THE STANDING SENATE COMMITTEE ON
FOREIGN AFFAIRS AND INTERNATIONAL TRADE
Wednesday, March 11, 2020
Senate Committee on Foreign Affairs and International Trade met this day at
4:15 p.m. to the subject matter of Bill C-4, An Act to implement the
Agreement between Canada, the United States of America and the United Mexican
Housakos (Chair) in the chair.
Honourable senators, I call this meeting of the Standing Senate Committee on
Foreign Affairs and International Trade to order.
My name is Leo
Housakos, senator from Quebec, and I am the chair of the committee. Welcome to
The committee has
been asked by the Senate to pre-study Bill C-4, An Act to implement the
Agreement between Canada, the United States of America and the United Mexican
Before we begin,
I would ask the senators to introduce themselves, starting from my right.
Ataullahjan: Salma Ataullahjan, Ontario.
Greene: Stephen Greene, Nova Scotia.
Massicotte: Paul Massicotte, Quebec.
MacDonald: Michael MacDonald, Nova Scotia.
Thanh Hai Ngo, Ontario.
Peter M. Boehm, Ontario.
Dalphond: Pierre J. Dalphond, Quebec (De Lorimier).
Mary Coyle, Nova Scotia.
Tony Dean, Ontario.
Patricia Bovey, Manitoba.
Dawson: Dennis Dawson, Quebec.
Honourable senators and members of the public, today we welcome government
officials, mainly from Global Affairs Canada, to discuss the subject matter of
Affairs Canada, we have before us Steve Verheul, Chief Negotiator and Assistant
Deputy Minister, Trade Policy and Negotiations; Marie-France Paquet, Chief
Economist, Global Affairs Canada; Robert Brookfield, Director General and Deputy
Legal Advisor, Trade Law; Martin Thornell, Senior Advisor, Tariff and Goods
Market Access; Stephanie Chandler, Senior Advisor, Trade Policy and
Negotiations; and from Agriculture and Agri-food Canada we have Aaron Fowler,
Chief Agriculture Negotiator and Director General.
Welcome to the
committee. We have allocated 15 to 20 minutes at the beginning for your
presentation, and for the rest of the time my colleagues will be offering some
questions to you.
please go ahead.
Chief Negotiator and Assistant Deputy Minister, Trade Policy and Negotiations,
Global Affairs Canada: Good afternoon, chair and members of the committee.
Thank you for the invitation to appear before you today. We look forward to
answering questions regarding the outcomes of the Canada-United States-Mexico
Agreement, or CUSMA, following my opening remarks.
The signature of
the CUSMA on November 30, 2018, followed 13 months of intensive
negotiations that brought together a broad range of officials and stakeholders,
with a strong partnership between federal and provincial officials.
achieved several key outcomes that served to reinforce the integrity of the
North American market, preserve Canada’s market access into the U.S. and Mexico,
and modernize the agreement’s provisions to reflect our modern economy and the
evolution of the North American partnership.
December 10, 2019, following several months of intensive engagement with
our U.S. and Mexican counterparts, the three NAFTA parties signed a protocol of
amendment to modify certain outcomes in the original agreement. These related to
state-to-state dispute settlement, labour, environment, intellectual property
and automotive rules of origin.
modifications were largely the result of domestic discussions in the U.S.
However, Canada was closely involved and engaged in substantive negotiations to
ensure that any potential modifications to the agreement were aligned with
negotiations, Canadian businesses, business associations, labour unions, civil
society and Indigenous groups were also closely consulted and contributed
heavily to the final result.
In terms of the
context for these negotiations, I would like to recall that the NAFTA
modernization discussions were unique in terms of trade negotiations. This was
the first large-scale renegotiation of any of Canada’s free trade agreements.
Normally, free trade agreement parties are looking to liberalize trade. In this
process the stated goal of the U.S. at the outset was to rebalance the agreement
in its favour. The president also had repeatedly threatened to withdraw from
NAFTA if a satisfactory outcome could not be reached.
The opening U.S.
negotiation positions were unconventional, to put it mildly. These included a
50% U.S. domestic content requirement on autos, which would have devastated our
auto sector. They also called for the complete dismantlement of supply
management. They called for the elimination of the NAFTA chapter 19 binational
panel dispute settlement mechanism for anti-dumping and countervailing duties,
which we have relied on heavily. They called for the removal of the cultural
exception. They wanted to have a state-to-state dispute settlement mechanism
that would have rendered the agreement completely unenforceable.
They proposed a
government procurement chapter that would have taken away NAFTA market access,
leaving Canada worse off than all other U.S. free trade agreement partners, and
a five-year automatic termination of the agreement known as the sunset
administration also took the unprecedented step of imposing tariffs on imports
of Canadian steel and aluminum on purported national security grounds for which
there was no basis or legitimate justification. The U.S. administration had also
launched an investigation that could have led to the same result for autos and
In the face of
this situation Canada undertook broad and extensive consultations with Canadians
on objectives for the NAFTA modernization process. Based on the views we heard
and our internal trade policy expertise, Canada set out a number of key
objectives which can broadly be categorized into the following overarching
areas: first, preserve important NAFTA provisions and most importantly market
access into the U.S. and Mexico, modernize and improve the agreement where
possible, and reinforce the security and stability of market access into the
U.S. and Mexico for Canadian businesses.
In terms of the
first objective of preserving NAFTA, we managed to maintain NAFTA tariff
outcomes, ensuring continued duty-free access into the U.S. and Mexican markets
for originating goods. The chapter 19 binational panel dispute settlement
mechanism for anti-dumping and countervailing duty matters, a key component of
the overall goods market access package of the NAFTA and of the original
Canada-U.S. Free Trade Agreement, was also preserved. Canada’s preferential
access to the U.S. under the Temporary Entry for Business Persons chapter was
preserved. Predictability and security of access for services suppliers and
investors were preserved. Cultural exception was preserved. State-to-state
dispute settlement was not only preserved but improved upon, including through
the protocol of amendment, to ensure that Canada could rely on an efficient and
effective mechanism to resolve disputes with the U.S. and Mexico, which is
something we do not currently have under NAFTA.
In the area of
autos, changes were made to the rules of origin regime to encourage the use of
more inputs from Canada, in particular by increasing the regional value content
requirements for autos and auto parts and by removing incentives to produce in
Together with a
quota exemption from potential U.S. section 232 tariffs on autos and auto
parts secured as part of the final outcome, these new automotive rules of origin
will incentivize production and sourcing in North America and represent
important outcomes for both our steel and aluminum sectors.
With respect to
modernizing NAFTA, we agreed to modernize disciplines for trade in goods and
agriculture, including with respect to customs administration and procedures,
technical barriers to trade, and sanitary and phytosanitary measures, as well as
a new chapter on good regulatory practices that encourages cooperation and
protects the government’s right to regulate in the public interest, including
for health and safety.
trade facilitation and customs procedures have been modernized for the 21st
century to better facilitate cross-border trade, including through the use of
electronic processes, which will reduce red tape for exporters and save them
money. The agreement also includes modernized obligations for cross-border trade
in services and investment, including financial services and
On digital trade,
the agreement builds on more than three decades of free trade agreement practice
supporting data-driven business opportunities for Canadian companies, especially
small and medium size enterprises. The outcome is consistent with Canada’s
domestic regime. Future flexibility has been retained to enable the government
to continue to regulate digital issues in the public interest.
On labour and
environment, we have made important steps forward by concluding ambitious
chapters that are fully incorporated into the agreement and subject to dispute
settlement. These obligations will help ensure that parties maintain high
standards for labour and the environment, and that domestic laws will not be
deviated from as a means to gain an unfair trading advantage.
The outcome also
includes a special enforcement mechanism that will provide Canada with an
enhanced process to ensure the effective implementation of labour reforms in
Mexico, specifically related to freedom of association and collective
outcomes advance Canada’s interests toward inclusive trade, including through
greater integration of the gender perspective and better reflecting the
interests of Indigenous peoples.
With respect to
some of the other outcomes on supply management sectors, we should recall that
the U.S. made an explicit and public demand for the complete dismantlement of
the supply management system. In the end, we preserved the three key pillars of
the supply management system, including production controls, import controls and
price controls, and granted only limited access to the U.S. The government has
been clear in its commitment to provide full and fair compensation to farmers
for these measures.
property, certain outcomes will require changes to Canada’s current intellectual
property, legal and policy framework in certain areas, such as intellectual
property rights enforcement to provide ex officio border authority for suspected
counterfeit or pirated goods in transit, as well as criminal offences for the
unauthorized and wilful misappropriation of trade secrets.
In other areas
Canada has transition periods to implement its commitments. For instance, on the
obligation to provide a copyright term of life of the author plus 70 years,
Canada currently provides a term of life plus 50. We have a 2.5 year transition
period to implement this obligation following the entry into force of the
amending protocol, the parties agreed to remove the obligation to provide 10
years of data protection for biologic drugs, meaning that Canada does not need
to change its existing regime in this area which provides a protection term of
eight years of data protection.
On a couple of
other notable outcomes, faced with a U.S. demand for automatic termination every
five years Canada instead proposed a process that would lead to the regular
review and modernization of the agreement. The NAFTA partners settled on a
16-year term with a formal review every six years, after which the agreement
could be extended for another 16 years.
We also addressed
issues of concern to civil society, including with respect to the removal of the
energy proportionality clause, carrying forward the declaration on right to
water from the original NAFTA into the side letter, introducing new obligations
on privacy and access to information and an exception for Indigenous rights.
We have also no
longer included trilateral investor-state dispute settlement for Canada.
Investor-state dispute settlement under the original NAFTA will have a
three-year transition period for investments made under the current NAFTA.
I would like now
to turn to my colleague, Marie-France Paquet, who will provide remarks related
to the economic impact assessment.
Paquet, Chief Economist, Global Affairs Canada: Mr. Chair, honourable
senators, thank you for your invitation to appear before the committee
In my capacity as
the Chief Economist and Director General of the Trade Analysis Bureau of Global
Affairs Canada, I am pleased to provide a perspective on the potential economic
impact of the Canada-United States-Mexico Agreement, or the new NAFTA.
Our role at the
Office of the Chief Economist is to assess to the best of our ability the
potential impacts of a trade agreement. We report the results of our findings in
a document called The Canada-United States-Mexico Agreement: Economic Impact
Assessment. The overall effect of the implementation of the new NAFTA on the
Canadian economy is strongly positive when considered against the consequences
of a U.S. withdrawal from NAFTA. It would secure GDP gains of $6.8 billion
Canadian dollars, or 0.249%.
How do we get to
that? Our internal model is a dynamic computable general equilibrium model with
57 sectors and 140 countries and regions of the world. Such models allow impacts
to feed into other sectors of the economy and those sectors to adjust over time.
We can then evaluate potential impacts on production, exports, imports and, for
the first time in a final assessment, on the labour market.
Regardless of the
degree of sophistication of our model, it remains a simplification of reality.
This means that unfortunately we are not in a position to include all the gains
from the negotiators in the model.
We approach every
assessment in the same way. We discuss and consult all relevant parties within
government to understand the provisions and determine what can be included in
the modelling approach. This time is no exception.
negotiations were conducted in a very different context than CETA or CPTPP where
the starting point was no free trade agreement and the result was a new free
trade agreement. For the task at hand we had to consider what would happen if
the United States were to withdraw from NAFTA, as well as the new agreement
called CUSMA. The economic impact assessment before you is based on the final
results represent the potential benefits of NAFTA preserved by CUSMA, the
avoidance of section 232 on the Canadian steel and aluminum industries, as
well as the incremental impact of the implementation of the CUSMA outcomes.
under CUSMA could also help reduce policy uncertainty in certain areas such as
services, investment and digital trade, and result in a positive impact on
Our model at the
Office of the Chief Economist takes into account the reduction in policy
uncertainty in investments and financial services to reflect the binding
commitments of the FTA in this context. However, it has never conducted analysis
on data transfers which is assumed to affect every aspect of the economy and is
the key contributor to strong GDP gains in the USITC report.
The Office of the
Chief Economist attempted to model such commitments using USITC coefficient
without concluding results. In fact, the impacts on GDP were as follows: an
increase of the GDP $9.3 billion U.S. for Canada, $19.7 billion for Mexico, and
$16.7 billion for the United States. These impacts seem way too big for Mexico
and way too small for the United States.
The USITC reports
an increase for the U.S. economy of $68 billion. Since we could not explain
these differences, we have decided not to include reduction in policy
uncertainty in this way stemming from data transfer in this study.
of these obligations have already been implemented by Canada under CETA, and by
Canada and Mexico under the CPTPP.
The modelling of
quantitative impacts of CUSMA focused on modernized provisions in customs
administration, trade facilitation and origin procedures, new market access
provisions, automotive rules of origin, and data localization commitments for
financial services. These elements were selected for modelling based on the
expected magnitude of their economy-wide impact, data availability and
effect on the implementation of the new NAFTA on the Canadian economy is
strongly positive when considered against the U.S. consequences of a withdrawal
From a labour
perspective, CUSMA secures nearly 38,000 jobs that would otherwise be lost if
the United States were to withdraw, of which 18,708 are for men and 18,853 are
I will now turn
back to our chief negotiator for his concluding remarks.
Mr. Verheul: In closing, I would like to underline that our
objectives for these negotiations were informed by Canadian priorities and
interests, close engagement and consultations with provinces and territories, as
well as a wide range of stakeholders, and the collective knowledge and
experience of trade policy and sector experts across the government. A strong
support for the new agreement expressed by industry in key business associations
is clear evidence that we listened carefully to their views and advocated
strongly for their interests.
This concludes my
opening remarks. We would be pleased to answer any questions you may have
regarding the agreement.
Thank you to all for being with us today. I will exercise my privilege as
chair and start off by asking the first couple of questions.
My first question
is for the chief negotiator. We have seen throughout the years contrasts in
negotiating styles from one government to another. I am old enough to remember
the original pioneer of free trade agreements, Mr. Mulroney, and his
approach to negotiating. I remember at the time that he was very big on building
relationships and making sure that his relationship with the President of the
United States was extra solid, which led to historic free trade agreements and
even led to an historic acid rain agreement that paid off tremendous dividends
from an environmental perspective.
We saw the
strained relationship between the Trudeau government and the Trump
administration at the G20 summit, and we saw it after Foreign Affairs Minister
Freeland made a bunch of disparaging comments at a conference in the United
States that led to a cooling off period. Did that strained relationship make
your job as a negotiator easier or harder?
Mr. Verheul: With the current administration in the U.S.,
they had a fundamentally different view with respect to objectives in trade
negotiations from the traditional approach. I think that caused most of the
strain in the negotiations.
We clearly had
wide gaps between us on many issues, but we nevertheless formed personal
relationships. I did with my counterpart. We had many honest conversations.
Minister Freeland at the time also eventually formed a strong relationship with
Ambassador Lighthizer, her counterpart. The negotiations tended to be more
detail oriented and the broader relationships faded into the background while we
tried to grind through the issues.
My second question has to do with the point in time when the Americans
offered to bilaterally negotiate. As someone who has been in business, I know I
would seize the opportunity when I am in a trilateral negotiation and the one
with the largest amount of leverage decides to call me to the table bilaterally
Why did Canada
strategically decide not to seize the opportunity when invited to bilaterally
negotiate with the Americans? Of course we saw later on the Mexicans seized the
fact that we didn’t and ran away with the torch.
Mr. Verheul: I wouldn’t characterize it quite that way.
When we first started the negotiations, it started out as a traditional
negotiation. We had negotiating rounds. It was a professional negotiation, the
type that we tend to be used to.
I think the U.S.
found that Canada and Mexico were largely opposing many of the U.S. initiatives.
The U.S. then decided they would reach out to Canada at one point in time and
reach out to Mexico at another point in time to see if they could come up with a
different formula for trying to break through the kind of approach that both
Canada and Mexico were taking, which was to reject many of their proposals.
There was never a
real opportunity for us to negotiate a bilateral agreement with the U.S. Nor did
we think that that would be necessarily in our interest. The North American
market between Mexico, the U.S. and Canada has developed over the past 25 or
more years to a common market where we are very integrated in terms of supply
chains and in terms of the way the economies operate. I think all three of us
recognized at one point in time that we would be better off having a trilateral
agreement than any other option that might be available.
Wouldn’t we agree that in the end the Mexicans and the Americans negotiated
a bilateral agreement and that in the latter phases we were brought in to
Mr. Verheul: No, it actually didn’t happen that way. We
were in close contact with our Mexican counterparts. We were in close contact
with our U.S. counterparts. Throughout that process we knew exactly what the
U.S. and Mexico were talking about, and we had our views put into that process.
As they came back
they had to have certain issues with the Mexicans dealt with that didn’t involve
us all that closely. When they came back to us, we were able to ensure that
Canadian objectives were front and centre, even if that meant changing in some
cases what the U.S. and Mexico had started to converge on.
Massicotte: Before I go to my questions, I really want to thank you and your
team, Mr. Verheul, as well as the minister and the Prime Minister, for the
extremely demanding and difficult work you have done. The negotiations were not
easy, but I think you did a good job. Of course, it’s not a perfect agreement,
but I would like to congratulate you on behalf of Canadians, because I believe
that this agreement will be extremely important for our economy and that you
have done well. Thank you very much.
I will now ask my
two questions; the first is about dairy farmers. I’m sure you are aware that we
received a letter from dairy farmers advising us that the agreement refers to a
base year where negotiated cutbacks or amendments take effect. As a result, they
have implicitly asked us to delay the negotiation and to negotiate the effective
date of the agreement to take effect in a few months, because otherwise they
will definitely be at a disadvantage.
Can you tell us
whether this is really a significant dispute? Do you have a solid grasp of the
Mr. Verheul: I will make some initial comments and then I
will turn it over to Aaron Fowler for more specific comments related to
I can tell you
that the U.S. has been pressing hard for Canada to ratify this agreement as
quickly as possible. They included a provision in their legislation that
provides the possibility that if one of the parties is slower in its
ratification process than the other two, the other two should move ahead or
should have the ability to move ahead without that third party.
We are the third
party in this case because the U.S. and Mexico have already completed their
processes. The U.S. has made it clear to us, both in their legislation and in
various conversations we have had with them, that if we take too long in our
ratification they will move ahead with Mexico.
We can talk about
whether that is a serious threat or not, but it is in their legislation and they
have made that point a number of times. We have to be cautious about what we
might try to do with respect to timing on ratification. The U.S. is clearly in a
Massicotte: Is the information we received from the dairy farmers accurate?
Is there a significant impact if the agreement is signed tomorrow rather than
three or four months from now?
Mr. Verheul: Yes, the Canadian dairy year begins on
August 1. Under the implementation of the agreement, if we were to
implement the agreement and have it enter into force before August 1, the
first year of the agreement would be put in place and as of August 1 from a
dairy perspective they would then begin the second year of implementation.
That would have
an impact, particularly when it comes to exports of some particular
Chief Agriculture Negotiator and Director General, Agriculture and Agri-Food
Canada: Maybe I will speak briefly and summarize the provision we are
talking about. As part of the negotiated outcome Canada agreed to establish
export monitoring mechanisms for three specific dairy products: skim milk
powder, milk protein concentrates and infant formula. We established two export
thresholds, one for skim milk powder and milk protein concentrates and a
separate volume for infant formula. The issue you are referring to relates only
to the first basket of goods, MPC and SMP.
The terms of the
export monitoring provision say that for the first year Canada can export up to
55,000 metric tons of these products. In the second year, that export volume
will drop to 35,000 metric tons and thereafter it will grow at 1.2% per year
The concern of
the industry is that we have never before exported more than 11,000 tonnes of
SMP and MPC in a month. If the agreement enters into force partway through the
dairy year such that they have less than five months to work with, their view is
it is unlikely they will fully utilize that year one volume.
of that will not happen in year one because there will be no restrictions
applied to Canadian dairy exports in year one. The consequence will be in year
two where with a delayed entry into force they would have access to the year one
volume they will instead have access to volumes that are 20,000 tonnes lower and
a 35,000-tonne export volume.
Massicotte: I have another question. We also received a letter from the
Union nationale des fermiers that talks about problems with the interpretation
of CUSMA, that is, the bill that will bring it into force is more demanding and
restrictive than the agreement itself. They therefore asked us not to approve
the bill as it stands, but rather to amend it and ensure that it is more
consistent with CUSMA. They also asked us not to impose unnecessary conditions
in the agreement we have reached with the United States and Mexico. Can you
enlighten us on that? What is the impact of all this? Who is right?
Mr. Verheul: I am familiar with some of the concerns raised
by the NFU. I wasn’t aware they related to the sunset clause. Perhaps
Mr. Fowler has some comments with respect to the concerns raised by the
Mr. Fowler: I am not aware of the connection to the sunset
clause either, but I can speak to the concerns of the NFU.
As part of the
negotiated outcome Canada agreed to allow U.S.-grown varieties of wheat
registered in Canada to receive an official Canadian grain grade. Previously it
was not possible for wheat grown outside Canada to receive an official quality
In the context of
implementing those obligations contained in the CUSMA, Canada included in
Bill C-4 two types of changes. The first types of changes are those that
are necessary strictly to implement the obligations Canada agreed to under this
agreement in a manner consistent with how the Canada Grain Act is structured.
In that respect I
would note that the act doesn’t define wheat. It doesn’t define any particular
commodity. It talks only about grain. To implement a commitment with respect to
only one type of grain would require significant changes to the structure of the
The second set of
changes are those to implement measures intended to protect the integrity of
Canada’s grain quality assurance system, given the changing treatment that will
be afforded to U.S. grain once the agreement enters into force.
The next group of
amendments is necessary in our view to ensure that Canadian and U.S.-grown grain
is treated in the same manner while putting in place appropriate oversight for
the entry of grain grown in a different regulatory environment because U.S.
farmers are growing grain according to rules slightly different from those in
place in Canada.
included in Bill C-4 will not affect the overall quality of Canadian grain
exports or weaken the ability of the Canadian Grain Commission to act in the
interests of producers. The consequential changes proposed to the CGA are
intended to ensure that all U.S.-grown grain included in shipments from Canada
meet the same rigorous quality standards applied to Canadian grain. The intent
is to ensure U.S. grain is treated in a manner that is extending national
treatment, not better than national treatment, to the treatment received by
Canadian farmers and to protect the overall integrity of the grain assurance
Massicotte: So they are wrong. You are saying that it’s not true, that there
are no major consequences?
Mr. Fowler: They are not wrong that the changes to the act
go beyond what is negotiated with the United States. Our view is that the impact
of those amendments that go beyond what is strictly in the agreement will not be
negative for the Canadian grain handling system or for grain producers in
MacDonald: Before I ask my first question I want to clarify something that
you both brought up. We were faced with a situation where we had to deal with
the president’s threat to cancel NAFTA and bring in a new one.
The president is
in a powerful position, but he does not have the authority to cancel NAFTA. He
can negotiate a new deal, but only Congress can cancel NAFTA and Congress is
necessary to approve the new deal. I think we should put that on the record.
Second, it is
important to keep in mind that we have no control over any president. President
Obama proved that with the Keystone XL Pipeline. The only thing we control is
how we conduct ourselves. We have to put that on the record as well.
Like a lot of
Canadians I was disappointed to see the terms of the agreement with steel and
aluminum in the agreement. Some 70% of steel, aluminum and glass used in the
production of automobiles must also originate in North America. However the 70%
steel requirement must be met by steel melted and poured by North American
steelmakers. There are no similar provisions for aluminum, which means a
recycled Chinese aluminum can continue to be used in the manufacture of cheaper
Mexican aluminum products.
The president of
the Aluminum Association of Canada said that we lost on this. I am just curious.
Why couldn’t we achieve the same result for aluminum that we achieved for steel?
Why didn’t the Americans support us on that?
Mr. Verheul: We did a lot of research and consulted a lot
of lawyers, and it is not clear cut that the president is unable to initiate the
process of withdrawal from NAFTA. He could certainly take the first step of
initiating the six-month period to withdraw from NAFTA.
Whether or not he
could ensure that is implemented is another question, but if we did have an
initiation of that six-month process we would already be into significant
difficulties. There are some legal differences about the issue.
With respect to
aluminum, we clearly tried to get the same provision as is provided for steel.
In the case of steel it would be melted and poured within North America.
We tried to get
the same approach on aluminum that would be smelted and poured within North
America. We were unable to do that at the time largely because of Mexico’s
objections to that. Mexico does not produce aluminum.
When we look at
it from the perspective of the current provisions, there are currently no
provisions in NAFTA requiring any percentage of either steel or aluminum to be
used in the manufacture of automotive vehicles. We now have a provision that
says 70% of the purchases by manufacturers of steel and aluminum have to be from
This puts a
significant constraint on automakers in all three regions. Coupled with the
other more rigorous requirements for domestic content, such as the 75% regional
value content that didn’t exist before, the 75% requirement on core parts that
didn’t exist before on engines, transmissions, bodies and those kinds of things,
and the 40% labour value content requirement, all of that squeezes the amount of
foreign products automakers use in the manufacture of automobiles. They just
don’t have that much room anymore. There is a very strong likelihood they will
have to use as much North American aluminum as they can.
We have an
agreement that after 10 years we can revisit the issue. Beyond that we have
already had conversations with the U.S. and Mexico about the clear expectation
on our part that if we start to see aluminum coming in from countries outside of
North America and undermining our markets, we would expect to have the same
treatment for aluminum as we will have for steel after seven years.
MacDonald: I will go back to another sector. I would like to put on the
record that I have been on the Canada-U.S. IPG for 11 years. As vice chair and
co-chair I spent a lot of time with Congress. Unless they had a proper trade
agreement to replace NAFTA, particularly with the Republican Congress free
traders, the odds of getting the old trade agreement thrown out would have been
very long under the other circumstances.
Anyway, I was in
Washington to speak about a trade alliance on the Sunday they announced the
agreement. Needless to say, I had to change all my notes and speak off the cuff
for about an hour. I spoke to them then about supply management. In principle, I
am not a big supporter of supply management. I am more a supporter of the free
flow of goods.
I said to the
Americans at that time, even though I don’t support supply management in
principle, that when it comes to the U.S. I support it in practice. The reason I
do is that Americans subsidize agriculture to the tune of over $70 billion a
Did we put that
on the table? Did we push that? What was the response? They have an
overproduction problem when it comes to dairy. The state of Wisconsin
practically produces as much as our entire country. Even though I know the
Canadian consumer is a big loser under supply management, I don’t understand why
we couldn’t make more hay with the fact that they subsidize their industry so
Mr. Verheul: I can start by saying that we had many heated
discussions over that issue. We take some offence at the fact that the U.S.
heavily subsidizes its agriculture sector. They have a $1 trillion farm bill in
place now. With the standards of subsidization around the world, I think it is
fair to call close to obscene.
In the dairy
sector they have surpluses. They have a surplus problem consistently. They have
gone so far as to store skim milk powder in caves in Pennsylvania because they
don’t know what to do with it. This was one of the more difficult aspects of the
negotiations on those issues.
We pushed very
hard on U.S. domestic subsidies, but the reality is that getting the U.S. to
move on domestic subsidies when we are talking about a world environment where
all kinds of countries subsidize their producers, the U.S. was always unlikely
to agree to something that would be particularly stringent on a bilateral or
I can tell you
this was a long and difficult fight, and Mr. Fowler knows this better than
Mr. Fowler: I will chime in to say that I agree. We are
well aware of the impact domestic support provided by the U.S. to its
agricultural producers can have on Canadian producers, global prices and the
marketplace. In our experience, not just in the context of this particular free
trade agreement but generally speaking that issue is very difficult to
discipline on a bilateral or even a regional basis.
The framework of
rules that exist with respect to the provision of domestic support to the
agriculture sector exists under the WTO agreement on agriculture. Part of the
WTO Doha round of negotiations has taken up that very challenging issue since
2000 with limited progress.
By the end of
this decade the EU, China and India, none of which is the United States, will
have more than half of global entitlements to provide trade-distorting domestic
support to their agricultural sector. In that kind of global context it was
difficult, as you could imagine, to persuade the United States that it should
discipline itself in a trade agreement with Canada and Mexico, without having
any assurance that other major global subsidizers, particularly the countries I
just mentioned, would ever agree in the short term to similar discipline.
made any sort of meaningful discipline with respect to domestic support quite
challenging in the CUSMA context.
Ataullahjan: Witnesses yesterday were asked about the significance of
article 32.10 of the CUSMA which requires all three parties to give
three-month notice to the other two countries before it begins negotiating a
free trade deal with any non-market country.
described this provision as unprecedented. Others argue that it is really no big
deal because our relations with China, the principal non-market economy that
appears to be the target here, are in deep freeze anyway. Dan Ciuriak of the
C.D. Howe Institute essentially told us yesterday that the U.S. is in effect
signalling that any free trade deal with China is off the table.
Is that an
accurate assessment in your view?
Mr. Verheul: No, I wouldn’t share that assessment. When we
negotiated this specific provision, it was clear that the U.S. wanted to send a
signal with respect to negotiations with non-market economies. We had long
discussions about this, but at the end of the day there is nothing in that
article and that provision that is any different from what would happen
If we were
intending to initiate a negotiation with China at this point in time, we would
certainly give our trading partners a heads-up that we were intending to do
that. We would provide the U.S. with an indication that we were initiating
negotiations with China, if that were the case.
The recourse the
U.S. would have is the same recourse they have under the agreement as it stands
now. They can indicate that they would be prepared to withdraw with a six-month
certainly wanted some kind of optical presentation of this issue, given their
views with respect to China; but it doesn’t fundamentally change any of the
rights or obligations we have under the agreement. As some people have pointed
out, the U.S. has spent much more time negotiating with China than we have over
the past number of months.
Ataullahjan: Would we have to inform the Americans if we were negotiating a
trade deal before we informed the Canadian Parliament that we were negotiating a
Mr. Verheul: Absolutely not. I cannot imagine any
government informing the U.S. of our intention to begin negotiation before
informing the Canadian Parliament. That would be fundamentally at odds with
every practice we would follow.
Ataullahjan: On August 14, 2017, Minister Freeland outlined some core
objectives of the government in the negotiation. These included chapters on
gender and Indigenous rights.
were not incorporated, and with respect to the provisions in the agreement on
gender non-discrimination, the Conference Board of Canada has stated:
. . . the
impact of the gender non-discrimination provision will likely be limited. In
particular, the “non-discrimination” statement included in Chapter 23 of the
original deal reached at the end of September had been watered down by the
time the agreement was signed on November 30. This watered-down version
suggests that each party can choose whatever policies it considers
appropriate. . . .
Would you say
that this analysis is correct and given the orientation of the U.S.
administration on such issues, could American resistance on this matter had not
been reasonably foreseen?
Mr. Verheul: It is fair to say we knew when we first
started pursuing both of those issues that we would encounter resistance on the
part of the U.S. We put forward comprehensive chapters on gender issues and a
comprehensive chapter on Indigenous peoples as well. It is certainly true that
we did not achieve those chapters at the end of the day.
We had long
discussions over those. The U.S. and Mexico engaged in those discussions. We
were not able to secure a chapter in either of those cases. In the case of
gender we have specific references in the labour chapter, the investment chapter
and small and medium size enterprises.
rights we have a new general exception that has never been negotiated in a free
trade agreement in the past. We have the flexibility to provide preferential
treatment for Indigenous peoples in a number of chapters, including services,
investment, government procurement and a number of other state-owned
Despite a clear
resistance on the part of the U.S. in particular, and to some extent from
Mexico, we managed to achieve much more than we had achieved in previous
agreements on both gender issues and Indigenous rights. It wasn’t the ideal
environment but I think we certainly achieved most of what we were hoping
I would like to continue my questions on aluminum. We all know that almost
90% of aluminum is produced in Canada, and it comes from Quebec. In CUSMA, the
provision regarding steel requires that it be melted and poured in North
America, but there’s no such similar provision for aluminum.
We have learned
this Monday in a The Hill Times article that Bloc Leader
Yves-François Blanchet had a talk with Deputy Prime Minister Chrystia Freeland
about protection of aluminum, a talk that led to the Bloc securing two
commitments from the government on aluminum. In the article I mentioned,
First, we will
have real-time data on aluminum imports into Mexico, or so-called traceability
Mexico is found to be supplying itself with foreign aluminum, the government is
committed to raising the issue so that the “melted and poured” in North America
clause applies to aluminum as well, as is the case for steel.
We haven’t heard
from the Deputy Prime Minister, but in the meantime I would like to know if
these two commitments will better protect our aluminum sector than a similar
provision like the one for steel. Will these two commitments be more effective
or not? Could you comment on that?
How about some
commitment that could be secured for our dairy and forestry sectors to protect
them as well?
Mr. Verheul: I am afraid I can’t speak to the discussions
in any letters that may have been exchanged between the Deputy Prime Minister
and the Leader of the Bloc. I wasn’t part of those discussions.
I can tell you
with respect to aluminum that we have had discussions with the U.S. and Mexico.
We made it very clear that if we start to see aluminum coming into Mexico from
foreign sources that is displacing Canadian aluminum, we need to set up a
monitoring system to track what aluminum is coming in.
All of that has
been the subject of discussion between us, the U.S. and Mexico. The U.S. has
also set aside significant funds to monitor aluminum coming into North America.
If we start to see aluminum is coming in from offshore, we have made it clear
that we would intend to press very hard for aluminum to be treated in the same
way as steel has been treated.
We need to keep
in mind that these are purchases by automakers, so they can be traced fairly
easily. We also have to keep in mind that the steel provision does not come into
effect until seven years after the agreement has been in force. We will have a
significant body of evidence with respect to what is happening with aluminum
during that period. I think we will have a very strong case that aluminum should
be treated the same way if we are seeing aluminum coming in from offshore and
displacing Canadian aluminum.
When you testified at the House of Commons Standing Committee on
International Trade you mentioned that CUSMA provided important stability and
predictability for Canadian businesses and workers.
I would like to
know how that applies to our dairy sector, our forestry sector and other sectors
negatively impacted by this agreement.
Mr. Verheul: I will start with the forestry sector and I
will ask Mr. Fowler to respond on the dairy sector.
Both NAFTA and
the new agreement provide that there shall be duty-free trade between Canada,
the U.S. and Mexico on softwood lumber. That is a clear provision in those
agreements. However, the U.S. also has the right to pursue anti-dumping and
countervailing duty investigations against imports into the U.S., as we do and
as Mexico does.
those rights. Most importantly, we have managed to preserve the former Chapter
19 mechanism for pursuing disputes on anti-dumping and countervailing duty
actions which actually reviews U.S. actions and considers whether or not they
are consistent with U.S. law.
When it comes to
softwood lumber, we have won many of those cases. We recently won a case that
relates to injury, which is probably the most important element of this process.
The U.S. will be bound by those decisions. On softwood lumber, we have preserved
the most important elements, but I will not pretend it is not an ongoing
irritant between Canada and the U.S. It is and will continue to be, but we have
mechanisms to challenge that which leads to the return of duties paid, unlike
any dispute settlement system such as in the WTO.
Mr. Fowler: I will start by providing a bit of context. The
Canadian agriculture and agri-food sectors produce roughly $120 billion worth of
product every year and exports 50% of that. Of the amount exported, more than
half goes to our NAFTA partners.
of the preferential market that existed for those two markets under NAFTA was
incredibly important. In every case we preserved the market access that existed
under NAFTA. In some cases we obtained incremental access for products of
interest to Canadian exporters.
outcome is positive from an agricultural perspective, even when compared to the
agreement in place today and not to a scenario where we don’t have an agreement
which would have been devastating to the sector.
I understand the
concerns the dairy sector has expressed with respect to these outcomes. I would
note, however, that they fall far short of the initial negotiating position of
the United States, and indeed the negotiating position that the United States
maintained throughout the entire negotiation. In September 2018 the U.S.
continued to put forward proposals that would have had the effect of making it
impossible to maintain a supply management system for dairy in this country.
agreed to provisions that could be classified into three baskets. Incremental
market access for certain dairy products, which is largely commensurate with the
approach we have taken under our commitments at the WTO and in our FTAs with the
CPTPP partners and the European Union. While not insignificant, certainly from
the sector’s standpoint the vast majority of the domestic Canadian market for
dairy products continues to be served exclusively by Canadian producers and
The other two
categories of commitments that were taken on with respect to dairy were pricing
commitments and export monitoring commitments. Those commitments largely apply
to the three specific products I referred to before: skim milk powder, milk
protein concentrate and infant formula.
I would never
minimize the impact of these commitments on the sector. I understand where they
are coming from, but it is overall a much more positive outcome than we could
have had for dairy and without any hesitation a positive outcome for the
agriculture sector more broadly.
Do you think that those sectors were not neglected in the agreement?
Mr. Fowler: I do not believe those sectors were neglected
in the agreement.
I would like to compliment the chief negotiator and all the negotiating
team. I appreciate the tremendous amount of work they did and their dedication
to Canada, Canadians and trade. Also, I am very pleased with your consultations
with the First Nations, which I believe included Inuit peoples in the Arctic.
I have two
questions. One has to do with the extension of copyright. I was pleased to learn
early on that the copyright 50-year extension was going to be increased to 70
years after death. I also presume 2.5 years to get that in place allows for the
time to change Canadian intellectual property and copyright law to enact that.
However, is that
retroactive or does the 70 years come into effect on the day the agreement comes
into effect? Will people who are dealing with this have to go back since 1950
and suddenly increase 20 years of copyright provisions that may have expired 50
years after death?
Mr. Verheul: I have our lead negotiator on intellectual
property here, and he will respond to that question.
Director, Intellectual Property Trade Policy, Global Affairs Canada: On the
first part of your question, the 2.5 years will allow the government to study
the implications of the obligation thoroughly and come up with a plan for that.
As to the second
part of your question, anything in the public domain when the obligation kicks
in for Canada will remain in the public domain. It will not come out of the
I know this question will be asked by the arts and culture sector, artists
and artist estates. I can see myriad issues going down the path, so I am pleased
to know that.
In summary of the
CUSMA outcomes on the Government of Canada website it states:
agreement preserves Canada’s cultural exception, which gives Canada flexibility
to adopt and maintain programs and policies that support the creation,
distribution and development of Canadian artistic expression or content,
including in the digital environment.
was important in NAFTA which has done much to protect Canada’s unique identity
and provide greater security for the over 660,000 Canadians who work in
industries such as publications, broadcasting, books, magazines and all.
On behalf of
those over 660,000 Canadians who work in the cultural industry, what else has
changed or improved under CUSMA as compared to NAFTA?
Mr. Verheul: On the cultural exception our biggest fight
was to preserve the exception we had in NAFTA. The initial position of the U.S.
was to get rid of it entirely. We then had long discussions over elements the
U.S. wanted to carve out of the cultural exception that would then be exposed to
actions by the U.S. We went through that for a very long period of time but
managed in the end to protect the cultural exception as it was in NAFTA. We also
added some elements of modernization to the cultural exception to reflect
digital media and those kinds of issues in a way that brings them more up to
Not only will this provide opportunities for those working in film and
digital industries, but it will allow for cross-border and freedom of trade for
visual artists using digital industries and new technologies in their work.
Mr. Verheul: The cultural exception applies to those
practices as well.
Thank you, Mr. Verheul and your negotiating team for being patient for
days and days, but it will certainly involve more and more months of negotiating
to get the job done.
The briefing note
that came from Global Affairs is very good. I am not sure who sent it to us, but
it was helpful for me.
This new deal
increases and enhances opportunities for small and medium size enterprises. A
few years ago this committee studied small and medium enterprises. We recognize
what a bonus it is for Canada to have small and medium size enterprises in our
speaks about women and Indigenous peoples engaging in small and medium size
enterprises. Could you explain to us how this is enhanced within the particular
agreement as compared to NAFTA?
Mr. Verheul: There is nothing of this kind within NAFTA at
all. There is no chapter on small and medium size enterprises. There are no
references to gender or to Indigenous peoples with respect to the small and
medium size enterprises. This is all brand new.
This was a
Canadian initiative. This was not a chapter that was particularly welcomed by
the U.S. or Mexico, but we thought it was particularly important that we have
this chapter in the agreement. It was also important for us to ensure that we
had the specific references on gender and on Indigenous peoples.
The chapter is
intended to promote participation of small and medium size enterprises in trade
within the NAFTA region, to assist them in that participation in trade, to make
things easier for them to enter those kinds of activities, and to bring more
profile to them and greater cooperation between Canada, the U.S. and Mexico on
promoting their interests.
At the end of the
day the other two parties agreed to it, and we consider that a significant
victory in this agreement.
The kinds of things you are saying it will do are the kinds of things that
our report recommended: assistance for people in small and medium size
enterprises who do not necessarily know how to go about facilitating trade. I
think you have made a very important point.
Mr. Verheul: That was exactly our target, yes.
I have read that it will minimize or reduce red tape at the border and
facilitate trade. Yet yesterday we heard from the exporters and importers a
little concerned about the implementation at the border. They say that it is one
day it is NAFTA and the next day CUSMA. There is no period for everyone to get
used to it.
CBSA was not part
of the negotiation. I am not sure and could be corrected on that. they don’t
develop the laws; they enforce them. Their recommendation was for an increase in
the number of CBSA officials at the border for the first few months at least to
get things working and we have that flow. The worst thing that could happen is
to have a lot of red tape after being told there would be less.
I wonder what is
being done to ensure that CBSA is ready for the deal on the day it is to be
Mr. Verheul: We consulted with CBSA even before the
negotiations started. We had representatives from CBSA that were actually part
of our negotiating team, including leading on negotiations related to border
issues and some of the ones you mentioned with respect to simplifying the
process at the border.
The example I
often use is the process for claiming preferential tariff treatment under the
agreement. As it stands now, this is a fairly complicated process. Paperwork is
involved and many exporters simply don’t bother following it because of the work
With the process
we have established now under this new agreement, none of that work has to be
done. It’s all electronic, and origin can be conferred on the basis of any kind
of documentation. It is much simpler than it has been in the past.
We have come a
long way. CBSA has certainly been actively engaged in preparations for this
agreement coming into force, as have the rest of us. We will be getting
information out to exporters and the business community on an ongoing basis. We
have already done that to some extent. We will be doing it with more precision
as we get closer to entry into force. We do not anticipate difficulties in
moving to this.
With respect to
what CBSA needs to do as far as treating products at the border, probably the
majority of goods will not be treated all that differently than they are
currently under NAFTA. There are specific provisions related to autos, to
textiles and apparel, and a couple of other products. Aside from that, the
treatment is really pretty much the same as it exists now, with the added
elements of facilitating the process of getting goods back and forth across the
border and reducing and eliminating paperwork in doing so.
We are not
anticipating that we will have big challenges at the border, with the possible
exception of some time it will take with the auto sector, and perhaps to some
extent with the textiles and apparel sectors.
This is the second time I have heard your explanation and it is sinking in
now. Thank you all for being with us and for your remarks.
In our previous
briefing, Mr. Verheul, you spoke about the steps after ratification. Could
you speak now formally before this committee about the several steps to come
after ratification, as well as any concerns you may have that we should be aware
of regarding those steps post ratification?
Mr. Verheul: As you are very much aware, we are now in the
process of trying to get this bill through the Senate. After that there is
typically a period of about 12 days where we have to get Royal Assent. We have
to have from the justice department the blue stamp regulations and orders. We
have a regulatory package that needs to be signed by ministers processed by the
Privy Council Office and considered by the Treasury Board.
legislation is done there is a regulatory process that has to happen afterward.
It will take a period of time as well. The Governor General will need to
eventually sign that.
approval of the bill by the Senate, which we hopefully will achieve, we are
probably looking at 12 to 14 days of process.
Beyond our own
process a number of elements have to be completed trilaterally before we reach
entry into force. The U.S. and Mexico have not yet provided to us their
notification that they have ratified the agreement. That is a requirement before
we can move to entry into force.
We have to deal
with a process that the U.S. has to complete on certification. Under their Trade
Promotion Authority, the U.S. has to certify that both Canada and Mexico in
their view have taken the actions necessary to live up to their obligations
under the agreement. That has to be completed. We are in the fairly early stages
our chief negotiator around the rules of origin side, is working with the U.S.
and Mexico to reach agreement on what is called uniform regulations, which are
further details on how rules of origin will actually be administered and
We have dispute
settlement elements that my colleague Robert Brookfield, our legal counsel, is
working on with his U.S. and Mexican counterparts. We have to establish a roster
for dispute settlement. We have to establish rules of procedure and a code of
conduct. In our view all of that has to be completed before entry into
All of that work
is going on, and it is also going on in many other areas in terms of U.S.
certification. There is quite a bit of work to do outside of our own
Ms. Paquet, what we have heard from you has been positive. You compared
what it would look like if NAFTA had disappeared. Yesterday we heard from
somebody else, Mr. Ciuriak. I recognize we are not talking apples to apples
here, but I want to get your feedback on what he had to say. He said:
economic impact, relative to the status quo of an in-force NAFTA we have
estimated that the CUSMA provides a negative impact on the Canadian economy of
about 0.4% in terms of real GDP.
I know this is
not something you were talking about, but could you comment on that?
Ms. Paquet: You are right to point out that the way we
presented it is quite different. It is not apples to apples. In our view the
C.D. Howe study is overstating the negative impacts for two main reasons. One is
the rules of origin and how they are treated in the model for autos and auto
parts, and the second one is on chemical products.
The way to
implement in the modelling approach the new rules of origin on autos and parts
is simply to impose a reduction in terms of imports on the parts side to force
the sourcing in North America to meet the new threshold for the rules of origin.
However, they do that a bit artificially, which means that the costs will go up
a lot more than what we have chosen to do in our approach.
In our approach
we looked at a model base. We looked at 213 models and used data from the
American Fair Packaging and Labeling Act. We went deep down. Yes, it’s true that
North American producers will enhance sourcing from North America to meet the
new threshold. In part that is what we were hoping to see in that sense, but
they will do so until they reach the 2.5% tariff. There is no point in going
above that in terms of increasing costs. Otherwise you will just pay 2.5% one
way and 6.1% the other way.
We let the model
increase the sourcing in North America up to those two thresholds. That is not
the case in the C.D. Howe study. It overestimates an agreement in fact and we
think that businesses will quite quickly clue into what is better for them to
do. It is one thing that is quite different in terms of approach.
The second thing
is the way they have interpreted the changes in the rules of origin on
chemicals. We think they have a wrong interpretation of it. We have experts on
rules of origin here, but they see this as a restrictive change in rules of
origin. Because chemicals are an important sector it has a negative impact that
we do not see in our model.
There are other
more technical reasons, but those are the two main ones that would explain why,
even if he had compared apples to apples, we would not get to the same number
because of an overestimate in cost.
Massicotte: Pretty simple stuff.
Perhaps I could ask a supplementary question to a very simple question that
got a very complicated answer because Senator Coyle’s question is important,
In the economic
report that Global Affairs presented, and I believe you presented it to the
House committee on February 26 or somewhere around that time, you make the
claim that CUSMA will improve GDP gains by $6.8 billion and that the
implementation of the CUSMA outcome was basically done on a base analysis of
U.S. withdrawal from NAFTA.
your analysis you are comparing the agreement to no agreement, correct?
Ms. Paquet: Yes.
When you make that kind of comparison, it certainly skews the numbers
considerably. My understanding of the C.D. Howe analysis is that it is actually
analyzing the current agreement with the past NAFTA agreement.
I am a bit
troubled by two things. I am trying to figure out why Global Affairs would not
provide the Parliament of Canada with an adequate economic analysis of this
study, this negotiation or this deal with what is in place right now?
What is really
troubling is: Why did Global Affairs present this economic analysis, which I
encourage my colleagues to analyze carefully, to the House of Commons Foreign
Affairs Committee a month after the agreement was tabled and the review on the
part of the House began?
It would only be
appropriate that this study, with all due respect, be provided by Global Affairs
right at the outset to the House committee on January 29 when it was
tabled. Why did Global Affairs not do a straight-up analysis of the current deal
versus what we had in place under NAFTA?
Ms. Paquet: We see the situation exactly this way. NAFTA
was never a status when it was viable. It was simply not. Therefore, the real
comparison is either CUSMA, the new NAFTA, compared to no NAFTA. This is what
you have before you. That is the one thing. This is what we strongly believe.
This is exactly what the negotiators were facing.
Plus, we had in
position the section 232 tariff-free on steel and aluminum. That was
reality, so that is also in the base scenario. We also managed with the new
NAFTA to eliminate those section 232 tariffs. These are positive things.
For us, the real situation we were facing is CUSMA compared to no NAFTA. This is
what you have before you.
On the second
point in terms of timing I understand it is not optimal. Believe me, I would
have liked to have provided you with an earlier document. We have decided, and
that is why I alluded to it in my remarks, to revisit this idea of policy
uncertainty. Many economists and business people you have probably seen and
talked to will tell you the same thing. A reduction in policy uncertainty is a
good thing. You have heard our chief negotiator mention a few of the good areas
they have achieved in terms of positive outcomes. As I said, it is unfortunate
we were not able to take that into account.
We revisited this
idea of reduction in policy uncertainty. We tried to do it the way the USITC has
done it. If you look at the USITC report, you will see that it is the first time
they have three scenarios in such a report. They normally only have one number
This time they
have three numbers: $2 billion added to the $235 billion, with $68 billion right
in the middle. What drives everything here is how they treat policy uncertainty
reduction. If you don’t do anything in the model, if you don’t force anything
there, you have a negative impact on the U.S. economy. If you have a bit of
reduction in policy uncertainty, you have a positive $68 billion. If you have a
lot of reduction policy uncertainty, you have plus $235 billion.
We were not able
to completely replicate what the U.S. had done for different reasons such as
lack of data and lack of knowledge because they included extra modelling
beforehand. We tried our best; we just couldn’t do it. We decided to revisit the
issue. We imported the coefficient from the USITC in terms of how to include the
model. We will try it, and I alluded to that. As a result there was a very
bizarre huge impact on the Mexican economy of close to $20 billion and a smaller
impact on the U.S. economy of $17 billion or so when the U.S. report states $68
billion. We were so far away that we just couldn’t stick to that. We can’t.
they have put other interventions in the model based on their interpretation of
the agreement that we are not aware of. There is something else going on that we
can’t explain. We have done it but we have decided not to report, not to treat
it the same way in the model. That is in part why we were so last minute.
I appreciate that answer and I appreciate the comparison vis-à-vis the U.S.
report, which again I invite my colleagues to look at because they are two very
different types of documents and approaches.
Affairs have thought it would be helpful, in addition to having an analysis of
this agreement versus no agreement, to have this agreement versus the NAFTA
agreement so that we could actually compare the most current agreement? Wouldn’t
Global Affairs think that would have been a useful exercise and document to
Ms. Paquet: Again I can say the same thing. We believe
strongly that this is the situation we are facing. If NAFTA had been a status
quo option, I doubt that we would have embarked on such long and painful
I have no questions about coefficients, so that is my lead-in. I thank all
of you and congratulate you for the hard work and significant achievements in
the face of considerable adversity. I noted the highly diplomatic and very
Canadian mention of unconventional approaches by your partners.
I have known for
some time that Canada’s federal public servants are among the best in the world,
if not the best in the world. I have learned from this exercise that our trade
negotiators are among the best in the world as well. I congratulate all of you
I have two
questions. The first is on implementation. I know it is early days and you can
probably only talk about this generally, but I am particularly interested in the
labour provisions as they relate to Mexico.
Could you give us
a very general sense of the nuts and bolts of implementation and enforcement,
again bearing in mind that this is new and there will be considerable work to be
While you are
pondering that, my second question relates to the very successful approach
Canada took in reaching out to what I will call a thousand points of contact,
both in this country and outside of it, and bringing to bear the influence of a
broad range of actors.
I wonder if you
could give us a sense of how important organizations and individuals in the
United States were in applying internal pressure on their own administration as
you went through this process. Some of that will be confidential, I know, but
just a general sense. We know how important it was within this country, but I
would be interested in your perspective on that from the other side of the
border as well.
Perhaps you could
start with labour provisions in Mexico.
Mr. Verheul: I will make a couple of preliminary comments
and then I will ask my colleague Pierre Bouchard, our lead negotiator on the
labour side, to add further comments.
With respect to
labour under the current NAFTA, there is no labour chapter. There is a side
agreement on labour and environment. With this agreement we have a full labour
chapter subject to dispute settlement. It is far more ambitious than previous
labour chapters we have done.
We also have a
completely new mechanism to address breaches of labour obligations with respect
to specific facilities, which has never been done in any free trade agreement
that I am aware of. We have gone further than we ever have in the past.
Bouchard, Director, Bilateral and Regional Labour Affairs, Employment and Social
Development Canada: Yes, labour might be the area of agreement that had the
biggest jump from the original extremely weak and ineffective side agreement, to
unprecedented provisions in the labour chapter and the bilateral mechanisms on
the scope of obligation and the enforcement available to them.
the labour chapters were discussed and provisions on violence against workers
and clarifying prohibition, which is something that has not been mentioned much,
the implementation of goods made by forced labour were included and will come
into effect subject to the regular enforcement dispute settlement and bilateral
To your question
about what we are doing, for some time we have been heavily involved with Mexico
in quite unprecedented labour reform. The administration in Mexico is fully
committed. A bilateral working group on labour was established by our former
Minister of Labour last August, and we meet quarterly to go over each of the
reforms. We are helping them with existing and potential future resources to
implement that. There is an emphasis on technical cooperation to help them both
at the federal and state levels.
A lot of work is
ongoing on the technical assistance side and on what was negotiated in the
bilateral mechanism agreement. We are developing and expecting to be able to
publish guidelines for filing complaints under the bilateral mechanism in the
same way as the existing guidelines on filing complaints. We call them public
communications under all of our labour chapters or free trade agreements. These
are published. We expect to have something equivalent to them.
We are also
working with CBSA and the Department of Finance, which have responsibility for
the Customs Act, on preparing ourselves for the ban on the importation of goods
made from forced labour. Canada already has a ban in place for several decades
on the importation of goods made from prison labour. In addition we will now
have that ban.
These are some of
the steps. We are very busy and there is probably much more work to be done by
us right now and in the coming months.
I will tell you that you are further ahead than I expected, so
Moving south of
the border to the third country now involved in this deal, how important was the
pressure from within in support of Canada’s objectives?
Mr. Verheul: We had different relationships and
occasionally shifting relationships with both the U.S. and Mexico. On many
issues we were on exactly the same page as Mexico and were putting pressure
on the U.S. The Mexican industry was very closely engaged in negotiations with
respect to Mexican positions, so we worked closely with them as well.
It was a bit
different in the U.S. from what we had been used to with respect to the private
sector. The U.S. did not closely consult with their private sector through much
of the negotiations.
In fact, my team
and I met with the U.S. Chamber of Commerce at virtually every negotiating
round. They wanted to meet with us to hear what was ongoing in the negotiations.
We talked to them about the various proposals and various issues, and we
received quite a bit of support from the U.S. business community.
It was an
environment where we had close relationships with the U.S. business community,
with the Mexican business community, the Mexican government, and the U.S.
government, but those relations were occasionally strained depending on the
issues to be discussed.
Griffin: My question is basically a follow-up to Senator Massicotte’s.
Mr. Fowler agreed with his view on the changes in Bill C-4 regarding
the Canada Grain Act that indeed go beyond what is necessary for CUSMA but will
not be negative.
I am not so sure
I have such a sunny view of it. The National Farmers Union is very concerned,
and I can see why they are because there is to be a review of the Canada Grain
Act. This review process was supposed to start some time this month, yet
policy-related things are occurring now prior to that review of the Canada Grain
I am puzzled as
to why this would have happened if they weren’t needed for CUSMA. Are you not
pre-empting the Department of Agriculture process?
Mr. Fowler: The process to review the operation of the
Canada Grain Act will proceed as scheduled and can consider changes including
changes that relate to the aspects touched on in the implementation bill, to the
extent that they don’t affect Canada’s ability to comply with the obligations we
have agreed with the United States under the CUSMA.
Bill C-4, as
I said, contains two types of changes to the Canada Grain Act with respect to
the treatment of U.S.-grown varieties of grain. Substantive changes are
necessary to bring Canada’s grain handling and grading system into compliance
with the commitments we have accepted. Consequential amendments are needed in
our view to ensure that once the Canadian grain handling system is able to
accept deliveries of U.S. grain, the U.S. grain is not treated in a manner that
disadvantages Canadian grain growers who produce grain according to the Canadian
regulatory system as opposed to the regulatory system in place in the United
Canada Grain Act does not contemplate the possibility of that happening because
U.S. grain is not regularly delivered into the grain handling system, which was
what gave rise to the obligations in the first place.
One aspect that
is neither consequential from a regulatory perspective nor strictly necessary to
fulfil the obligations in the agreement is the change or the decision to make
the change with respect to grain rather than with respect to wheat, the product
for which the commitment was taken.
That reflects the
structure of the Canada Grain Act, which deals with and defines only grains, not
individual commodities. It is not possible, with the act as it is currently
structured, to make a change that would apply exclusively to wheat.
In our view the
economic realities are such that the impact of these changes are limited.
American producers have access to the Canadian market. They sell their grain to
Canadian grain handlers at a negotiated price today. What the CUSMA does and
what this implementing legislation will do is allow them to receive an official
grade under the grain grading system rather than selling by specification, which
is what they do today.
Small volumes of
U.S.-grown grain regularly move through the Canadian elevator system on this
basis. The changes being introduced through this piece of legislation are not
expected to significantly influence that trend.
Griffin: Twice you have used three words: “in our view.” Does this include
the Agriculture and Agri-Food Canada view?
Mr. Fowler: I believe I am here on behalf of Agriculture
and Agri-Food Canada. As far as I know that is the only view I am presenting
Griffin: I am hoping so. We will find out tomorrow.
Saint-Germain: I want to acknowledge your contribution from a different
perspective than that of my colleagues. It is important for Canada to have a
strong team that specializes in economic, trade and international negotiations.
This is an extremely complex area, with many divisions that play a coordinating
government role and have an institutional memory through governments,
negotiations and treaties. Above all, there is a network of international
contacts that are extremely valuable to us as parliamentarians and to the
industry. I very much appreciate that we could rely on your expertise.
Having said that,
I know that time is ticking away and that we have a final version of this free
trade agreement that will have to be passed and then receive Royal Assent. Of
course, we will not see it today. We have read it over the months and through
My question is
about what happens next, that is after Royal Assent and after regulations have
been prepared and passed and all trilateral obligations have been verified by
the partners. So my question is about what appears to me to be a gain that is
not spectacular, but really important to me. Contrary to what the United States
wanted, that is, automatic termination every five years, and with all the
impacts that can be observed, Canada has proposed and won the right to monitor a
process that will regularly lead to the review and modernization of the
agreement. Over a period of 16 years, we anticipate that there will be a review
and reassessment approximately every six years.
In this context,
I would like to know whether this could be an opportunity, given the rapid and
unpredictable development of the North American economy, to examine the impact
of the agreement with respect to certain particularly shifting sectors, such as
the whole digital economy.
would we have in some cases, or is it possible to update the agreement, which is
already ratified? What do you have in mind as perspectives to watch for?
I’m also going to
ask my second question right away. It kind of follows from the first one. When
it comes to supply management issues, we should not put our heads in the sand;
these are industries in transition that will need to convert, not only within
the North American market, but also in relation to other markets. This is not an
issue of international trade negotiations, it is one of economic policy,
conversion and economic transition.
If you are in a
position to do so, can you tell us who we should invite to appear as a
representative of the Canadian government, which has more responsibilities for
these conversion and transition issues in supply-managed industries,
particularly in the poultry, egg and milk sectors?
It is a long
question; I hope that it is clear.
Mr. Verheul: Thank you for that, and in particular thank
you for your opening comments.
If I can take a
moment, the team we have for this negotiation has been built up over many years.
We went through CETA and CPTPP negotiations and through this negotiation. Those
are more intense and larger negotiations than I think any other country in the
world has gone through.
I think the team
we have for trade negotiations is second to none in the world. We have more
expertise, experience and capability than any other negotiating team. I wanted
to take the opportunity to say that. I am very proud of the people I work
With respect to
your comment about the sunset, part of what we were trying to achieve when we
moved the U.S. off its initial position of having an absolute sunset to the
agreement was to have a built-in mechanism that would allow us to make updates
on a regular basis.
The NAFTA is
still in place, but it has been more than 25 years. It has been modernized to
some extent in small ways some 11 times over the course of those years.
Obviously the world changes and we have to keep up to it in our trade
agreements. They should be constantly evolving. They should not be static and
stay the same.
digital. That is certainly an area we want to continue to modernize as the years
go by to ensure the agreement is consistent with what is happening in the
economy and what is happening with technology.
example is the auto sector. As we all know, the auto sector is going through a
fundamental change. It is moving and will move beyond the kinds of cars being
produced today. We started to talk to the U.S. and Mexico about cars of the
How can we start
to put in place rules, regulations and practices with respect to the cars we
expect to see on roads in the future? What kinds of disciplines and mechanisms
should we have for the production of those kinds of cars?
We want to get in
front of any place where technology is modernizing and not only products but
processes are changing. We are actively thinking about not just the agreement we
want to have in place right now but about what we need 10 or 15 years from now
and beyond. That is clearly something we will factor into regular reviews of the
agreement going forward.
With respect to
the supply management issues, I will turn to Mr. Fowler to provide comments
Mr. Fowler: I always like to provide the broader context
from an agricultural perspective when I talk about the specific outcomes for
dairy. I understand the commentary around those and the concerns expressed by
I don’t want to
minimize the impact these obligations will have on supply managed sectors and
particularly the dairy sector. The government has acknowledged that impact. In
the fall of 2018, the government announced the formation of three working groups
with dairy, poultry and egg farmers. Two working groups were focused on
mitigation and addressing the impact. In the dairy sector, a strategic working
group was established to talk about and create a vision for the future long-term
sustained competitiveness of the dairy sector in Canada under supply management.
Work related to
the strategic working group for dairy is ongoing. The government is engaged with
Dairy Farmers of Canada, Dairy Processors Association of Canada, Canadian Dairy
Commission, as well as AAFC at the table. A lot of thought is going into the
question of the long-term strategic future of dairy in Canada.
I know you have
asked for the name of an official that can appear. I hope you will forgive me if
I decline to provide one right this second, but I am confident that we can
follow up with an appropriate person to discuss these issues further.
Saint-Germain: Please do that. Thank you.
My question is again for Mr. Verheul and it has to do with government
procurement issues. It is something of concern to all Canadians now for a very
long time. On the one hand, the Americans are practising rigid rules when it
comes to government procurement. On the other hand, American companies are privy
to an open competitive market here when they are bidding on large public works
projects, building bridges or accessing procurement contracts of Crown
All of us were
quite disappointed that we didn’t get much movement on this particular aspect of
the deal. Canada now relies heavily on WTO rules to resolve some of this. As you
well know, the Americans are now threatening to pull out of the WTO agreement
when it comes to government procurement.
Did we fail at
it? Was it just non-negotiable? What do you suggest going forward? It is a major
impediment for us and Canadian corporations.
Mr. Verheul: I would certainly not disagree with that. The
Buy America and Buy American programs have both been considerable irritants for
Canada, Canadian businesses and exporters for a very long time.
on government procurement were particularly contentious in this negotiation. The
U.S. proposal they put on the table would have given us worse access to the U.S.
market than the country of Bahrain has to the U.S. market. In other words, we
would have been worse off than any other free trade agreement partner the U.S.
has at this point in time. That was not an agreement we could contemplate.
We put the most
ambitious proposal on government procurement that we have ever put on the table
in a free trade negotiation, but that indicates to you just how far apart our
There was no
question that we could agree to what the U.S. was talking about on government
procurement. Instead, rather than agree to anything in NAFTA or in the new NAFTA
which would put us at a disadvantage, we would be better off to agree that the
government procurement agreement at the WTO prevail. They would give us much
better access than we have under NAFTA at the moment, including access with
respect to some 37 states where there is no state level coverage under the
You mentioned the
rumour that the U.S. was considering withdrawing from the GPA. So far from all
of our investigations that remains a rumour. They may be contemplating it, but
at this point in time we are not seeing any strong evidence that they are
prepared to do that, at least in the short term.
We have given the
message to the U.S. very clearly that if they were to withdraw from the
Government Procurement Agreement at the WTO, it would upset the balance of
concessions we agreed to in this agreement. We would expect that the imbalance
created by the U.S. withdrawing from GPA would have to be corrected. We would
expect that we would have to negotiate a bilateral agreement to give us that
level of access under this agreement.
I had a
discussion with my counterparts as recently as last week. It has taken place at
other levels as well. I would also remark that the U.S. business community has
approached us and is strongly opposed to the U.S. withdrawing. The U.S. clearly
understands that if they were to contemplate such a move it would not be an easy
process to go through.
It is something
we are going to keep our eye on for sure. We don’t think the U.S. will simply
withdraw from that agreement and leave us with very little in the new NAFTA
Could we have done more as a government in terms of having a buy Canada
process or having an extra weighted system in favour of Canadian enterprises?
Would that have
been something that would have given you more leverage in the negotiations? Or,
is it just that the U.S. is on an economy of scale basis so much more powerful
than we are that we just have to live with the consequences?
Mr. Verheul: Are you referring to the government
procurement negotiations in particular?
Mr. Verheul: Yes. The attitudes are very different in the
U.S. They have these programs at the state level as well as at the national
level. They have two of them at the national level in particular. The U.S. is
very strongly attached to them. It is very politically popular in some quarters.
You may be aware
from seeing the press coverage that some of our provinces are reaching out to
some U.S. states to try to reach agreement on some elements, but I think the
U.S. remains highly protectionist on this issue.
negotiated the agreement with the European Union, we went much further into the
whole government procurement area. We have access that is greater than any other
country outside of the EU to the EU procurement market, which is a very large
market with 27 member states. We are already starting to see some gains from
The U.S. has a
different attitude. We still have avenues where we are participating in U.S.
government procurement contracts, but in terms of locking in those rights it is
an ongoing battle, not just for us but for virtually every country in the
Massicotte: I have two quick questions.
I would like to
talk about dairy farmers again. They are claiming that the Canada-United
States-Mexico Agreement will limit their exports outside the United States and
Mexico. Is that true?
Mr. Fowler: The export provisions apply to global exports
to all countries. Whether those provisions will be restricting remains to be
seen, but they apply to exports to all countries.
Massicotte: Therefore, if it is a global test and given that they are
already exporting significantly locally and so on, it will probably diminish
their ability to export elsewhere, correct?
Mr. Fowler: It is a difficult question to answer, and I
don’t want to speculate about how market dynamics will evolve over the next
several years. I can say that in 2019 global exports of skim milk powder and
milk protein concentrates were below the 55,000 metric ton export threshold that
will apply in year one.
If the agreement
had applied last year, Canadian exports of those products would not have
triggered the export charges under the threshold.
Mr. Verheul: If I could just add briefly to that, one
important clarification is that those export limits apply to three products:
skim milk powder, milk protein concentrate and infant formula. There are no
restrictions on any other exports of dairy products in this agreement, including
full milk powder, for example, which is not that much different from skim milk
powder. This is a very narrow provision that relates only to those specific
Massicotte: Mr. Verheul, you said in your testimony that a lot of
negotiations are still going on with our partners, so there will be delays in
terms of signing all these agreements. Does that mean that the effective date
for CUSMA will be delayed to finalize these documents? Or will the effective
date remain fixed in the days following approval of the implementation bill? If
there is a delay, could this indirectly satisfy dairy producers with respect to
the effective date of their measures?
Mr. Verheul: The agreement we reached with the U.S. and
Mexico when the negotiations were concluded was that the agreement would enter
into force on the first day of the third month following the last notice of
None of the three
members have issued their notice of ratification so far. It depends on when we
see those notices of ratification. Ours cannot be completed until we complete
this process, Royal Assent and the regulatory issues I have mentioned
That is one
element. I have also mentioned before that we have trilateral work that needs to
be completed. The U.S. has to complete its certification process to advise
Congress that they view what Canada and Mexico are doing as bringing both of
them into compliance with the obligations under the agreement.
There is quite a
bit of work to do. Predicting how long that will take is difficult to do. I will
not guess at a date, but I will say there is still quite a bit of work in front
Massicotte: So it is possible that the dairy farmers’ concerns will actually
result in our meeting the deadline they were asking for?
Mr. Verheul: The only thing I would add is that the U.S.
has been very clear with us on many occasions that they wanted to have the
agreement in force as quickly as possible and would be pushing for that to
I also mentioned
that within their own legislation they have a provision where they would be able
to move ahead with parties that have ratified the agreement. In this case it
would only be the U.S. and Mexico. They may well push that issue harder if we
end up taking longer than they might expect.
It is a delicate
issue as to when this will eventually enter into force. A lot of work needs to
be done before we can get a clear sense of exactly when that would be.
Massicotte: Thank you very much.
MacDonald: I want to go back to the nature of these studies that Senator
Housakos touched upon earlier.
I confess I find the rationale for the nature of this study fairly unconvincing.
The U.S. Congress received a 400-page study which they had time to analyze,
amend and bring back for ratification. That study compared the old NAFTA to the
new NAFTA. They did not have a study which compared the new NAFTA to no NAFTA at
I find it very
difficult to think we would take a different type of approach, so I will ask you
this question: The study that we put together, was it an independent initiative
of Global Affairs, or did the ministry or the government instruct Global Affairs
to do a study of this nature as opposed to a comparison of the old NAFTA and the
Ms. Paquet: Yes, it was independent. It is actually our
proposal to present it this way because, as I said, this is what we believed we
MacDonald: I don’t believe we were facing that. If you look at the American
study, that is not what they put on the table. The American study compared the
old NAFTA to the new NAFTA. Why would we not do the same?
Ms. Paquet: The U.S. also decided to put forward three
different scenarios. As I said before that was the first time. If you do it one
way, you have a negative. If you do it another way, you have a positive.
It is a different
approach, yes, and we believe this one is much more in line with what we were
Mr. Verheul: Perhaps I can add to that. When we were
approaching the beginning of this negotiation before the government made the
decision to enter into the negotiation, we had a number of discussions with the
U.S. We were given a fairly stark choice: NAFTA would end or we would negotiate
a new NAFTA. We were not given the choice of either continuing with the existing
NAFTA or negotiating a new one. It was one or the other.
MacDonald: Who said NAFTA would end? Was it the Office of the President of
the United States or Congress?
Mr. Verheul: It was certainly the administration that gave
us that message.
As I mentioned
earlier there was some differing legal views about whether or not the president
could take action to terminate NAFTA. Certainly some legal advice we have
received suggests that the U.S. president is able to do that. He can certainly
initiate the six-month process and it is quite possible that he can complete
Over the years
Congress has given an increasing amount of power to the administration over
Brookfield, Director General and Deputy Legal Advisor, Trade Law, Global Affairs
Canada: It is a very complex domestic legal situation in the United States.
The simplified view is that Congress has constitutional jurisdiction over
international trade. They have delegated that power in many acts, including the
original NAFTA Implementation Act and section 232, to give the president
power to impose tariffs on steel and aluminum.
wisdom of most trade analysts in the United States is that the president alone
has the power to withdraw from NAFTA because the power is in the United States
NAFTA Implementation Act that gives the president power to change tariffs and to
withdraw the definition of what constitutes NAFTA in that country.
MacDonald: None of that precludes us from doing a comparative study in the
same way they did. That’s all.
I want to reiterate that point as I did earlier. I agree with Senator
MacDonald that the decision certainly in itself was flawed not to do a
comparative analysis of what we had in place to be able to judge the new deal.
The thing that I
find more egregious than that, quite frankly, is still the fact that Global
Affairs did not present an economic analysis at the tabling of this agreement on
The time was
adequate because certainly the government had precluded the deal and the
negotiations were done pretty much. There was quite a lapse of time before
Parliament was recalled and before the agreement was brought to the House of
Again, we will
have the minister answer that particular question because at the end of the day
it is the government that presents these reports to the House committee. It is a
serious omission not to be giving members of the House of Commons all their
information to draw their conclusions.
Ataullahjan: Minister Freeland outlined some core objectives of the
government in negotiations. She said that referencing climate change in the
agreement was “an absolutely Canadian goal going into these talks.”
However, just a
few months prior the United States said that it would not implement the Paris
agreements and signalled that it would withdraw. The agreement we have does not
include measurable targets for pollution or greenhouse gases.
Was it wise for
the government to spend negotiating capital on unachievable objectives? Did
negotiators provide advice on this matter, and would you be able to tell us what
the advice was?
Mr. Verheul: The issue of climate change was one that we
tried to bring into the negotiations. We had that as part of our objectives in
trying to address those issues.
It was difficult
to advance in the face of U.S. resistance on anything to do with the Paris
Agreement or climate change in other configurations. At the end of the day we
achieved a fair amount of success in ensuring the inclusion of articles on
environmental goods and services, sustainable forest management and air quality.
Particularly with respect to the Agreement on Environmental Cooperation, we have
included obligations to cooperate in areas like energy efficiency, alternative
and renewable energy, and low emission technologies.
All of these
kinds of issues were our way of getting as many tangible issues related to the
environment and climate change into the agreement without actually having
something that would be very upfront in terms of speaking to climate change and
in particular the Paris Agreement with the U.S. which they never would have
With what we have
achieved, we have managed to work around some of the U.S. objectives and come up
with a number of priorities that we were looking to achieve.
Ataullahjan: Would we be able to get a list of those priorities? I would
like to know what we did achieve.
Mr. Verheul: Absolutely. We can provide that.
I have another question with regard to digital provisions. As you know, some
analysts have expressed concerns about the security of Canadian data under the
terms of this agreement.
Recently in The
Washington Post Professor Michael Geist of the University of Ottawa who has been
before the Senate committees on a number of occasions said that these
. . .hamstring
online policies . . .by restricting privacy safeguards in
hampering efforts to establish new regulations in the digital environment.
Would you agree
with Professor Geist’s perspective?
Mr. Verheul: No, I think we would have a different view.
protected privacy quite extensively with respect to the provisions we have
agreed to. We have to remember that some of the elements in the agreement,
including incorporating the General Agreement on Trades in Services obligations
directly into the agreement, includes the privacy exception as part of it.
We also have more
specific obligations in relation to privacy, and we do not see any restrictions
on our ability to have further provisions or further actions on our side with
respect to the issue of privacy.
Mr. Verheul and members of the panel, with the agreement of my
colleagues, do you have some closing statement or closing remarks you want to
share with the committee?
Mr. Verheul: No. We are pleased to have had the opportunity
to speak to you this afternoon and to respond to your questions. I wish you
success in your further studies.
On behalf of the committee, I thank you for the gargantuan work you have
done. We know that negotiating an $800 billion deal is not an easy task and that
you have done it while protecting the interests of Canadians.
You have worked
very hard, and we thank you and your team for that. We also appreciate very much
Global Affairs coming here to spend time with us and answer our questions.