Proceedings of the Standing Senate Committee on
Foreign Affairs
Issue 8 - Evidence
OTTAWA, Wednesday, October 2, 1996
The Standing Senate Committee on Foreign Affairs met this day at 4:00 p.m. to consider the future business of the committee in relation to its proposed mandate to examine and report upon the growing importance of the Asia Pacific region for Canada.
Senator John B. Stewart (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, I call the meeting to order. Since we do not, as yet, have a reference from the Senate, I propose that, this afternoon, we do a reconnaissance regarding relations between Canada and the Asia Pacific region. On the basis of our discussion this afternoon we will draw together a draft, or terms of reference, which we will take to the Senate.
The committee is currently dealing with various other items of business.
With your approval, I would ask our witnesses to take us as on, as it were, an exploratory trip to the Asia Pacific area.
Mr. John Klassen, Director General, APEC, Department of Foreign Affairs and International Trade: In discussing amongst ourselves how best to present information to you, we concluded that we should break it into four groups. I will speak first to you about APEC, how it is progressing and our plans for 1997 when Canada will chair the process.
My colleague John Bell is ambassador for Canada's Year of Asia Pacific, an initiative that we have taken to build upon the fact that we are hosting APEC and there will be, therefore, a certain profile of Asia Pacific in Canada. He will speak to Canada's Year of Asia Pacific and our planning in that regard. His remarks will be followed by those of Roger Ferland, director for North Asia and Pacific, and those of Ingrid Hall, director general for South and Southeast Asia. They will speak more specifically about the scope of our bilateral relations with Asia Pacific and also touch upon some of the other issues that we think are of interest to the committee, such as security, human rights issues and law enforcement.
We are accompanied by a couple of experts from the department who will be able to answer any particular questions from the committee that we cannot handle. Some background information on APEC has been distributed, and I will give you a brief historical survey to bring you up to date as we are about to chair this process.
APEC began in 1989 with its first ministerial meeting being organized by Australia. At that time a number of working groups were established. The first meeting of APEC economic leaders was held in 1993. This meeting of leaders has now become an annual event in the APEC calendar. Leaders meet in the second half of the month of November. In fact, this meeting of the leaders on an annual basis has become a key dynamic in the process.
Because APEC is a rather different organization from any of the others we deal with multilaterally, it requires continued political impetus, political direction and political push to maintain its direction.
As you know, the chairmanship of APEC rotates on an annual basis. In 1993 it was held by the United States. In 1994, it was Indonesia and, coming out of the leaders' meeting in 1994, we had what we call the "Bogor Declaration." Under this declaration, leaders committed themselves to developing free and open trade and investment in the region by 2010 and 2020: 2010 for developed countries; 2020 for developing countries. We then spent most of 1995 developing a work program to realize the Bogor vision. The result was the Osaka Action Agenda, which is a blueprint for the two main aspects of APEC work; one is trade and investment liberalization and facilitation, the other is economic and technical cooperation.
The action agenda laid out with respect to trade, for instance, a number of objectives across a broad range of trade policy issues, a number of principles to which we should adhere, and we all undertook certain commitments that we are now in the process of fulfilling through 1996.
On the economic and technical cooperation side, it was more or less a compendium of the various working groups' activities. I will talk a bit about how we are trying to improve upon that.
This year, under the chairmanship of the Philippines, we have spent a good deal of time developing the implementation process for the Osaka Action Agenda. On the trade side the most substantive thing we are involved in is developing what we call our "individual action plans." These plans lay out, across the 14 policy areas -- and these cover everything from tariffs to government procurement to intellectual property -- what are our current regimes and what are our intentions in terms of further liberalization of access to our markets. These will be approved by ministers and leaders at the meeting in November in Manila, and they will take effect from January 1, 1997.
On the economic and technical cooperation side, substantial work is under way in APEC to try to give a better focus to the work, to try to establish priority frameworks within which we can harness the working group activities and to establish more common directions for this work. The results of this work will be discussed at the leaders' meeting, and that will lay the groundwork for some of what we wish to achieve in 1997 as the chair of the process.
In terms of the basic structure of APEC, as I said, we have the annual leaders' meeting and also an annual meeting of foreign and trade ministers who meet just a day or so before the leaders' meeting is held. There are 10 working groups as well as a couple of other main groups. There are also two principal policy bodies, and the whole organization is managed at the officials' level by the Senior Officials' Meeting.
There is a very small secretariat by international standards located in Singapore. In order to keep our costs down, it is largely financed by secondments from member economies. In terms of our overall costs for various international multilateral organizations, APEC is one of the leanest.
One has to understand a number of key features about this unique process of APEC. One is the fact that it is consensus based and it is based on voluntary approaches. Although we have this very firm goal that the leaders gave us of free and open trade and investment by certain dates, the approach to it is not a negotiating approach like we are used to, say, in the Uruguay Round or in the WTO, it is a much more unilateral action, consensus development and voluntary approach.
It is also important to understand that APEC, unlike the NAFTA and our negotiations with Chile, is not a free trade area. Anything we do in respect of trade liberalisation in APEC is on a most-favoured-nation basis. That means that, if we decide to lower tariffs on some product, that benefit will be extended to all members of the WTO. We will not be creating a closed trading group at all like NAFTA or the European Union. I still see that error being made in the press from time to time. This is a fundamental characteristic of APEC.
There is considerable emphasis on trade facilitation, which I think is one of the key value-added components that APEC can bring to the whole question of multilateral international trade. We also believe there are ways we can better integrate the trade facilitation and economic and technical cooperation elements of our work to facilitate trade across the board. This will be one of the themes of our leadership in 1997.
There is also a very strong interest in encouraging and developing private sector involvement in the APEC process. This is done principally through the various working groups. Some in particular have very strong participation from the Canadian private sector, for example, the transportation sector. Anywhere from six to ten Canadian telecommunications companies are actively involved. We think this is a principle that we should encourage across the board as much as we can. To that end, a number of policy seminars have been held around the region.
Let me speak very quickly about the focus this year on the development of trade liberalization and also economic and technical cooperation. I have already mentioned the individual action plans. Currently, these have, largely, a two- to three-year time horizon, so they are living documents, if you will. We must continually address pushing the deadline further out, encouraging our partners to be more ambitious in their liberalization efforts. I think it is fair to say that, in this first round, this is the first time we have tried to develop these individual action plans which, by and large, are a compilation of actions or activities that most of us have already undertaken or were planning to undertake, in many instances, pursuant to our WTO obligations. I think we will gain more experience with each another and more confidence in this process as it moves forward. There are also various collective actions on the trade side that we have committed to and in which they are currently engaged.
On the question of economic and technical cooperation, as I mentioned earlier, we want to bring a much better focus to this area in terms of APEC's work. APEC, because it has developed the way it has, has developed without, perhaps, sufficient structure and sufficient guidance. This is one of the elements that we think is most lacking. In fact, Canada chairs a task force on management issues which is mandated to have a look at the whole APEC process, how the various groups relate to each other, and to come up with recommendations on how we might improve that process. This, again, is a theme we will see through 1997.
In Osaka last year the leaders gave us another mandate, or direction, which was to study the impact of economic development and population growth on food, energy and environment in the region. The various studies that are required to pull this together are now under way. The studies will be integrated into a single report during the Canadian year. This will be addressed at the Vancouver meeting which will be hosted by the Prime Minister in November of next year.
The leaders and ministers in Osaka also created an APEC business advisory council, recognising the importance of the private sector input to the whole process. The council consists of a group of high level business persons, three per member, who meet and who are preparing a report which they will deliver at the end of this month to President Ramos as the current chair of the overall process. The general objective of the council is to ensure that what we are doing within APEC corresponds to and meets private sector priorities and objectives. Basically, we hope the council will tell us what their priorities are and whether or not they think we are doing a good job and if we are not, why not, so that we can continue to structure and shape the APEC work to respond to the private sector priorities. This will be a major feature of the Vancouver meeting in 1997 when, in effect, we will have our first report card on how we have done in responding to the council's recommendations.
One other main issue we must address this year is the question of membership in APEC. APEC now has 18 member economies. It has grown from its original membership of 12. Three years ago it was decided to place a moratorium on new members. That expires at the end of this year, so the question is: Should we extend the moratorium, should we allow one or two new members to join, or should we allow the list of new applicants to join the organization? I think it fair to say that the majority of members feel that we should extend the moratorium on membership. However, there are some who wish to debate it further and who think that, perhaps, we should allow one or two new applicants to join the forum. We will address this again at the level of senior officials. Then ministers and leaders will have to consider it at the meeting in Manila.
The Prime Minister, in effect, at the end of the Manila meeting will be de facto chair of the APEC process and, as I say, that will continue until the November meeting to be held in Vancouver. As an overall theme we have posited the idea of strengthening the Asia Pacific community and, under this framework, we have focused on certain sectoral priorities dealing with environment and sustainable development, human resources development, infrastructure, in particular telecommunications, transportation and energy.
We also wish to have certain threads or themes that we weave throughout the year. One deals with an emphasis on small and medium size enterprises and their role in trade in Asia Pacific. The other deals with youth and getting youth more involved in various aspects of APEC work. Finally, as I have already mentioned already, we want to deal with even more private sector participation.
In 1997 we will host three other ministerial meetings in Canada, one on environment, one on transportation, and one on small and medium size enterprises. We may also host one on energy but that has not yet been decided. These will be in addition to the November meeting of trade and foreign ministers and leaders that I mentioned earlier.
We are also very aware of the need to build continuity into the APEC process. I think it fair to say that, up until almost this year, the APEC chairs, on an annual basis, have been characterized by rather distinct work plans and efforts. There has been a building of a sense of continuity, but we think we can build even more in terms of managing or addressing certain issues within APEC. Therefore, we are working very closely with the Philippines, the current chair, and we are discussing this concept and working with Malaysia who will follow us in 1998 as chair of this overall process. The will be followed by New Zealand in 1999.
Mr. John Bell, Ambassador for Canada's Year of Asia Pacific, Department of Foreign Affairs and International Trade: I have just returned from Malaysia where I was high commissioner for the last three years plus, and I am now about to assume the position of Ambassador for Canada's Year of Asia Pacific.
As John Klassen has pointed out, the APEC leaders' meeting will be held in Vancouver in November of 1997. With this in mind and the fact that various ministerial meetings will be hosted in Canada, the Canadian government engaged Le Groupe Columbia to do a survey across Canada. They surveyed some 365 business firms, cultural institutions and others, and the report was very positive and enthusiastic about the benefits that Canada would derive by naming 1997 Canada's Year of Asia Pacific.
Let me briefly mention a few characteristics of this endeavour. First, it will run during the calendar year, 1997. Second, it, hopefully, will involve activities and Canadians across the country. Third, the participating countries will be the 18 APEC economies Mr. Klassen has mentioned, plus South Asia, India, Pakistan, Sri Lanka, and Indochina. The main emphasis or focus, if you like, will be on activities within Canada which will put us in a position for new linkages, new partnerships and create a new awareness of what we can do in this part of the world which, as everybody knows, is dynamic and growing. Recognition of that will create additional opportunities for Canada in that part of the world.
The year itself will be composed of three components: the APEC leaders' meeting, the ministerial meetings, and the senior officials' meetings. There will also be a number of special events, so of which are still at the formative stage. Describing those from west to east, there will be the World Chinese Entrepreneurial Conference in Vancouver, in August of 1997, as well as the Business Council on National Issues Summit of CEOs in Spruce Meadows, Calgary, focusing on Asia Pacific -- and invitations will be extended to CEOs from Asia Pacific.
An important youth summit in will be held in Winnipeg probably during Youth Week in May of 1997. John has mentioned the fact that Malaysia will be hosting the APEC leaders' meeting in 1998, and Minister Badawi has taken a leadership role in advancing his youth theme at this conference in the hope that this theme will be carried throughout the year.
La Conférence de Montréal, which has taken place for the last two years in Montreal, will, in June of 1997, have a focus on Asia Pacific and productivity themes. There will be a Canadian consortium on Asia Pacific security and other issues.
A second element is the cultural component. In this regard, the Harbour Front group from Toronto has just visited 17 countries in the region and found that there is a great deal of enthusiasm in those countries about coming to Canada in 1997 and sharing various cultural activities with us. The cultural component will most likely have three interrelated parts. One, there will be many community activities. There will be some five community committees in different regions of the country which will set up ethnic festivals, music festivals, and so on. Two, Canadians, often of Asian background or with an Asian connection, will be offered the opportunity to perform. Finally, it is hoped that, there will be both performing artists and visual art displays from the 17 or so countries in evidence in Canada during 1997.
The communications component, of course, is an extremely important element. The group that did the initial survey, Le Groupe Columbia, has been engaged to help in the logistics of the communications. Nearing completion today is the selection by the Prime Minister of a logo for Canada's Year of Asia Pacific. That will be chosen from 120 entries submitted by art and graphic design schools across the country. This logo will be unveiled, most likely, in Vancouver this month. It will signify the beginning of the official communications program for Canada's Year of Asia Pacific.
A Prime Minister's council on Asia Pacific, to be made up of some 20 people from business, culture, academia, is soon to be announced. They will advise the Prime Minister on both Canada's Year of Asia Pacific and APEC.
I have, Mr. Chairman and senators, provided your committee with a concept paper which outlines where our thinking is now. This was prepared to send to the 363 people who were initially surveyed as to whether there should be a Canadian Year of Asia Pacific. We have included a page concerning our discussions on key communications messages.
The central message relates to the opportunities for economic development and job creation, particularly in light of the tremendous potential and opportunities in the region.
The paper also touches on engaging and exposing Canadian values in dialogues on issues such as climate change, environmental pollution, peace and security, human rights, preservation of endangered species, democratic institutions and so on.
We are a small secretariat in the Department of Foreign Affairs and International Trade. We work very closely with other interested government departments.
We look forward to an exciting year.
[Translation]
Mr. Roger Ferland, Director General, North Asia and the Pacific, Department of Foreign Affairs and International Trade: It is a pleasure for me to be here with you today. I attended a meeting of your committee a little over a year ago, at which time we discussed the economic and trade outlook for Asia Pacific. Allow me to refer you to this report. I believe it is still relevant today as a reference tool.
[English]
The region I cover, which is Northeast Asia and Pacific, is really the region of Oceania, With the exception of China and North Korea, the area comprises the most advanced economies of the Asia Pacific, with Japan, South Korea, Hong Kong, Taiwan, Australia and New Zealand being the really mature economies and markets. All these economies rank very high as trade partners for Canada. We have developed some very strong traditional political and trade links with some of them, both bilaterally and multilaterally, and particularly with Japan, Australia, New Zealand and Hong Kong. That region is not devoid of potential flash points, such as the Korean Peninsula, China-Taiwan and the South China Sea.
Today I would like to focus on three key relationships we have in that region, specifically, our relationships with Japan, Korea and China -- and when I deal with China I will touch on Hong Kong. The Prime Minister will be visiting those three countries between now and January.
There are a number of reasons why we must continue to build a relationship with Japan. Let me give you a quick reminder of the importance of Japan. They account for 18 per cent of the world GDP; they account for 70 per cent of the Asia Pacific region's economic output; and they represent 30 per cent of the region's trade. For Canada, it is still the world's largest provider of ODA and the largest contributor to the United Nations. It is our second largest trading partner, with $24 billion of bilateral trade in 1995, a little over four per cent of our total exports.
To put it in context, exports to the Asia Pacific region represent a little over ten per cent of our total exports, which is more than any other part of the world except the United States.
Japan is also our second largest source of portfolio investment, estimated at $45 billion as of March 31; and our third largest source of foreign direct investment. It is the second-largest economy in the world after the U.S. and it is a player with an increasingly important role in setting the international economic agenda. Because of Japan's economic weight they are now more and more willing to assume a position of leadership; in shaping international affairs in the United Nations, for example, and in regional and multilateral forces in security and peacekeeping.
Twenty years ago our relationship with Japan was almost entirely of a commercial nature. Since then and today it has expanded dramatically. We consult regularly at prime ministerial level and official level on ODA, on peacekeeping. We have a tourism dialogue. We have revitalized our cultural discussions and exchanges, and we have increased our youth exchange with Japan. We find that, increasingly, our agendas, particularly our international agendas, coincide. Our relations with Japan are largely problem free.
Canadian business has been very successful in carving itself a place in the Japanese market. SMEs are very active in Japan and they are successful. As of last year, we became the largest supplier of wood frame housing in Japan, beating the American suppliers. We are a major food supplier to Japan.
Just over a week ago we received the Keidanren, the major industry association of Japan. They visited our country and were most impressed with our economic course. Some of the Keidanren members talked about a new Canada, which is extremely comforting and positive for us.
We have an action plan for Japan, which has been made available to you, so that we can fully exploit the substantial opportunities offered by Japan. We also have a new mechanism for dialogue with Japan called Forum 2000 to expand our bilateral consultations and to build on the relationship which should not be taken for granted. I think the visit of our Prime Minister to Japan in November will underline this.
The emergence of China as a world force is probably the main issue in Asia, as I think it should be for all of us. Its sheer size, its 6 to 7 per cent annual growth, the economic reforms that they are going through, and the improvement in their transparency and rule of law, all make it imperative for us to continue to build a strong relationship with China. Our economic, security and social interests are directly engaged when we deal with China.
China has become our fifth largest trading partner, right behind Germany, with bilateral trade of $8 billion. It will move to third position when our trade with China and Hong Kong are combined. Since 1979 our exports have grown 13 per cent annually, on average. Our goal in China is to capitalize on China's market size, its liberalization and its growth, and to reduce uncertainty for Canadian business. China's eventual integration into the world trading system will, of course, contribute to this.
In addition, the integration of China into global systems, into global and security dialogues, also makes it an important partner for Canada. Our goals there are to promote stability, transparency and the rule of law, to encourage non-proliferation and confidence building, to support democratic decision making and to encourage respect for human rights which, as you know, is an integral part of Canadian foreign policy.
If I may just as an aside here talk a bit about human rights and how human rights policy must reflect Canadian values as well as Canadian interest and take account of international law. The key question generally is how to find the most effective voice in promoting human rights. When it comes to China, Canada could have stood on the sidelines and simply criticized China. Instead, we have recognized that a more effective approach is one of engagement. We have initiated a direct dialogue on human rights with Chinese officials, using Canadian expertise to help foster a greater respect for the rule of law in Chinese institutions. This has been backed by a very innovative CIDA program which has used Canadian institutions to provide China with exposure to more modern models of governance with a focus on the Chinese judiciary and the legal system in China.
We have not hesitated to use our high level dialogue with Chinese leadership to stress the importance that Canadians attach to the issue of human rights, and to stress that improved human rights practices in China can only help our bilateral relationship.
I will now turn to the issue of security. China's growth and stability is important in the region. It will also have an impact on the viability of Hong Kong which, in large part, is one of the engines of economic growth in the region and in China. The smooth return of Hong Kong to China on the basis of one country, two systems, will be essential if we are to maintain confidence and viability. Our goal is to support the smooth transition of Hong Kong, as well as our Canadian interests in Hong Kong.
We have half a million Canadians of Hong Kong origin, 100,000 Canadian citizens in Hong Kong, and a very strong business presence as well as bilateral trade worth $2.5 billion. Our objective is to safeguard these interests during the transition of Hong Kong through consular protection, integrity of our immigration flows and, certainly, managing the political implications for our 500,000 Hong Kong Canadians. This underlines the fact, as I stated earlier, that Canada's key economic security and social interests are directly engaged when we talk about our relationship with China.
Our interest in Korea arises from our desire to ensure their continued stability on the peninsula, and to enhance our important and growing bilateral relationship. We firmly support South Korea's effort to improve its relationship with North Korea and to lessen the tensions in the peninsula. This mutual interest we have in peace and stability has been greatly enhanced by our important growing trade and economic relations. They have a population of 42 million and they are the world's eleventh largest trading powerhouse.
Our trade relationship with South Korea continues to gain momentum. Our two-way trade was at almost $6 billion in 1995. Korea is Canada's third most important export destination in the Asia Pacific region and our sixth largest export market in the world.
At the APEC summit in 1993 Prime Minister Chrétien and President Kim conceived the idea of a special partnership for Canada and Korea. This partnership has taken on a life of its own and it recognizes that there is significant potential for Canada and Korea as middle powers in the Asia Pacific region. Our goal is to intensify this special partnership. We intend to expand our market share in Korea's economy, as their economy grows at a rate of 6 to 8 per cent yearly. We would like to achieve $10 billion two-way trade by 2000 and maintain Korea as our third largest trading partner in Asia and hopefully move it up the scale in the world as a key trading partner for Canada.
We also look to strengthening our industrial and technological cooperation. We have just started the process of putting our business communities together to discuss cooperation, particularly when it comes to technology exchange and commercialization of technology. We also intend to further enlarge and strengthen our cooperation in political and security fields. As I said earlier, security and stability on the Korean Peninsula is one of our prime interests and our continued participation in KEDO, the Korean Economic Development Organization, is essential to fulfil this objective. Finally, we would like to ensure a strong increase in people-to-people relations. We look to doubling the number of tourists from Korea to 250,000 by the year 2000.
Our main bilateral issue in South Korea is essentially market access. That is why the special partnership group was established. It is hoped that, through this group and the industrial and technological cooperation committee, we can make access to doing business easier. Team Canada will be going to Asia -- to Korea, the Philippines and Thailand, in support of these objectives.
[Translation]
Ms Ingrid Hall, Director General, South and Southeast Asia, Department of Foreign Affairs and International Trade: I am very happy to be here this afternoon. My approach will be somewhat different. I will not be discussing each country individually, but rather each region. Otherwise we would be here until midnight.
[English]
Canadian relations with the ten countries of Southeast Asia are long standing. They started with a traditional donor-recipient relationship originating in the Colombo Plan of the 1950s. We are now increasing economic partnerships. We enjoy excellent relations with most of the countries in the region. Only in Burma and Laos is there no Canadian resident diplomatic relationship.
Political and economic partnership is the focus of Canada's relationship with the Association of Southeast Asian Nations, ASEAN, the regional organization founded in 1967 which groups together Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Burma, Laos and Cambodia are expected to join ASEAN in the near future. ASEAN began establishing dialogue partnerships with selected countries in 1972. Canada became a dialogue partner in 1977.
[Translation]
South Asia will be one of the world's most dynamic regions in the coming decade. This market is both highly promising and strategic. Sustained economic growth will fuel the expansion of the infrastructure and generate market growth potential for our Canadian exporters.
Exports from South Asia have increased by 65 per cent in the past five years and are now valued at $2.7 billion. Our imports from this region increased by 157 per cent to total $5.1 billion in 1995, which resulted in a $2.4 billion surplus in 1995 for South East Asia.
[English]
We are increasingly focusing on the business environment in Southeast Asia which is opening up as a result of a move to freer trade through the World Trade Organization, APEC, centred in Singapore, and the Association of Southeast Asia Nations' own proposed free trade agreement, AFTA, which is to ensure internal free trade by the year 2003.
Prime Minister Chrétien will attend the APEC meeting in Manila this November, as my colleague Mr. Klassen has described, and Minister Eggleton will participate in the WTO meeting in Singapore in December. Mr. Pettigrew will visit Vietnam in October en route to China to encourage trade relations and reinforce the importance Canada places on La Francophonie. The Prime Minister will also lead a Team Canada mission to Seoul, to Manila, and to Bangkok in January of 1997.
We remain deeply concerned by human rights abuses in Burma, Indonesia and Vietnam. Canada makes its views known through bilateral and multilateral channels, and works with bodies such as the UN, the UNHRC to bring about reform. We often raise individual cases at the highest level of governments in what we call "four-eye" conversations. In the case of Indonesia, Canada has promoted cooperation between the Canadian and Indonesian national human rights commissions. Canada also supports the UN sponsored talks between Indonesia and Portugal, and the All-inclusive East Timorese Dialogue, as a means to resolve the problem of East Timor.
The latest crackdown by the military regime in Burma is further evidence of the need for the international community to work together to encourage Burma's military rulers to make a concrete commitment to national reconciliation and democratic reform. Canada has proposed a contact group under the UN or other auspices as a possible mechanism to draw the Burmese regime out of its isolation. Canada has provided support through CIDA for administrative and legal reform in Vietnam.
In 1993 the ASEAN Regional Forum, the ARF, was launched. It deals with geopolitical concerns and increasingly with regional security and international security issues. Annual meetings have been held for the last three years. In addition to ASEAN members and dialogue partners, participants include those countries with observer status at ASEAN. Those are Burma, Cambodia, Laos and Papua New Guinea.
Outside the ARF, Canada co-chairs, with Japan, the Council for Security Cooperation in Asia Pacific working group on Enhancing Security Cooperation in the North Pacific and, through CIDA, helps fund round-table meetings on regional security organized by ASEAN-ISIS, as well as a workshop series, hosted by Indonesia, on the South China Sea.
There is a program of annual ship deployments to the region, called Westploy. DND has sent technical experts to assist the Cambodian Mine Action Centre.
This January the Prime Minister will lead provincial leaders and territorial leaders on the third Team Canada trade mission to Asia Pacific. This mission will include a business delegation. It follows on the January 1996 Team Canada mission to India, Pakistan, Indonesia and Malaysia. We have seen significant increases in exports as a result.
I will now move to South Asia. The region is huge, it is complex, it is full of diversity. Canada's relations have been primarily based on poverty alleviation, expanding economic partnership, and the cultivation of enhanced political relations. We enjoy good relations with all South Asian countries, the exception being Afghanistan, where we have not had diplomatic relations since 1979.
While Southeast Asia has enjoyed stability and economic growth, most of the countries of South Asia have experienced periods of political instability in the past five years. Within the last two years, democratic elections in India, Nepal, Bangladesh and Sri Lanka have brought a greater degree of stability, however, Pakistan remains beset by political instability. Afghanistan has been in a state of civil war.
[Translation]
The population of South Asia is extremely varied and this represents a major challenge for each respective government, from a regional, linguistic, ethnic as well as religious standpoint. The caste system in India further complicates matters.
Most South Asian governments give priority consideration to economic reforms, in particular the easing of poverty and economic disparities. India, Pakistan, Sri Lanka and Bangladesh have all initiated an economic restructuring program geared to freer trade and the privatization of their industries.
[English]
We are seeing this move through the private sectors of each country.
In 1995 the Prime Minister led Team Canada visits to India and Pakistan. These visits shift the focus from a donor-recipient relationship to one based on strategic alliances.
Priority sectors for the region include power and energy, telecommunications, environment, transportation, agri-food and infomatics. We expect that the world-class expertise of Canadian companies in these sectors will make definite inroads into the South Asian market over the next five years.
India remains the predominant power. Other countries tend to feel overshadowed by both India and China. The new Indian government is making bilateral overtures to each of its neighbours as a sign of goodwill. We welcome this.
Kashmir remains central to the tensions between Indian and Pakistan, both of whom have nuclear capability. We hope that Indian and Pakistan will sign the NPT and the CTBT.
The civil war in Sri Lanka continues and in recent weeks military activity has heightened. We wish to see a peaceful resolution to these differences.
All the countries of South Asia have been guilty of human rights abuses. Afghanistan and Burma that have the worst records, followed by regions with civil strife, including Kashmir and Sri Lanka. In the Punjab the situation has steadfastly improved in recent years to the point where we feel we may be able to open an office in Srinagar in early January.
We were notified that you wished some comment on the question of child labour. This afternoon Minister Axworthy is making a statement before another committee. Copies of his statement will be available.
On the aid front, Bangladesh is the largest aid recipient, followed by China, India, Indonesia, Pakistan, the Philippines and Vietnam. All programs will experience reductions as a result of the government's desire to cut the deficit.
On the immigration side, primary sources for immigration are Hong Kong, followed by India and Sri Lanka. We are, indeed, increasingly becoming an Asian nation, as witnessed by the diversity of our demography. This will be underlined by the Canada Year of Asia Pacific and by our hosting the Vancouver APEC Summit. The four of us will be working very closely together in the months ahead.
The Chairman: Mr. Klassen, when you spoke of continuity you mentioned the names of countries, the Philippines for example. That immediately prompted a question in my mind. It reminds me of the expression, "the Crown," which we use in our own constitutional parlance, which often raises the query: Who or what are you talking about? In relation to the Philippines, for example, who or what are you talking about? This is important in relation to continuity. Are you talking about the politicians of the day, who may come and go, or are you talking about a bureaucracy which has considerable permanence? Does it vary so much from country to country that it is impossible to give a general answer?
Mr. Klassen: When I referred to continuity what I really meant was more continuity in the management of issues. For instance, this year, the Philippines has put substantial emphasis on sustainable development as an important theme for APEC. The Philippines hosted a sustainable development ministerial meeting in July. We worked very closely with them running up to that ministerial meeting, in setting the agenda and, in fact, in the ministerial meeting itself. We will follow that up with an environmental ministerial meeting which we will host in Canada in 1997. In our meeting in 1997, we will further develop many of the themes that were identified as priorities at that Manila meeting. We will soon discuss with the Malaysians, who will follow us, the importance of carrying this kind of policy forward.
As I mentioned, we deal with the leaders who attend the leaders' meetings and those who attend the annual meeting of foreign and trade ministers. However, these other central ministerial meetings continue to give the impetus to APEC in that they give it political direction and they continue to set its priorities in many respects. The lead-up to these events is managed, on a day-to-day basis, by officials from the various member economies.
Does that answer your query?
The Chairman: Yes, that is helpful.
Senator Carney: I have one request and two questions. Coming from Vancouver I am, of course, acutely aware of the fact that we are a Pacific country. As committee members know, in some parts of Vancouver up to a 25 per cent of the population is Asian; 80 per cent of school children speak an Asian language; and I think we have the largest Korean population outside of Korea.
Senator Grafstein: What about Toronto?
Senator Carney: I believe we have the largest Korean community.
Perhaps you could give us as a background paper containing some information on the demography of Canada, indicating the languages that are spoken and what our Asian Canadian population is made up of, so that we can have some sense in our work that this is an internal issue for us, not just a trade and investment issue. We might be able to enlighten Senator Grafstein on where Korean Canadians are most densely located.
My first question relates to the fact that, in the literature you have given us, and in some media reports, we are continually described as "timid" players -- that Canada is a timid player in Asia. Some of you have had extensive experience in Asia. Why are we perceived this way?
Mr. Bell: I also happen to come from Vancouver. I was impressed by an Asia Pacific Foundation publication last year called Canada's Hidden Advantage, Its Asian Population which contains a lot of statistical information on the Asian population. In fact, one of the themes of the Canada's Year of Asia Pacific, is taking advantage of our Asia population in expanding our relations.
As to Canada being characterised as a timid player in the region, I think that some of our partners felt that, particularly in terms of our development assistance, the Colombo Plan programs and so on, we were there to help out. However, as our relationship has changed, we have become far more aggressive. We have set our objectives and decided what is in Canada's interests. We have contracts, arrangements, the interests we want to pursue, and we have been far more forceful in meeting our goals. My personal view is that our timid nature is quickly changing. That is one reason we are having Canada's Year of Asia Pacific.
Senator Carney: My second question is: What can we, as a Senate committee, do to assist you in terms of the Year of the Pacific? I can say, without fear of contradiction from the chair, that this committee does good work. We have just completed a study relating to Europe and we have an engagement to study the economic monetary policy of the European Community. Our committee is very active. Is there anything we can do to raise the profile of this issue, with a view to reaching a wider constituency than simply the business community? There are deep and sometimes troubling cultural issues and others involved in this area, so you may wish to give some thought to what our committee can do to focus attention on some of the issues that you wish to have brought forward. I have not discussed this question with our chairman.
The Chairman: Perhaps our panel of witnesses would think that question over and give us their considered reaction.
Ms Hall: As some of you may know, I served as Canadian Ambassador to Indonesia from 1989 to 1992. What my experience was that the challenge is to ensure that the people of our own country understand what is happening in Asia and the opportunities that exist there. We must consider how we can engage ourselves, our communities, our schools, our universities, our young people in looking across the Pacific. I am referring not only to the very vibrant areas of Vancouver, Calgary and Edmonton, but to Toronto, Montreal, the Atlantic Provinces, including Newfoundland. We must demystify Asia. We must not think of Asia as one mysterious mass but understand how Asian countries are working together, how Asian economies are developing, and what opportunities there may be for us as Canadians now and in the years ahead.
The Chairman: Senator Carney observed that we sometimes read that Canadians take a timid approach in dealing with Asia Pacific. The response was that we are no longer timid. Who are you referring to when you say that? Are you talking about the Department of Foreign Affairs and International Trade, or are you talking about Canadian businesses?
When we were in Europe, although the word "timid" was not used, it was at least implied that we were so deeply involved with our relationship with the United States that Canadian companies were not making the kind of effort they should to penetrate the European Union market.
Would it be accurate to say that the same could be said with regard to Asia Pacific -- that Canadian companies for many reasons, including language barriers, are not as aggressive in that market as, let us say, some American companies? What is your reaction to that?
Mr. Ferland: In terms of our role in the region, moving away from development to business partnerships, Canada has a very credible voice in APEC as well as in the ARF. I mentioned the relationship we have with Japan and the common stances we often take in international affairs. We have credibility. That is, I suppose, from a political perspective.
Seventy per cent of the businesses travelling through our region are SMEs. They are mostly medium size enterprises, but there are some small firms that are doing extremely well. You could go through the whole region to practically every major country and you would find that SMEs are travelling the country. They may not represent the bulk of the business, the large volume, but they are active. The timber frame housing we provide to Japan is a major example of this. We are now doing well everywhere.
Perhaps we are timid. Our presence is not as strong in Asia as the American presence. There is no question that we must improve on that. We need to understand the profile of the successful firms in Asia and we should publicize their success stories which are not widely known. That is, again, probably something we could do jointly and not strictly as officials.
Senator Grafstein: Members of this committee share with you a deep interest in this area. Some of us have spent a fair bit of time in the area. I have spent a lot of time in China. We come at this with preconceptions and notions and we wonder whether or not, Mr. Chairman, we are taking on a task that is too enormous for us because of the diversity of the territories we are talking about. As Ms Hall mentioned, we could spend all of our time studying China, Japan, or Indonesia and that, in itself would be an major undertaking.
First, following up on what Senator Carney asked, I would be interested to know the demography in Toronto. I have the impression, and I am not saying this from a regional bias, that Toronto has the largest Asian community, be it Chinese, Japanese, Korean, Filipino, or others in terms of absolute numbers. If that is correct, as I look at the activities which are being set up to publicize APEC, I see that the only activity in Toronto will be a community music week. I would hope there would be a greater focus in terms of the run-up to the APEC with events in Toronto.
Second, it would be useful, Mr. Chairman, if we could get from the department, an analysis of the manpower allocated to the various markets. For instance, I would like to know how much manpower we have at External Affairs in Ottawa; how much is out in the field as it applies to the EU; how much as it applies to Asia; and how much as it applies to the United States.
We understand the department is under tremendous stress because of downsizing, but I think that will be very short term. I notice two major areas where we are not even represented. It would be useful for us to have that analysis so that we can then see whether or not the powers that be have made the acute forward looking analysis that I think we did in our last study and that we hope that we will do in this study. My impression is that we are not properly allocating resources to growth areas.
Third, I would like to have a language breakdown. I would like to know how many people within the department, either here or in the field, speak the Asian languages, specifically Mandarin, Cantonese, Japanese, Indonesian and so on. My impression is that we have not diversified our resources within the department to reflect these growing markets.
Lastly, who is our best working partner within APEC? This idea for APEC came from the Australians. Who are our best working partners in this experience? I take it we have embarked upon a very unwieldy exercise. Canada is to be the chair, so I assume that we will need some very good, close working relationships to make any substantive breakthroughs in terms of structural organizations that might enhance Canadian trade and investment. Who do you consider to be our best working partners in this field? Am I correct in assuming for the moment that they are the Australians?
Mr. Klassen: On the trade and investment side of the ledger, the members with whom we share the closest views and with whom we coordinate and have bilateral meetings are the Australians, the New Zealanders and the Americans. Hong Kong is extremely active and we have very good relations with them. They have some very good people in the Committee on Trade and Investment. Singapore also has some really excellent people in that committee and we deal with them.
We have a lot of bilateral contact with like-minded people. This year, we helped to institute a small troika meeting, if you will, with the past, present and future chairs of APEC -- Japan, the Philippines and us. We tried to meet on the margins of these senior official meetings so that the previous chair could point out some of the pitfalls and some ideas with the idea of continuity in mind. We want to continue to build on what has been done and ensure that there is a continuity in policy management. Australia is a main player has, because Australia was instrumental in establishing APEC and has, I think for quite a while, had a certain almost proprietorial sense about APEC. They are very focused on the trade and investment agenda. The United States shares that focus. The Asians tend to focus a little more on economic and technical cooperation. They participate on the trade agenda but many of them they would like to see more effort and more progress on the economic and technical cooperation side.
We will try to strike a balance in our year. We are certainly not going to let the trade agenda down. We have some thoughts on how to rejuvenate or build some further momentum on the trade side but, at the same time, place a little more focus on economic and technical cooperation in certain areas.
Senator Prud'homme: Although I am not a member of this committee, I would like to ask you some questions.
[Translation]
Mr. Chairman, I was asked by the House of Commons to write up a report on the Parliamentary Associations.
[English]
Throughout my years in Parliament, I have come to recognize the importance of parliamentary association, and I think Canada has a window of opportunity in Asia Pacific in that respect. Therefore I would recommend that adequate funding be set aside for such parliamentary association even though it may be unpopular in the press. I can tackle the press any time they want, publicly, privately, or otherwise, because I passionately believe that parliamentarians must be involved in the international scene.
I personally recognize the importance of parliamentary exchange and parliamentary association in Asia Pacific. They count on it but we seem to be hesitant. In fact, most Asian peoples are in favour of their parliamentarians being members of all kinds of delegations or special missions. The parliamentarian need not be a minister, who may have a very busy schedule; the duty may fall to a bureaucrat. I must say that most briefings by bureaucrats to parliamentarians are most helpful. I have never heard any complaints. If we do not receive as much information as we require, it is usually because we have not known what questions to ask. What I find lacking is a debriefing procedure to ascertain just how much information we have absorbed from our meetings. Throughout my experience of 33 years I have occasionally felt that we confront each other as if we were enemies rather than different fingers of the same hand. I have already raised this concern with the three ministers involved.
[Translation]
Mr. Bell: I would like to say a few words, Mr. Chairman. Senator Prud'homme mentioned an exchange of parliamentarians which had a significant impact on our relations.
[English]
Senator Carney asked what we, as a committee, could do to engage more in Asia Pacific dialogue. One of the things we discussed before coming here was the creation of more parliamentary associations between Canada and the countries in Asia Pacific. An important Asia Pacific parliamentary forum will take place in Vancouver from January 6 to 10 which will be the first and one of the most important initiatives of Canada's Year of Asia Pacific.
The Chairman: Time is marching and we do not have an order of reference from the Senate. In anticipation of discussion of an order of reference I have put together a document. Most of the substantive material in the draft was provided by Senator Carney in a letter to me, and I would ask that this draft be now circulated and that members of the committee consider it. I would also like our witnesses from the department to inspect it in the event that any change in focus or emphasis should be brought to our attention.
I would ask Senator Carney to comment since she may well want to make a suggestion with regard to an improvement.
Senator Carney: I think the draft reference we have is an improvement on the one I drafted because it replaces the phrase, "within the context of APEC" with the phrase, "with emphasis on APEC." I think that gives the committee more breathing space.
I would suggest that we add, at the end of the first paragraph, the words, "the Year of Asia Pacific," so that it would read, "The Standing Committee be authorized to examine and report on the growing importance of the Asia Pacific region for Canada, with emphasis on the upcoming Asia Pacific economic cooperation conference to be held in Vancouver in the fall of 1997, the Year of Asia Pacific." That would at least indicate to our Senate colleagues that this would have some priority.
The Chairman: We should capitalize "Year of the Pacific" and there should be a comma after "1997."
Any further comments?
Senator Grafstein: Mr. Chairman, two of our witnesses raised the issue and we have an excellent briefing report on the emerging security issues as they apply to this region. As I understand it, APEC does not focus at all on security, its main focus being trade. That is why, I assume, Taiwan, Hong Kong and China are sitting at the table together. Having said that, I think it is incumbent upon us to take a look at securities issues as related to Canada. In that respect, perhaps we should add the definition of security as well as economics, trade and so on, to our reference so that we can be specific. I believe this may emerge as a huge problem in the next decade or so and, at least, we should have an inkling of the issues. Our study in that regard may not be intense, but at least we should have a start on that.
The Chairman: Perhaps I can explain my thinking in changing the language Senator Carney originally put forward. As a Liberal senator, I have heard rumours about an election. I have even heard rumours of a June election, which means that, after March, we will be out of here. Although I do not have a crystal ball or any special information, I do not believe those rumours because I think the election is much more likely to take place in the fall. However, I think we have to proceed cautiously and, since we have the conference coming up in 1997, in Canada's Year of Asia Pacific, I would like the committee to be in a position to make an interim report relative to the APEC conference, let us say, by the end of March. That would not exhaust the reference. While our initial emphasis would be on trade matters and the like, we certainly would have a concern for security. I thought that security, that second line of action, was covered by the growing importance of Asia Pacific, not only its economic importance but its security importance.
If someone in the chamber challenged me that security is outside the terms of this reference, I would attempt to refute that contention.
Senator Carney: As a supplementary comment to that, that is why I say that Senator Stewart's wording is better than mine. Mine was much more narrowly focused on APEC and, by changing "within the context of APEC" to "with emphasis on APEC" there is room to adjust these other issues.
Senator Grafstein: I will defer to our chairman. If he says that the growing importance of the Asian Pacific includes security matters, I will take him at his word.
Senator Prud'homme: Is it to be two complete items or is it to be one? Am I to understand that you are not putting the word "security" in the reference? I am afraid my esteemed colleague may go in a different direction than the one you really want to go in.
The Chairman: I think the important words are: "the growing importance", and that has two aspects, one of which would be emphasized initially, namely, the conference and the Year of Asia Pacific, but the other would be the security concern, which I think is very important.
Senator Stollery: Mr. Chairman, I will not quarrel with the terms of reference, but I must say that I find myself blinded by the acronym "APEC" and the concept of APEC. I recall spending 45 days crossing the Pacific Ocean many years ago. It is an incredibly complex region. Our witnesses have just taken most of our period explaining its diversity because it is so complicated. I do not say that as a criticism. I find the concept blinding and I think it will prove very difficult to get around.
Page 2, paragraphs 1 and 3, of the report Senator Carney has given us, sums up my view, which states that if this grouping were used the areas would be China, Japan, Southeast Asia and South Asia. I agree that and they are vastly different areas. I completely agree that two countries remain essential to any study of the area, China and Japan.
I will certainly support any reference but I think the concept of APEC is phoney. It simply does not exist. It is a gigantic area of the world with which we all wish to trade. No one would argue with that, and the idea that we have just discovered it is ludicrous. I was in that area in 1960 and there were Canadians there then. The British were there in 1825. I do not think anything has been discovered.
In any event, I would certainly support the terms of reference.
The Chairman: We are ready for a motion.
Senator Carney: Mr. Chairman, being mindful of the discussion which has taken place around this table, I would move that the terms of reference be adopted as amended with the words "Canada's Year of Asia Pacific".
The Chairman: All in favour?
Hon. Members: Agreed.
The Chairman: We have a quorum and we have a decision by the committee to accept the draft terms of reference as amended, and that is carried.
Before we adjourn, I would remind that, as Senator Carney said, we had very good report on the implications for Canada of European integration. We have received detailed responses from the two ministers which I am sure you will want to peruse. I do not believe those have been circulated as yet.
We recommended that we meet with people from the department regularly. Having made that recommendation, we must make ourselves available for those meetings.
[Translation]
Senator Prud'homme: Mr. Chairman, there is not a great deal here for Eastern Canada. I do not see anyone from Quebec on the list.
[English]
The Chairman: I wish to thank our witnesses from the department. Your testimony this afternoon was most helpful.
The committee adjourned.