Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue No. 61 - Evidence - Meeting of April 10, 2019
OTTAWA, Wednesday, April 10, 2019
The Standing Senate Committee on Foreign Affairs and International Trade, to which was referred Bill C-85, An Act to amend the Canada-Israel Free Trade Agreement Implementation Act and to make related amendments to other Acts, met this day at 4:16 p.m. to give consideration to the bill.
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: Today we are examining Bill C-85, An Act to amend the Canada-Israel Free Trade Agreement Implementation Act and to make related amendments to other Acts.
We are pleased to welcome government officials to the committee. We understand the minister is not available this week, but fully understands that we have a policy in the Senate that we are following through on: no minister, no bill. I’m being assured that the minister will make himself available as quickly as possible because we are under time frames as to when we have to deliver the bill to the Senate for third reading. That is an agreement of all leaders, and we will abide by that to the best of our ability, with the final conclusion of the minister appearing.
Before I introduce our presenters from Global Affairs Canada, I will ask the senators to introduce themselves.
Senator Busson: Bev Busson, British Columbia.
Senator Boehm: Peter Boehm, Ontario.
Senator Bovey: Patricia Bovey, Manitoba.
[Translation]
Senator Cormier: René Cormier from New Brunswick.
[English]
Senator Dean: Tony Dean, Ontario.
Senator Ngo: Thanh Hai Ngo from Ontario.
Senator Coyle: Mary Coyle, Nova Scotia.
Senator Greene: Stephen Greene from Nova Scotia.
Senator Housakos: Leo Housakos, Quebec.
The Chair: I’m Raynell Andreychuk from Saskatchewan.
Before us today from Global Affairs Canada, we have Troy Lulashnyk, Director General, Maghreb, Egypt, Israel, West Bank and Gaza; accompanying him, Mary-Catherine Speirs, Director, Trade Policy and Negotiations (Europe, Middle East and Africa); and Stacy-Paul Healy, Deputy Director, Market Access and Trade Remedies Law.
Welcome to the committee.
Mary-Catherine Speirs, Director, Trade Policy and Negotiations (Europe, Middle East and Africa), Global Affairs Canada: I’ll provide some opening remarks and then we will be happy to take your questions.
[Translation]
Good afternoon. Thank you for the opportunity to speak today on Bill C-85, An Act to amend the Canada-Israel Free Trade Agreement Implementation Act and to make related amendments to other Acts.
[English]
Since the Canada-Israel Free Trade Agreement, or CIFTA, first came into effect over two decades ago, Canada’s two-way merchandise trade with Israel has more than tripled, totalling $1.9 billion in 2018.
The original CIFTA agreement covered industrial goods. Additional market access was negotiated for Canadian agriculture and agri-food exports in 2003. In 2014 and 2015, Canada and Israel engaged in negotiations to update and expand the agreement. Four chapters were modernized, including Market Access, Rules of Origin, Dispute Settlement and Institutional provisions. Seven new chapters were added to help address non-tariff barriers, to contribute to facilitating trade, to make trade more predictable and help reduce red tape and some of the costs for companies doing business.
These chapters are Electronic Commerce, Intellectual Property, Labour, Environment, Sanitary and Phytosanitary Measures, Technical Barriers to Trade and Trade Facilitation. In 2017 and 2018, Canada and Israel agreed to the addition of further, inclusive elements to the trade agreement which seek to ensure that the benefits and opportunities that flow from trade and investment are more widely shared. Chapters on trade and gender, small- and medium-sized enterprises and an article promoting corporate social responsibility were included.
[Translation]
Once in force, close to 100 per cent of all current Canadian agriculture, agri-food and seafood exports to Israel will benefit from some form of preferential tariff treatment, up from the current level of 90 per cent.
[English]
Meaningful market access for Canada’s agriculture and agri-food processors was a key interest for these negotiations and negotiators successfully obtained unlimited duty-free access on sweetened and dried cranberries, which have a current tariff of 12 per cent; baked goods, with current tariffs of up to 8 per cent; and pet food, with current tariffs of 4 per cent.
In the fish and seafood sector, where Canada is among the top suppliers of fish and seafood to Israel, 98 per cent of current Canadian exports will enter Israel duty-free in unlimited quantities under the modernized CIFTA compared to the current level of 90 per cent, which will make Canadian fish and seafood products more competitive.
Key Canadian products in this sector that stand to benefit from duty-free access include lobster, leg crab, shrimp, scallops and mussels. These important tariff outcomes for the agriculture and agri-food sector place Canada on a more level playing field with exporters from the United States and the European Union, who are key competitors. They also give Canadians a leg up on other competitors who do not have a free trade agreement with Israel.
In exchange, Canada agreed to eliminate tariffs on certain targeted Israeli agriculture and agri-food imports, such as certain fish, nuts, some tropical fruits and certain oils. The modernized Canada-Israel Free Trade Agreement, like its predecessor, fully protects and respects Canada’s supply management system.
The negotiated outcome has the support of key Canadian agricultural stakeholders, including Pulse Canada, the Canola Council of Canada, the Canadian Vintners Association and companies involved in the processing of potatoes, cranberries, soybeans and pet food.
An important aspect of the modernized CIFTA that aims to ensure that these opportunities are more widely shared among Canadian is its forward-looking framework that includes new chapters on trade and gender, small- and medium-sized enterprises, labour and environment. More specifically, the Trade and Gender chapter acknowledges the importance of incorporating a gender perspective into economic and trade issues. It seeks to remove barriers and create opportunities for women-owned businesses to better engage in trade.
The chapter on small- and medium-sized enterprises includes provisions that recognize the importance of SMEs to the economies of both Canada and Israel and facilitates cooperative activities and information sharing.
The dedicated chapters on labour and environment are a first for Israel and are in line with our other recent agreements. The Labour chapter ensures high labour standards are maintained with recourse to labour-specific, enforceable and binding dispute settlement mechanisms where non-compliance could lead to monetary penalties.
The Environment chapter will ensure that environmental protections are maintained with recourse, again, to a chapter-specific dispute resolution process.
The modernized CIFTA agreement also contains a dedicated corporate social responsibility provision that affirms both Canada’s and Israel’s commitment to encourage businesses to adopt internationally recognized CSR standards and uphold responsible business conduct abroad, making specific reference to the government-backed OECD guidelines for multinational enterprises. Together, these provisions in the modernized CIFTA help to ensure that economic gains are not only greater but are sustainable and more inclusive.
Beyond the economic benefits of the agreement, the modernized CIFTA stands as a testimony to Canada and Israel’s shared commitment to maintain openness and friendship and to expanding our links so that more of our people and businesses can benefit from them.
[Translation]
A timely ratification of the modernized CIFTA will establish a more predictable trading environment, strengthen our bilateral relations and expand commercial opportunities that can contribute to sustainable economic development for both our countries.
[English]
This concludes my opening remarks. My colleagues and I would be happy to answer any questions you may have about the modernized CIFTA.
The Chair: You said the agreement is patterned after other agreements. Is there anything in this agreement that is not in CETA, or similar to CETA or our negotiations with the new NAFTA? How modern is this? We have done Chile recently. Is there something we should be specifically noting in this agreement that is unique?
Ms. Speirs: I think all of our agreements are unique in their own way, but this one is certainly on a par with the commitments we have sought and achieved in CETA, CUSMA and CPTPP, particularly in areas such as labour and environment, where the chapters have become more robust and enforceable with dispute settlement.
The Trade and Gender chapter is the second that we have negotiated in an FTA. The first one was in the modernized Chile agreement, which came into force in February of this year. In fact, the Trade and Gender chapter in the modernized Canada-Israel agreement actually goes a step further than in our agreement with Chile in that we have dispute-settlement provisions in the Trade and Gender chapter in our agreement with Israel.
The Chair: Could you elaborate on why there isn’t an investment chapter, a side agreement or a separate agreement? We normally start with that and go to a trade agreement.
Ms. Speirs: I will check my notes. In fact, we don’t have any services or investment provisions in the Canada-Israel FTA. Generally, that reflects the interests of Canadian stakeholders, as well as the ability of our trading partner to negotiate provisions that would be in the interests of Canada or would meet our usual standards in an FTA.
Both Canada and Israel are engaged in the talks on services in the WTO context and the General Agreement on Trade in Services, and during the exploratory process, Israel expressed a preference to keep those talks in the multilateral sphere. At the time, we set the services discussions aside and agreed that we would proceed together in the WTO context.
On investments, our models differ significantly between how we would approach investment provisions, either in an FTA or in a foreign investment promotion and protection agreement. This is quite different from how Israel would approach these things. We explored with Israel whether there was enough common ground to proceed with seeking investment provisions, and the decision was taken that we would not be able to achieve a high-quality chapter that met our usual standards with respect to investment. In this case we opted not to proceed with those negotiations.
The Chair: Does that make our businesses more vulnerable when we do business with Israel because we don’t have that protection? It’s usually a comfort or an actual need in other cases.
Ms. Speirs: That’s true. In this case, we didn’t have any actual needs that were specifically identified in our stakeholder consultations, so we’ve not heard from Canadian stakeholders that they have specific concerns vis-à-vis investment with Israel. That’s on the positive side.
We don’t have specific provisions in the FTA context, but it shouldn’t be taken as a negative signal to our investors to avoid engaging with Israel. I agree with your point. It doesn’t provide them with that additional comfort that an investment provision could provide, but, on the other hand, if they are not identifying any particular challenges to us, then hopefully this won’t preclude their ability to invest in Israel.
The Chair: I will leave it at that.
Senator Boehm: Thank you for joining us, and thank you for the presentation. I had the pleasure of joining a few of my colleagues from the Senate in visiting Israel in January. It snowed in Jerusalem, but no matter, we travelled through the country. What we noticed, and certainly what I noticed, was a genuine appreciation for this particular trade agreement. People seemed to know about it.
In travelling to Tel Aviv and beyond, I was on the search for Jaffa oranges. You know where I’m going in terms of what the World Intellectual Property Organization’s geographic indicators or indications signal. In Jaffa, I asked about the groves and where they grow them, and the answer was that that was a historical matter because the brand had been sold to Spain, I believe.
In Article 10.3 of the CIFTA, there is a reference to discussions on geographic indications taking place at some particular time. Are there just not enough geographical indicators or indications that would not have been included in the original negotiations or in the negotiations that came after? When are these discussions going to take place? What products do you think could be included, including from our side?
Ms. Speirs: I have some background on that.
Senator Boehm: I know that in the CETA this was an issue on everything from Serrano ham to Parma, champagne and all of these, but I’m just curious about that.
Ms. Speirs: I have a bit of context on that. Basically, right now on the wine and spirits side, which is one area where Canada does have some interest with respect to geographical indications, it says that Israel does not have a domestic registration system at this stage so they wouldn’t be in a position to make any commitments to protect our geographical indications.
We do have the ability to pursue any alleged infringement of GIs through Israeli courts, so there is some recourse for Canadian countries in that respect. Some other countries — most likely in the EU — have secured some GI provisions with Israel, but even the EU was not really able to obtain the amount of GI protection they had sought. They’re very much the demanders usually when it comes to GIs.
From Canada’s perspective, I think the fact that we obtained an acknowledgment to re-engage at some point in the future was considered to be sufficient, particularly given that most of the GIs that our stakeholders were interested in were in the wine and spirits sector. We don’t have a timeline for re-engaging with Israel on that, though.
Senator Boehm: I think the wine and spirits sector is going to be very difficult because the vintners in Israel — there are many — tend to be small, and some of them are kibbutz-focused, so it could be a long time, perhaps, before we get to that stage.
Ms. Speirs: I think that must have been the reason they weren’t in a position to make any commitments at this juncture.
Senator Boehm: Thank you.
[Translation]
Senator Cormier: I am replacing Senator Massicotte today. Welcome.
My question is about article 1.7 of the modernized CIFTA. In the documentation we received, some observers have noted that both the original and the modernized version of the CIFTA seem to cover products from the areas that Israel has occupied since 1967, that is the West Bank, the Golan Heights, Gaza and East Jerusalem.
The modernized article 1.7 stipulates that the agreement applies in the territory where Israel’s customs laws are applied. They currently apply in the areas that have been occupied since 1967. However, according to Global Affairs Canada, Canada does not recognize the permanent control over those areas that Israel exercises. Then again, under the terms of the European Union’s agreement with Israel, no preferential trade treatment applies to products that come from Israeli settlements beyond the 1967 borders.
Here is my question: Why does article 1.7 of the modernized CIFTA define the territorial extent of the agreement as the territory where Israel’s customs laws are applied? How does this modernized article fit in with Canadian policy on Israeli control over the areas it occupied in 1967?
[English]
Troy Lulashnyk, Director General, North Africa, Israel and Palestinian Territories, Global Affairs Canada: Thank you very much for your question. I will field that one.
As you very rightly point out, the scope of the modernized CIFTA is as you have described, and indeed it represents the scope that has existed since the beginning of CIFTA in 1997. The scope covers the area where Israeli customs laws are applied, and this relates back to a series of agreements. Even going back to the Oslo peace process in 1994, the Israelis and Palestinians established a customs arrangement.
When we negotiated our original agreement, we also took the opportunity to negotiate a joint framework with the Palestinians that would reference CIFTA and permit the flow of goods from these territories, including West Bank and Gaza. Our reference and use of CIFTA reflect the previous Israeli and Palestinian agreement that would allow the flow of goods and allow us, in effect, to trade with the Palestinians.
In view of this arrangement, and then subsequently our framework, we have been able to use CIFTA in the original form and in the modernized form to not only trade with Israel but to also trade with the Palestinians, and that is ongoing.
You have also rightly pointed out that we consider that the Israeli settlements are illegal and contrary to UN Security Council resolutions. This is a stated approach, and we have raised it on numerous occasions, including today, re-articulating our policies as described in Parliament.
This is absolutely our approach. We want to see the two parties sit together and negotiate a just and comprehensive peace. This is what we continue to work for, and we hope we will be able to get there in the near future.
Senator Coyle: Thank you to our guests today. Actually, Senator Cormier asked the questions I was going to ask, but I will go a little further on that.
As senators, many of us have been receiving a fair bit of correspondence, shall we call it, from very concerned Canadians about this opportunity in front of us now to modernize this fair trade agreement with Israel. No one is saying we shouldn’t have a modernized fair trade agreement with Israel. In fact, there are wonderful new aspects to this agreement that you yourselves have pointed out.
There are, however, concerns from the Mennonite Central Committee, the United Church of Canada, Amnesty International, a professor at Western University and the Quaker group in Canada, that these provisions that relate to the occupied Palestinian territories are not being treated adequately in this. There are also concerns that there are other standards for these types of free trade agreements with different kinds of language that accommodate this better — particularly with the EU, I think they are pointing out. They are also wondering why we can’t go a little further on human rights language as part of this agreement, where Canada perhaps has used that in other free trade agreements. Could you speak to this in a little more detail?
Mr. Lulashnyk: Thank you very much. Maybe I will take the first part and then pass it to my colleagues.
I very much appreciate the concerns. I think what was decided, when the original agreement was put in place, that we need a mechanism that will enable and facilitate trade with Israel but also have a mechanism, given the political circumstances on the ground, where we can also trade with the Palestinians. So we found a way through our mechanisms, not only our bilateral, legally binding agreement but through the Israel-Palestinian agreements and our framework, to facilitate all of it so we can trade with both Israel and the Palestinians. That has been working and happening now for a couple of decades.
When we did the modernized negotiations, we wanted to make sure that the flow of goods could continue into the future, always keeping uppermost in our minds that we need to work not only on the economic side in positive directions for both entities, but also on the political front to work toward a solution that is permanent and just that addresses the settlement issue, which we consider to be illegal.
Senator Coyle: Thank you very much for that explanation. On that diplomatic side of the answer, which we are all aware of the importance of that ongoing diplomatic effort, could you speak about how optimistic we are about that in today’s current context with some of the larger powers in the world and how they’re operating in their relationships with that part of the world and also with the recent elections in Israel?
Mr. Lulashnyk: Certainly. There have not been meaningful negotiations between Israelis and Palestinians for a number of years, and attempts in the past have failed to reach a positive conclusion.
Lots of people are very pessimistic about the possibilities and intentions of the Israeli government, and indeed the Palestinian government, to work together toward peace. There are a lot of negative perspectives out there. A lot has been said about the U.S. plan that is forthcoming, and we understand will be released soon. There is a lot of speculation and pessimism.
My answer would be that it helps to try. It helps to sit down and discuss the situation. We’ve been trying for a number of years and we haven’t been successful, but we should keep it up. Most of the players understand what the major stumbling blocks and issues are. At the end of the day the Palestinians and Israelis are there, and we have to find a way to work together.
There’s a lot of pessimism and politicization, but at the end of the day we need to continue to try and recognize that the decisions that are taken have material, real-life consequences for people, and so we need to be motivated to do our utmost to improve the situation.
Ms. Speirs: I won’t comment on the political elements, but I can speak to the human rights approach. You’re correct that there are no specific mentions of human rights in the Canada-Israel Free Trade Agreement.
Canada has occasionally made reference to human rights in some of our FTAs. It’s not consistent. When we have, it has been in the preamble, which is, frankly, not the highest level of commitment in the FTA.
There are no specific provisions; however, there are a number of provisions which pertain to human rights within the CIFTA. Notably in the Labour chapter, which is a strong and enforceable Labour chapter, we have references and provisions relating to workers’ rights and working conditions. We also have an article on corporate social responsibility and provisions on anti-corruption. All of these contribute to supporting human rights more broadly.
We also include the inclusive trade elements to ensure that the economic gains do not come at the expense of important Canadian values and priorities, including gender, small- and medium-sized enterprises as well as environmental and labour protection.
We also include the creation of a joint commission under the CIFTA, which is composed of ministerial-level representatives or their designees, which can discuss the overall functioning of the agreement. This can serve as a venue to discuss and review problematic issues in terms of considering ways to further enhance trade. It can also be used by either party as a mechanism to raise human rights issues with respect to trade.
Ultimately, we have robust commercial and economic ties, and we feel that a strong free trade agreement can help support dialogue and our ability to engage on other foreign policy priorities with partners like as Israel, such as on human rights. We engage on human rights issues with Israel through other bilateral discussions and statements at ministerial and senior diplomatic levels at organizations such as the International Labour Organization, through other mechanisms in the regional and multilateral sphere, including through the United Nations system, which my colleague mentioned.
All of our free trade agreements are consistent with the UN Universal Declaration of Human Rights and international treaties, including all international human rights treaties to which Canada and Israel are a party, including the International Covenant on Civil and Political Rights; the Convention Against Torture and Other Cruel, Inhumane or Degrading Treatment or Punishment; the Convention on the Elimination of All Forms of Discrimination against Women; and the International Convention on the Elimination of All Forms of Racial Discrimination.
Senator Dean: Thank you for joining us. I’m once again going to say we’re always in awe of the scope of your geographic responsibilities and yet how deep you can go on any particular area.
I’m a little familiar with dispute resolution mechanisms by way of my background, and I noticed there are a couple that are employed here. On trade and labour, there is a binding dispute resolution mechanism that is usually the second part. Is access to that binding mechanism based on a complaint by just one of the parties? That’s the first question.
We have a different model for the Trade and Gender chapter, which is consensual at step one. Both parties need to agree to enter the process. Is part two binding on trade and gender? You understand the nature of the question.
Stacy-Paul Healy, Deputy Director, Market Access and Trade Remedies Law, Global Affairs Canada: Thank you for the question. With respect to your first question, access would be based on one of the parties bringing a complaint. It is a state-to-state mechanism. It’s modified for the particular context of the Labour chapter and the ability to impose monetary assessments.
Mr. Healy: The nature of the Trade and Gender chapter is a bit different. The idea is both parties would have to agree to submit it to a dispute settlement panel. There you would be focused on the interpretation of the chapter and how to interpret the commitments. The idea is you both have to agree to submit it to the dispute settlement panel, and then you would follow basically the same procedures used for the state-to-state dispute settlement.
Ms. Speirs: But it would be a binding decision.
Senator Dean: The decision would be binding. That’s very helpful. Thank you.
The Chair: I’m interested in the SME sections. They’re new, at least in the way they’re stated, and the corporate social responsibility. They’re somewhat aspirational or inspirational, rather difficult to pin down. What tracking mechanism will you use if we call you back in a year and ask about progress made in furthering the agenda on small- and medium-sized enterprises? What progress has been made on corporate social responsibility? These are undertakings, and you will probably have some joint committees going between Israel and Canada. Sometimes they try to do good work, but it doesn’t really come to fruition.
How are you marking success in moving the agenda for SMEs — which are so important to Canada, and I presume to Israel — and corporate social responsibility, which is a continuing issue that we and Isreal are dealing with?
It’s not an uncommon problem for countries to grapple with that. How do we mark it? How do we know it isn’t just on paper and that something is really happening? What are your markers?
Ms. Speirs: That’s a very good question. I’m going to address SMEs first, because we have some experience now with SME chapters. That started with some of our work on the CETA and more recently with the CPTPP agreement, where we had a specific SME chapter for the first time.
We’ve been able to work with our SMEs and identify some specific needs they have with respect to our FTAs. One of the easiest and most pressing needs they have is for better information. To that end, we’ve made commitments in these FTAs, including in the Israel context, that we will facilitate transparency and information-sharing. We will create dedicated SME websites where they can easily access information pertaining to the FTAs and to specific provisions in the FTAs that would be of interest to them.
We’ve recently deployed, for example, a tariff-finder website, where anyone can look up tariffs pertaining to specific goods. That’s not specific to the Canada-Israel FTA, but it’s the type of endeavour we can do to make that information more accessible to any SME.
We also have an SME committee that will be established under the FTA. They will have a specific role, which is to oversee any cooperative activities that are identified under the chapter and to review the implementation.
I don’t know if we’ll know in a year, but we will certainly be able to take stock on a yearly basis, roughly, when the committee meets as to whether we are meeting our shared objectives of making the agreement more accessible to SMEs.
Other provisions of the chapter include identification of cooperative activities. These could be seminars and workshops to better inform SMEs of some of the opportunities available to them under CIFTA. There are some capacity-building efforts that could be undertaken to help them develop their export capacity, as well as assistance and training programs to be able to meet that demand for their products and exports. Then there are additional cooperative endeavours that could help identify ways to assist SMEs to participate and integrate effectively into the global value chains.
Once a year at least, the committee is required to convene a meeting. They’re required to review and coordinate their work program, as well as coordinate their work program with the work of other committees under the FTA. The SME chapter is really designed to improve the ability of companies to access the full range of provisions under the FTAs. There will need to be some cooperation among officials in the context of the SME committee to make sure that other committee work is also keeping SMEs as part of their focus and lens.
The SME committee will also have the ability to bring in experts to collaborate specifically with SMEs to identify programs and activities that could be of benefit, and they can make recommendations to the overall commission for the implementation of the FTA in order to better improve things.
It will be cooperative in nature, but because we do have a committee and an annual review, we’re optimistic that this will help us to ensure that we are able to implement it effectively. It actually goes beyond our CPTPP SME chapter, so we’re continuing to move the bar forward to seek to meet the needs of our Canadian SMEs.
For Israel, this is the first SME chapter that they’ve negotiated in a FTA, but they share a somewhat similar business structure to Canada in that the vast majority of their companies are SMEs, so they have a shared interest in pursuing those objectives.
To turn to corporate social responsibility, it is not a chapter but an article. It is not binding and not subject to dispute settlement. It is a first step in the right direction, but the challenge is that there is a lack of international norms that are agreed upon with respect to CSR. Our specific article mentions the OECD guidelines. Both Israel and Canada are members of the OECD, and the OECD guidelines for multinational enterprises have been endorsed by member governments of the OECD.
They’re considered to be one of the strongest international standards that we were able to refer to in this context. By making reference to seeking to meet those guidelines, Canada and Israel have taken the commitment that they will endeavour to hold their companies to the highest standards.
Senator Boehm: I’ve been looking at the trend line in terms of overall volume, and it’s gone fairly well since the first agreement was struck to about $1.7 billion in 2017. It weighed about three to one in Israel’s favour in terms of any balance that we might be looking for, and a significant dip in Canadian exports in 2015 by about $100 million. When you have a total of some $342 million, as statistics indicate, that’s a significant dip.
What is Global Affairs Canada, through its network across the country as well as through the regional offices and our mission in Tel Aviv, doing to encourage Canadian exporters? The updated agreement will do some of that, I know, but is there some active proselytizing going on — trade fairs and that sort of thing? Could you offer some examples?
Ms. Speirs: That’s a good question. I can certainly speak to the promotion of our trade agreements and the efforts that are under way more broadly and which we intend to roll out as the modernized CIFTA is brought into force.
With our most recent trade agreements, there has been a clear need identified to ensure that Canadian companies and stakeholders are aware of the agreements and the opportunities this offers them, and that they are given information about the tools and how they can best access those provisions. We are working with our colleagues who work on the trade promotion side, including our regional offices across Canada, to ensure that as the modernized CIFTA is brought into force, we are best able to convey the information about the agreement to the relevant stakeholders and companies so they’re aware of the new provisions and new benefits the agreement can bring to them.
That will be incremental. As you know, we have had an FTA with Israel in place for some time. The vast majority of our industrial export goods already had the tariffs removed under the first CIFTA. The difference we will see with the modernized agreement on the tariff side is primarily focused on the agriculture and agri-food sectors, as well as fish and seafood. Where we will be able to best advise Canadian companies is where we’ve made strides in reducing non-tariff barriers in the modernized agreement, particularly with measures such as trade facilitation. That should better smooth the flow of goods into Israel.
We have dedicated Trade Commissioner Service representatives in our posts in Tel Aviv, who work consistently to offer opportunities and promote these for Canadians. We also have an S&T agreement with Israel that they’re able to leverage as well to try and promote collaboration and engagement on S&T and research in commercialization. They’re able to combine both the trade promotion aspect as well as the elements of collaboration on research and development in order to try to foster those links between our industries.
The Chair: By “S&T,” you mean “science and technology.”
Ms. Speirs: Yes. I apologize for using the initialisms.
Senator Coyle: I just want a little further refined clarification for my own understanding. How is a good that is produced in an Israeli settlement inside the Palestinian territory dealt with under this agreement?
Mr. Lulashnyk: Under this agreement, all goods that are produced in Israel, the West Bank and Gaza, including those produced in settlements, are covered by this agreement. That allows for the exchange of goods and commerce between the Israelis and Canada, and the Palestinians and Canada. It’s all covered, as it is defined and applied by where the customs law of Israel is applied.
The Chair: Following up on that, referring to my notes from our analysts, 1999 was the Joint Canadian-Palestinian Framework for Economic Cooperation and Trade with the Palestinian Liberation Organization on behalf of the Palestinian Authority. Does that framework agreement work only within the confines of this trade agreement that we are talking about, or is there a way of having that framework affect other methodologies in working with Palestinians?
Mr. Lulashnyk: I think the framework is larger than just the CIFTA application but, as I mentioned, there is a reference in the framework which facilitates and permits the use of CIFTA to allow the Palestinians to enjoy the preferential trade.
The Chair: But they get can the preferential trade without CIFTA, given examples or situations, or is it always through CIFTA?
Mr. Lulashnyk: The trade aspect is through CIFTA exclusively, but the framework is broader than the trade relationship. I would add, on Senator Boehm’s question about promotion, we had an Israeli minister here who held large events in Toronto to promote CIFTA. We continue to have delegations go back and forth for business-to-business. We recently had a state visit from the president of Israel, and that included a business delegation. Israel is called a start-up nation. They are really strong in IT, information management, cyber and agriculture, of course. We are building those ties and bridges as their economy and our economy evolves. I think everyone is quite hopeful that this will propel additional opportunities for both sides. Similarly, we’re working with the Palestinians to try to stimulate our trade relationship there as well, given this mechanism.
[Translation]
Senator Cormier: I have an additional question so that I can better understand the situation involving Palestinian territory.
Is it possible for Canada to assess how Palestinians have tangibly benefited from the original agreement?
You may have answered that question previously, but I would like to know how they have benefited from that agreement and how they will also benefit from the modernized one.
[English]
Mr. Lulashnyk: We continue to have trade with the Palestinians. They have their trade statistics on how much that is, and we have ours. The numbers are fairly different in terms of how you evaluate it, but we do assess each year and continue to try to grow that relationship. There are some statistics that we use, and we are able to say that we have this trade relationship that has benefited from CIFTA, from the signature to where we are today. As this relationship develops and as CIFTA is implemented, we’ll be in a position to show the delta, or how the modernized CIFTA has enhanced or accelerated trade with the Palestinians.
Ms. Speirs: We have some development-related projects in Palestine geared toward building economic growth and empowerment. During Minister Carr’s visit to Israel and to the Palestinian territories last September, he oversaw the launch of a Palestinian-Canadian business council designed to strengthen the trade ties between the Palestinian communities in Canada. We also have a joint project with the Trade Facilitation Office Canada, which is working in the West Bank and Gaza to help small- and medium-sized enterprises there become more trade ready. This is where some Canadian development assistance is being used to foster trade growth or economic growth on the part of Palestinian businesses who, should they choose to export their products to Canada, would be able to benefit from CIFTA.
The Chair: I have one final question which we always put on these trade agreements. Bill C-85 is where our discretion comes in, but the free trade agreement is between the two countries so we cannot alter the trade agreement. I suppose we could say yes or no.
Are the amendments that are in Bill C-85, directly as a result of changes within the trade agreement, nothing more, nothing less?
Mr. Healy: I can answer that, and thank you for the question. That is correct. The implementation act is actually quite short, and the reason for that is because we already have the original implementation act. The changes here are just making amendments to that first implementation act to implement the necessary changes arising out of the modernized agreement, and there weren’t very many. It’s mostly to the institutional provisions and a few other provisions of the agreement.
The Chair: Thank you. I have exhausted the questions of the senators, and we will continue our study. We look forward to the meeting with the minister to discuss the policy issues that we’ve started on, but we recognize the limits of what you can answer. We are waiting for the minister to provide us the policy overview, both foreign policy and trade policy, and we look forward to that.
Thank you to the witnesses.
(The committee adjourned.)