Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue 26 - Evidence - Meeting of May 22, 2013
OTTAWA, Wednesday, May 22, 2013
The Standing Senate Committee on Foreign Affairs and International Trade met this day, at 4:15 p.m., to study security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region, and other related matters.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: Honourable senators, today the Standing Senate Committee on Foreign Affairs and International Trade is beginning its study on security conditions and economic developments in the Asia-Pacific region, the implications for Canadian policy and interests in the region and other related matters.
In this session, in fact our first session, we are pleased to welcome a panel of officials from the Department of Foreign Affairs and International Trade and the Canadian International Development Agency. Perhaps they can tell us what their new name might be soon so that when we say it all in one breath, we will know.
Representing Foreign Affairs and International Trade Canada, we are pleased to have before us Mr. Peter McGovern, Assistant Deputy Minister, Investment, Innovation, Business Development and Asia; Mr. Marvin Hildebrand, Director General, Trade Negotiations Bureau; Mr. Peter MacArthur, Director General, South, Southeast Asia and Oceania; Ms. Cindy Termorshuizen, Acting Director General, North Asia; and Mr. Artur Wilczynski, Director General, Security and Intelligence Bureau and Acting Assistant Deputy Minister, International Security, Africa, Latin America and the Caribbean. Representing CIDA, we welcome Mr. Jeff Nankivell, Regional Director General, Asia, Geographic Programs Branch.
As you know, you were invited to appear here today. We have a broad mandate to study the Asia-Pacific region. Because of that, we were interested in studying something that would be of benefit in our study towards foreign relations and international trade. We know there are many areas we could study, many areas we should study, but we were looking to you to give us what the policies are towards this region within the government at present, and perhaps any recommendations of areas of exploration that would be of benefit to the Canadian public at large and the government in particular.
I leave it to your discretion as to how you wish to approach this. I know you have been in touch with the clerk. We look forward to your opening remarks.
Will you, Mr. McGovern, be speaking for all sectors at the moment? Then there will be questions and answers perhaps to individual members of your panel.
Peter McGovern, Assistant Deputy Minister, Investment, Innovation, Business Development and Asia, Foreign Affairs and International Trade Canada: If you agree, I would propose to make an opening statement, after which we would all be available to take on whatever direction the committee wants us to move in.
The Chair: Perfect. We will go to your opening statement.
Mr. McGovern: Thank you, Madam Chair. I am very pleased to be here. I have had the honour of appearing before this committee before. I know what serious work you do. I was actually a part of the study that you did on India and China, and I appreciate that work. I know there is a lot of discussion about senators these days. My only comment is that I hope they win tonight and the series continues in Pittsburgh, and I will leave it there.
The shift of political and economic power towards Asia highlights the importance of expanding Canada's bilateral and multilateral relationship in the region.
[Translation]
I will speak broadly about the Government of Canada's efforts in Asia, and then my colleagues and I will be happy to answer questions and in greater depth.
[English]
Asia, as a whole, is expected to account for a full 50 per cent of global GDP by 2050. There are already more Fortune 500 companies headquartered in Asia than in either the U.S. or Europe. Our companies have long recognized, as have our key competitors, that diversification of our trade and investment to this region, with its rapid urbanization and growing middle class, is critical to continued prosperity. Ministers Baird and Fast have said as much in speeches here at home and in Asia.
Minister Baird said that increasing Canada's engagement in Asia is not a choice; it is a national imperative.
[Translation]
For the first time in recent memory, our department's Report on Plans and Priorities tabled in Parliament earlier this spring-cites increasing Canada's economic and political engagement in Asia as one of six distinct organizational priorities. Canada is already benefitting tangibly by Asia's rise.
[English]
Since 2006, Canada's goods exports to Asia have increased by 57 per cent, and two-way foreign direct investment has increased sharply. Asia is the source of 59 per cent of the international students in Canada and 60 per cent of new immigrants. Exchanges of students and tourists between Canada and Asia are at unprecedented levels, and science and technology cooperation is on the rise.
Indeed, I and a number of colleagues just came to this meeting from a luncheon and round table we were hosting for China's number-one scientist, the Head of the Chinese Academy of Sciences.
The past year has seen a series of bilateral accomplishments with our anchor relationships in the region — China and India. With China, Canada signed a foreign investment promotion and protection agreement and completed an economic complementarities joint study. Bilateral trade is up 7.7 per cent to $70 billion, and China has now surpassed the United Kingdom as Canada's number two export destination. We have also seen significant increase in Chinese investment in Canada.
With India, the importance of a more vigorous and productive strategic partnership was highlighted by Prime Minister Harper's November 2012 state visit. Among the agreements concluded was an arrangement to bring into force a nuclear cooperation agreement that will to help address India's chronic power shortages.
There are other relationships of importance to Canada, including our mature and dynamic relationships with Japan, Korea, Australia and New Zealand. We have an expanding trade and development relationship with Mongolia as well. Our ties to the ASEAN countries have also assumed a much higher priority in recent years, and we are building on momentum in these relationships.
Even during a time of constrained resources, Canada is maintaining and even increasing our presence on the ground with 10 new offices in China and India since 2006 and new resources placed within ASEAN, including our first embassy in Burma.
[Translation]
But there remains much more room for growth. Through the Global Commerce Strategy and Canada's Trade Commissioner Service, we are helping small and medium-sized enterprises from across Canada and a wide range of sectors enter Asian markets, capitalizing on what Asia needs.
[English]
Asian interest in Canadian natural resources and agricultural exports represents a particular opportunity, not only to increase trade but also to open doors for multiple sectors. In particular, the impact of potential energy exports to Asia by way of our West Coast could be transformational, improving our trade balances and boosting our investment. While we have completed nine free trade agreements since 2006, we have not yet completed one with any country in Asia. The government has been leading the most ambitious trade agenda in Canadian history in an attempt to change that.
In addition to active bilateral free trade negotiations with India, Japan and Korea, Canada is a member of the Trans-Pacific Partnership negotiations, which has the potential to become a leading mechanism for regional economic integration in Asia and to bring significant benefits to Canadian exporters and investors.
The TPP membership, now including Japan, represents a population of over 792 million people and a combined GDP of $27.5 trillion. That is over 38 per cent of the world's economy and accounts for roughly one quarter of total global trade.
However, this is about more than our economic interests. As our Prime Minister and ministers have noted and demonstrated during their many visits to the region, Canada is underpinning its economic efforts in the region with a multi-dimensional approach.
[Translation]
In spite of the success stories of Asia, CIDA's mandate remains vital. Asia has experienced significant poverty reduction in the past two decades but is still home to two-thirds of the world's poor.
Inadequate infrastructure and weak institutions for supporting market economies, attracting foreign investment and combating corruption all undermine growth. Canada has had an active development assistance presence for many years and has ongoing bilateral programs in Indonesia, Bangladesh, Vietnam, the Philippines, Sri Lanka, along with a regional program for Southeast Asia.
[English]
The promotion and protection of human rights is an integral part of Canada's foreign policy and a priority in our relationship with Asian countries. Canada consistently raises human rights bilaterally, multilaterally and, in the case of North Korea, through a strict sanctions regime.
[Translation]
Free, transparent and open societies promote economic opportunity, as do stable and secure markets in regions devoid of conflict. Security and prosperity go hand in hand.
[English]
Non-traditional security threats in such domains as cyber-espionage, human smuggling, organized crime and terrorism have global reach. China is demonstrating a growing assertiveness and military strength. Traditional security threats, such as territorial and maritime boundary disputes and weapons proliferation, have the potential to create significant regional and international instability with the potential to impact upon the security of Canadians at home and abroad.
North Korea's nuclear and ballistic missile program and ongoing threats against the United States and South Korea are of ongoing concern. Canada stands ready to support appropriate measures and to work with allies to bring attention to the horrific human rights abuses in North Korea. Canada is reinforcing its security and defence relationships in the Asia-Pacific region through both bilateral and multilateral mechanisms. Our objective is to fulfill our role as an important security partner that other nations can count upon in times of distress and that is prepared to meet the security concerns of the region.
Recognizing the emerging importance of new regional institutions, Canada is also seeking membership in the East Asia summit and the ASEAN Defence Ministers Meeting Plus to complement our role in both the APEC and ASEAN regional forum. We are also working with key allies to identify opportunities to heighten impacts of engagement where we can do more together. Canada and the U.S. have a deepened dialogue on Asia at multiple levels and we continue to take lessons from Australia's ongoing efforts to strengthen its relationships in Asia.
[Translation]
To conclude, this high level overview only begins to present the opportunities and challenges that Asia's growing global importance presents Canada. We are making significant process, but much work lays ahead, including in fostering greater knowledge among Canadians about Asia's growing importance.
I know your study will make an important contribution in that regard.
[English]
The Chair: I am sure that senators have many questions. Are there any areas that you think we should address as a Senate committee? You know our work. You might find some benefit if we zeroed in on a particular aspect that the public should be aware of. Questions could be just general knowledge about the policies and practices of the government in the region.
Mr. McGovern: Allow me to make a personal observation: As Canada diversifies away from the United States, it is quite evident that we are increasingly reliant on open markets in Asia, whether China, Indonesia or India. I found it very interesting that recent polling suggested that the appreciation of Canadians for Asia as an economic partner diminishes the further away you go from the West Coast. By the time you reach Eastern Canada, it is very small.
From my perspective, bearing in mind that I am Canada's Chief Trade Commissioner as well, it is not a zero-sum game. It is not that we will give up Europe or the United States, but Asia increasingly is central to Canada's prosperity. This is what will provide jobs and prosperity in small towns across this country, as the richer countries in Asia start buying Canadian products and not solely our primary resources.
The middle class in China now is measured in the hundreds of millions. The same will be true of India very soon. I think, from that sense, the fact that Asia is little understood, that we have important relationships — and we have some very key relationships with countries like Japan that share our values of freedom, democracy, human rights and the rule of law, and which have been a partner to us for a long time — will play a very important role.
The transformational dimension that I mentioned about energy is really significant. I know that members are probably familiar with this, but if you look at the price of natural gas in Tokyo and bear in mind now that, after the horrible tsunami/earthquake, decisions were made by the Government of Japan to move away from nuclear power generation. The price of natural gas per cubic metre in Japan is over $15. The price of natural gas per cubic metre in Canada is about $2.19.
There is tremendous opportunity but also a requirement of Asian nations to be able to have a secure, reliable, sustainable source of energy moving forward. That is an observation. It is personal, as I mentioned, and I would be interested to hear what members say in terms of their own views.
I think there is a discussion, and I understand you will be talking to Yuen Pau Woo of the Asia Pacific Foundation tomorrow. Of course, one of the activities of the Asia Pacific Foundation is they are having a dialogue on Asia. In that context, members of this committee, given their informed nature, can make a major contribution to a better comprehension of the significance of Asia.
Senator Downe: Thank you for your presentation. You certainly covered a lot of ground and a lot of activity in the region.
Given these new associations and alignments going on, what role do some of the old forms like APEC play? Has the position of APEC decreased in importance? Obviously we are not going to give up our membership, but how is that integrated with some of these new initiatives that are under way in the region, and are they in a leadership role?
Mr. McGovern: That is a very interesting question, senator. The answer is not an easy one. What we are seeing is a number of emerging architectures, and you did note that I referred to the East Asia Summit and to the ADMM-Plus. Again, these are important, emerging architectures. APEC is a club that we have belonged to. It has a stated objective of trade liberalization set out in the Bogor Goals or clauses, which would see moving towards free trade by the year 2020.
The issue for APEC is that as an organization that works on a consensus principle it is very difficult to drive difficult decisions. However, it is an institution where leaders have the opportunity to talk about issues that are specific to the Asia-Pacific region. I think, from Canada's perspective, we have to be a member, as a country that borders on the Pacific, of those groupings where important matters are discussed. That is why the Prime Minister has instructed us to look at the East Asia Summit, but again I think you can question any number of individuals and they probably would have conflicting views as to whether APEC has seen its day and the centre is now moving towards the EAS.
Again, APEC is interesting in the sense that it brings together China and the United States and includes Canada. I do not know if there are colleagues who would like to chip in.
Senator Downe: Tell me about the participation. I have not followed APEC closely in a number of years. Do all the leaders actually show up now or are there gaps and do they send replacements, ministers and so on?
Mr. McGovern: Interestingly enough, the high-level representation has been fairly solid.
Senator Downe: Meaning leaders?
Mr. McGovern: Leaders show. Again, the bellwether of this is whether President Obama shows up, and he has. I think he may have missed the last meeting but there were particular circumstances to it, I think the election campaign. My colleague has just said there was an important thing called the Democratic National Convention that was taking place, which explained his absence, but other leaders were there.
Again, an element of these meetings, as much as anything, is what transpires on the margins of the meeting. I know both our ministers and the Prime Minister are very active in the number of bilateral meetings that they arrange while they are there. They take full advantage of that dimension as well.
Senator Downe: There is no question, if the leaders show up it is a very useful forum for the reasons you outlined, not only the main agenda but the side meetings that can be arranged.
Of the new emerging architecture, as you call it, associations, which one has the most promise for Canada to play a prominent role and events of interest to our country, in your opinion?
Mr. McGovern: The one we are looking at very closely, and have been instructed by the Prime Minister to seek admittance to, is the East Asia Summit. The East Asia Summit has grown out of ASEAN. ASEAN, as you know, is moving to a full customs union in 2015. As it stands now they have a leaders' summit. They have just taken on the United States and Russia.
In terms of our adherence to that particular summit, they are saying to let them digest the big meal they have just eaten before moving on to admitting other members. Again, one of the tensions in the East Asia Summit is that APEC generally is about economic matters. The EAS summit is more focused on security.
That being said, there are some members of the East Asia Summit who would like to see it be about security and economic matters. Again, this is the kind of tension that exists between these emerging architectures in terms of whether APEC is supreme or is it the EAS that will be supreme? At this point there is not a clear view on either; both are relevant and important.
I think the yardstick that you have identified, senator, that if leaders are willing to, with the very busy schedules they have, commit to participate, then they are both relevant.
Senator Downe: Is there any opposition to Canada's participation in the East Asia Summit?
Mr. McGovern: There is not, but the discussion we have with the ASEAN members has to do with Canada's engagement in the region. We were viewed, to a certain extent, as fair-weather friends, that we had not been present in ASEAN particularly for a number of years. They are saying, well, we welcome you, and we are certainly getting a lot of high level attention. That must be sustained. There must be full commitment.
What our issue largely with ASEAN had been, and one reason why we were not fully engaged with them, was the situation of Burma. We had, as you remember, the most stringent sanctions package of any country in the world, and very limited engagement. As an organization that counted Burma as a full member, it was very difficult for us to do anything with ASEAN as a group.
We have moved forward ambitiously in the last year. We are pleased with what we have seen, and that has opened the door to closer engagement with ASEAN as an organization.
One of the important things that we did is we signed something called a TIFA, which is a trade and investment framework agreement. That is a nonbinding agreement, but it showed that we were prepared to engage fully with ASEAN, and from that point on we are now fully engaged. We have had quite a number of ministerial visits, the Prime Minister has visited, but their view is that this is good but it cannot be a flash in the pan. They need to see us fully committed and engaged for the long term, and I think that is valid.
[Translation]
Senator Fortin-Duplessis: First of all, Assistant Deputy Minister McGovern, I am very pleased that you are appearing before our committee. Welcome to you and your team.
To your knowledge, are Canadian enterprises facing a barrier of some kind that would hinder bilateral trade between Canada and the countries in the Asia-Pacific region?
Mr. McGovern: There are still barriers. In fact, that is one reason why we are pursuing this large number of free- trade agreements. However, there is a small difference between, say, us and the United States, which does not support Canadian entrepreneurs.
That is partly why we are now being very aggressive with China, India, Japan and Korea. Also, we can be very impressed by what our entrepreneurs have done in the past five years, even with barriers. China is not an easy market. The rate of our exchanges between our two countries has exceeded $70 billion. China has become the second most important country for us after the United States.
It is important to always be competitive with the other countries because there is always a battle between countries for markets. We now have our trade delegates throughout the markets in Asia. We are working very hard, especially with SMEs. Big boxes do not need a lot of government help or assistance, but small companies need someone on site to help the companies find opportunities.
Senator Fortin-Duplessis: Following the trips we have made, my observations have been that relations with some Asian countries have made huge progress and also seem to be intensifying. Personally, I think we have taken a big step forward.
However, I have an excerpt from a report that I want to mention because it concerns me. A report drafted in 2011 for the Canada China Business Council and the Canadian Council of Chief Executives by Wendy Dobson, professor at the University of Toronto's Rotman School of Management, maintains that Canadian relations with Asia are unfortunately lacking in strategic continuity and consistency. She said that Canada has a reputation in Asia of showing up there but not being serious about establishing long-term relationships. That was not always the case. In the past, we built strong bilateral relationships with Japan and China and contributed to international aid programs in India, Malaysia, and Thailand. Canada was also a strong supporter of the Association of Southeast Asian Nations in the early years following its founding in 1967.
The picture is one of an ad hoc approach, one that lacks a strategy toward developing both ties with Asia and a Canada ``brand.'' I was shocked when I read that.
I would like to know what you think about that. Do you agree?
Mr. McGovern: Obviously, I do not agree with the report. I will let my colleagues respond to another part of your question. We have had relationships with countries in Asia, relationships that have been very important for Canada, for 50 or 60 years. To say that there is no plan or vision is unfair.
Having said that, I can tell you that, with the changes in the world today, Asia is now a major global power, if we include China, India, Indonesia and other countries. We are like the Americans, where people talk about pivoting toward Asia, and we are in the process of doing the same thing. We are not so different from the Americans. In the department, we thought that if we were going to talk about what we are doing, we would have to use either a hockey or skating term. Perhaps we are in the process of doing a triple jump toward Asia. We are now putting all our relationships together to create an Asia strategy, basically.
In their speeches, the Prime Minister and Minister Baird also announced an Asia vision. Ms. Dobson said that we do not understand Asia, and that is unfair. We have always been committed.
I will turn things over to Mr. Nankivell, who can talk about the component of development aid that is still very important in Asia and very well known, our development brand.
Jeff Nankivell, Regional Director General, Asia, Geographic Programs Branch, Canadian International Development Agency: I can add a few things to what Mr. McGovern just said. Speaking of CIDA's current and recent programs, I can say that we have a consistent strategy in the region that puts particular emphasis on sustainable economic growth because most of the countries in the region have experienced quite strong growth. However, all the countries still have poor populations; the majority of poor people, meaning people living on less than the international level of $1.25 per person per day, are in Asia.
Despite rapid economic growth across almost the entire region, reducing poverty is still a challenge, but aside from a few countries like Bangladesh and countries in Southeast Asia, the issue has more to do with providing assistance that supports economic growth. There is very little talk now of humanitarian assistance programs, except during natural disasters. However, the conditions are not like the conditions in Africa, where a lot of aid is given for food and basic needs. Rather, it is a matter of working with institutions that are the key foundation for economic growth.
We still have major programs in countries like Indonesia, Vietnam, and Bangladesh, and rather modest programs in the Philippines and Sri Lanka. We are in the process of working with people in Mongolia on a small-scale, but very focused, economic growth program. It is a policy that responds to changes in Asia during this period. In countries where we currently operate, we are still a major donor agency with what we call country programs, country-to-country programs.
Artur Wilczynski, Director General, Security and Intelligence Bureau and Acting Assistant Deputy Minister, International Security, Africa, Latin America and the Caribbean, Foreign Affairs and International Trade Canada: The only thing I would add is that the dialogue about security with Asia and Pacific is an important part of the global strategy. We have targeted dialogues with certain key countries, such as Japan, China and Korea. We have special relationships with Australia and New Zealand when it comes to defence and intelligence. We are working multilaterally on terrorism and marine disputes in the context of the region's multilateral institutions. This is part of an integrated strategy that includes the economy, development and security as an integral part of our approach in Asia.
Senator Fortin-Duplessis: Thank you for your positive answers. I would like to ask a brief question if we have a second round.
Senator Dawson: Mr. McGovern, you spoke about our previous studies on China and India. You are coming in early in the process of this study. If you had to give us a little coaching, be it on geography, or on what the focus of our study should be because the subject is very broad, if you had some geographic parameters to give us on what we should make a priority, I think the committee would welcome your advice.
Second, could someone from your team tell us a little more about some of the topics you raised, including student exchanges? I understand that it is now a two-way street, that a lot of people from Asia-Pacific come and study in Canada, and that more and more Canadians at the post-secondary or post-university level go and study in Asia- Pacific.
If our aim is too broad, tell us and we will try to find an easier mandate, like aviation. I have the disadvantage of being the chair of the Standing Senate Committee on Transport and Communication, and I often come back to the subject of aviation. There is an obvious weakness regarding Canada's relations with Asia-Pacific countries and the supposed open sky. We are not in a situation where we actually give Asian countries access to our market, particularly on the Pacific Coast.
What do you think the Canadian government should do to try to encourage that? Because, by definition, it boosts tourism and economic exchanges. However, the more restricted the opening is, the less economic opportunity there will be.
I have asked you three or four questions. I will not come back in the second round.
Mr. McGovern: Thank you very much. I will start with the first question. If I had some advice for the committee, I would say that you have worked very hard on China and India, and we greatly appreciated it. It is an important part of the dialogue on these two important markets.
[English]
What is the next group of emerging Asian relationships to look at? Would that be Vietnam? Certainly, I would include Indonesian engagement, perhaps with countries that are involved in very important situations of their own like Burma.
I think we are all pretty surprised by what has transpired in Burma, and the questions that linger in the back of my mind are whether it is for real and if it is sustainable. We have been dealing with them on the basis that this is real change.
It is an appreciation of the committee for something like that, because what has transpired in the case of Burma is that they have indicated that the first dimension was the regularization of the political and diplomatic situation in that country. Their second thing is to create the conditions of sustainable economic development.
There is an opportunity on the one hand, but what would that look like? Work on that I think would be appreciated.
[Translation]
It is in that sense that I am proposing an important niche for the committee to look at, if you feel the same way.
We have other very important relationships in Asia, aside from China and India. I do not mean mature countries like us, Japan and Korea, which are very important for Canada.
I will leave it at that and will ask Ms. Termorshuizen to respond to your question about students.
Cindy Termorshuizen, Acting Director General, North Asia, Foreign Affairs and International Trade Canada: I can give you China as an example. Currently, in Canada, we have about 80,000 Chinese students at our universities and other schools. They account for about one-quarter of our foreign students. So, it is a fairly large percentage.
The number of Canadian students in China is fairly small, about 3,400 students. That is a fairly small number.
Perhaps we can ask a few questions about Canadian students: why do they not want to study abroad? Are there barriers to Canadians who want to study in Asia? What importance does Canadian students' studying in Asia have for our prosperity?
I think it is a very important question, when it comes to our prosperity.
Senator Dawson: And Blue Sky?
Mr. McGovern: Before touching on Blue Sky, I would like to add, if I may, that there are 250,000 foreign students studying here in Canada, with a quarter of them coming from China. Unfortunately, the number of Canadians in the other direction is very low. We need our students to look at studying abroad as an important part of their education, especially in a world where globalization is important.
Dr. Chekma, who did a study for Ministers Fast and Flaherty on international education, noted in his report that an important aspect is the fact that Canadian students studied abroad, not only in Asia, but around the world, to better understand global conditions. It is important for Canada in terms of being competitive with other countries. Now onto the Blue Sky Policy.
[English]
Marvin Hildebrand, Director General, Trade Negotiations Bureau, Foreign Affairs and International Trade Canada: With respect to the Blue Sky Policy, since 2006 it has encouraged the development of new and expanded long-term, sustainable, competitive air services access for both travellers and shippers to support Canadian tourism and Canadian business.
Under the policy, Canada pursues ongoing liberalization, proactively, for bilateral air services transport markets and seeks to negotiate reciprocal Open Skies-type agreements when it is in Canada's interests to do so.
Specific to Asia, I can tell you that in the last couple of years our existing air transport agreements have been updated with China and Japan, as well as India last year and Korea in 2007. We also have air transport agreements with a number of smaller partners in the Asia-Pacific region, including Malaysia, Singapore, the Philippines, Vietnam, Thailand and Indonesia.
From a trade policy perspective, we see the whole area of air transport agreements as an important link or an important complement to trade liberalization in that it is one thing to expand access to markets. The logistics of taking advantage of those are also crucially important. Air is one element of those logistics, but it is certainly an important one. Therefore, we see this whole area as very much complementary to what we are doing otherwise in the area of market access and trade liberalization.
The Chair: If I can just follow up on education and this question may be directed to you or to our research staff. We keep hearing about education as a lever with trade and investment, and that education is not only good for the student and good for education but also for our long-term welfare. Do we have statistics somewhere, or do we have to go to AUCC to get statistics, of how many students stay in the province they are from, how many go to another province and how many go overseas?
I am saying that because, for a long time, this country gave incentives for students to remain in their own province look to them as a resource. We then reached out to other provinces; going from Saskatchewan to Quebec was like going way off the course that you have known. More recently, we have started to value international education in a different way for cross cultural understanding, which is still important, but there are so many other factors.
We keep having this education thing in our reports, but can we have some comparative statistics so we know what we are talking about? You gave us some on Asia. If you have anything to help us on that — and I am searching for our research staff to give us something on that as well — not right away but as you find it.
Mr. McGovern: We can provide you with comprehensive material on foreign students studying in Canada. The domestic part we probably could find for you if you wish.
The Chair: That is fine we will look for it. If you can provide us your portion, that would be helpful. Thank you.
Senator D. Smith: The growth of Asia's influence on the world economy in my lifetime is nothing short of explosive. The first time I was over there was 1969 when I was in the Soviet Union and I got far enough to get into the Asian part, but all the action was on the European side. I remember the condescending ways in which they would talk about China in those days, whereas now I guess the quid pro quo has totally reversed.
One thing that intrigues me is that on page 2 of your report, the second paragraph from the bottom says you have completed nine free trade agreements since 2006, but not with any country in Asia. Is there some pattern or unique situation that is perhaps almost generic that makes it much more difficult to finalize a deal with Asia than other parts of the world? If so, why have you not been able to cross the finish line and get a free trade agreement with any country in Asia yet?
Mr. Hildebrand: Certainly in terms of the government's pro-trade plan, as reinforced recently by the Economic Action Plan and Budget 2013, the current trade agenda is the biggest it has ever been in our history. It is largely in the bilateral and regional sphere and is focused pretty clearly on Asia. In the opening comments we heard a brief rundown of the ongoing initiatives. There are one or two others in the exploratory phase. In addition, we have another type of treaty, foreign investment promotion and protection agreements with a number of countries in Asia and have ongoing negotiations.
With respect to your question in terms of the challenge of concluding something in the Asia-Pacific region, there is not a simple answer. The fact is we only launched 14 months ago with Japan bilateral FTA negotiations, but had been pursuing those for many years. Things changed in Japan a couple of years ago with the earthquake. Their whole stance has changed and they have now begun with the European Union. They are on the cusp of joining the Trans-Pacific Partnership and they are also engaged in a trilateral with China and Korea. That is an initiative that has only just started. Korea is a different story and there are unique challenges related to timing and other negotiations that Korea has been engaged in. Most recently, they have gone through a political transition with their election that has delayed things a bit further.
There is not a single answer. For the most part, there is not an FTA out there that is particularly easy to nail down, and I would not put the Asia-Pacific region in that. However, I can tell you that the momentum right now on the part of the government in terms of the agenda is huge, and there is much going on with respect to the initiatives that have been mentioned. Concluding those is at least as high or higher priority than starting them.
Senator D. Smith: I have the impression there were a couple fundamental problems. I have been lucky to go to China 10 times over 40 years and the difference in each window is absolutely incredible.
For my last question, I cannot resist mentioning this and the chair knows I am intrigued by it. The view of most is that North Korea's pattern under the grandson of the great leader Kim Il-sung is on the brink of triggering military problems. From an economic point of view they are irrelevant, but in terms of being ready to respond to some crazy guy pulling a trigger, do you think this is primarily bravado or is there a real risk that something crazy could happen? Do you have a view?
Mr. McGovern: The government, as you would expect, is terrifically concerned about what transpires in North Korea. It is difficult to ascertain just what the motivation is there and we cannot possibly condemn in stronger terms than the government condemns what transpires there. This is a country where there is systematic abuse of civil rights. It is a country where their population is starving. One has to really question what is going on in the mind of their new leader as you watch some of the things that he posts on YouTube.
It is a tremendous concern. It is a concern to our close allies in South Korea, Japan and the United States. It is worth remembering that Canada is technically still at war with North Korea. We cannot condemn in stronger language what transpires there. It is extraordinarily troubling. I will defer to Ms. Termorshuizen to add to that.
Ms. Termorshuizen: I do not think I can add much to that. This is a real concern and it is very difficult to understand exactly what goes on in the minds of the Korean leadership. I think what is potentially encouraging is to see some of the reaching out that appears to be happening in the last couple of weeks by North Korea with some of its key neighbours, particularly Japan and China. In fact, we understand from reading press reports, as you may have seen as well, that the Korean government has sent an envoy to China. We will be watching that very carefully because how it engages with its neighbours is of critical importance in determining what is happening.
Senator D. Smith: Over the years when you would be in China you just could not talk about North Korea. However, the last time I was there about 15 months ago, it was really different. They did not say anything, but when you bring up the subject of North Korea they would go — however, you could not quote them, but they were —
The Chair: We are not being televised today so it is going to be a little hard to get the theatrics.
Do you wish to respond or can we move to the next question?
Senator Ataullahjan: I have a lot of questions, but I think the chair will maybe allow me two, if that is okay.
The Chair: You can start and we will see how it goes.
Senator Ataullahjan: First, we tend to think of the Asia-Pacific region as a whole but it really is a set of distinct nations. There are larger countries like China, India and Indonesia and smaller prosperous countries like North Korea, Vietnam and Thailand. We cannot really think of this region as a bloc, but we need to look at the inter-regional dynamics. How would you define the region and how would you construct a model that addresses the diversity of this region?
Mr. McGovern: I think you have touched on an important point. Asia is not monolithic. There are very distinct and different regions. One could start mapping out. Of course, you would have China as one pole and you would also identify India. You have the mature economies that share our democratic values in Korea, Japan and Taiwan. You have an emerging bloc in ASEAN, the nine or ten countries that constitute that grouping. You have Oceania with Australia and New Zealand, who are very closely aligned with us, so it is not one-size-fits-all in terms of our dealings with Asia.
As a consequence, it is trying to align ourselves where we see opportunity for Canada in terms of promoting the prosperity agenda, while, as well, respecting relatively old and historic Canadian relationships.
It is worth remembering that Canada recognized India, Pakistan and Sri Lanka on the first day of their independence. We have been present for a very long time. The Colombo plan, which is one of the major accomplishments of Canadian development assistance, for all of you, as you travel and meet senior members of governments across the region, chances are a good number of them have been educated in Canada and are forever thankful for the opportunity that this country provided them and the major role that we played in sustaining the early independence of a large number of countries, some of which may be Commonwealth countries.
Again, there are many different regions and relationships that we manage in the context of Asia. You are right; you cannot talk about it as just ``Asia.''
Senator Ataullahjan: I am concerned about the human rights situation in certain countries of the region. We saw an example with the garment workers in Bangladesh. We are seeing the treatment of Christians and Muslims in Myanmar and Burma. When we approach these nations with our political and commercial interests, can we at the same time ensure the promotion of human rights?
Mr. McGovern: The issue of human rights is always at the forefront of the government's agenda. Our ministers and the Prime Minister never shy away from raising issues of concern that they have in terms of human rights. If you will, diplomacy is about two things: It is about the promotion of interests and about the promotion of values. Those values of freedom, democracy, human rights and the rule of law, which are important to this government, are always a dimension of the conversations that we have.
It is interesting. In some of the places where we have very significant relationships, we are doing things that fly below the radar that are not commented on. However, if you look at Indonesia, which is the largest Muslim country in the world, we, at the request of the Government of Indonesia, have an interfaith dialogue to discuss the kind of elements of moderation and tolerance that come out of Canada. It grows out of a program that was CIDA-funded from the Islam centre at McGill University. We have these initiatives, and we have a range of them across all our relationships.
Some of these discussions are not easy. Discussing human rights with China is never an easy matter, but whenever a minister or the Prime Minister goes, they raise the issue of human rights. We do it in a respectful way, but it gets done. We will never shy away from speaking about issues of concern.
Ms. Termorshuizen: With respect to China, that is very much the case. There are a large number of activities that do not necessarily hit the public eye, but we work regularly with the dissidents. We work with like-minded countries, for instance, to attend trials so that we can have eyes on some of the issues that are happening with respect to human rights defenders. There is an ongoing area of activity that complements the discussions that we have with Chinese leaders and ministers on these issues, but it is a critical part of our relationship with China.
[Translation]
Senator Nolin: Mr. McGovern, did I understand correctly that you were developing a strategy for Canada right now or has it been completed?
Mr. McGovern: We are working on a strategy for the government that is one aspect of the foreign policy. There is a Foreign Policy Plan. One aspect of the plan is the Asia strategy.
Senator Nolin: What guiding principles did you identify in order to develop this strategy? Perhaps you will say that you cannot talk about it because the government did not back this strategy, but you must have some idea of the guiding principles.
Mr. McGovern: The elements of the plan were discussed in the statement I made to the committee. Asia is important for Canada's prosperity. For the future of our small towns and cities, Asia is a market for our products of the future. It is an important point. With that, it cannot be one way; there is also an element of security. What is Canada's commitment with respect to the security of our partners? That is one aspect as well. These are the two sides of the coin: prosperity and security. We are developing that.
If we look at it like an umbrella, underneath, there are very important relationships with the regions and countries. We have a component that deals with China and India. There is also a part that deals with Thailand. We also have a partnership with Korea and Japan. That is basically it, without going further into it.
Senator Nolin: We will want to go into it a little more. How can we define this security issue? We have the Atlantic model, with which we are quite familiar; we have a model that has served us well elsewhere. How to define it with Asia- Pacific? Do we have to start by identifying our major partners and their security concerns? What are our priority concerns? I am trying to understand, to develop a model. That is part of the mandate we have been given.
Mr. Wilczynski: Security is an integral part of our approach. For us, we have already identified certain threats in the region that are very close to our interests. We must target those threats and attack them. That includes terrorism, border disputes in the region, illegal immigration in the region, and cyber security threats. It is important for Canada to work with partners that are already well-established, like Japan, Korea, partners in Oceania, Australia and New Zealand, to address these problems. We are already involved in a multilateral regional architecture. We need to stay focused on our interests.
[English]
If I can talk about our interests from a security perspective, it is to show that we are not fair-weather friends, that we are a country that is focused and will work with regional partners and allies to address those threats to keep those threats away from Canadian shores and address them in a way that complements the interests of our partners in the region to show the overarching, integrated nature of our relationship to complement our economic interests in the region.
[Translation]
Senator Nolin: I really like your response, but I am trying to determine how, more specifically, we should try to develop a regional security agreement or have a truly bilateral security approach with each country. I understand that we have major partners with whom we have very sophisticated relationships, including Australia and New Zealand. Should we have a global approach with everyone or maintain a more personalized bilateral approach?
Mr. Wilczynski: I do not think we can compare the Pacific region with the Atlantic region. We have had a very specific alliance, NATO, for several decades. That sort of goes back to Senator Ataullahjan's comment when she spoke about diversity in the Pacific region. Our relationships with partners like Japan and Korea and very different from those with China, from a security perspective.
We need to target each partner and use the region's security architecture in a way that promotes our own interests. In the Asia-Pacific context, I do not think we can adopt an approach that is as integrated as the one in the trans- Atlantic context.
Senator Nolin: Thank you.
Senator Robichaud: With respect to a question asked by the hon. Senator Fortin-Duplessis regarding human rights, could you tell us about the working conditions in Bangladesh? You said in your presentation that CIDA still has a role to play in the region, where two-thirds of the world's poor people live.
When the catastrophe at the garment factory happened in Bangladesh, people were shocked to learn that Canada was importing products made in atrocious conditions. With what I saw on television, I told myself that the employees in those factories were treated like slaves. What warnings are issued when the time comes to do trade with industries like that?
Mr. McGovern: I will first ask Mr. Nankivell to speak to you about development aid, and then Mr. MacArthur will take over.
Mr. Nankivell: Development aid is a very serious issue. As for CIDA's working conditions in our country programs, we do not have a lot of projects like that in the region, but we need to take into account multilateral programs that Canada supports through organizations like the International Labour Organization, the World Bank and the Asian Bank.
For our direct programs, in Bangladesh, we already had a few projects on developing employment capacities, training projects or projects dealing with the technical training system in Bangladesh, and which always include aspects related to working conditions, such as training programs and employee safety at work.
Obviously, since these recent events, we have been looking for opportunities to develop new programs in partnership with local and international organizations, as well as with the domestic and international private sector.
The global impact has been profound, and it is hoped that the outcome will be a political will on the part of many stakeholders to develop new approaches or expand existing ones. We are currently looking for opportunities for new initiatives. We are looking at our current projects in Bangladesh to see whether there would be more opportunities to expand everything related to factory working conditions.
In other countries, such as China, we had programs with international organizations and Canadian organizations on occupational health. We had a project in Chongqing, in China's interior, and we were working with local and national authorities on the system and institutions that are responsible for working conditions.
This is obviously a big challenge, and Canada has not played a big role in China in this respect, but we have worked with international partners to support our expertise on what Canada is doing. We shared that with partners in Asia.
Moreover, this is an integral part of all our projects having to do with sustainable economic growth. We follow international standards on working conditions. That is part of our analysis before we start a project, and it is also a part of the monitoring of projects under way and evaluations when projects end.
Peter MacArthur, Director General, South, Southeast Asia and Oceania, Foreign Affairs and International Trade Canada: I will mention the case of Bangladesh. I just met with the ambassador of Bangladesh this morning to go over a recent visit by Canadian industry, supported by the Canadian Embassy in Dakar.
Senior company representatives met with the Minister of Labour, the Minister of Trade, the International Labour Organization, the United Nations, other western governments, but also Bangladeshi industry, including factory owners, in the case of the garment industry.
An important fact is that the Canadian Embassy has already distributed hundreds of copies of a book in the language spoken in Bangladesh that deals with the cooperative social responsibility applied in the textile industry for Bangladesh. Our partners there greatly appreciated it. Some companies decided to protect the three million workers, mainly women, who make their living from that industry.
One company signed an agreement with other western companies to strengthen vigilance of factory structures in Bangladesh. That gives you an idea of the work our ambassador in Dakar has been doing.
Senator Robichaud: When products arrive in Canada, does someone try to find out how they were made, where they came from and what the working conditions are for the people who made them?
Because once products have arrived and are placed on shelves, the sales intermediary has already made the profit. It is too late to take action, and we do not have any influence over the exporting country. Is any of that being considered?
[English]
Mr. Hildebrand: I will make a couple of comments from the perspective of FTA's in trade arrangements. It is relevant to this conversation just to reinforce the point that was made earlier in terms of the importance that Canada ascribes to this whole area.
You will find, in Canada's free trade agreements, several things of relevance — preambular references to human rights, preambular references to corporate social responsibility and references in both the environment and labour side- agreements that typically accompany our free trade agreements as well. The existence of labour cooperation agreements as part of our FTA packages is significant because those agreements oblige both parties to respect and recognize their International Labour Organization, ILO, commitments. They provide for a program of cooperation between the parties to help do things better in the areas of labour conditions, respect for workers' rights and so on. They also provide a mechanism for the resolution of differences or disputes, including, if necessary, a ruling or a finding that could result in a monetary assessment against a party that is found to be, shall we say, lacking or failing in terms of the obligations of the treaty.
This whole area of labour and related areas, CSR and so on, is obviously not the heart and soul of an agreement to liberalize trade, but it is also present in various aspects.
The other reality is that these industries that we are talking about — apparel manufacture in particular but also textiles — are somewhere down the ladder of economic development for many developing countries. What has happened in Bangladesh is clearly tragic. It is most unfortunate, and it warrants the attention that it has been given.
The reality is that there are also success stories in terms of the unilateral access arrangements that Canada has provided, under its Customs Tariff, to developing countries for virtually all goods. It has encouraged their economic development by virtue of more liberal access — duty-free, quota-free access — for a wide range of goods. That leaves the question of how the world does better in terms of this particular question that you have raised. Part of it is consumer awareness, and it has to do with ministries other than the ones that are represented here in terms of some of the specifics related to labelling and so on.
I will leave it there in terms of the trade-related and market-access dimensions.
Senator Robichaud: When we develop trade agreements, we put all those conditions in, but how much weight do they bear when we trade with those people? Is that something that is in there that looks good, but, as long as we can get good products at a very low price, then that is the most important thing?
Mr. Hildebrand: What I can tell you is that the labour cooperation agreement provisions that I mentioned include binding provisions and formal dispute resolution mechanisms. Some of the things that I mentioned are preambular in nature in terms of human rights and corporate social responsibility. Others are clearly binding commitments that are binding on all parties. A number of the free trade agreements that Canada has in place are with developing countries, and these are not easy provisions to negotiate.
Senator Robichaud: I am sure.
Mr. Hildebrand: They are clearly important to Canada, and they are essential elements of the agreements that we negotiate, a standard feature. As I said, they are not easy to negotiate, but they are important and serve a useful purpose.
Senator Wallace: Mr. McGovern, in your comments you said something that resonated with me. A number of things did, but one, in particular, caught my attention. I think you were referring to India and the tremendous opportunities that India presents. I think you said something along the lines that in Canada, as you go east, there seems to be less involvement in those opportunities and perhaps less awareness of those.
It makes me think about the Asia-Pacific region as a whole and, in particular, not necessarily the larger countries — Japan, China, India, Korea — but some of the other countries and the opportunities that the government approach is attempting to open up for the benefit of Canadian businesses and investors. What I am wondering is how you are finding that Canadian companies are responding to those opportunities. The government is trying to set the table for them. How do you find that Canadian businesses and investors are reacting to those opportunities? In particular, in comparison, you see what other countries are doing, the business investments that are coming from other countries, the private sector. How are we stacking up? How are Canadian businesses and investors responding to those opportunities?
Mr. McGovern: I would say, to begin with, that, at the current time, we are holding our own. The challenge, though, is that, if you stand still, you actually fall behind. We have been, as I mentioned, in a position where we have opened a number of small trade offices in China, in secondary and tertiary cities. It is interesting when you think that, in a market like China, there are roughly — my colleagues have much better memory for these kinds of statistics than I do — over 200 cities with a population of a million or more. When the Prime Minister was in China in February, we upgraded one of our consulates to a consulate general. It is a secondary city, Chongqing, with a population of 34 million people. When you think about that, it is kind of mindblowing that a secondary city has a population equal to that of our own country. We are trying to be in places where we think Canadian business people need to be. Again, it changes market to market. Some markets are difficult. India is a difficult market. China is a difficult market. Canadian business people need to have representatives on the ground who are beating the bushes finding opportunities for us.
Again, if you use that same equation on India, how many cities in India have a population of a million or more? There are 14. Some of those cities are quite mammoth, but you can see that the challenge for India is that it has not gone through the process of urbanization that China has. There will be different challenges and different opportunities for us.
If you look at ASEAN, which is coming together as a combined market, the population is 640 million people. It goes from Singapore, which has a GDP per capita roughly equivalent to Canada, to Laos, which is one of the poorest countries in the world. You have a range of development as well. These are all the things that we are trying to get the measure of so that we can be in a position to pursue those opportunities that are of considerable interest.
You mentioned Japan. Japan has just moved up in the table of investors in Canada from, I think, ninth place to sixth place. There are over 350 Japanese companies that are investing in Canada. They are creating thousands and thousands of jobs. We have to be in a position to create the kind of conditions that will welcome those firms in.
We are also an important dimension of how Canada does business in that we are investing almost equally abroad as we are in terms of the investment that is coming into Canada. Intra-firm trade, which is trade between affiliates of Canadian firms that are abroad, is in some instances as significant, when you look at a company like Bombardier, as the actual export is.
There are all kinds of new models of trade that we are trying to be nimble enough to pursue, and in areas where you never would have thought there would be opportunities. We would never have thought there would be major investments coming into Canada from Thailand. The Thai energy company has made big investments in Alberta.
Perhaps my colleague Mr. MacArthur, who deals with India, will add to this. We see that there are Indian firms buying up mothballed paper mills in Canada, bringing back life to small towns where the mill was the important dimension. Again, this is unexpected. You do not expect to have investment coming from those kinds of areas.
I remember that when I previously appeared before your committee, Senator Mahovlich was here and we were talking about the wealth that was present in these kinds of countries. I made the mistake of saying that perhaps one day the Tata family will buy the Toronto Maple Leafs. That caught his attention big time. We have not reached that point yet. However, we are talking about an area, a region, that is in full economic flight, and our challenge is to ensure that we can continue to progress to get our share of the opportunities that represents for Canada.
Mr. MacArthur: Since the economic crisis hit the United States, we do see evidence of more medium-sized and small companies moving into Asia as their typical, traditional markets in the United States weaken. For example, the number of Canadian SMEs active in India in the past few years has doubled. This is partly a result of the Canada-India Business Council and the government, with a CEO forum, to try to mobilize more senior-level Canadian business community champions being challenged and mobilizing to go after these tougher markets. The longer-term markets take patience and money.
Between the Trade Commissioner Service of DFAIT and EDC, as well as CCC in some instances, the government levers are there to be pulled by companies, and part of this is awareness. The good news is that last August, in ASEAN, when Minister Fast was travelling through Southeast Asia, the Canada-ASEAN Business Council was founded in Singapore. A new report for Canadian companies on opportunities by sector in the ASEAN markets is about to be released, and in October they will be holding their first business forum in Singapore, which we expect many Canadian SMEs to attend, learn and be mentored by existing Canadian firms such as Manulife, which have been there for over a century, to learn more about not just the goods business but also services and investment.
Mr. McGovern mentioned the question of Indian investment in pulp and paper mills. There is an Indonesian firm as well investing in pulp and paper towns for paper, and in some cases also for rayon, for the textile business. This is under the radar screen of many people, but it has a very good benefit for Canada.
I wanted to end by mentioning Indonesia in terms of the committee's upcoming report. Indonesia tends to live in the shadow of China and India. It is a G20 country. As you heard, it is the largest Muslim country in the world. It is a good example of modernity and Islam coming together. It is a large market for MRI technology companies and a very important investor both ways.
The question of Malaysia, for example, and its recent investment in British Columbia for natural gas, LNG production, but also transportation into Asia, will be an important factor in energy linkages across the Pacific. These are some examples of the activity. Progress Energy Canada Ltd. of Alberta was involved in that in terms of the acquisition. Canadian production and employees will benefit from this kind of ASEAN-Canada business introduction.
Senator Wallace: Mr. MacArthur, you mentioned energy opportunities, in particular in Canada. As most of us would be aware, TransCanada has a proposal, which many of us hope comes to fruition, to extend the pipeline west to east to bring Alberta crude to Eastern Canada and the potential for export from Atlantic Canada. One of the major markets of that could be India. Do you have any comment to make on what that market opportunity could be for Canada?
Mr. MacArthur: We do believe it is a very real opportunity for Canada, and the High Commission is working closely with Indian industry. Earlier this month, a number of Indian oil and gas companies gathered in Calgary for a meeting, which was supported by the Canada-India Business Council.
There is great desire in India to diversify its imports, as we seek to diversify our exports, because they are very much dependent on the Middle East. Since the Arab Spring developments, the risk factor for them has increased. They are trying to reduce their imports from Iran as well. Natural gas is a very important aspect, as is uranium for the nuclear industry, to get away from coal and to be able to diversify sources of supply. That is a real opportunity certainly for Eastern Canada. There is also, as I mentioned, the Malaysian opportunity and others in Western Canada.
Mr. McGovern: One of the very interesting things has been a realization in India that Atlantic energy is now a feasible concept for them. Our High Commission has been actively promoting the Atlantic gas off of Sable Island and other places, oil off of Newfoundland, as potentially viable in terms of the economics for India. They have been running the numbers, and it does now appear, certainly with the price of natural gas where it is, that this may be a source of energy that is reliable, from a trusted, sustainable source. I think there was a meeting in Halifax with significant energy players from India to look at the Atlantic region. There could be important developments on that front.
Senator Wallace: I think LNG opportunities in particular are on that agenda.
Senator De Bané: Mr. MacArthur, during the tragedy in Bangladesh, over 1,000 women died in that building, which was visibly unsafe. Correct me if my figures are incorrect. Women working in the textile industry in Bangladesh earn $40 a month; in North Vietnam, $100 a month; and in Shenzhen, over $200.
When that happened, I read the Canadian papers. You told us what the Canadian government is doing there to sensitize the Bangladesh business community. However, in Canada, our media told us that one large Canadian company, which was subcontracting to that firm, immediately said: ``This is unacceptable. We will have our own employees on site to check that the companies that do work for us are doing it in a safe environment.''
By the way, you are signalling that you agree with what was said by that company; you agree with that.
What distresses me is that for the other Canadian companies doing business there, all we heard is a deafening silence.
You are in charge of that region. Is your directorate going to call in those Canadian companies and tell them to take an example of that other Canadian company and do the same thing, instead of keeping invisible, under the radar? Please give us a brutally frank answer.
Mr. MacArthur: You are right that a major Canadian company came forward and said publicly that it was concerned that not enough other Canadian firms came forward. As you saw in press reports, there was a meeting of retailers of the Retail Council of Canada. This company has taken a corporate social leadership role, sending four senior executives, who had to wait to get into the country because of civil disturbances and labour disturbances, but they were determined to meet and see. They visited a centre where some paralyzed victims of the tragedy were being treated. It is our information that a second Canadian firm is coming forward to do exactly the same thing, following the larger company's lead; and this is positive. The industry is concerned, and domestically there are opportunities for one big company to inspire others to do the right thing.
I should also add, however, that a number of Canadian companies are actually models of behavior and take great care in their regular audits to ensure that building structure and fire safety are included in their audits. Those companies were visited not only by this Canadian company but also by other foreign countries as models of behavior. Therefore, those companies will not come forward because there are no corrective measures they need to take. They are actually models of behavior, and Canadians can feel good about the Canadian values that are being applied in that instance.
I will leave it at that. It is within industry, but I can assure you that when a company comes forward, the second company will receive the same services from government in terms of a full program and full access with the assistance of the Bangladesh High Commissioner in Ottawa, who was very cooperative. From my discussions this morning, I believe that the minimum wage laws in Bangladesh are expected to go up as a result of this tragedy for that industry, which is a positive.
Senator De Bané: Can you give the committee an idea of how much people earn in those countries? Are my numbers off the mark?
Mr. MacArthur: You seem very well-informed. I think those are solid numbers.
Senator Johnson: In terms of the Pacific alliance, what issues will be addressed before we go for full membership; or will we? What is the status of that?
Mr. McGovern: The Prime Minister is currently in Peru. I will defer to my colleague who deals with trade policy because the discussion will be largely about trade policy.
Mr. Hildebrand: Mr. McGovern is correct. There is clearly a trade policy dimension to the Pacific alliance, which I can speak to. There is a wider agenda that has to do with quite a long list of subjects. I think it may still be evolving but, for reference, the current full members are Mexico, Colombia, Peru and Chile. There are several observer members, including Canada. One of the aspects of the current membership and criteria for membership is to have a free trade agreement with every other member, which differentiates, shall we say, that group from the Trans-Pacific Partnership, for example, which is a much larger grouping of 11 members, soon to be 12, with more than 3 times the population and about 10 ten times the GDP in total. It is very different.
As an observer, Canada is doing that and is in a position to see how the trade policy objectives will manifest themselves and what the benefits might be for Canada prospectively. It has not been around for long and, as I said, a number of dimensions are evolving.
Senator Johnson: It is hard to keep track of all of these. We will learn so much in our study.
The Chair: I want to pursue a question. We are looking at trade and at security. It was a rather obvious match on the Atlantic side because we had common values and had come through a common situation; thus NATO was created as a defence force. In reaching out to the Asia-Pacific, we have a lot of issues that we have to deal with. One is that we have some common security concerns with countries in the area — whether we share the same values, security issues, criminality, terrorism, ecological disasters, et cetera. We want to work with them on those issues. Yet, exchanging military and security information can be a problem if you do not share the same value systems. How do we build some sort of security network as we increase our trade? How do we start creating some confidence in that when we are working with them and reaching international agreements with them? These are all hopeful signs as we trade and exchange and they develop. However, we get reports from CSIS, et cetera, on cyber issues of security and technology raiding. The security issue is not easy to define and to work with. It is an issue that Canadians grapple with, as you know, and are concerned about.
Equally, there is the human rights situation. Just to come clean, I sat on this committee when we looked at Asia- Pacific, more particularly China. I was in opposition and said, ``Okay, so you will do quiet diplomacy and these projects will be done through CIDA; but how will you mark success — that you are having an influence?'' We want to deal with them and to encourage them. We think quiet diplomacy is the way and we have not found a better way to do it. Yet, it is easier to talk human rights in a smaller country than it is in China. I am not sure we have moved further in the 20-year struggle, yet we have had a changing dialogue and a changing face of Asia-Pacific. Certainly, none of the countries are the way they were.
We are trying to tackle this. How do we push closer cooperation and closer ties, while knowing that we have human rights and security concerns? How do we build structures, architecture and policies so that we can have a more coherent way to address the public to avoid running into issues like the one in Bangladesh or the purchase of one of our resources by perhaps a Chinese company? It is all woven together. That is what we are trying to address.
Senator Nolin: To what extent does not getting into a closer security relationship go against having good trade with a country or group of countries?
The Chair: If you can answer this one, we can start writing our report.
Mr. Wilczynski: The security architecture is a very important question. There is a natural comparison that people would like to make between the integrated way we engage in the transatlantic nature with a legally binding treaty alliance we have with countries that we have a lot in common with from a security interest perspective and from a values perspective. That relationship is relatively clear.
In Asia, the architecture is still developing. We have to use and are using a diversity of tools to do that. One of them is the ASEAN regional forum, in which Canada participates at the ministerial and senior official level. It covers a wide range of security issues, including non-proliferation, arms control, disarmament, counterterrorism and transnational organized crime.
Canada is already in part of it. We want to expand the architecture that we are privy to, and that includes the ADMM-Plus; that is the Defence Ministers' Meeting-Plus of ASEAN countries. It also focuses on key security issues, such as maritime security, peacekeeping operations and military medicine. There are fora that we are not part of yet that we want to get into in order to have that comprehensive security dialogue with as broad a range of countries in the region as we can.
However, that is also not enough because it does not capture everyone, given the diversity of countries that are there and the diversity of interests from a security perspective that we are trying to engage in. That is why we complement these multilateral fora with bilateral discussions with China, Korea and Japan.
I do not think we will have necessarily as neat and tidy an approach to security, given the diversity of interests that we have and the diversity of threats that emanate from the region. We have to be nimble in our approach in order to ensure that while we are engaging in our economic interests, we are also pursuing our security interests to ensure, whether from countering crime, corruption or terrorism, that we are having an integrated approach in how we address those challenges, with the right architecture in the region.
I am not sure if that answers your question.
Senator Nolin: How do the Americans go about the same problem?
Mr. Wilczynski: They are in the same types of fora. They also have bilateral relationships. Frankly, they also have more integrated military relationships with certain key countries — like Japan and Korea — that we do not have. Again, they have treaty alliances with them. Also, they have a very different capacity than Canada has; Canada does not necessarily bring the same tool box to the problem as our American friends do. However, we bring very specific capacity that is of interest in the region, and we have to maximize limited resources in advancing our interests, using security tools again to address particular challenges that we face in the region and that our partners in the region are interested in seeking our help to address.
Mr. Nankivell: To add a word on human rights, you have raised an interesting problem, which is the challenge of how you measure what you are achieving and what kind of goals, targets and indicators you can set for yourself.
From my experience of CIDA programming in the region and also having worked on the Foreign Affairs side on various files in my career, I would offer a couple of things. First, in all of this, as you see us sitting around the table here, one has to take a diversified approach; you do not put all your eggs in one basket. There are different mechanisms: dialogue; capacity building; technical exchanges; and working with governments in some cases and nongovernment organizations in other cases.
When you are talking about changing political and national cultures, and addressing power relationships in societies, which is what we are talking about when we talk about human rights, those are very long-term, deeply entrenched structures. It is appropriate to take a long-term approach and to be forceful but patient in setting objectives, and to be prepared to experiment and try different things; not all of them will succeed. Some of them succeed, but you only find out years later that they succeeded.
One thing in particular I would note: On the challenge of measuring how you are doing, the nature of the problems are such that in many countries — and Canada would not be so different — if you get experience from outside or someone comes and tells you that you should do this or you should do that, then you may actually take it on board. However, the people we deal with on these issues in other countries are answerable to their own constituencies, the public, the media and so on. Therefore, they are often reluctant to acknowledge the role that foreigners have played in helping to stimulate changes, for very good and valid reasons.
That can sometimes make it hard to measure the impact that we have had. Where we can sometimes have a very good impact — where something has been successful — the people who now own it are a little bit shy about saying, ``Well, we got this from Canada or we got this from the EU or from Australia or the U.S.'' I think it is an interesting question for the committee to pursue with witnesses.
The other thing is that it is a long-term change that one is looking to achieve on very deeply entrenched issues. It does speak for an international approach where you work with other countries and partners. You work with other countries and partners on a common front to address certain objectives over a long period of time and each of us does our part in that.
The Chair: We are fast running out of time. Senator Nolin wants to ask a supplementary question.
I will ask members, after I thank our panel, to stay for one minute.
[Translation]
Senator Nolin: Mr. McGovern, in your presentation, you said that the further away from the west coast you get, the less interest Canadians have in Asia-Pacific. Are there any programs? Have you started developing ideas to try to fill this gap in Canadians' interest? You have 30 seconds to respond.
Mr. McGovern: It is a big challenge. We have ties, and it is not entirely the same for every country. Setting India aside, this is true mainly for China. We start with the west coast and, once we get to Ontario, if we ask whether investment in China is a good thing, most people say no. It is very difficult.
Madam Chair touched on how to manage our relationships with a country like China that does not share our values. It is very complicated. For example, if we are speaking with RIM and BlackBerry, Indonesia is the number three market for BlackBerry. There are jobs in Waterloo that belong to that market, but that is not well known. A lot of people think that Indonesia is a developing country. People in Indonesia have access to the Internet through their BlackBerrys. It is a central part of their lives, and it is a Canadian product. That is not well-known. How do we share these stories with Canadians? It is not easy. I cannot answer your question, Mr. Senator, but perhaps that is one of the committee's challenges.
Senator Nolin: Basically.
[English]
The Chair: Mr. McGovern, to you and through you to the rest of the panelists, thank you for initiating our study. My hope had been that you would narrow what we should concentrate on. Unfortunately, I think you have expanded it more than I had anticipated. However, with Senator Nolin's last question, you did take what I heard at the start from you: Canadians probably have not been paying attention, and quite rightly so, to the developments throughout Asia-Pacific and what impacts those have on Canada. We have done it from time to time, issue to issue.
Perhaps this committee can be that force that brings the information to Canadians to give them the understanding of this ever-changing world that we are in on the Asia-Pacific side. Thank you for starting the dialogue, and we very much appreciate your candour and the thoughtfulness that you have approached our study with. I am pleased to see that you are wishing the senators well, in all senses of that word.
Mr. McGovern: Madam Chair, I always wish senators well.
The Chair: Senators, I want to take a moment to note the passing of our colleague, Senator Doug Finley. He was part of our steering committee, and in the last number of months, he participated when he could, although he was not here as often. He was certainly in many cases the impetus for many of the things that I did. He questioned virtually every one of my moves. He was the conscience, in many ways, to get on with the task. He will be missed and noted for his contributions in this committee.
On your behalf, I am sure that you will appreciate correspondence to the family, to express our condolences and our appreciation for his work on this committee.
Senator Downe: As the other member of the steering committee, I want to associate myself with your comments. Senator Finley was a tremendous member of the committee. The steering committee got to know him. As I said, before I actually met Doug, his reputation preceded him a bit, so I was prepared during the first few meetings for a brawl, none of which happened. He treated everyone with great respect and courtesy, and we will all miss him very much.
The Chair: Thank you. A letter will go out on behalf of the committee, expressing our condolences to his wife Diane and the family.
(The committee adjourned.)