Canada-Honduras Economic Growth and Prosperity Act
Mr. Speaker, I am pleased to rise today in this House for my first speech of 2014, and welcome all my colleagues back, to speak about the Canada-Honduras free trade agreement.
This agreement represents yet another important step in the diversification of our trade relationships around the world and our efforts to find new markets and to grow markets for Canadian goods and services.
The priority of our government has been focused on opportunity and prosperity for Canadian families. This begins and ends with ensuring that our producers and firms have new markets to trade their wares. Trade leads to employment and prosperity for Canadian families. Whether in the towns of Bowmanville, Port Perry or Uxbridge in my riding or indeed in the cities and towns across the country, families are made stronger by the simple fact that mom or dad can find meaningful employment if they want to be engaged in the workplace.
Canadian exports already account for an astonishing one in five Canadian jobs. More than 40,000 Canadian companies are global exporters. Canadian companies and their innovative products are leaders in sectors ranging from aerospace, transportation and agriculture to information and communications technology.
With trade being critical to Canada’s prosperity, Canada has long been a key architect of international trade rules at the World Trade Organization, through the free trade agreement with the United States and ultimately with NAFTA. Our country relies upon strong international agreements and treaties to counter protectionism and keep global markets open for our employers.
We remain very engaged and positive about our most important trade relationship with the United States. Trade with the United States has been a defining part of the Canadian story. From north-south mercantile trade before Confederation to the national policy of Sir John A. to the free trade agreement signed by the Conservative government in 1988, trade with our American friends has brought prosperity to generations of Canadian families.
The need to diversify Canadian trade relationships has been raised for decades because of a growing dependence on trade with the U.S., and this need to diversify came into sharp focus with the global recession in 2008.
In 2008, Canadian exports to the United States totalled $368 billion. The following year, amid the global economic crisis, these exports dropped to $270 billion. While there has been a recovery in the U.S. economy and exports have been rebounding, statistics from 2012 show that our exports to the U.S. still remain 10% below 2008 levels.
The strong economic leadership of our Prime Minister and this government has helped Canada weather the global turmoil better than most developed countries, but we cannot rest on our laurels when it comes to trade. We also must come up with a dual strategy that builds and strengthens our critical trade relationships now while also building new and growing markets to sell our goods and services.
The global economy is changing rapidly, and new markets are exploding around the world. Trade is helping lift millions out of poverty while also promoting peace and security through stronger international engagement.
Canada needs to pursue these new markets that are growing with gusto. We need not only to keep up with our global competitors but to leverage our natural advantages to penetrate new markets faster and deeper than our competitors. Standing still will not create jobs for Canadian families. Over time, inaction could erode our position in the world and our quality of life.
This is why our government has responded with an ambitious international trade agenda. Opening new markets for Canadian companies, large and small, is cornerstone to this plan, as we continue to grow the Canadian economy and the jobs in our economy created as a result of trade.
We have made significant progress on opening new markets for Canadian goods and services. Last October, the Prime Minister announced an agreement in principle on the Canada-European Union comprehensive economic and trade agreement, the most ambitious trade agreement Canada has ever negotiated.
Our agreement with the European Union would give Canadian companies preferential access to an economy of more than 500 million consumers and a $17 trillion GDP. That is tremendous opportunity.
A joint study by Canada and the EU, as part of our negotiations, concluded that our agreement with the European Union could boost Canada’s GDP by $12 billion annually and increase bilateral trade by 20%. Most importantly, the deal could result in the creation of 80,000 net new jobs once the benefits of the Canada-EU trade agreement are realized.
While the Canada-EU trade agreement represents the culmination of many years of work with a group of nations, with our provincial stakeholders, with industries and with municipalities who are eager to access the 500 million consumers of Europe, our government has also been tirelessly pursuing trade opportunities in markets of all sizes.
Since 2007, our government has concluded free trade agreements with Peru, Colombia, Jordan and Morocco. New agreements and relationships are being struck while existing ones are being expanded. We have also concluded or brought into force 22 new or updated foreign investment promotion and protection agreements to provide better access to growing global markets for Canadian exporters, while also providing more certainty in these markets through the secure framework that a foreign investment promotion and protection agreement offers. It gives me great pleasure to advise the House that Honduras will soon be yet another market that we have opened for Canadian employers through this Canada-Honduras free trade agreement.
While our EU deal represents Canadian opportunities across the pond for exporters, there are also tremendous opportunities here in the Americas. Total merchandise trade between Canada and the countries in the Americas stood at $56.2 billion in 2012. This has increased by 32% in the last six years alone. Canadian direct investment in the Americas totalled $168 billion in 2012 and has increased by 59% over the same period.
We are already engaged in South America and Central America, and our government knows that we need to do more in our own backyard. Canada’s trade agenda is not just about the planes, trains and automobiles we manufacture in Canada—and great ones, to boot—nor does it only represent natural resources and agricultural products. We are increasingly pursuing markets for our intellectual property, academic excellence and delivery of professional services around the world.
Canada is very much engaged in negotiations surrounding the trade in services agreement, which would provide a secure legal framework and new market access for Canadian service suppliers in many of the world’s most important and growing service markets. We also remain an active participant in multilateral negotiations at the World Trade Organization, where just a few weeks ago Canada helped conclude a trade facilitation agreement that will boost trade by cutting red tape for Canadian companies.
However, we are not just stopping there. Canada is also committed to advancing our ongoing free trade negotiations with other partners in the Caribbean, in Morocco and here in the Americas. We are also looking for new opportunities to grow Canada’s international trade and are undertaking exploratory discussions with Thailand and Turkey to determine what benefits Canadians and Canadian employers could see from trade agreements with these partners in the future.
In addition, we continue to update our existing free trade agreements to ensure that Canada remains a global leader in trade and commerce. We recently announced the modernization of the Canada-Chile Free Trade Agreement. This expansion and modernization builds on an agreement that dates back to 1997 and a trade relationship that is now worth over $2.5 billion. The updated agreement with Chile includes the addition of a new financial services chapter, which will help world-class Canadian financial institutions develop new markets in the areas of banking, insurance and asset management in Chile. It also includes new roles on government procurement, customs procedures and dispute settlement.
As members are aware, the Prime Minister announced last week that we would also modernize our existing free trade agreement with Israel.
The Canada-Israel Free Trade Agreement really has been a cornerstone of a growing and important relationship for our country. While our countries enjoy a sophisticated trade relationship, an updated free trade agreement with Israel would enhance bilateral commercial flows by reducing technical barriers, enhancing co-operation, increasing transparency in regulatory matters and reducing transaction costs for exporters.
It would also create greater visibility for Canadian companies in the Israeli and Middle Eastern market and support closer ties with this dynamic economy and important democracy in the Middle East.
It is clear that the government is working hard to ensure that Canadians reap the economic benefits of global trade, which as I said at the outset, accounts for one in five jobs in Canada.
The Canada-Honduras free trade agreement is part of our efforts to liberalize trade with our partners here in the Americas. It is also a realization of our global markets action plan, which will grow existing and important trade relationships while forging new ones around the world.
The Americas offer great potential. Trade has been growing dramatically in the last six years, as I said. We also need to promote increased mutual economic sharing of ideas and increase engagement.
Canada’s strategy for engagement in the Americas focuses on intensifying trade promotion and relationship-building efforts, to ensure that the Canadian private sector can take full advantage of the trade and economic agreements, as well as helping to build the capacity of our trading partners to capitalize on the benefits of free trade with Canada and the benefits that come along with a growing and emerging middle class in many of these countries.
Canada is committed to a strong economic partnership with Honduras that would contribute to enhanced prosperity and sustainable economic growth for both our countries in the long term.
This Canada-Honduras free trade agreement is a key component in advancing the goals of Canada’s strategy for engagement in the Americas and would support our growing commercial and social relationship with that country.
Canada’s two-way merchandise trade with Honduras grew by 46% in the last six years. Canadian companies are active in Honduras in the areas of apparel production and mining. However, there are other sectors of huge potential opportunity, such as green building, clean technologies and information and communities technologies, to name just a few.
Once implemented, the Canada-Honduras free trade agreement would eliminate tariffs on 98% of the tariff lines going both ways. We would gain better access to a growing market in our hemisphere, with grain and oilseeds, beef, pork, potatoes and processed foods being some of the early and big winners and the potential for more industries and, particularly, service areas, as the relationship with Honduras develops over time.
Canada’s Trade Commissioner Service already works with Canadian companies that are interested in doing business in Honduras. These are recognizable and important employers across Canada, such as Gildan Activewear, Aura Minerals and Canadian Bank Note, to name just a few.
Once the trade agreement is ratified, our trade commissioners would ensure that companies, in particular small and medium-sized enterprises, are aware of how they could benefit from this free trade agreement so that they could take full advantage of the greater transparency, stability and protection the agreement would provide in the Honduran market.
In addition to opening doors for Canadian companies and building our trade relationship, Canada is also committed to supporting Honduras in other ways.
Canada and Honduras first established diplomatic relations in 1961 and have a broad and diverse relationship, driven by a wide range of links and collaboration, from political dialogue and commercial exchange to people-to-people ties, as well as long-standing and substantial Canadian development co-operation.
We maintain an open dialogue with the Government of Honduras, as we believe that engagement is the best way for us to help Honduras meet its challenges, grow its economy and promote stability.
Engagement on all levels will grow prosperity and security for Hondurans.
As one of the 20 countries of focus for Canada’s development assistance, Honduras is Canada’s largest bilateral program in Central America and the fourth largest in the hemisphere. In 2011-2012, Canada provided over $39 million to the country through all development channels. This makes it the largest bilateral donor in all of Honduras and the sixth largest overall donor in the hemisphere.
Canada’s development program will support and promote economic opportunities in Honduras in a way that will allow its trade with Honduras to grow steadily over time.
It is our view that prosperity, security, and democratic governance, including full respect for human rights, are interconnected and mutually reinforcing. Increased prosperity through trade can contribute to the reduction of poverty and social exclusion by increasing economic opportunity for all Hondurans. Once ratified, this free trade agreement would be a cornerstone of our bilateral relationship with Honduras and would benefit both our countries.
This is a comprehensive trade deal that would give Canadian businesses a secure and predictable framework in a growing Honduran marketplace. The United States and the European Union already enjoy free trade with Honduras, so it is especially important that we ratify this agreement and put Canadian companies on a level playing field with our main competitors.
Let me turn to some specific examples of the benefits of the Canada-Honduras trade agreement. First and foremost, it would help make Canadian products more attractive in the Honduran market by eliminating tariffs. Today Canadian exports to Honduras face average tariffs in the 11% range for agriculture and the 5% range for non-agricultural goods. Once the agreement is in place, Honduras would immediately eliminate tariffs on almost 70% of its tariff lines in respect of goods imported from Canada.
This agreement represents an important component of our government’s global markets action plan. This plan would coordinate the funding and expertise inherent in our foreign policy, trade, and development arms, and focus them in countries where we can make a difference, recognizing that benefiting the social and human rights of a country will also help benefit its local economy. Jobs for Hondurans will help promote stability in the country.
This government is on an unparalleled track for promoting the trade of our goods and services across the world. The Canada-E.U. trade agreement represents a huge leap in terms of global trade agreements in that it will provide opportunities for Canadian exporters in a market of 500 million people while it also allows penetration right down to services and mutual recognition of professions. It really is taking trade agreements into this new millennium.
In my riding of Durham, one in five jobs relates to trade. The communities of Uxbridge, Scugog, and Clarington need these new markets for their goods, particularly at a time when the American market is slowly rebounding from the 2008 world economic crisis.
Our government is firmly committed to building new markets for our goods and services to maintain the job creation that trade promotes. These deals are not just with mammoth markets of 500 million people, like the Canada-E.U. trade deal. They are also in other important areas of the world, such as Georgia and Morocco and now Honduras. There our trade, our prioritization of our services, and our engagement through our global markets action plan could not only promote trade in that country but could also promote stability and engagement in a range of labour, environmental, and other areas.
This is a pivotal part of our government’s global markets action plan. It is a pivotal part of keeping Canadian families employed and engaged. I am truly hoping all members of the House will support this important agreement.