Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 19 - Evidence, November 25, 2009
OTTAWA, Wednesday, November 25, 2009
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 4:55 p.m. to study the rise of China, India and Russia in the global economy and the implications for Canadian policy.
Senator Consiglio Di Nino (Chair) in the chair.
[English]
The Chair: I wish to welcome our special guest to this meeting of the Standing Senate Committee on Foreign Affairs and International Trade. The committee is continuing its special study on the rise of China, India and Russia in the global economy and the implications for Canadian policy. We are delighted to have appearing before the committee today the Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway. Minister Day was first elected to the House of Commons in 2000 and re-elected in 2004, 2006 and 2008. On October 30, 2008, Minister Day was sworn in as Minister of International Trade and Minister for the Asia-Pacific Gateway.
[Translation]
Mr. Minister, welcome to the Senate. You have the floor.
The Hon. Stockwell Day, P.C., M.P., Minister of International Trade, and Minister for the Asia-Pacific Gateway: Thank you, Mr. Chair. I want to start by saying that I am grateful to the committee for its work, and I fully appreciate its concerns regarding trade with other countries, especially the three you just mentioned.
[English]
Basically our overall goal as government when it comes to trade and international trade is not to tell Canadian businesses where they must do business but to do everything we can to keep taxes down and lighten the load for them. As you know, the OECD has said that our business taxation regime is the most competitive among industrialized countries.
We want to keep the regulatory regime as common sense as possible and then pursue, as aggressively as we can, trade agreements with other countries. Ideally, they will be free trade agreements that remove all tariffs and decrease the regulatory regimes while increasing confidence within the investment climate so that should a Canadian business, industry, service or worker want to export a product or service, he or she can do that knowing that they are as least encumbered as possible because of the policies of the government.
That is why we are aggressive in these emerging markets, large and small, especially the three that you mentioned. For instance, I looked at your report on China and some of what you were able to see there. These are the reasons that you saw the Prime Minister in India recently, and he is travelling to China next week. We have seen an increase in trade in all three of those countries.
In looking at the "close-out" figures for 2008, moving into 2009, we think there is more to do for many reasons. That is why we are aggressively pursuing trade, investment protection agreements, science and technology agreements, and research and development. Our overall goal is to do everything we can to open up opportunities for a level playing field for Canadian producers, investors, shippers, exporters and workers, to enhance collaboration and to invigorate our own economies while at the same time invigorating economies in other countries.
We do have votes coming up, so I do not want to take any more of your time. As you know, I could go on and on because I am enthused about this particular area. However, I want to hear from you, get your advice and possibly address some questions. Therefore, I yield the floor to you, Mr. Chair, and to the members of this committee.
The Chair: As you know, Minister Day, the committee travelled to Russia last month and to China a couple of weeks ago. We have some personal experiences we can share with you and also some issues that we would like to raise. I have many senators on the list of questioners. You are a popular gentleman.
Senator Stollery: Thank you very much for being here today, Mr. Minister. As you know, we are in the midst of a complicated study involving China, India and Russia and have completed two thirds of our field trips.
I would like to quickly ask you, because you raised it, about our free trade agreements. I completely agree with you that the idea behind free trade agreements with various countries is to do away with all of the tariff/non-tariff barriers to trade for Canadian companies.
The problem seems to be that when we have free trade agreements with countries, we agree on many things, but where there are disagreements, as with the U.S., we put those issues into a dispute settlement mechanism. The fact is that the free trade agreements with various countries — and I acknowledge that there are slight differences — often do not include the difficult areas. Those are put into a dispute settlement mechanism, and then one has to question the value of a free trade agreement. The best example would be the softwood lumber issue with the United States, but there are others. I do not have to tell you about them because I am sure you are as aware of them as I am.
I wonder about the value of some of these agreements and the work that our officials have to do in putting them together. In many cases, we enter into a free trade agreement based on tariffs with which we have no problem, but we do not often deal with the difficult issues because they are impossible to deal with.
Mr. Day: In fact, a free trade agreement is struck and then a dispute settlement mechanism is agreed upon, but we do not prejudge what elements may find themselves within that particular dispute settlement mechanism.
In our NAFTA deal, we had an issue with steel products coming into Canada from the United States. When the deal was signed, everyone knew there could be some issues here, but we did not say, "Steel will be a problem, so we will put that over in the dispute settlement area." We said, "Here is the free trade deal; it includes steel. Whether it is steel, apples or anything else, if there is a dispute, here is how we will handle it." We agreed beforehand that there would be a referee and that both sides would live with the decision of the referee. That is the beauty of a dispute settlement mechanism. Without it, it is like having a hockey game without a referee; it will be a shambles. When the referee makes the call, the virtue of the game is you live with the call. You can have a video replay if you want, but still you live with the call; it is the only way the game can go on. The free trade deal is done, all the elements are agreed upon, and there is a settlement process if you run into a problem.
Senator Stollery: I do not want to go on. I think that question could be pursued, but I will not do so.
Senator Wallin: I will pursue that a bit.
Minister, could you sketch out what you see? We have learned many lessons from the Canada-U.S. Free Trade Agreement and from the North American Free Trade Agreement. Some of our subsequent deals have been more informal around the edges for reasons that you specifically lay out. It is sort of like a marriage ceremony versus a civil ceremony. What are we looking for in a trade agreement with India?
Mr. Day: A few days ago, India's Minister of Commerce and Industry, Minister Sharma, and I signed the official joint study to begin the scoping exercise. We will look for as full and comprehensive an agreement as possible with India.
Before we even began the discussion, they indicated one of their concerns. They said, "The agriculture sector in India is at the subsistence level." It is actually their policy to allow for and maintain one- and two-hectare farms. They looked at Canada's highly sophisticated agricultural system developed by entrepreneurial, innovative farmers over the decades and said, "You will overwhelm us; there is no way we can compete." What I said to them at that point was, "You have sensitivities in agriculture. We will take that into account while we look at this comprehensive trade agreement." I then added, "By the way, we have sensitivities in agriculture, too." I think everyone around this table knows what those are. In some cases, we agree beforehand.
A lot of our stuff says "free trade agreement." However, if you notice the language with India, it is a comprehensive economic agreement. We are acknowledging even beforehand that we know that they have big-time sensitivities. We are telling them, "We will be sensitive to your sensitivities." We will still look at agriculture and what we can do there, but we will seek to obtain as broad as possible an agreement with them.
We always aim for a 100 per cent tariff removal. The agreement that we signed with Belgium, Norway, Switzerland and Liechtenstein is 100 per cent tariff removal. About 98 per cent was immediate; a few areas will be extended for several years to allow industries to adjust.
We will make it as comprehensive as possible, Senator Wallin, but I cannot predict how many sectors will move to zero and how quickly.
Senator Wallin: We can sell them lots of potash. That will help.
Mr. Day: We will be selling lots of that.
There is one other thing we must keep in mind with these free trade agreements. For example, we just signed an agreement with Jordan, which is not the biggest economic power in the world. However, it is our first trade agreement with an Arab state, and Jordan has free trade agreements with other countries. Prior to this free trade agreement, there was a tariff for our producers who wanted to sell their products to Jordan. Our products were hit with a tariff when they went into Jordan. If Jordan had a free trade deal with Sweden, a business person selling the same product from Sweden into Jordan did not face a tariff barrier, whereas the Canadian business person did. Therefore, they were at a disadvantage before they even looked at the extra transportation cost. In many of these cases, the free trade agreement is to ensure that our business people have a level playing field with business people from other countries who are already operating under a free trade agreement with these countries.
Senator Wallin: What about the issue of intellectual property? How have we framed that?
Mr. Day: Frankly, that is a big issue in many countries. To be honest, some of the countries that we are dealing with see some of our legislation as too restrictive. We look at that all the time. We believe strongly in the protection of intellectual property; that is why we have an act to that effect.
If we think it is truly too restrictive, we will consult first with our industries. Again, we are talking about comparing apples and apples. We may look at possible adjustments. However, we are strong on the issue of intellectual property and we want to ensure that we do have legislation in place to protect that.
We had to make a move about a year and a half ago because the Americans were saying that we were not properly protecting intellectual property rights when it came to the movie industry. We were allowing the copying of movies and not being aggressive enough in clamping down on those who were doing the knock-offs and selling them to other markets. If you neglect the area of intellectual property, you will wind up losing the business. The United States film industry was saying, "We will not do business in Canada if you do not get serious about clamping down on people who are doing these counterfeits and knock-offs." It is not only a matter of protecting our own intellectual property but also of ensuring those who want to invest in Canada that that theirs will be protected also.
[Translation]
Senator Fortin-Duplessis: Mr. Minister, after seeing what a new power China has become and understanding that its economic strength is undeniable, we realize that international standards and institutions are no longer adequate. How should international institutions, such as the World Trade Organization, the International Monetary Fund, the World Bank and the Organization for Economic Co-operation and Development, be restructured in order to accommodate China's rise in global power? And what role should Canada play in that restructuring?
Mr. Day: That is a good question. If not for the institutions you just mentioned and their rules, not only could China behave aggressively, but it could also fly in the face of the standards we have developed over a number of years of trade.
We need to continue being aggressive and using the tools that the institutions you mentioned put at our disposal. For instance, we used the rules of the World Trade Organization against China; I think we now have 13 or 14 cases involving iron and steel manufacturing. Through these organizations and their rules, we hope to tame China, if I can put it that way, so that it adapts to trading standards that other democratic countries have developed over a long period time. We are going to continue using the rules of these institutions, which are very important.
Senator Fortin-Duplessis: After some business meetings that we had with various levels of government in China, I jotted down some notes about needs that the country has, needs that many Canadian companies could fulfil, in my opinion. I would like to share them with you.
Among other things, the country has a lack of raw materials and transportation needs. China is also facing serious pollution problems. When we arrived in Beijing, we just could not see across the street. It was rather odd.
However, I do think that corruption in China's legal system could harm Canadian companies doing business there.
But it is becoming increasingly appealing for Canadian companies to do business with China, and I hope that you will improve their ability to infiltrate that market.
Mr. Day: There are a lot of problems, and I think that "problem" is the right word. Chinese companies use different pressure tactics, which can cause problems for Canadian companies.
You mentioned the problem of corruption.
Senator Fortin-Duplessis: Yes, it is a big problem.
Mr. Day: When I go there, I do not mention it, but it is a problem. That is why it is important to have agreements that protect investment. We need to force China's government to follow the rules set up by institutions.
Of course, there are still problems with the methods used by the government and companies in China, but it is important to acknowledge the progress that has been made, as the situation was no different ten years ago. After meeting with Chinese officials a number of times, I am convinced that they want to give the impression that they respect trading and investment standards. They do not like being accused of corruption.
That is why we need to be committed and to continue exerting pressure on the Chinese government and using the tools at our disposal. But we do explain to Canadian companies and investors that there are a bunch of risks, if I can use that expression. And that goes not just for China, but also for other countries that are not quite as democratic and that do not necessarily have the same legal system.
We warn Canadian companies. We tell them that when they operate in various areas, there are risks involved. In certain countries, including China, we have helped institutions set up trade tribunals and develop their institutional capacity.
Despite the progress, there are still risks, sometimes big risks. We have seen instances where a Canadian mining company bought a mine in a democratic country. After allocating the funding, Chinese companies can negotiate with the government of another country to reach a deal that cancels the contract with the Canadian company.
That is why I say that, in my opinion, the Chinese government wants to project a good image. We have seen an improvement in their activities, but it is still not perfect. And so I warn Canadian companies.
[English]
Senator Smith: Minister, first, let me say, on your Indian initiative, I applaud it and encourage you to continue down that road. We as a committee have not been there yet, although I personally get there often for private reasons. I think that is the way to go.
You have already heard that we have been to both China and Russia. I will not get into that other than to say that this past weekend I was in New York City for a family wedding. For every crane with a new building going up in New York, there were 25 in Shanghai. It is exploding. Although the rhetoric is different from the reality, they have embraced free enterprise in a way that is hard to imagine, and I have been going there for 35 years.
I will ask one question that relates to our trip to Russia and your Alberta background and the oil and mineral opportunities in northern Russia and Siberia. There are many Canadian companies over there. When we were in Moscow, we had meetings with a number of different companies to listen to issues and we had discussions with officials, and it was the same thing when we were up in Siberia. The one theme that kept coming back — and we will have to look into it — is the issue of business visas. We heard more about that than almost anything else, namely the constraints and difficulties of the system. I am not sure that some of the constraints in the legislative program were necessarily intended, but it puts our people in a straitjacket. It has been almost 18 years since the former Soviet regime collapsed, and it is still difficult to get visas for people who were somehow involved in it. It is like going through the Hampton Court Maze.
There was an embarrassing situation a few months ago with regard to a senior parliamentarian. I think we developed a consensus, and not on a partisan basis, that in this case it is a real problem. To what extent have you been sensitized about this issue with these Alberta oil companies who want to do more work over there? We never stopped hearing about this problem the whole time we were there. Is there a review under way? I think we are prepared to do one. Perhaps you could react to that issue.
Mr. Day: To be clear, are you talking about visas being made available for Canadians getting into those countries, or the other way?
Senator Smith: It is more for them sending people here, but I am also referring to people going over there. My question had more to do with people working for companies that want to get into Canada. I am talking about visitors' visas, not immigration.
Senator Stollery: They cannot go to trade shows in Canada because they cannot get a visa.
Senator Smith: It is a real issue.
Mr. Day: We have heard about this a lot, and it is a real issue. Minister Kenney's office is cranking up the resources and asking for more to be able to deal with not just the backlog but the deluge and the time that it takes. We heard it a lot in India. A couple of years ago, we started hearing about it big time. They put in place "express business visas," as they call it. In the last eight months in India there has been a 100 per cent approval rating within 24 hours. I do not know if it is the same in Russia.
Senator Smith: It is not.
Mr. Day: However, they are aware of it and are trying to speed things up. That is about all I can say. Your point has been noted.
Senator Smith: We will be looking at it because it is a real problem.
Mr. Day: I heard about it when I was in Moscow in July. We know it is an issue, and they are trying to crank up the resources there.
The Chair: Similar concerns were expressed during our trip to China, although not to the same degree. It is a lot better, but to complete the picture, it is not perfect there either. We are talking about business visas, not visitors' visas or immigration.
One of the things that struck me as we travelled through Russia and China is how we were welcomed by officials, but particularly by business people doing their thing over there in the fields of investment and trade. They were delighted that we were there and were engaging with the local authorities — and this was at high levels. We were given access to high-level people. That begs the question: Are we supporting our trade and investment opportunities sufficiently in these countries?
Mr. Day: We are aggressively pursuing it in an increased way. There is no question that our presence there is welcome.
You mentioned China and Russia. Given the relative sizes of the two economies, the differences are huge. China's GNP is $4.6 trillion, and in Russia it is $1.7 trillion; yet they are both wide open to Canadian participation and investment.
Senator Smith mentioned China in terms of growth. You have been to China, so you have seen it. They redefine growth. We talk about building a road; they talk about building a city. We talk about building a ship; they talk about building a navy. It is unbelievable what is going on over there, as you have seen, and we want to be part of that. That is why we aggressively pursue as many arrangements as we can to make it as easy as we can.
Russia's GDP is not the same size. If you look at our bilateral trade, we exported $10 billion to China last year; we imported $42 billion. It is a fraction of that with Russia. However, Russia has some unique areas where they can use Canadian expertise, such as in the oil and gas sector, as well as in housing construction, especially in extreme climates.
It is the same for China. Obviously our energy supply is of interest to them. Also they recognize, as we see with the upcoming Copenhagen Summit, that they are being looked at by the rest of the world in terms of emissions. They are soaking up alternative forms of energy. When I was over there, they signed a deal of over $100 million with a compressed natural gas company in Chilliwack, British Columbia. They are buying gas from the company in Chilliwack, but at the same time, they are building 100 terminals to dispense this gas to buses and taxis in one particular region. We facilitate those types of deals by trying to remove to regulations and by trying to level the playing field.
Export Development Canada is also available. Last year, EDC facilitated $85 billion worth of economic activity. In many cases, especially Russia — and the Ukraine is a good case in point in that we have started free trade agreement discussions also — they do not have the credit capacity to handle a Canadian company wanting to go over there, do the investment and help with oil and gas, so EDC enters into the deal.
I think we are doing a lot. You can see that by the fact that the numbers are increasing. India's numbers were up in terms of imports and exports. The 2008 "close-out" figures regarding imports and exports to China were up 31 per cent. They are on the increase, but there is more to do. We are being as aggressive as we can be.
Senator Jaffer: Mr. Minister, I was impressed that you opened a trade office in Ahmedabad; I never thought we would do this. I was impressed because my ancestors come from there. It is not just that, but it is very much a trade hub. I can see that you are looking in different areas where I did not think we would be looking. Congratulations.
Mr. Day: Thank you. The trade office was so well received in that part of India; people were overjoyed. As you know, that region is such a gigantic engine of economic activity. It was tremendously well received.
Senator Jaffer: That is right. That was visionary of you. Thank you for doing that.
The reason we are sitting here is we know we need to look at new trade partners. What I am saying is not new to you. We need to increase our trade with other countries, especially India and China.
You go to these countries to learn about what is happening there and to build relationships so that they come to know Canada and we to come to know them. What are we doing to engage Indo-Canadians and Chinese Canadians to work with you and build a knowledge base? People who come from those areas know those areas. What is your department doing to build partnerships with those people who live in our country and are Canadian citizens to allow them get a jump on other countries? We have this knowledge base sitting within our country. What specific programs are you setting up to engage those communities?
Mr. Day: The Indo-Canadian business community in Canada is the first source that we go to. I have been to India three times just this year. Before we even go, we hold round tables and extensive consultations with the Indo-Canadian community across Canada to obtain advice on where the greatest possibilities are, where the greatest areas of need are and where it will be of the most mutual benefit. Obviously there must be mutuality or they will not be interested on the other side.
We also survey them to see which companies can meet us there, who can be there to facilitate meetings and which Canadian companies are already integrated in India. We involve the community extensively, as we did before and after we went to China, to ensure that we are on the right track.
The Indo-Canadian community is absolutely invaluable in terms of our success with India. I dare say they opened most of the doors for us. This is a great natural advantage for us. We have a community of 1.4 million people, and we use of all those business contacts to facilitate our successes.
We then go beyond that and look at educational linkages and input, mainly the post-secondary institutions. Last year across the country we had about 178,000 foreign students. Just over 7,000 of them were of Indian heritage. We need to increase that, and we can.
Other countries have natural advantages. Depending where you live in India, Australia can be closer. I know this sounds funny, but I have been having discussions with educational institutions over there, and one of things students think — I do not know where they get this idea — is that Canada is kind of cold. If they have a choice, all things being equal, they might choose a warmer climate.
We make the case that all things in their favour are more than equal if they choose Canada. Our post-secondary institutions are not as expensive as some in the United States and some, possibly, in Australia. We have science and technology agreements between institutions that then work toward ongoing commercialization. I am also making the case with my own colleagues.
I met with the 75 presidents of colleges and universities in Canada and also challenged them. The U.S. is far more aggressive. They go on to campuses in India. Whether or not we like this idea, the U.S. pays their people a commission for every student that they get to come to a U.S. institution. They are very aggressive on an institutional basis.
I have told the presidents of the colleges and universities that we will do even more. We have work programs now through the visa offices that allow students to work when they finish their school year. We have the Vanier scholarships and now the Emerging Leaders scholarships. I am saying to my colleagues that we need even more resources on that end.
When you extrapolate what 178,000 students from other countries paid last year for rent, groceries, clothing and tuition, it was about $6.4 billion. That went straight into our economy. This is a win-win situation. It is not just on the economic side; we pursue it on the educational front also and we work closely with the Indo-Canadian community.
Senator Jaffer: In addition, we build influence if they are in our country.
Mr. Minister, I know that you have good, informal contacts. However, as we grow in these countries, perhaps we could do so on a more formal basis to engage our communities within Canada.
You were talking about it being cold here. When we were in China, education officials told us that they have students who have been here and who then went back to China to talk about how to deal with the cold. That was interesting.
When we were in China, I was impressed, as were all of my colleagues, with David Mulroney and his group and how they knew Mandarin and related to each other. Promoting languages is another area that is not directly trade related and not directly within federal jurisdiction, but we need to look at it. How do we make it easier for Canadians to learn Mandarin and Hindi? Going to China, it became obvious that we have to promote French, English and Mandarin here because that is the way to look at trade.
The embassy there has received the message, but we need to do more. We learned from our visit there that hopefully we will be able to export a lot of education — that is, bring students to Canada. We can export educational products to China, but we will also have to know the languages of China and India. I am hoping that you can tell us if you are doing anything or looking into something to doing something about that.
Mr. Day: I agree. You have quite rightly observed the importance of having fluent Chinese-speaking people in our missions over there. That is why they put a premium on that. We invest a lot in DFAIT in terms of language training.
You are right. I agree that David Mulroney is definitely a Sino expert and it is great to have him there.
Again, the language issue comes back to the educational side. The opportunities are huge. I spoke with a doctor at Sun Yat-sen University. When I was preparing to speak there, I asked about the size of the university. They told me that it was 14,000. I said, "That is pretty big," and they said, "That is just the faculty." Again, it comes down to order of magnitude. It is almost beyond what we can comprehend. That is why we have to be aggressive in pursuing these opportunities.
Senator Andreychuk: Thank you, minister, for the work that you are doing and for appearing here today.
I wanted your reflections on the fact that we have changed some of our perspectives regarding trade. We have more provinces involved. They are taking control over their resources. I am from Saskatchewan, a province that has made a dramatic difference in the lives of its people by being able to market differently and to move into markets where previously it had not been present.
What is your take on the federal-provincial position? Are you changing from previous times? Are you approaching cooperation with the provinces differently so as to make an impact, not with respect to the large national corporations but in terms of many niche markets that really help citizens in certain pockets of Canada? I want to know your perspective with regard to moving in this direction.
The Chair: Before you respond, did I notice some time constraints on your part?
Mr. Day: Yes; there is a vote. The bells have started ringing. However, I can stay until there is four minutes left. My colleague will notify me.
The Chair: If you have a few minutes, please go ahead.
Mr. Day: I have about six minutes before I have to run through the door and keep the government from falling.
Senator Wallin: Good work.
Mr. Day: Provincial involvement is something that we are not just encouraging, we want to see it increase. We cannot have as full a grasp of all the local opportunities at the same level as the provinces.
Two days ago I was talking with my colleague in Ontario, Minister Sandra Pupatello. Premier McGuinty and others are going over there. We are talking about how the federal offices can facilitate their visit. We do what we can to help that along because the provinces know where it is at in terms of being closer to the economic scene on a regional basis.
I believe there has been a real change — and I am not saying this in a partisan way, but maybe because of the global geopolitical forces at work — in the involvement of the provinces in trade issues. We are in the fourth round of negotiations with the European Union. We made a commitment to the provinces before we entered into those negotiations that they would be right there with us in each stage of negotiation. Before a negotiator gets to the table with the EU commissioners, he or she knows what the provincial position is on a sector-by-sector basis. They take that to the table and negotiate. Before we agree on anything, they come away from the table and consult with the provincial representatives to ensure that everything is intact and on track. That has happened because of the EU and because of the "Buy America" situation. This was unprecedented. I think the media failed to understand the importance of the provinces coming together to sign a procurement agreement, and they did it in a relatively short period of time. Premier Charest was chairing the Council of the Federation at that time and was instrumental in pulling the provinces together on this matter. The provinces are more involved in all elements of trade; they must do so because of recent political situations. We are trying to impress upon them that they are closer to the local and regional action, and we want to do everything we can to ensure that they are empowered to do what they do best.
The Chair: With apologies to my colleagues, I would ask Senator Grafstein and Senator Downe to ask their questions now and, hopefully, you will have time to reply.
Senator Grafstein: I think the minister has responded to one of our major questions. There is no question that there is a consensus here and across the country that our economic prospects with the United States are not what they were. The dollar there is softer; the economic future there is bleaker than it has ever been in my memory and there is no sense that it will come alive or grow as it did before. We have to do something that is hard for me, having worked on this file for years, namely, change the direction of the department and our government and focus our attention on these other markets.
With respect to the EU, as you have suggested, I think we have to move faster on that front.
In terms of the China market, there was an interesting article in the Financial Times. Rupert Murdoch said that if you are going to focus on any of the BRIC countries, you would focus on India because of the rule of law. You mentioned that.
Let me deal with that last topic briefly. If we are doing a full-court press with India or China, we have to do a number of things. Twinning cities is good. That program, which we started years ago, has gone soft.
There is also the twinning of schools. We have started that program, but we have not focused as much as we should have on the rule of law and twinning law schools in India, China and specifically in Russia.
Finally, as Senator Wallin will recall, we established 17 new trade offices in the United States. We went from a few to a lot, and it made a huge difference in terms of the spread of our trade. I am not sure why we do not use the same technique in terms of China and Russia and, specifically, India.
Mr. Day: We have done exactly that. We have increased the trade offices in China and India. The most recent one, as we just heard from Senator Jaffer, is in Ahmedabad. We are increasing those.
We are trying to make people aware of the need to establish mutual trade laws and common practices because companies now are so integrated. Sometimes we hear Canadians saying, "We have to stop all these imports from another country." I will say, "Oh, really?" Pick a country. Let us use China. China must play by the rules and we are tough on them in that respect. However, when people say, "Stop imports from China," they do not realize that many Canadian companies make a certain product and then sell it to China. The Chinese company then further develops it and sells it back to Canadians. If we are saying, "Stop the importation of products from China," many times it is Canadian product coming back because it has been reshaped. If you stop the importation of a product from other country, you could be shutting down a factory in your own country. These supply chains are integrated. Major international companies, from start to finish — that is, literally from the mine site to the retail store — are totally integrated. That is why this is a brand new game in terms of international trade, ensuring that the rules and regulations are the same for everyone so that this integrated trade can be as seamless as possible.
I am getting word here, Mr. Chairman, that we are about to have a vote in the other place.
The Chair: If you have to leave, I am sure that Senator Downe will understand.
Senator Downe: I look forward to being first on the list of questioners next time, Mr. Chair.
The Chair: You will be the first.
On behalf of the committee, I would like to express appreciation to you, Mr. Day, for taking the time to be here today. We shall invite you back soon.
Mr. Day: Thank you for your good work in these countries. We are looking at your reports with real interest. They are very helpful.
The Chair: Thank you, Mr. Minister.
(The committee adjourned.)