THE STANDING SENATE COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE
EVIDENCE
OTTAWA, Thursday, April 16, 2026
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 10:30 a.m. [ET] to study Bill C-13, An Act to implement the Protocol of Accession of the United Kingdom of Great Britain and Northern Ireland to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Senator Peter M. Boehm (Chair) in the chair.
[Translation]
The Chair: Honourable senators, my name is Peter Boehm. I am a senator from Ontario and the chair of the Standing Senate Committee on Foreign Affairs and International Trade. I will now invite committee members participating in today’s meeting to introduce themselves.
[English]
Senator Adler: Charles Adler, Manitoba.
Senator MacDonald: Michael MacDonald, Nova Scotia.
Senator Busson: Welcome. I’m Bev Busson, from British Columbia.
[Translation]
Senator Gerba: I am Amina Gerba from Quebec.
[English]
Senator Woo: Yuen Pau Woo, from British Columbia.
Senator Pupatello: Sandra Pupatello, Ontario.
Senator Harder: Peter Harder, Ontario.
Senator Wilson: Duncan Wilson, British Columbia.
Senator Petten: Iris Petten, Newfoundland and Labrador, and sponsor of the bill.
[Translation]
Senator Youance: I am Suze Youance from Quebec.
[English]
Senator Al Zaibak: Good morning. Mohammad Al Zaibak, Ontario.
Senator Cardozo: Andrew Cardozo, Ontario.
The Chair: Welcome, senators. I would like to acknowledge that Senators Pupatello, Petten and Cardozo are here as guests. Senator Petten is the sponsor of Bill C-13 that we will be studying today.
Welcome, everyone. I want to welcome all who may be watching us across the country as we deliberate today.
Colleagues, we are meeting to continue our examination of Bill C-13, An Act to implement the Protocol on the Accession of the United Kingdom of Great Britain and Northern Ireland to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Today we have the honour of welcoming to this committee for the first time, finally, The Honourable Maninder Sidhu, Minister of International Trade.
Welcome, minister. Thank you very much for taking the time to be with us today. I know you’re just back from China and probably find yourself in another time zone.
The minister is joined by the following officials from Global Affairs Canada: Aaron Fowler, Associate Assistant Deputy Minister, International Trade Branch and Chief Trade Negotiator; and Darren Smith, Executive Director, Indo-Pacific Trade Policy Division.
Before we hear the minister’s opening statement and proceed to questions and answers, as usual, I would like everyone to please mute notifications on your devices and also be mindful and look at the card in terms of best practices for meeting participants with particular emphasis on the use of the phones and the earpiece, as we want to shield our very dedicated technical staff and interpreters from any dangers related to that.
Minister, we’re ready to hear your opening remarks, which will be followed by questions from senators. Minister, you have the floor.
Hon. Maninder Sidhu, P.C., M.P., Minister of International Trade: Thank you, Mr. Chair, and honourable senators. It is great to be here. As you know, I have been on the road quite a bit. It’s nice to be here, and I will be back next week on Wednesday to talk about Indonesia, but here we are to talk about Bill C-13, the legislation for the U.K.’s accession into the CPTPP trading bloc.
Let me begin with what this bill represents.
The United Kingdom is Canada’s third-largest single-country trading partner and one of the largest sources of foreign direct investment in Canada.
This represents a real opportunity for Canadians: energy producers in the Prairies, agri-food exporters in Atlantic Canada and the West, advanced manufacturers in Ontario and Quebec, aerospace workers, technology firms, financial services providers, and small- and medium-sized businesses in every region of this country.
Bill C-13 is about anchoring that relationship within one of the world’s most ambitious and strategically significant trade agreements.
The CPTPP is a high-standard, rules-based agreement spanning the Indo-Pacific and now, with the United Kingdom’s accession, extending into Europe. With the U.K.’s entry, the CPTPP becomes the first truly trans-regional trade agreement of its kind, linking the existing group of dynamic economies on both sides of the Pacific with the North Atlantic.
It is not simply growing in size; it is expanding in strategic reach.
For Canada, this matters enormously.
First, it secures long-term, predictable market access for Canadian exporters in the United Kingdom under a modern and comprehensive framework. The ratification of the U.K.’s accession to the CPTPP through Bill C-13 provides the certainty of a durable multilateral agreement, one with clear rules, enforceable commitments, and a forward-looking architecture.
Under the CPTPP, tariffs will be eliminated on the vast majority of goods traded between Canada and the United Kingdom. For Canadian exporters, that means improved competitiveness in sectors such as seafood, forestry products, and manufactured goods, and supporting good paying jobs right across the country.
In services, an increasingly important driver of the Canadian economy, the agreement provides enhanced access and transparency in areas such as financial services, digital trade, engineering, and professional services. This is particularly important given that services account for a growing share of both Canadian exports and domestic employment.
Second, this accession strengthens supply chains among trusted partners.
Over the past several years, Canadians have seen first-hand the consequences of global disruptions, from the COVID-19 pandemic to geopolitical instability and rising protectionism. These events have underscored the importance of resilience, diversification, and reliability in our trade relationships.
By bringing the United Kingdom into the CPTPP, Canada is helping to expand a network of countries committed to open markets, high labour and environmental standards, and transparent, rules-based trade.
The U.K.’s accession will create new opportunities for integrated supply chains, where Canadian businesses can source inputs, add value, and export to multiple CPTPP markets under consistent rules.
Third, it enhances Canada’s strategic position in a changing world.
Canada is proud to be one of the original group of countries that brought the CPTPP into force, and we continue to support the expansion of the agreement through accessions like this one.
By supporting the United Kingdom’s accession, we reinforce Canada’s leadership within the agreement and contribute to the growth of a trading bloc that now represents nearly 15% of global GDP, which is approximately $13 trillion in economic activity.
But beyond the numbers, this is also about influence. Trade agreements today are not just only about tariffs. They are about setting the rules of the road for the global economy. They shape how data flows, how businesses compete, how workers are protected, and how environmental standards are upheld.
The CPTPP reflects a vision of trade that is open, rules-based, and grounded in high standards. Expanding that framework to include the United Kingdom strengthens its global relevance and sends a clear signal that countries committed to these principles can and will work together.
For Canadian businesses, particularly small- and mid-sized businesses, this translates into greater certainty and expanded opportunity. Small- and medium-sized enterprises, or SMEs, often face the greatest barriers to entering international markets: regulatory complexity, lack of transparency, and limited resources.
I have seen this first-hand being in the private sector for 13 years prior to politics, facilitating trade for hundreds of businesses. There is a lot of hand-holding required there.
The CPTPP helps address these challenges by establishing clear, predictable rules and reducing unnecessary barriers. It also opens doors beyond the U.K. market itself.
By operating within a single framework that spans multiple economies, Canadian firms can scale more efficiently across the CPTPP region.
Honourable senators, there is also an important geopolitical dimension to this agreement. The United Kingdom’s accession reflects a broader strategic shift and its increased engagement in the Indo-Pacific region following its departure from the European Union.
For Canada, this aligns closely with our own Indo-Pacific strategy, which recognizes that the region will play a defining role in global economic growth and geopolitical dynamics in the decades ahead.
By supporting the U.K.’s accession, Canada is helping to build a broader coalition of like-minded partners that value predictability, transparency, and rules-based trade. At a time when global trade norms are being challenged and, in some cases, eroded, reinforcing this kind of partnership is not only economically beneficial, it is strategically necessary.
It is also important to consider what this accession signals to the rest of the world.
The CPTPP was designed as a living agreement, one that could grow over time. The successful accession of the United Kingdom demonstrates that the agreement remains open and attractive to economies willing to meet its high standards. This creates the potential for future expansion, further increasing its economic weight and, of course, strategic importance.
For Canada, being at the centre of this process allows us to help shape the future of global trade in a way that reflects our interests and, of course, our values.
As you examine this legislation, I would also like to acknowledge the importance of the Senate’s work. This chamber is defined by experience, expertise, and perspective.
Many senators have built businesses, including the Senate sponsor of this bill, Senator Petten. Senator Petten and all of you in this room understand what it takes to innovate, to grow and to compete in global markets.
Senators have also contributed to Canada as journalists, academics, legal experts, doctors, diplomats and community leaders — with each of you, in your own way, helping to shape Canada’s economic and social landscape.
Mr. Chair, I would be remiss if I did not acknowledge your work of public service and contributions to advancing Canada’s role on the world stage.
I mention all of this to make the point that the depth of this experience in this chamber strengthens our legislative process and ensures that agreements like the CPTPP are examined with rigour, balance and foresight.
Your work helps ensure that Canada’s trade policy reflects both our immediate interests and our long-term prosperity.
Honourable senators, Canada stands at a critical moment. The global economic landscape is shifting. Supply chains are being reconfigured. Strategic competition is intensifying. The rules that have underpinned international trade for decades are increasingly under pressure, as I saw at the WTO just a few weeks ago.
As our Prime Minister has said, “We are in the midst of a rupture, not a transition.” And in this environment, standing still is not an option.
To succeed, Canada must diversify its trade, strengthen its partnerships and reinforce its commitment to working with partners to achieve more than what we could on our own. We must elevate the collective expertise and talents of our country — workers, entrepreneurs, Indigenous leaders, innovators, financial institutions and public servants. We must also ensure that the benefits of trade are broadly shared — supporting good jobs, fostering innovation and promoting sustainable economic growth.
Bill C-13 is a practical and meaningful step in that direction. It deepens our relationship with one of our closest and most trusted partners. It expands opportunities for Canadian businesses and workers. It strengthens supply chains and enhances resilience. And it reinforces Canada’s role as a leader in shaping the future of global trade.
Supporting the United Kingdom’s accession to the CPTPP is a clear demonstration of Canada’s commitment to engagement, to openness and, of course, to leadership. By working together — government, Parliament, industry and Canadians in every region — we can ensure that Canada not only adapts to a changing world, but that we do our part to shape the world and make it better. We are building an economy that is more diversified, more resilient and more prosperous for generations to come.
The work to diversify Canadian trade belongs to all of us; when we are successful, it will be felt by Canadians from coast to coast to coast.
Thank you, and I look forward to your questions.
The Chair: Thank you for your statement, minister. Colleagues, just a reminder, we’re going to follow, as usual in this committee, the three-minute rule. I’m going to enforce the three minutes, so I would suggest you keep your questions very concise and to the point so as to allow the minister and his team to provide us with fulsome answers, I might say.
Senator MacDonald: Minister, thank you for being here this morning. I want to preface my remarks by saying that I’m a big believer in free trade, always have been. So, in principle, I like this agreement, but I am concerned about the concerns that were raised by the cattle industry and the pork industry in the country that we’re not being treated fairly, reciprocally, in this deal. I would like you the address that.
Mr. Sidhu: Thank you for the question, Senator MacDonald. It’s great to be here. I sat down with the cattle farmer and, of course, the beef sector is very important to me. Having been born in Calgary, I know the importance of ranching and the farmers who produce good-quality beef.
When I talk about the beef industry with my counterparts in the U.K., yes, there are some impediments that we need to get over: carcass washing, what chemicals are being used, and how they are inspected in the U.K. So that is an ongoing conversation that we’ll continue to have.
But when you look at the CPTPP and how the beef sector has benefited since the enforcement of the CPTPP in 2018, there’s been tremendous success there. Just to give you some numbers here, Canadian beef exports to CPTPP markets have grown from $338 million in 2018 to $751 million in 2024, which is an increase of over 120%. This agreement has significantly benefited the beef sector.
Are there things we need to continue to work through? Yes, of course. I will continue to have those conversations to continue opening those doors. But to me it is about those opportunities and the export opportunities for those ranchers and those farmers.
I just came back from China, which you know beef is now in those markets as well, so important region and workers, 250,000 workers in the beef sector alone. Yes, we need to continue having those conversations and continue opening those markets, but the CPTPP has tremendously benefited that sector.
Senator MacDonald: I appreciate that, but that still doesn’t address the concerns that cattlemen and pork producers have expressed. Mexico is one of the last ones to join in with the U.K.
What impediments do they have? What is the deal that they cut with the U.K. in terms of exporting beef and pork back and forth? Do they have a different sort of arrangement than we would have?
Mr. Sidhu: I think it’s important to focus on what we are trying to get achieved here and not what other countries are trying to achieve. What I can speak to is what Canada is trying to do is to get over some of these issues around what chemicals are being used in beef production in terms of carcass wash and how we can continue to push for access.
To me, talking to beef farmers, their supply chains are very constrained right now. In fact, in the markets that we’re opening, they are not able to fulfill that demand as quickly as possible. They tell me it will take them two years to get their supply up to the levels as we are opening new trade agreements, like Indonesia and other markets around the world, including China.
To me, yes, the U.K. market is important, but I am also focused on a practical approach to see what more can I do in other markets as I continue to have this conversation with the U.K.?
The Chair: Thank you, minister.
Senator Wilson: Minister, on a similar theme, yesterday we had a witness who used a metaphor that really resonated with me, and that was versus our traditional bilateral agreements, multilateral agreements like this are akin to comparing checkers with chess.
In that context, there are going to be, obviously, puts and takes that are going to be different with different economies. We also had witnesses yesterday who testified about bilateral concerns with the U.K.
I would be interested in how you think about that sort of chess game, if you will, in terms of the puts and takes or — as the Prime Minister used in his Davos speech — the variable geometry that we’re now trying to employ.
Mr. Sidhu: That is a great question, Senator Wilson. Part of the conversation bilaterally, as you heard, is around cheese, beef and pension issues. So those are conversations that I’ll continue to have with my counterpart. In fact, we had a good meeting in Cameroon just a couple weeks ago to talk about many of these issues and how we can overcome some of these differences. It is an ongoing conversation.
I am not about to give concessions if we are not able to get those wins for Canadian industry. As the chief negotiator sitting beside me, it’s important that we continue to fight for access for Canadians. That is part of the bilateral conversation.
Around the CPTPP, it is also important that we welcome like‑minded partners, partners that have high-quality trading rules, as we grow the CPTPP partnership, studying that. You know, senator, that Canada and Mexico are the only ones last to ratify this; all the other partners have done this. The Prime Minister made a commitment to Prime Minister Keir Starmer last year that we are going to get this done because the U.K. is, in fact, an important trading partner.
To me, right now, we have 99% access to the market. Of course I’m going to continue fighting for that 1%, but being practical with our approach is very important to get the best benefits for Canadian businesses.
So having those conversations bilaterally and multilaterally is very important. There are different issues that we bring up at different tables.
Senator Al Zaibak: Thank you, minister, and your team for your leadership on expanding Canada’s trade footprint across the world.
Now, given the growing importance of the Indo-Pacific markets to Canada’s long-term economic strategy and the government’s continued efforts to diversify trade beyond traditional partners, recent ministerial trade missions have played a key role in strengthening commercial ties and in opening new opportunities for Canadian businesses.
Having said that, minister, could you provide an update and outline the outcomes of your recent trade missions to South Korea, in particular, in terms of new market access opportunities, investment partnerships and support for Canadian exporters?
Mr. Sidhu: Thank you for that very important question, Senator Al Zaibak, and thank you for your work and what you bring to this table. I know you, yourself, have a lot of experience in international trade and in the business community.
Your question goes back to what we are doing in our trade missions. What are we doing for businesses that come on these trade missions? To me, being in South Korea just a few weeks ago was about opening doors. As I said in my opening statement, a lot of businesses will require a lot of support. You can imagine sitting here and trying to cold call a customer in South Korea and the reception you may get. There are language differences, and they are not familiar with you. But when we take trade delegations there, the business-to-business, or B‑to‑B, connection is what is important. When you do the B‑to‑B matchmaking, the South Koreans will help us do the matchmaking. It led to a lot of commercial deals, and, in fact, we came home with commercial deals valued at over $1.2 billion in the mining sector, in the digital trade sector, in AI and in ICTs. These delegations lead to real results for Canadians.
You need to shake hands more than once to get a deal done, as you know, in the business community. Showing up to have those face-to-face meetings is very important. Trade delegations, with not just our government but with multiple governments, have long been part of the importance of making sure that the B‑to‑B matchmaking goes on. We’ve heard tremendous feedback from the business community on how helpful they are.
It’s also the quality of B-to-B matchmaking utilizing trade commissioner services. This is why we start planning months in advance. It’s because, at the other end, we want to make sure those meetings are meaningful.
It takes a lot, tens of thousands of dollars, for a business to go across and have those meetings. Some of those outcomes are commercial results, but some are also starting conversations that lead to real results in the coming months. This is what trade delegations mean to me, but it’s also about coming home with real results. That was one result that came out of it; the $1.2 billion in commercial deals.
Senator Al Zaibak: Thank you, minister.
The Chair: Colleagues, if you have questions, please indicate your interest to us here at the front.
Senator Woo: Thank you, minister, for being here. We heard yesterday from the pork producers and, to a lesser extent, the beef producers that the problem with the deal was not simply that there were non-tariff barriers that did not improve market access beyond what we currently have in the U.K., but that there was a kind of — here, I didn’t fully understand it — “demonstration effect.” It seems they thought the non-tariff barriers, or NTBs, would diffuse to other Indo-Pacific CPTPP partners. The fear was that Korea may pick up on the same idea that the British have. Korea isn’t a member yet, but other markets in CPTPP would pick up the same NTBs.
I really didn’t understand that logic; whether there was a change in the rules or whether it’s simply a fear that what the Brits have done can be picked up by other CPTPP countries and be imposed on our current beef imports/exports. I don’t know if this is strictly sanitary and phytosanitary, or SPS, issue or a more generic kind of signalling problem that we’re worried about.
Mr. Sidhu: Your question is very technical, so I want to get a more wholesome answer from our chief negotiator.
Aaron Fowler, Associate Assistant Deputy Minister, International Trade Branch and Chief Trade Negotiator, Global Affairs Canada: Thank you, minister, and thank you, senator, for the question. Obviously, we understand the concerns that the industry has expressed to us with respect to the specific SPS measures that the United Kingdom maintains. If the suggestion is that countries in the Indo-Pacific region who are members of the CPTPP will be inspired by the U.K.’s regime by virtue of its accession to the CPTPP, I would share with you a lack of understanding on how one quite follows from the other, to be perfectly honest.
Those countries have very robust regimes in place right now to protect the health and safety of their food supply. Those regimes are not based on the other members of the CPTPP. They are pre‑existing, and they comply with the requirements that are set out in the agreement.
If anything, the likelihood is that the United Kingdom may find itself inspired by the members of the CPTPP to take a look at its own regulatory regime to see whether there are approaches that are more trade facilitative than are currently in place with existing CPTPP members.
Senator Woo: Minister, what is your thinking on further accession of countries that are on the list? The U.K. came late. China and Taiwan were the first on the list. What is your thinking on these two territories?
Mr. Sidhu: When you look at the CPTPP and the high-quality standards based on the Auckland Principles, those are first and foremost when countries put up their hands to ask, “How do we start this conversation?” Obviously, Costa Rica is further ahead in the process. Other countries have put up their hands, like the Philippines and Indonesia — and those are active consultations with members.
Again, it is a consensus-based approach. So it’s not just what Canada wants; it’s what the bloc wants. Those conversations will continue to happen among ministers, but it’s nice to see the demand to be part of this high-quality trade agreement.
[Translation]
Senator Hébert: Thank you, minister, for joining us this morning. I must say we appreciate hearing from people from all walks of life, but we’re always happy to hear from people like you, from the business sector, especially at a pivotal time like this one for our country. During the committee hearings in the other place, an amendment was made requiring a review at the end of the three-year agreement. Is Canada the only country in the CPTPP to have such a requirement?
[English]
Mr. Sidhu: I know it’s a mouthful, senator, and I hope to answer your question one day in French. I’m in the process of working on that.
Senator Hébert: No, it’s okay. You can go in English.
Mr. Sidhu: But, look, coming back to your question, it’s a very important question. I sat on the trade committee for a couple of years. The trade committee will bring up studies from time to time. Coming back to it, yes, I think Canada is one of the only countries that has this, but, again, I don’t know what the committee will look like three years from now. It’s up to members of the committee to determine what they study. Yes, it could come up. Will it have any weight? Sometimes we study things, and as you know, the recommendations are not always implemented.
Again, I think it would be up to the trade committee at the time, three years from now, what they want to study, if they want to study it and if it’s still relevant. I wouldn’t say it is for the government to decide what the committee will study. Trade committees should be able to study what they believe is best, and so, three years from now, we’ll see what that is.
[Translation]
Senator Hébert: I heard or it was my understanding that it was the same thing and that there’d be a similar amending provision in Bill C-18 regarding Indonesia. Is this something Canada intends to do with all of these agreements? I’m asking, because I wonder what this does multilaterally to the image Canada wants to project, especially in the current context?
[English]
Mr. Sidhu: It comes back to what committees want to study. I haven’t had any negative feedback from trade ministers for my conversation. It is a Bloc amendment which was brought forward. Trade committees study and review many different things. If they want to add Indonesia to the list, they can; sure. It’s important to hear from businesses three or five years down the line: “How have FTAs benefited you? What more can the government do to support you?” To me, it’s always good to look at things and analyze how things can be done better.
To me, I welcome looking back at different things that committees want to study, but it’s not something that the government has put forward.
[Translation]
Senator Hébert: Thank you.
Senator Gerba: Thank you, minister, for joining us today. I also applaud the fact that we have a person of action heading this department. You can see it; you can feel it: you’re everywhere. You bring a very special dimension to the job. That’s really commendable.
Witnesses yesterday said SMEs wouldn’t benefit from this agreement to include the United Kingdom. You just said the opposite, that they would benefit. Can you give us more details on that? That’s the first part of my question, minister.
I apologize ahead of time for the second part. I don’t want to go off topic, Mr. Chair, but I’d like to take advantage of the minister’s appearance to ask him why we wouldn’t also consider free trade agreements, or trade agreements like this one, with African partners, including those in the African Continental Free Trade Area, which will generate a global GDP of over $3 trillion.
[English]
Mr. Sidhu: Thank you, senator, for that very packed question. I’ll try to unpack it in three minutes.
When I look at FTAs, I don’t sign FTAs just for the sake of signing them. I sign them based on consultation with businesses across the country and based on conversations we’re having with the boards of trade and chambers of commerce. This is something that businesses have asked us to pursue. That is why the Prime Minister had committed last year to getting this done and having it ratified because it is about opening doors and opportunities.
I strongly believe that SMEs will benefit from FTAs. I have seen it first-hand in the private sector working with FTAs for 13 years. I know the outcome is always beneficial to SMEs.
Coming to the second part of your question in terms of Africa, thank you for your support and what you’re doing in the community but also for bringing the Canadian-African connection together in business elements and partnerships. I want to say thank you for pushing forward on the Cameroon round table that I had at the WTO with the business community. Africa is a very important partner to Canada. I’ve mentioned this. I’ve said it out loud. I have been there multiple times. I have seen the growth opportunities there.
When it comes to FTAs with African countries, we have an understanding with the African Union that we’ll be supporting them in their trading bloc in the larger negotiations. That doesn’t mean that we can’t engage individually with countries in Africa. Engagement in Cameroon was about finding opportunities but also supporting them in infrastructure. What I have seen is the need for infrastructure in many African countries, and I think, for those watching, it’s important to note that Africa is many different economies. It’s thousands of dialects, thousands of businesses and thousands of sectors, so it’s not just one block. There are things that we should look at there.
When I talk to the business community, it wants to do more with Africa. They want us to help facilitate more with Africa, but part of that equation is the investment, promotion and protection and the Foreign Investment Promotion and Protection Agreements, or FIPAs, that we have with many African countries. Nigeria is one that I’m trying to work on because we know there is enormous potential there. There is also a need for more infrastructure to get those goods out of those markets and into trading markets like Canada. That’s part of the conversation.
Senator Harder: Thank you, minister. My question has to do with the capacity in your department to deliver on the commitments that the government is entering into with this trade agreement and others.
You spoke about the importance of the Trade Commissioner Service. You spoke about the importance of the network of embassies and missions. You also spoke, I think quite rightly, about how our trade relationships are also a political statement so that it’s not just the Trade Commissioner Service, it’s the political service. All of this in the context of cuts in your department, which I recognize as more of a condominium than your department alone.
Can you assure us that as the condominium of Global Affairs deals with its cuts, you will express your view that those cuts should be on the side of what I would call administrative oversight and delayering rather than our political and foreign service Trade Commissioner Service capacity and the network abroad?
Mr. Sidhu: That’s a very important question, Senator Harder.
In terms of the service exercise that you’re referring to that we’re undertaking in multiple departments, if you heard what we promised to Canadians in the election last April, it was about trade diversification. If you look at the mandate letter to all the ministers, the top item is trade diversification, as it relates to many ministries. That is the focus that the Prime Minister has made to Canadians. When our largest trading partner is creating some uncertainties in the business community, we need to be able to diversify our trading partners.
I’ve been fortunate in Budget 2025 to get additional funding, actually, for more trade negotiators and more resources. I know our deputy minister is actively hiring more negotiators because we’re not simply doing one negotiation per year as we are used to. In 10 months alone, we have completed multiple agreements, and we are moving at speeds never seen before. In order to move at those speeds, you need the resources behind it. The Prime Minister has recognized this.
Senator Harder: I want to point out, though, the negotiators are in Ottawa. They may be flying as well, but what I’m speaking of is having the network capacity globally to bring the trade discussion to the political dynamics of the countries in which we are seeking to build these partnerships and the capacity of the Trade Commissioner Service to service those.
I know that it is a delicate balancing act, but I would urge you to be an advocate for enhanced representation abroad, both in missions and the number of missions.
Mr. Sidhu: I appreciate that. I think it’s important to have those insights on the ground. We have close to 1,500 trade commissioner services, as you rightfully mentioned, in missions all around the world. We need to continue to support that.
Obviously, in these FTA discussions, it is the chief negotiators who lead those discussions with countries and their chief negotiators. But again, those resources are very important for me to make sure I have them. I’m negotiating six trade agreements this year, so you can imagine the scale that we’re moving at.
I have been fortunate to get that support from the Prime Minister and the Minister of Finance on the trade side of things, and we’ll continue pushing forward to make sure there is representation in our embassies around the world.
Many of these trade delegations are supported by trade commissioners on the ground. The connections on the ground are important. They are the ones that set up those matchmaking services because they know their markets, as you’ve said. We’re here in Ottawa, but they are located in markets.
Senator Busson: Again, thank you, minister and officials, for being here today. I’m sure, from what you’re telling us, you’ve had an incredibly busy schedule. It’s great that you could be here.
Reportedly, the signatories of this agreement have all signed off except for Mexico and Canada. Mexico is announcing that they are going to sign off in the very near future as they move forward.
I’m wondering, given the geopolitical landscape that we’re dealing with — you talk about many urgencies — why is it that Canada has taken so long and is now the last in the group of signatories to sign off on this agreement? Is there anything that this committee should hear that could add to that urgency?
Mr. Sidhu: First of all, senator, coming back to your question, I can’t speak to what previous governments have done and why there were some lapses there. I can speak to what our government has been doing.
Since Prime Minister Carney was sworn in as Prime Minister, one of his very first trips was to the United Kingdom. It was to talk to Prime Minister Starmer about what more we can do together. One of the very first commitments we made as a government was to get this done and over the line.
Obviously, the legislative process takes time, and we are moving as fast as we can through that. We are catching up and moving at speeds because it’s a commitment we’ve made to our partners, especially the United Kingdom, which is a trusted partner. It’s a partner we have many shared values with.
I don’t want to speak to previous governments and why there was some puck-dragging there, but I can speak to how fast we are moving. The testament is this committee and how fast you were able to get this legislation through. I appreciate the support.
There is some urgency. We’re seeing that across all parties now, regardless of political stripe, that we need to come together. We need to stop putting up barriers. I think around free trade, we can all see consensus in that. The conversation has shifted quite dramatically from previous years, where now we’re seeing the benefits of trade agreements. That is why we need to move as fast as possible. That is why I’ll be back next week talking about Indonesia and, hopefully, in the coming months about other agreements that we want to get through.
Senator Busson: Thank you very much.
Senator Pupatello: Thanks so much for being here. Thank you for having me in as a guest today.
It’s interesting to me that the U.K. has decided to attempt this joining because when they were part of the EU, the EU was not part of the CPTPP. It’s interesting that they started negotiations between the EU and CPTPP last year sometime on trying to get around logistical issues and more trade barriers, et cetera, but not joining.
What I wonder is, given that the U.K. is now coming into this agreement, is there an opportunity that opens the door? They would have been, I would have thought at the time, one of the barriers to the EU joining, given their views on cheese, dairy, meats, et cetera.
Is there a chance that this helps us open the door to joining the EU as a country? If we were to join the EU, we would automatically get access to all of the EU agreements that we may not otherwise have. Considering that now the Canada-European Union Comprehensive Economic and Trade Agreement, or CETA, is sort of actively in play, given how long it took us to get to CETA, is this a good sign for us to say that Britain is in ours now, and the EU may well join, given that Britain is in? How does this help us on the EU front? Is there an official government position on Canada joining the EU? It seems to come up every 12 months or so as a potential thing we should seriously consider. I don’t think the environment has ever been more positive toward the potential of us doing that.
Mr. Sidhu: When we compare the U.K. market to the European Union market, I look at it in terms of the free trade agreements we have. Right now, we have 15 free trade agreements with 51 countries. That includes the European Union, so this would give us more access to the U.K., but we already have access to the EU. Joining the EU wouldn’t potentially give us more access.
Regarding the EU, first of all, kudos to our chief negotiators for getting us access to the EU SAFE procurement mechanism. Canada is the only non-EU country welcomed into those defence procurement opportunities. That is huge. That means hundreds of millions of dollars of potential procurement opportunities in the European market. That’s caused some jealousy among other countries. We are very fortunate that our negotiators were able to help us get into that procurement mechanism.
In terms of Canada joining the EU, I think that’s a larger question we have to ask. I see it as I sit at the WTO table, where Spain and Germany are not able to talk because the EU speaks for them. There are some nuances that you need to be aware of if you do decide to go that route. You may not have a voice at the table, whereas Canada did have a voice at the table. There are certain nuances that I think we have to be mindful of.
Senator Pupatello: Thank you.
Senator Cardozo: Welcome, minister. I want to follow up on a couple of questions that have been posed. One is with regard to Europe. Is there room to move beyond the CETA, short of joining the EU? I wonder if you can say anything there in terms of more trade between Canada and Europe?
The other is with regard to the question you didn’t have enough time to answer about Africa. Certainly, if the West doesn’t engage more, China and Russia are there, and I think we’re missing out on important opportunities.
Mr. Sidhu: Thank you, senator, for that very important question.
On CETA and what we’re doing with our European partners, I do see room for more engagement, especially around energy and critical minerals, because that’s an active conversation. As you’re seeing supply chains being weaponized in the critical minerals environment, Canada has taken a leadership role in that. You saw that with the Prime Minister at the G7 summit that we hosted last year in Kananaskis, where we initiated a critical minerals alliance to work with like-minded countries, especially in the European Union, to protect our supply chains.
As we grow our industry and our defence, auto and technology sectors, we need access to critical minerals. Working together with our European partners is very important. That was part of the conversation I had when I took a delegation to Italy. As you know, they just recently acquired a mine here in Canada, so we need to continue working with those partners. Yes, there is more we can do. We are actively exploring that.
I just mentioned the EU SAFE procurement mechanism, which is very important. We just launched our defence industrial strategy. You know it supports 81,000 jobs right now. We’re going to grow that by 125,000 jobs. Seventy cents of every dollar we spend right now goes to one particular partner in defence procurement. We need to diversify and invert that so Canadians benefit more.
We need to grow our industrial capacity. Europe has long done that. We can learn from Europe in that sense. They have the technology and the industrial capacity, so if we can partner up with the European Union more to bring that industrial capacity to Canada, I think that would be beneficial to workers.
Senator Cardozo: And on Africa?
Mr. Sidhu: On Africa, you’re right. We need to stay engaged. There are other countries. I’ll give you one example. I won’t mention the country name. They’re putting out procurement opportunities for infrastructure, and Canada never puts a bid in. I said, “Do you have an investment agreement with Canada?” No. Well, if you want our pension funds to invest, you need investment protections for them. They came back and said, “There are all these particular countries that put their bids in, and Canada never bids. You guys do all these projects everywhere.”
Coming back to what Senator Gerba was asking about investment promotion and protection agreements. We need to carry out that conversation with some African countries to make sure Canadians can engage, and as we invest our pension dollars there, that the investment is protected. We do want to engage, and we are continuing to engage, but part of that conversation is a broader one with governments in Africa to ask: How far can you go for investment protection? Because we want to engage. We want to help you. We want to build up the infrastructure, and we want to work together.
The Chair: Thank you very much. We are into round two.
Senator MacDonald: Obviously, Great Britain wants this deal, and we have some leverage. We have 200,000 British pensioners in this country who are being treated differently by Britain. If they were in the EU or America, they would have their full pension, but because they are in Canada, for some reason, they are being treated differently. Here we are, a member of the Commonwealth, and we are being treated differently. Why aren’t we using our leverage to ensure that these people are treated appropriately?
Mr. Sidhu: Thank you for that question, senator. On the pension issue, you probably get the same emails I get in my constituency office from U.K. pensioners. It’s something I am very aware of and that I will continue to raise bilaterally with my counterpart. They are dealing with the same thing in Australia, I believe, and a couple of other countries where the same rules don’t apply. We’ll continue pushing for that for pensioners.
I think relating that to free trade agreement negotiations is probably not the right approach because then what else are you going to throw into the negotiations? I think they should focus on business-to-business ties and what we can do for our workers and businesses. I don’t want to discount the pension issue. I’ll continue to stay on it, but I strongly believe you need to disconnect the two issues to make sure that you’re able to move forward and bring some real results for businesses and workers.
Again, coming back to the over 200,000 pensioners, I know it’s important to them and me. I will continue raising that.
Senator MacDonald: Once we sign it, we lose all our leverage for the pensioners and the pork producers and the beef producers.
Mr. Sidhu: That’s what I’m saying. I wouldn’t tie the two together. I don’t tie pensions to free trade agreements. I’ll be frank about that. Those are two separate conversations that we need to have. We’ll continue to engage on the pension issue because I know it’s important. It’s important to many people that live in my riding, especially dual citizens. We’ll continue engaging on that. I do believe that we should not tie the two together.
The Chair: Thank you.
Senator Al Zaibak: Moving forward, minister, as Canada prepares for the upcoming trade mission to Japan, an important strategy partner under the CPTPP, can you please outline the key objectives of that mission and what tangible benefits Canadian businesses and workers can expect from strengthened trade and economic ties with Japan?
Mr. Sidhu: Thank you, senator, for that question. For those watching, there will be a Team Canada Trade Mission led by me to Japan on, I believe, June 23. Applications are open for businesses that are interested. You can apply through the trade commissioner’s services.
Some of the sectors we will be focused on during that trade mission are defence and security, aerospace, advanced manufacturing, ICT, AI, clean technology, agri-food industries, energy and forestry products. We have selected some of these sectors not only because there is tremendous potential there but also because chambers of commerce and provinces across the country have asked us for some of these things that we need help with. Especially in the forestry sector, as you know, there are some things there we need to explore, especially regarding Japan, South Korea and China. These delegations are very important. Traditionally, giving businesses access to the business-to-business component of those trade delegations is very important.
Following up on the Prime Minister’s commitment, the Prime Minister was in Japan not too long ago, and he made a commitment for a trade delegation to follow up on those promises. It’s also about middle powers working together. I know the Davos speech came up today. The Prime Minister is very clear that Canada has convening power. We can play a role as a key facilitator, and we can work with middle powers. Japan is a middle power with Canada. We need to work together with our middle powers. It’s the same thing the Prime Minister did in Australia when he was there. It’s the same thing with the South Koreans. What more can we do around defence, energy, mining and all these sectors that I mentioned? This is why it’s important for Canadian businesses to take part in the Japanese delegation so we can create more opportunities there.
Senator Al Zaibak: Thank you, minister.
The Chair: Thank you.
Senator Woo: Minister, when it comes to preferential trading agreements, or PTAs, it sounds like Canada is a world champion with so many PTAs. There are two problems with them. The first is the so-called spaghetti-bowl problem, where tariff preferences are not taken up by other countries that can use them because it’s too confusing. I want to ask officials — or yourself — if you know anything about the uptake of tariff preferences or whether they are defaulting to most favoured nations, or MFNs.
The second problem is a bigger one. PTAs benefit the countries that can be part of them. Countries that are not part of them will hurt. We are thinking about Africa. We’re thinking about island nations and some South American countries. What is Canada’s commitment to reviving multilateralism, particularly with the WTO? What are we doing concretely to try to get back to a multilateral system that benefits everyone and not just the countries that are so lucky to be part of a PTA?
Mr. Sidhu: Thank you, Senator Woo. It’s a very important question. I was just at the WTO meetings in Cameroon a couple of weeks ago with over 100 trade ministers. It was not the outcome we hoped for. We wanted to move forward with significant reforms at the WTO to make sure it works for everyone. We’re a founding member of the WTO. We strongly believe in the multilateral system.
But coming out of that meeting, we also came together — 60 countries — to sign a plurilateral agreement around e‑commerce. E-commerce, for those watching, it is important for digital trade to take place and online sales. Yes, the WTO plays an important role for the least developed economies to be engaged with developed economies like Canada, and we’ll continue moving in that direction.
It’s also imperative we continue supporting that conversation bilaterally, and so what we’re doing with ASEAN countries. You can have provisions there, but you need to be able to do capacity building. That’s what we’re doing in Africa. We’re enabling capacity building, because we do have institutional knowledge of trade negotiations. What more can we help these countries to get more of those negotiations going? How do we build on the 15 FTAs we have? That’s part of the equation as well.
The WTO is important. It’s important to engage in the Caribbean. I met with many of those partners as well. It’s important to engage in Africa, but also to help build capacity. That’s what Canada can do and has long done.
Senator Woo: Do you have an answer on the tariff —
Mr. Sidhu: Yes, on the utilization rates. As I said at the beginning, FTAs are only as good as they are utilized. One example of utilization rates is the European Union. It’s used 60 to 65%. You are never going to get to 100%, but there is room to grow that.
Senator Woo: [Technical difficulties]
Mr. Sidhu: That’s right. How do we grow that? Working with the Canadian Chamber of Commerce, doing more seminars, Trade Commissioner Service, getting more businesses engaged, saying, “Hey, did you know about this?” I did it in the private sector saying, “Why aren’t you utilizing this FTA? You can save 10% duties over here.” Part of that is educational, so we will continue doing that.
In our budget, you will see we’re launching an SME export‑readiness program to get more small businesses aware of why FTAs can work for them.
[Translation]
Senator Hébert: I wish I could’ve worked with you when I was at the CFIB a number of years ago, in a former life.
Minister, I’d say Canada is good at concluding agreements, but our results objectives are very ambitious. The Prime Minister set out a very clear objective, which is to double our exports outside the United States. The agreements we’ve concluded help us do that, and I’m glad to hear efforts are being made to help our SMEs.
However, if we really want to meet this objective, we need to work closely with high-potential players in major projects. With regard to member countries of the agreement and Great Britain, I’d like to know if Canada’s working on sectoral strategies with these high-potential players to participate in major projects and make significant investments to move the needle?
[English]
Mr. Sidhu: It’s a very good question, senator. This is why we’re launching our strategic export office. It was announced in the budget we put out. Part of that is really economic diplomacy. Countries have long pushed for their specialists to be able to access new global markets. President Macron does this all the time and engages in commercial deals. We need to be just as aggressive and ambitious.
Some of the sectors I have identified that can move the needle quite drastically are aerospace space, energy and mining.
So, how are we out there pitching for our aerospace industry? I was just in Mirabel at Airbus two weeks ago and talked to them. Ninety per cent of what they produce at that factory — which is close to 30,000 workers they support indirectly and directly — is exported. So as airlines and as governments procure airplanes, we produce a wonderful A-220. We should be out there pushing for that. Bombardier produces wonderful jets. De Havilland produces wonderful firefighting aircraft as well. We need to be able to engage.
Part of the strategic export office is to bring that engagement together; what all our ambassadors are working on around the world, what our trade commissioners are working on, what the private sector is working on, and bring into one spot. If it’s me or another minister going out, we are hitting on those things that can really move the needle but that employ thousands of Canadians across our country. We need to stand up for our industries, and we will be doing more of that.
[Translation]
Senator Gerba: I’d like to come back to my question about Africa. Historically, Canada has explored bilateral trade avenues with Africa, notably a draft free trade agreement with Morocco in 2013. I understand things are evolving with Nigeria, though no agreement has been reached. Is the government in talks with these countries? I’m referring to Morocco specifically, because although it was already negotiated, the agreement was suspended in 2013.
[English]
Mr. Sidhu: I know your question is more historic. As you know, it has been a year since I’ve been in this role. You’re asking questions from prior to that. I’ll turn to Mr. Fowler, but I think the conversation with Africa is a conversation that we will continue to have. Bilateral FTAs right now, we’re mostly focused on the investment side of things because we’re allowing the African Union delegation to have those negotiations take place. Maybe I can ask Mr. Fowler to expand on that.
Mr. Fowler: Thank you, minister.
[Translation]
For a long time now, Canada has been deeply interested in Africa and has been building stronger trade relations with the African continent and African Union countries. Canada’s been trying to conclude a free trade agreement with Morocco for 10 years or 12 years now, but it’s not possible at this time. The two countries’ positions were far apart and they both had specific interests, so it was difficult to find a middle ground that addressed the concerns of both countries.
That’s why there are no ongoing negotiations with Morocco; everything’s on hold. We may come back to it. Morocco has specific and significant interests in the agricultural sector. We’ll return to the table with them eventually, but there are no active discussions at the moment while the African Union is working to establish its own continental agreement.
Senator Gerba: Will —
The Chair: Thank you, senator. Your time is up, but you’ll have another opportunity next week with the minister.
[English]
I see that we have only three minutes left, which is great for me as the chair. Now I can ask a question. Minister, you’re just back from China. Do you have any idea from your conversations there whether the Chinese interest in acceding to the CPTPP is real or whether this is a longer-term project?
By the same token, as you well know, the United States decided during the first Trump administration not to participate, in fact, to withdraw. Those are two economic giants, obviously, and important to Canada. What is your prognosis as you look ahead, as difficult as I know that is?
Mr. Sidhu: Thank you, senator. As well as chairing this committee, I think you know when it comes to China, we were there. I was there to explore opportunities around e-commerce. Just really quickly, I met with Alibaba, which runs an e‑commerce platform that services over a billion consumers in China. I met with JD.com, which services over 700 million consumers in China. To me, it’s about getting more Canadian SMEs on their platforms to sell directly from B to C.
It’s also to explore the conversation around electric vehicles. As you know, that’s part of the conversation with China. We committed in January, when I was there with the Prime Minister, to 49,000 vehicles, with the eventuality of them procuring joint venture opportunities in Canada and manufacturing those vehicles in Canada. I met with multiple manufacturers in China to encourage them to come and explore some of these opportunities to build those vehicles because that’s a very big part of that conversation with China.
Agriculture as well is part of that conversation, as you know. We had to unlock about $7 billion of agricultural opportunities in January for beef, canola and seafood. That’s very important as well. With China, for those that are watching, they are our second-largest trading partner. We need to engage constructively and pragmatically with them. It’s a large market we simply don’t want to ignore. We need it to be there.
Coming to your question on CPTPP, there will always be a conversation and discussion with multiple countries around the world. As you know, it is a high-quality agreement that many people want to partake in. We don’t have a free trade agreement with China, nor do we intend to do so right now. It is more of a partnership approach in certain sectors where we can work with the Chinese and work with other countries. That is part of the conversation.
I don’t lead on the U.S. efforts. Minister LeBlanc is more focused there, and it is important to continue those conversations with our largest and most important trading partner and will always be a very important partner to Canada.
My job is to look beyond North America, and that is what we’re focused on. The numbers are resulting. If you look at the numbers and the results coming out of that, last year alone, our non-U.S. exports grew by 17%, which is substantial.
If you look at the Port of Vancouver, which Senator Woo is a big advocate of, the Port of Vancouver had record exports to China, South Korea, Japan and others. On the east coast of the country, the Port of St. John had record exports. The numbers are adding up. We need to continue doing more. The Prime Minister publicly said we need $300 billion of additional non-U.S. exports. How do we get there?
Part of that relates to the senator’s question. How do we get the needle moving? What industries will help us move that needle as soon as possible?
We are moving in the right direction. We are signing more FTAs. We are getting the results in the numbers. We need to keep going. I have six more to negotiate this year with Mercosur, ASEAN, India, the Philippines, Thailand, and Saudi Arabia, so you can see the speed that we’re moving at, but it won’t happen without your support.
I know time is running out, but I wanted to say thank you to the senators around this table for working collectively. This is the Team Canada approach that the Prime Minister talks about, coming together regardless of partisan stripes or what part of the country you’re from. We want to ensure that FTAs and trade benefit communities across the country, and it can’t happen without this table, so thank you for having me here.
The Chair: Thank you very much, minister, for your kind words about the committee. We, of course, do appreciate that as well, but certainly for your testimony, your candour and the job you’re doing. We know you’re travelling a lot, so thank you for coming. We will have the pleasure of seeing you again next week in committee.
In addition to Mr. Fowler and Mr. Darren Smith who were here with the minister, I would like to acknowledge that we have as witnesses Axel Ndayisaba, Director, Trade Negotiations Division from Agriculture and Agri-Food Canada, and we have Matthew Smith, Chief Agriculture Negotiator and Director General, Trade Agreements and Negotiations. Sorry. I was momentarily confused because we have two Smiths on the panel, so bear with me.
From the Canadian Food Inspection Agency, we have Evan Lewis, Director, Trade Agreements. Thank you for being with us today. I suspect colleagues will have some more detailed questions to ask and perhaps some follow-ups from the session with the minister.
[Translation]
Senator Gerba: Welcome. My question is for Mr. Lewis. Yesterday, the president of the Canadian Pork Council, René Roy, said that, in his opinion, the United Kingdom had imposed unfair non-tariff barriers, especially regarding animal welfare or the control of specific pests. He argued these provisions limited Canadian product access to the U.K. market. What are those barriers, and why are they still in place following the negotiations with the U.K.?
[English]
Evan Lewis, Director, Trade Agreements, Canadian Food Inspection Agency: Thank you very much, senator. The barrier that the witness would have been speaking of is a requirement on the U.K.’s part on testing for the absence of Trichinella, which is a parasite that can be present in pork. In the accession of the U.K. to the CPTPP — I’m just stepping back for a second from that specific matter — our exercise was to assess the U.K.’s ability to comply with the SPS chapter. There were some other areas of concern that we did have. That was not an area of concern for us. We view that the requirement on the U.K.’s part itself is a valid requirement that we are working hard through existing mechanisms to meet.
We’ve supported the pork industry these past few years to put in place options for testing for the absence of Trichinella, and we have succeeded at providing that. Now they are also seeking our assistance in removing that requirement by demonstrating to the U.K. that it’s not scientifically justified, and we’re working through that process. The U.K. is raising valid procedural questions as we work through that. So we are using the existing mechanisms to work through that.
[Translation]
Senator Gerba: Does the current agreement provide for a different dispute settlement mechanism in that regard?
[English]
Mr. Lewis: Yes. The CPTPP SPS chapter provisions are, for the most part, subject to the dispute settlement mechanisms of the CPTPP. The provisions on science and risk of the SPS chapter are carved out from the application of the dispute settlement. That limits the types of disputes that we would be able to take if we chose that, but that has not become a relevant consideration yet, and specifically when we are talking about the Trichinella issue.
[Translation]
Senator Hébert: The minister talked about using the strategic export office to help support more exports with higher potential players. If we want to double our exports outside the United States, we’ll need more than SMEs. That’s why the minister wants to set up this office, but the problem is the teams on the ground — I know, I went through the same thing as delegate general — are trained to support SMEs, not large companies. Have you considered training plans? How is it going to play out on the ground?
Mr. Fowler: Thank you for the question. The strategic export office’s objective does differ from Canada’s approach, now and historically, regarding SMEs. The idea is to support strategic exports in countries where the government can play an important role. The Canadian government needs to support Canadian companies so they can position themselves to take advantage of these opportunities. It’s a bit of a different approach.
Of course, those best equipped to take on this responsibility will need training. The office is being set up right now and will be part of a broader effort to develop our economic diplomacy abilities to also include engagement, such as establishing the strategic export office.
Senator Hébert: It takes a mix of economic diplomacy and exchanges. We were told Canada was the only country to have a provision in its bill to review the agreement in three years. We might do the same thing with Indonesia in Bill C-18. We’re saying Canada’s a stable and predictable partner. Are you afraid this will contradict that message?
Mr. Fowler: Parliamentarians have the right to study the benefits of a free trade agreement as they see fit. That’s really important. We’re not worried about committees wanting to study the agreement. I can’t say whether other countries will have a similar approach. For now, Canada is the only one that has a provision to review the agreement. Other countries might follow suit.
The Chair: Thank you very much, Mr. Fowler.
[English]
Senator Harder: Thank you to the officials. Good public administration is a combination of poetry and plumbing. If I could extend the analogy, the poetry is the trade agreement, but I want to focus on the plumbing again. I talked earlier about the Foreign Service staff and the missions abroad. I would like to ask Mr. Fowler about the locally engaged staff, because I found that the locally engaged staff, particularly on the economic side, on the trade side, are often the anchors of Canada’s interest and sometimes the highest paid people in the embassy, or the mission.
My concern is that the cuts that the department is undergoing will take away some of that capacity, or worse yet, not nurture it for the future. Can you assure us that you have a locally engaged strategy to strengthen our capacity to service the agreements that we are celebrating?
Mr. Fowler: Thank you very much for the question, senator.
You are absolutely right. As you know very well, Canada’s diplomatic presence abroad and our capacities overseas rely heavily on an extremely qualified cadre of locally engaged employees. That team of staff is critical to the delivery of all of our diplomatic functions, including our diplomatic relationships and consular functions, but it is especially important in the context of our trade relationships. The work of the Trade Commissioner Service rests upon a deep understanding of how local business environments and economies work.
Those people who are locally engaged in a trade capacity overseas are central to delivering effective services to Canadian businesses that want to appear in those markets.
I think if you ask almost any public servant, we would always be happy to take more resources and tell you we will use them very wisely. The exercise of the comprehensive expenditure review has compelled the department to take a look at, not the resources necessarily, but the allocation of those resources. There are times when we are looking at a legacy allocation. Markets may continue to be important, but they may have become mature in the intervening years since the initial allocation decisions were taken. I think it’s reasonable for the department to ask itself whether the resource distribution across our diplomatic network continues to be as effective as it possibly could be or whether reductions in certain places that are on a stable and solid footing could be better utilized by allocating people to new and emerging markets where there are greater challenges.
That is the approach that has informed Global Affairs Canada’s decisions with respect to how to approach this.
Senator Al Zaibak: My question is for Mr. Fowler.
My understanding is that the Canada-UK Trade Continuity Agreement, or Canada-UK TCA, would continue to exist following the enactment of Bill C-13. So, if enacted, how would Bill C-13 build upon the Canada-UK Trade Continuity Agreement, and what additional market access to the U.K. would be afforded by Bill C-13, above what is afforded by the Canada‑UK TCA? Also, what additional market access to Canada would be afforded?
Mr. Fowler: Thank you for the questions, senator.
You’re right: The idea would be that the trade continuity agreement with the United Kingdom will remain in place following the U.K.’s accession to the CPTPP. In fact, Canada has multiple trade agreements with a number of CPTPP members, with Mexico being an obvious example with the CUSMA. But there are also Chile and Peru.
If some of the countries that are in the accession queue are successful in joining the CPTPP, that will also represent countries with which we have multiple agreements.
So, we don’t see any inconsistency there or any risk that one will take away from the other. Rather, traders will have the opportunity to choose which of the two agreements provides provisions that are more easily navigated and that offer better benefits, given their specific commercial interests into the country in question.
With 99% of our exports to the United Kingdom being covered by the Canada-UK Trade Continuity Agreement, the gains in the U.K.’s CPTPP accession are largely not in the area of market access for goods. There are some specific examples I could point to regarding things like sweet corn and volumetric access for certain other agricultural products; colleagues are here who can speak to that. The benefits are more with respect to the broader provisions, including in areas like digital trade, where the outcome is very ambitious in the CPTPP and continues to represent, in our view, the gold standard for such agreements around the world.
There are a few other areas, like that one where the rules of the CPTPP are more ambitious and go beyond the Canada-UK TCA, which is, of course, based upon the CETA that was negotiated several years before the CPTPP. The CPTPP had the opportunity to take into account evolutions in the policy space after that point.
Those are the benefits we see from accession. It is not simply “belts and suspenders”; there are fundamental differences between the two agreements.
Senator Woo: The U.K.’s accession to the CPTPP benefits Canada, but it benefits all the other members of the CPTPP. When you analyze the trade creation or trade destruction effects of free-trade agreements, you have to look at third‑party competition.
I would like to ask you and others this: Which other members of the CPTPP do you think will benefit the most from the U.K.’s accession? In which of the areas where they benefit, will we see third-country competition in the U.K.?
Mr. Fowler: Thank you for the question, senator. I’ll do my best to answer. Colleagues may wish to add more from their perspectives, as well.
I don’t have an economic analysis upon which to base this answer, but I will say that those countries that do not have their own bilateral trade agreements with the United Kingdom —
Senator Woo: Which is most of them.
Mr. Fowler: Which is most of them, but not, for example, Australia or New Zealand, which both enjoy FTAs in their own rights. Other countries for which this will be the first free-trade undertaking with the United Kingdom stand to benefit more significantly, I think, from the gains that will accrue as a result of the U.K.’s accession than, say, Canada, Australia or New Zealand will.
However, we will all benefit from having the United Kingdom in this agreement because it burnishes the reputation of the CPTPP as a very serious economic project and economic integration initiative that ties together countries, not just across the Indo-Pacific but around the world.
Interest in accession to the CPTPP increased dramatically following the success of the United Kingdom’s negotiating efforts because a pathway was revealed to other countries that this could, in fact, be done. Given the very volatile nature of the international trading environment today, I would argue that the ability for new countries to join dialogues like that with the EU and with ASEAN has positioned CPTPP as something of a life raft for the international-rules-based trading system for many countries right now that are trying to navigate this.
In the last six months, we have seen a number of new accession applications as well as a number of queries from new countries interested in understanding how the process would work, which reinforced the points that I had, I think.
Senator Woo: This is probably a question for Mr. Smith.
The CPTPP is part of the Indo-Pacific strategy, and I think we heard six or eight months ago that GAC is reviewing, revising or updating the Indo-Pacific strategy. Has that been done? If so, has it been released? When can we see the updated Indo‑Pacific strategy?
Darren Smith, Executive Director, Indo-Pacific Trade Policy Division, Global Affairs Canada: Thank you for the question.
I’m afraid I don’t have a specific answer I can provide to you this afternoon on that matter. Our particular input into that process is a relatively specific contribution, and we have colleagues who operate this broader strategy that takes into account all of the various economic, political and security‑related elements that is forge a relationship with the Indo-Pacific countries.
From a trade policy perspective, I think we continue to play a key component in the overall Indo-Pacific strategy in the sense that we are looking to utilize that specific strategy to complement our broader trade with our diversification strategy, ensuring we are providing Canadian industry, traders and investors with new and better opportunities and also for them to further solidify the opportunities that already exist with some of our trade agreements and other arrangements from the region.
Senator Woo: But a review is under way, though, is it not?
Mr. D. Smith: Correct. There is ongoing work. I just can’t give you the specifics in terms of the process.
[Translation]
Senator Youance: Mr. Fowler, you just said there’s a better understanding of the importance of the CPTPP. However, I’d like to come back to what Professor Dade of the University of Calgary said. He said this agreement’s importance and potential for Canada are severely undervalued and that Canadians don’t really understand the scope of multilateral agreements.
Could you talk about the involvement of Canadian companies in this agreement and the protocol under consideration? More specifically, I’d like to understand the role of SMEs and larger companies, which are said to be essential to move the needle. Who are these players, what sectors are they in, and what’s their specific view of this protocol?
Mr. Fowler: Thank you for the question, senator. Maybe Canadians don’t really understand the importance of the CPTPP. That’s true. The benefits Canadian companies have already reaped are considerable, including in the agriculture and agri‑food sector. Yes, there are benefits for larger Canadian companies in the sectors the minister talked about earlier, but, more importantly, SMEs can now explore these markets; that wasn’t the case before. This is in part thanks to Canada’s Indo‑Pacific Strategy and the supports set out in that strategy, but also because of market access and other rules set out in the CPTPP.
The international rules system governing trade is facing a number of challenges. That’s why it’s increasingly important to have an international agreement to protect initiatives such as these. Honestly, I think the CPTPP is probably the agreement that excites member countries the most, but third countries that are not yet part of the agreement are also very interested for trade reasons, for their own companies, and for geopolitical reasons.
Senator Youance: Thank you.
[English]
The Chair: I would like to ask a question.
Again, Mr. Fowler, I’m going to put you on the spot. It’s a bit of a follow-on to Senator Harder’s earlier question on something your minister said about all of these agreements — the six or seven — that are being negotiated almost simultaneously moving forward.
The minister mentioned that he is just going to find himself more trade negotiators. In my experience in your department, I found I was always very impressed by the trade policy branch, as it then was, and the experience there, particularly among the senior negotiators.
Those senior negotiators, in the past, were junior negotiators and, in some cases, trainees. They grew within the department and within the vocation. You can’t just — I don’t think — go on the street or advertise, “Trade negotiators wanted.” They have to know the system. They have to know the subject matter and how to engage with counterparts from other countries.
Are you actively engaging internally to ratchet things up in terms of new people coming in who are going to be given a lot of responsibility in a short period of time?
Mr. Fowler: Thank you very much for that question, chair.
I would agree with you. I would say that what I’m about to reply is relevant not only to Global Affairs Canada and the trade policy and negotiation professionals that we have there but to the entire trade policy function across government. There are many highly skilled trade policy professionals who work out of departments like Agriculture and Agri-Food Canada, the Canadian Food Inspection Agency, the Department of Finance Canada, Transport Canada and elsewhere, and it is equally important to the overall agenda that the government hopes to pursue that their capacity be bolstered as well because we rely heavily on the professional support of experts from those organizations to move our agenda forward.
I fully agree. I tend to tell people that trade negotiators are made; they are not found. They are not thick on the ground. We have a number of academic institutions in this country that do a very good job of creating people who have the necessary education and background to learn how to be successful in this field, but I do not believe it’s easy to understand how to negotiate a complex trade agreement like the ones Canada negotiates unless you’re sitting in the room with people who are negotiating trade agreements.
The pipeline of talent and keeping that pipeline refreshed with young professionals, who are going to move through it and become more experienced and more senior over the course of their careers, is absolutely essential, not just to move today’s agenda forward — and the charge that the minister has given to me is to deliver 6 free trade agreements with 16 countries by the end of this year, and I’m confident that that is not a closed list — but, also, to ensure that 10 years from now, when I am no longer the person who has to worry about this, that there is no shortage of people who are prepared, not only to take up the charge, but to execute that function more effectively than I could hope to do.
The Chair: Thank you. That’s a great answer. I just have one quick follow-up.
I have noticed that, in the past, there has been — as you referenced at the beginning of your response — an osmosis, if you like, between Agriculture and Agri-Food Canada and other departments that have been involved in negotiations.
Is that continuing, and is it being encouraged? Obviously, you have your colleagues here, and they have important roles in terms of negotiating various chapters of trade agreements, but is there a push to do more of that and to really make it a whole‑of‑government approach?
Mr. Fowler: Yes, chair. Thank you. We believe in the power of cross-pollination. We need people who are deep policy experts in specific areas, like sanitary and phytosanitary, but we believe that we can learn from each other and that being exposed to different aspects of the government’s agenda from different parts of the public service is very helpful.
I, myself, was previously in Matthew Smith’s position. Matthew Smith and Evan Lewis were previously at Global Affairs Canada. We do tend to move around. It is, maybe, a somewhat closed bubble within which we move, but we do move around. We think that that makes the overall machine a lot stronger.
The Chair: Thank you very much. I think cross-pollination is a better characterization than osmosis, which is really just one way, if I remember my high school biology.
[Translation]
Senator Gerba: My question is for Mr. Smith and probably Mr. Fowler. You talked about the strategic export office. I understand the office will support large companies, but I’ve learned that large companies often don’t need advice or support; they go directly to the market. Have you thought of an approach where this office could — my colleague talked about this a little earlier — match large businesses with SMEs so they too can benefit from this agreement?
Mr. Fowler: Thank you for the question, senator. I just want to clarify that the strategic export office isn’t going to focus solely on large companies, but rather on the more complex transactions where politics are difficult, where the role of the importing country government is more important, and where the Canadian government’s commitment will help Canadian companies win contracts and take advantage of opportunities in those markets. That often applies to the larger companies, but not always.
If SMEs have a chance to pursue such opportunities, for example, in nuclear defence or in the energy sector, the office might be in a good position to help them as well. It’s not just large companies.
Senator Gerba: Will it be open to all markets or just the CPTPP?
Mr. Fowler: It’s not just focused on CPTPP countries. Theoretically, it could help Canadian companies in any market where they have a chance to win an important contract, but I’m not an expert on how the office operates. We can provide the committee with more information after the meeting, if that helps.
Senator Gerba: I would appreciate that very much.
[English]
Senator Harder: Your response to Senator Woo’s earlier question got my mind turning a bit in respect of your comment that the CPTPP is a gold standard. People want to get in and, even more, are knocking on the door of inquiry. That leads me to challenge your diplomatic upbringing because I suspect you won’t answer my question.
At some point, is the CPTPP so strong an organization that it would not welcome a future United States government knocking on the door?
Mr. Fowler: Well, thank you. I will endeavour to live up to my diplomatic reputation. I would say, senator, that that’s not a question that any official from Canada can really answer because, of course, the Auckland Principles, which govern accessions to the CPTPP, require consideration of whether a country is able to achieve consensus or not. It would really need to be a meeting of the minds of the existing members — 12 now, soon to be more — on whether to open accession talks with any country.
Senator Harder: But on principle, more countries make it more difficult to have consensus.
Mr. Fowler: More countries make it more difficult, but quantity has a quality all of its own. The size of the U.S. market might be sufficiently interesting to many of those countries.
The other Auckland Principles are an established history of undertaking and entering into obligations at the level of ambition of those that are contained in the CPTPP, and a strong track record of living up to such commitments. This is an interesting moment in which to ask the question.
Senator Harder: I think you have answered the question very well. Thank you.
Senator Woo: This is a bit of a technical question. It connects not to CPTPP strictly but to CUSMA and what it might mean for new accessions to the CPTPP, particularly China. Vietnam is in there already, and Vietnam is classified as a non-market economy.
I want to get an understanding from our trade policy people of how to define the idea of a non-market economy. Which countries in the world do we classify as non-market economies? The context here, as you may know, is that we’re not allowed to enter into a free trade agreement with a non-market economy now that we’re part of CUSMA. Our hands are tied. The variables have been reduced. What does it mean to be a non‑market economy?
Mr. Fowler: A non-market economy is an economy whose fundamental decisions are not necessarily guided by the forces of a free market, where business decisions and commercial decisions might be driven by broader considerations that could be put forward by, say, the political level in that country, as an example, or it may be driven by other socio-economic aspirations, rather than simply the operation of the market in and of itself.
Canada doesn’t approach the question of a non-market economy like the United States does. We don’t have a list. I could stand to be corrected, but I don’t think we have a list of countries.
We have argued, in the past, in some cases, that countries operate in a non-market way in specific instances with respect to specific products or sectors, for example. This is an important consideration in determining how we apply our trade-remedies regime, as an example. There may be non-market behaviour or evidence of non-market behaviour in certain cases. That doesn’t necessarily mean that the Government of Canada is of the view that the country as a whole is a non-market economy, simply that there are certain instances that give rise to this type of description.
There is an obligation in the CUSMA that any party of the CUSMA that enters into a proposed free trade agreement with a non-market economy would share the details of that agreement with the other parties and make itself available to discuss those. Canada takes its obligations under the CUSMA very seriously. Were we to find ourselves in such a position, we would go through the procedural requirements that are set out there, just as we would expect our partners in the CUSMA to do for us if they were to enter into such a negotiation or proposed agreement in the future.
It is a procedural commitment. I don’t think it’s more than that.
Senator Woo: Thank you.
Senator Wilson: I had to step out for part of today’s hearing, so if my question has been asked and answered, I apologize to the group. But building on what Senator Gerba was asking earlier, I was interested. Yesterday, we had one of our witnesses talking about how the CPTPP is not built for SMEs. It’s really built for big business. That may or may not be true, but that’s what he said.
Given the situation that we’re dealing with in the United States and that the left isn’t necessarily going to be any better than the new right, as we move forward, we’re likely going to continue to have headwinds from the U.S.
What is your perspective on our readiness to support those SMEs in terms of accessing markets?
Mr. Fowler: Thank you very much for the question, senator. I can only speculate as to the rationale in the mind of the earlier witness in making that comment.
These are challenging markets for some small- and medium-sized enterprises, and especially small- and micro-sized enterprises, given the geographical distance and the extent to which the legal framework and consumer tastes might be different from that to which they are accustomed. For most small- and micro-sized Canadian enterprises, their first export market has historically been the United States.
But if you look at the provisions of the CPTPP, those provisions are not significantly different than any of the other agreements that we have done based on what we would call the NAFTA model. The market access is comparable. It is accessed in the same way through rules of origin that are administratively straightforward. We have the same rules with respect to non‑tariff barriers or at least comparable rules. So, it should not be fundamentally more difficult for a small- or micro-sized Canadian enterprise to navigate the operation of the agreement itself than it would be for that company to navigate the CUSMA.
I would suggest that maybe it is the markets that are more challenging. That is why it is very important to not only negotiate these things but that we then help Canadian companies to walk through the door that we open through these market‑access opportunities. That is where our colleagues in the Trade Commissioner Service really do come to the fore.
The Chair: Thank you very much. On behalf of the committee, I thank our witnesses, Evan Lewis, Matthew Smith, Axel Ndayisaba, Aaron Fowler and Darren Smith for your testimony today.
As you may have noticed, and, of course, it’s related to the government’s agenda. This committee has been doing a lot more on international trade lately. This work will continue, and I suspect we’ll see you here again before too long. Thank you for what you do and for your professionalism. Extend our thanks to your teams as well. We’re quite proud of them.
Colleagues, clause-by-clause consideration of Bill C-13 will take place on Thursday, April 23. Our clerk, Chantal Cardinal, will send an email with further details later today.
(The committee adjourned.)