benefit from all of the projects in the regions. What I mean by this is that there are more possibilities for capital funding for projects in the regions.
    With the TSX, that's a very promising opportunity to further broaden the capital markets in the regions, increasing competitiveness and the terms for our various businesses. I believe it would be a very promising opportunity that would enable us to allow the businesses in the region to expand.
    Just quickly, if you list on an exchange in Mexico, do you automatically get listed on the other exchanges?
    If I understand correctly, the businesses that are listed would appear on the entire market. On the technical details, I would want to consult financial experts so that I don't give you an incomplete answer.
    Perhaps I could share this with you. You may recall that when NAFTA won, when we, the three countries, were negotiating together, we had the same philosophy. We were three free traders, and we had to fight for our own constituencies as a government. But this time we have our mutual friend in between, who has a different philosophy. We have to face that fact of life. It is difficult to know what they have in mind or what the final goal is, but we know they are very concerned about deficits. As Canada and Mexico, we have to face that and be able to come out with very clear solutions in that area.
    I just wanted to share that with you. When you start talking about how things have changed in the arena internationally, the U.S., not just with NAFTA, has changed its philosophy. With the WTO, we don't know what will happen in the future. I think it's very important to have a different approach this time.

(1000)

    Thank you.
    Mr. Hoback, those were good questions.
    We'll move over to the Liberals now.
    Madam Ludwig, you have the floor.
     My question is for all of you, your excellencies and ministers, in regard to our progressive trade agenda that we have in Canada and that I believe is mutually supported by the member countries here.
    Could you explain to our committee how you reach out to women in your countries in order for them to benefit from international trade within the Pacific Alliance and others? Maybe it's microcredit or other examples like that.
Mr. Alejandro Marisio (Interpretation):
     For Chile, gender is at the very top of our agenda. That is something we're addressing. In fact, we have also included it when it comes to writing trade agreements. We should recall that when President Bachelet visited Canada during the negotiations for the Canada-Chile Free Trade Agreement, there was a gender chapter that was included to ensure that women would be able to benefit from international trade and to also ensure their rights and empowerment.
     After all, in Chile, women's empowerment is an important issue. For example, we have quotas for female candidates for political parties and all sorts of other protections for women. We are working closely with Canada's Status of Women department to exchange best practices and share our experiences.
     In the Pacific Alliance, Canada's progressive agenda is very familiar to us and is one that we wish to adopt as well. We've had many discussions about this. We are going to continue following up on it. This is not an issue that is unfamiliar to us. On the contrary, we want to promote gender equality, and not only to help women. There are also other aspects of that progressive agenda that we consider very important.
     Mexico and Canada share a vision on many of those issues. It is a common vision when it comes to gender, environment, and labour issues. For example, we are looking for new chapters in the Pacific Alliance with regard to these issues. I would say that a good indicator is what is happening in NAFTA. We want to add provisions about this to the body of the agreement, where we would include these environmental and labour provisions. This shows that Mexico wishes to continue promoting the development of these important issues. These are areas where we share a common vision with the Canadian agenda.
    In Peru, we are working to create policies to promote the 2030 objectives, including the fifth one, which is to promote gender equality and to encourage the empowerment of women and girls.
    Peru recognizes that gender equality is not only a fundamental human right but that it also will constitute the foundation for a prosperous and sustainable world. The more that women can have access to education, jobs, and medical attention, the more our economies will flourish. That is why Peru has created the ministry of women and vulnerable populations and why within the Pacific Alliance there is a technical working group on gender.
    Thank you.
    Now to speak on behalf of Colombia, there are three things I'd like to say, the first on institutionality. We have a secretariat for women's issues, and that's where we discuss all issues that have to do with gender equality. Second, as mentioned in the peace accord, we focus greatly on the victims, especially female victims of the conflict, and we incorporated multiple methods to help them return to society, to launch businesses, to encourage entrepreneurship, and Canada has helped us greatly in these areas. We've done a lot to afford that.
    Finally, there's an initiative with our labour department and the United Nations for a project called Equipares. It's our first initiative in Colombia in public policy to ensure that, when it comes to entrepreneurship, there is greater equality between men and women. It has to do with hiring, development, salary, and inclusive language.
    Thank you.

(1005)

    Mr. Carrie.
    I want to thank the witnesses for being here.
    I'm going to get right to it, because I only have three minutes, don't I?
     If you ask a question for all panellists, it varies from five to eight.
    I wanted to talk a little bit about regulatory coordination and coherence. Whenever you have trade agreements, it so important, I think, that you look at regulations, because sometimes, if you don't get it right, they can become non-tariff barriers. I was just wondering if you could comment on how important it is when you're looking at regulations, how it affects modernization, standardization, customs procedures, things along those lines, and how important it is to make sure that it's addressed in these trade agreements.
    These are extremely important issues. As I mentioned in my initial remarks, in the Pacific Alliance, the member states have increased the facility of doing business in the region, which shows that we desire to make these procedures more flexible so that businesses can grow.
    Now, for Mexico, we're seeing that throughout all of our negotiations. It's crucial to ensure that there is compatibility and standardization of regulations.
    In the Pacific Alliance, I think if Canada joined us, we would have the opportunity to share best practices, which would allow us to go further in that direction.
Mr. Alejandro Marisio (Interpretation):
    The advantage of these negotiations is that our countries and Canada already have FTAs, and so we have already discussed and thought about these issues.
    For Chile, for the modernization of our FTA, we will include the whole issue of origin. We will perfect our SPS measures. We are going to clarify procurement and include an investment chapter. We've already done that. In fact, on a bilateral level with Canada, that's already been done.
    Harmonizing the issues among all five countries is just around the corner, because we know that that will allow us to broaden our markets.
    I think that my respected colleagues have summed up this issue quite well.
    I would just like to mention that in the 20 technical working groups of the alliance, there is a specific group that discusses regulatory improvements.
    I would add that our committee for the facilitation of trade is one of our technical groups, and we also have a committee that's working on a one-stop shop system for regulatory issues.

(1010)

     Ms. Ramsey.
    It's no surprise that mining has been top of mind, and a part of many of our conversations. We know that in 2015, 28.7% of all Canadian mining assets abroad were in Pacific Alliance countries. I heard Minister Molinari speak to this earlier, and it's talking about the balance that needs to be achieved in mining with human rights, the environment, and Canadian companies being in all of your countries.
    Can you speak a little to the provisions in a Canada-Pacific alliance that would help develop extractive sectors, but in a manner that could be characterized as socially and environmentally responsible?
Mr. Alejandro Marisio (Interpretation):
    That's an excellent question. Naturally, I'm mainly speaking on behalf on Chile, but this applies to the other countries in the alliance. For us, protecting the environment is critical, and we need to ensure that our institutions work well. We've drawn lessons from the past. All businesses, not just foreign businesses but also Chilean businesses, need to respect our standards, so that today, no corporation should feel that it's being discriminated against simply because it is foreign.
    If this system didn't apply equally to all companies, we wouldn't be seeing all the foreign investment that we have in Chile. I believe that foreign businesses have seen that in Chile. We insist that our environmental standards be met and that we respect international standards. These standards don't come from the executive, but ultimately, it's the communities that are actively involved in these authorization processes, and get to have their say. That also comes to labour issues.
    Ultimately, in the Pacific Alliance, we are going to establish standards that protect our resources, but that also enable us to ensure that business gets done in the best possible way.
    I'd like to add to what the Chilean ambassador said.
    In my presentation, I mentioned how the Canadian mining sector ultimately made other sectors more dynamic as well. There are many opportunities in the mining sector for co-operation, for example, with technology, innovation, best practices, and environmental management.
    I would like to specifically mention a skills development project for education and professional competencies that is provided by Canada in the extractive sector. This project is focused on professional development, and it's one of the biggest areas of co-operation between Canada and the Pacific Alliance.
    Very quickly, I'd like to mention that in Colombia we have a method for environmental management. We understand the importance of the Canadian mining sector. From 2005 until 2016, the investment from Canada was over $10 billion, so ultimately, we have an instrument that considers both the environmental and social effects.
    There's something important that stood out for the communities being consulted. We signed an agreement with indigenous communities, which means that we have specific commitments in terms of consulting communities ahead of time. The national government is leading a project before congress to improve standards in the areas of consultations on costs, time, methods of participation, and making things more efficient.

(1015)

     Very briefly, in the bilateral area, mining is very important for Mexico: 50% of foreign direct investment in mining in Mexico is from Canada. At the bilateral level a lot is being done through the Canada-Mexico alliance. One of the eight working groups is on mining and a lot of progress has been made in the area of standards and skills. We've explored the possibility of temporary workers.
    For the international area, for the Pacific Alliance, we've talked about different disciplines: strengthening the environment and labour, all the topics that have been discussed in the area of social skills, and it will be strengthened to ensure that all the standards are met in these areas so that both countries are meeting the highest standards.
Ms. Yvonne Stinson Ortíz (Interpretation):
    As you know, social responsibility is an important topic, the environment as well. In the first free trade agreement with North America there was a side deal. Now with NAFTA 2, we'll have an area on labour and on the environment. The model that's existed for the past years are side deals in NAFTA. Now we have the TPP, which will be signed very shortly in Chile by 11 countries. The agenda has moved forward in the area of free trade.
    There has been development in these social areas, so I think in the Pacific Alliance, as has been done with the CPTPP, adding labour and the environment, this will be taken as a model for the alliance. Currently, it's not mandatory. It's focused on in the working groups. As I said earlier, in many of the disciplines we're used to looking at with the CPTPP, NAFTA, CETA, the Mexico-Europe agreement, the Pacific Alliance has taken a little time. Canada will help it advance more quickly.
    Thank you.
    Thank you.
    We have just a couple of minutes left. Parliamentary Secretary Goldsmith-Jones, do you have a quick question?
    I have two compliments. First, the global south certainly led in including a gender chapter in trade agreements. After Chile and Uruguay did that, Canada was very pleased to join with Chile in that. Thank you.
    Second, the work in the Colombia peace process has been very instructive for Canada's understanding of women, peace, and security, and it contributed a lot to our feminist foreign policy, so thank you for that.
    Minister Champagne has just appointed a Canadian ombudsperson for responsible enterprise. I wonder if you would care to comment on the effect that may have on mining in your countries.
    Very briefly, this was an announcement that demonstrates Canada's willingness to move forward in this area, to bring the progressive agenda to the forefront. We'll be looking to provide support, when it's necessary, for this new position that's been created.
     Colombia is very pleased with this new position. Previously, you had a strategy for businesses in the extractive industry that operate outside Canada's borders, and there's the counsellor for corporate social responsibility in the extractive industries. We see this as part of the evolution. This new position will doubtless help us with Canadian companies in our countries. It will help them operate as good corporate citizens, respecting the environment and human rights and everything that has to do with sustainability.

(1020)

     Very good. It has been a very active morning, with good dialogue. I hope everyone got their points across, and I hope all members of Parliament got the questions in that they wanted. As you can see with the time sheet, it's all over the place, but that's what we wanted this morning, that good dialogue and the good understanding back and forth.
    Unless there's something that the ambassadors or representatives want to say, we will close this meeting.
    The ambassador from Chile.
Mr. Alejandro Marisio (Interpretation):
     Mr. Chair, thank you for this opportunity that you've provided. The members of the committee would be very welcome to visit us in the spring. For Chile's part at least, we hope to be able to support them in preparing their visit, the trip they will be making to our four countries.
    Thank you very much.
    Mr. Hoback.
    On a point of order, this is a formal meeting and it's good; unfortunately, it's never long enough. I'd strongly suggest that you have an informal meeting where you serve some lobster and invite these gentlemen back and we'll have a chance to get to know them even better on a more personal basis.
    I'll try to get the lobsters, if you can bring some good steaks from out west.
    I would be glad to do that.
     I'll offer the Chilean wine, and you can offer the margaritas.
    Maybe sometime we can all get together. The trip to your countries is on our radar. It might not be this spring, but we're looking forward to it. Maybe if it happens beforehand, we can get together.
    Further to Mr. Hoback's point, perhaps during the Ottawa round of negotiations in May would be a great time to do that.
    Okay. We're going to continue this, but more informally. I hope we're going to have some Chilean wine with that, and berries from Chile.
    Are there any more comments?
    To promote the Pacific Alliance, the embassies of the four countries every year have a culinary event in Parliament and we'd like to invite you so we can show off our culinary skills. It will be held on March 21. We'll send you the invitations.
    Good. We'll have some Colombian coffee with that.
    I'll suspend the meeting so that everyone can get a picture here. Then we have about 15 minutes of new business that we have to tidy up and be out of here before 10:45.
    [Proceedings continue in camera]
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