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Results: 1 - 15 of 19
View Chrystia Freeland Profile
Lib. (ON)
Thank you very much, Madam Chair.
Thank you, members of this committee. I'll make a few introductory remarks and then I will be happy to answer your questions.
I'd like to acknowledge that we're gathered on the traditional territory of the Algonquin.
Let me start with very great pleasure by introducing the outstanding Canadian public servants who are here with me today and without whose hard work, dedication and intelligence this pivotal new agreement would not have been possible. I'm going to introduce the two people sitting next to me. Let me just say that they lead an outstanding team of Canadian professional trade negotiators. At a particularly rough moment during the negotiations, one of our negotiators said, “We think of ourselves as the Navy SEALs of Canada”. I think that is a very appropriate way for all of us to think of our outstanding professional trade negotiators.
With me is Steve Verheul, chief negotiator of NAFTA and assistant deputy minister of trade, and Kirsten Hillman, our acting ambassador to the U.S., as well as a trade negotiator of some renown.
I'm very pleased to speak today in support of Bill C-4, the act to implement the new NAFTA, the Canada-United States-Mexico agreement.
Canada is a trading nation. Indeed, with the world's 10th largest economy, trade is the backbone of our economy. Trade is vital for the continued prosperity of Canadian workers, entrepreneurs, businesses and communities across the country.
Our government champions an open, inclusive society and an open global economy. These fundamental Canadian values transcend party and region. In fact, each of Canada's three major, recently concluded, trading agreements—the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and now the new NAFTA—were the outcome of efforts across party lines.
Canadians support free, fair, and balanced international trade, based on mutually agreed rules. These rules provide predictability and stability in how goods, services and investment are carried out between Canada and our major trading partners. We have seen remarkable success in this area.
In 1994 NAFTA created the largest free trade region in the world. In 2018 trilateral merchandise trade between the U.S., Canada and Mexico reached nearly $1.2 trillion U.S., a fourfold increase since 1993.
Today the NAFTA region comprises almost 490 million consumers and has a combined GDP of more than $23.5 trillion U.S. Our three countries together account for more than one-quarter of the world's GDP, with less than 7% of its population. This record of growth is a tribute to all Canadians, to our entrepreneurs and our workers across this country. Trade between the NAFTA partners has helped us build a continental network of supply chains across a range of industrial and agricultural sectors. It has made Canada more competitive globally. It has created good jobs for Canadians and has fostered job-creating direct investment between Canada and the United States.
The new NAFTA helps ensure we maintain this vital relationship, and that we maintain predictability and stability in our commercial relationship with the United States—our closest, and overwhelmingly our largest, trading partner—and with Mexico.
The negotiations to modernize NAFTA were unprecedented in their intensity, scope and urgency. At the outset we faced a barrage of protectionist trade actions from the United States and the very real threat of a U.S. unilateral withdrawal from NAFTA altogether. Team Canada stood firm and team Canada stood united. Guided by strong support for free trade from Canadians across the country, at all orders of government across the political spectrum, from business to labour leaders to indigenous leaders, we sought advice and consensus and we acted in a united way.
I would today like to particularly thank the NAFTA council for its hard work. Together we worked tirelessly to modernize NAFTA for the 21st century and to extract further benefits for Canadians from a trading partnership that has been a model for the world, and that is exactly what we accomplished.
The new NAFTA preserves Canada's tariff-free access to the United States and Mexico. It restores and strengthens the predictability and stability of Canada's access to our largest market, and crucially, it does so in the face of rising protectionist sentiment south of our border and around the world. The new NAFTA improves on and modernizes the original agreement.
Allow me to highlight some of the key tangible benefits for Canadians.
First, this agreement protects $2 billion U.S. worth of daily cross-border goods and services trade between Canada and the United States. This means that 99.9% of Canadian exports to the United States are eligible for tariff free trade.
The new NAFTA preserves crucial cross-border auto supply chains, and provides an incentive to produce vehicles in Canada.
The agreement also commits all partners to comply with stringent labour standards, and strengthens labour obligations to help level the playing field for Canadian workers. Mexico has also undertaken specific commitments to provide for the protection and effective recognition of the right to collective bargaining.
I would add that our government is working in collaboration with the Mexican government to help Mexico implement its labour reforms.
Throughout the negotiations, Canada was confronted with the American tariffs that were unprecedented, unjust, and arbitrary with respect to Canadian steel and aluminum. We were able to avoid an escalation, however, without backtracking. We stayed focused on defending Canadian workers, their families, and their communities.
We succeeded, and those U.S. tariffs have been lifted.
There was an additional U.S. threat to impose a section 232 tariff on Canadian autos and auto parts. For Canada, that threat was lifted on November 30, 2018, the day we signed the new NAFTA and the day we signed a binding letter on 232 autos and auto parts with the United States. As a result, Canada's auto industry now has the stability to seek investment for further growth and innovation.
The new NAFTA also preserves elements of the original NAFTA that have been essential for Canada and were under threat.
It maintains chapter 29 regarding the dispute settlement mechanism for trade. This is a fair and impartial mechanism, which had been included in the original agreement thanks to the hard work accomplished by Canada. This mechanism has been beneficial for our forest sector workers well over the years, and has protected their jobs from unjust trade measures.
The new agreement preserves NAFTA’s cultural exception, which contributes to protecting more than 666,000 jobs in Canada’s cultural industries and is so pivotal to supporting the artists who tell our stories, in both official languages.
Critically, the new NAFTA maintains tariff-free access to the U.S. market for Canadian ranchers and grain farmers. We should never lose sight of the fact that the starting objective of the United States in the NAFTA negotiations was to abolish Canada's system of supply management.
We did not accept that. Instead, we stood up for Canadian farmers and preserved supply management for this generation and for those to come.
The agreement includes an enforceable environment chapter that requires NAFTA partners to maintain high levels of environmental protection, as well as ensuring sound environmental stewardship. In addition, it recognizes and supports the unique role of indigenous peoples in safeguarding and preserving our environment.
The new NAFTA contains ambitious and enforceable labour obligations to protect workers from discrimination in the workplace, including on the basis of gender.
In conclusion, the new NAFTA is good for continued economic growth and prosperity in Canada. It restores stability and predictability for exporters and for the hundreds of thousands of Canadian workers in our export-oriented industries. It allows us to put the uncertainty of recent years in the past.
Most importantly, the new NAFTA is pivotal in securing the future of good-quality Canadian jobs across our country as market access to the United States and Mexico will be assured—will be guaranteed—by the new NAFTA for years to come.
I want to be clear. We have come a long way. However, until this agreement is ratified by all three countries and enters into force, there continues to be risk and uncertainty, which will inevitably grow with the passage of time. This agreement has already been ratified by the United States and Mexico—our two other NAFTA partners.
Debate in Parliament, including at committees, is very important in our democracy, but the risk to Canada is also real. It is imperative we lock in the gains we have made with this agreement, the security we have achieved and the market access we have fought for by ratifying the new NAFTA without undue delay. That is what Canadians expect all of us to do and it's the right thing to do.
Thank you very much.
I'll be happy to take your questions.
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View Chrystia Freeland Profile
Lib. (ON)
First of all, let me thank the member from Prince Albert for his question and for the many conversations that we have had together about the new NAFTA. We go back to the time when I was sitting on the other side of the House, and I had the opportunity to ask the then Conservative government questions about trade. I really respect you, Mr. Hoback, with your long experience of trade issues and trade agreements and the many years now that we have spent talking about them and working on them.
You've raised a number of issues. Let me take them in turn.
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View Chrystia Freeland Profile
Lib. (ON)
When it comes to Parliament and the committee having time to discuss this agreement, let me just say that the NAFTA negotiation was a long and very public and very consultative process. Throughout that process I appeared many times. I believe it was a dozen times that I appeared before parliamentary and senate committees to answer questions about the new NAFTA. Officials will correct me if that's wrong, please. Canada's trade officials have been available to all parties to discuss the agreement.
I'm actually very proud of the extent to which the negotiation was a very public, very consultative process including members of Parliament, but more broadly also including members of the NAFTA council, including premiers, mayors, business leaders, labour leaders and indigenous leaders across the country.
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View Chrystia Freeland Profile
Lib. (ON)
Mr. Hoback, would you like me to finish answering all of your questions?
We have consulted extensively throughout the process, as is appropriate, and answered questions at committee and in Parliament throughout.
To the question of opposition parties having access to information about the final protocol of amendment, which has concluded the agreement and forms the body of the agreement we are now debating and seeking to ratify, immediately upon our conclusion of that protocol of amendment, we made our officials available to brief all the opposition parties. I know that Steve Verheul briefed all the parties, including the Conservative Party, including Mr. Scheer and his caucus. Information was made available right away.
To the idea that somehow we could have begun an official study of this agreement before the protocol of amendment was signed, let me simply say that it would have defeated the purpose of allowing Parliament and the committee to fully debate the finalized agreement. That finalized agreement was concluded only in December, after an extensive series of discussions between Canada, Mexico and the United States to introduce some further modifications to the agreement, which allowed for ratification in the U.S.
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View Chrystia Freeland Profile
Lib. (ON)
When it comes to those modifications, let me say one thing very clearly and with absolute conviction, and that is that the modifications that we agreed to in the protocol of amendment in December are 100% in Canada's national interest. It is very rare to have a negotiation where you can say that, but that set of modifications made a good deal better for Canada.
I see that our chair is asking me to wind up. I would be happy to go into those further, and I'd be happy to say more about aluminum. I suspect Simon-Pierre may have some questions for me about that.
We shall see.
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View Chrystia Freeland Profile
Lib. (ON)
Thank you very much, Mr. Arya. That is an excellent question. It points to something about the new NAFTA that is not fully appreciated by Canadians.
Something we have discussed often with the negotiators is that in many ways the negotiation around the new NAFTA was almost a two-level negotiation. There was the very high-profile set of issues, often about Canada's pushing back against unprecedented protectionist demands from the United States. That was what was most visible to Canadians, what Canadians were quite rightly most concerned about. Then there was a negotiation on what we sometimes have referred to as the set of bread and butter trade issues. These are the kinds of issues trade negotiations are more routinely concerned about, and they're where some of the greatest gains of NAFTA were won. Let me talk about a few of them.
One is that this agreement has very successfully removed a lot of the red tape associated with cross-border trade. In the consultations we did before and during the negotiation, one of the things we learned, and that we heard most urgently from Canadian businesses engaged in trade in the NAFTA region, was that their greatest issue was all the red tape involved in trade. We heard from a surprising number of businesses that simply didn't bother to claim their NAFTA preferences because the red tape was so overwhelming. Think about that. The weight of the red tape was greater than the value of the tariff-free access that NAFTA offered.
One of the real pluses of this agreement is that, working together with the United States and Mexico, we have done a very good job of cutting back a lot of the red tape by using some of the technologies that the 21st century allows to make it easier for people to trade. That is one of the things we did with NAFTA. It doesn't make a great headline, but it will make life easier for a lot of Canadian businesses and will make them much more competitive.
In terms of the 21st-century economy more broadly, that was another part of this that was beneath the sea level, if you think of an iceberg. There was the tip of the iceberg, the very visible struggles, and then there was all the rest of the iceberg. That was another part of all the rest of the iceberg of the negotiation: a stated effort where we had real agreement between Canada, the U.S. and Mexico to modernize this agreement, to make it relevant to the shape of the 21st-century economy, relevant for the service sector and for sectors of the economy that are based much more on intellectual property than on physical goods. I think we achieved a great deal there.
I would like to make one final point. When it comes to certainty in the future—and to me, this is a very important element of the new NAFTA, something that I hope we in Canada will be able to replicate—after an arduous process of negotiation, we have achieved an agreement that has strong cross-party support in both the U.S. and Mexico.
Mr. Hoback referred to the fact that the U.S. managed to ratify this agreement in the heat of the impeachment struggle in the U.S. We have, in the new NAFTA, an agreement that both Nancy Pelosi and Donald Trump support. I struggle to think of anything else those two important American leaders both support. It's important for Canada that they both support it, because that gives us a real guarantee for the future.
Madam Chair is asking me to wrap up, but let me just conclude by also referring to our guest from Mexico, Mr. Seade. He represents a government that was not in office when the bulk of this agreement was negotiated. I would like to thank and acknowledge the work of Ambassador Seade, and also of President López Obrador. They did a difficult thing, which was to take an agreement that was negotiated by their predecessors and political opponents, take ownership of it and get it across the finish line. That's a real show of national unity in Mexico.
I think it would be great if we could accomplish the same thing here in Canada.
Thank you.
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View Chrystia Freeland Profile
Lib. (ON)
Thank you for the question, Mr. Savard-Tremblay.
I am surprised that your first question is not about aluminum.
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View Chrystia Freeland Profile
Lib. (ON)
I see that, but I will be very happy to answer questions about aluminum too.
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View Chrystia Freeland Profile
Lib. (ON)
In terms of the agreement overall, I would like to start by saying that I am convinced that it is a good agreement for Canada and for Quebec. I am convinced of that because there were long consultations and discussions with entrepreneurs, workers and leaders in Quebec. As you are well aware, Premier Legault has said openly and clearly on a number of occasions that he and the federal government agree that this agreement is very significant and good for Quebec. I agree with Mr. Legault.
I have also observed, both in the negotiations on NAFTA and in those on CETA, that Quebec is one of the provinces in Canada that understands the importance of international trade very well. Quebec has negotiators with a lot of experience and we worked in close collaboration with them.
As for agricultural and dairy producers, it is important to understand the context. As I said in my remarks, the United States began with a clear demand, to completely dismantle the supply management system. To me, that is an astonishing demand. As you are well aware, that has been what the United States has wanted for a number of years. Once again, they tried to completely dismantle our supply management system.
I believe they thought it would be possible. I am very proud that our government stood firm in its response. We said that it would not be possible and that we were going to keep our supply management system.
You are right when you say that, in the negotiations, we gave the United States a little more access to our market, as the previous government had done in the negotiations on the Trans-Pacific Partnership (the TPP) and CETA. I agree with you and with the dairy producers of Canada that, as a result, it is essential for our government to provide fair and equitable compensation to Canadian dairy producers. I hope that all political parties will support that measure. Throughout the negotiations, I had long discussions with Canada's dairy producers. So the producers are well aware of everything that Canada has done.
I would like to take this opportunity to thank the producers in the dairy sector for their support and collaboration. People in the sector are well aware that Canada lives in a world of international free trade. We need open markets, but we have to preserve a part of our own market by protecting our supply management system.
It is complex, it is difficult, and producers in the sector stood with us throughout the process. After the agreement is ratified—which I hope will be done quite quickly—it will be time to provide those producers with fair and equitable compensation.
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View Chrystia Freeland Profile
Lib. (ON)
We will continue later.
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View Chrystia Freeland Profile
Lib. (ON)
Thank you very much for those questions, Mr. Blaikie, and also for the very detailed, professional conversations you and I have been having in recent weeks, and that have also involved our excellent trade officials who, I believe, have forgotten more about trade than any of us will ever learn.
I'd like to respond in two parts, first, talking about overall trade and progressive Canadians, and then second, about your specific proposals.
One of my objectives from the outset of this negotiation has been to achieve a truly progressive trade agreement, a trade agreement that Canadians, who perhaps traditionally have had doubts about the virtues of free trade, could support. That is why, among other things, we made a real effort to include union leaders, and I'd like to single out Hassan Yussuff, who I know has been speaking with you a lot as well, for his participation in the NAFTA council and for the advice he has offered throughout the negotiation.
Mr. Blaikie, you've pointed out two issues that progressives in Canada...and actually Mr. Manley has long been concerned about one of the issues you mentioned, ISDS. However, you mentioned concerns that progressives have long had with free trade agreements in general, and the new NAFTA in particular: ISDS and the proportionality clause. Two of the things I am the proudest of with the new NAFTA is that we have gotten rid of ISDS completely—a huge victory, a real benefit to Canada and a powerful precedent—and we have gotten rid of the proportionality clause.
I would also mention, as an element of the progressive trade agenda that we have not only articulated but done in the new NAFTA, the unprecedented protections for labour. Mexico—and again thank you very much, Ambassador Seade—as part of this agreement, has implemented historic labour reforms giving Mexican workers the right to organize. This agreement critically makes that commitment by Mexico enforceable. That is a huge win for workers in Canada, the United States and Mexico. The same is true of labour value content provisions. It is also true with our unprecedented environmental protections and protections for indigenous people and on the basis of gender.
Now I want to get to the second part of your question. I also would like this agreement, the entire negotiation process, ultimately, the ratification, to give us certainty in our trade with the U.S. and Mexico, but also to solidify the national consensus around Canada as a trading nation. I agree with you that transparency is a good thing. In the process of the NAFTA negotiation we have sought to be very transparent and very consultative with Canadians, but I agree with you that it would be a good thing to seek to formalize some of the things we have done. When it comes to the 90-day notification, let me simply say that Canadians had far more time than that to know we would be entering into a NAFTA negotiation, but it's a good thing to let Canadians know when we're contemplating working toward a trade agreement.
On the statement of objectives, we launched the NAFTA negotiation with a pretty long speech that I gave here in Ottawa, stating at some length what Canada's objectives would be. I think that was important for Canadians to hear. Again, I think that we would look very favourably at the notion of finding some way to codify that effort, likewise when it comes to sharing with Canadians our assessment of the economic impact of a particular deal.
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View Chrystia Freeland Profile
Lib. (ON)
Do I have to stop? Okay.
Let me simply conclude by saying, I think those are very constructive, productive ideas, and I thank you for putting them forward in such a thoughtful way. I am confident that working together we can find a way to give Canadians even more transparency, and confidence in more transparency, in future trade agreements.
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View Chrystia Freeland Profile
Lib. (ON)
Thank you very much, Mr. Carrie. Although we can't and we will never agree on everything, I am pleased to learn that we do agree that the changes that were codified in the protocol of amendment in December with the U.S. and Mexico make what I would characterize as a good deal even better. It's good we can agree on that.
I won't spend too much time comparing the U.S. process with the Canadian process, except to say that, certainly from my perspective, our process is different because we are a parliamentary democracy and I think our Parliament is fantastic. I love the Canadian system of representative democracy, but the reality is that, in the U.S. House, the time of the finalization of the protocol of amendment to the time of the U.S. House actually ratifying this deal was a matter of weeks. It was a very, very—
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View Chrystia Freeland Profile
Lib. (ON)
May I please finish? I listened to you without interruption.
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View Chrystia Freeland Profile
Lib. (ON)
If you want to use the 40 seconds by talking, I'm happy to listen.
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