Trade Committee explores boons and perils of increased Indo-Pacific ties as wait for feds’ strategy grows

The House Trade Committee is hearing about the growth for Canadian businesses in the Indo-Pacific thanks to the start of a handful of trade negotiations with nations and groups in the region, but some have raised concerns for environmental and labour standards. The federal government has been working on a much-anticipated Indo-Pacific strategy after years of strained relations with Beijing. Foreign Affairs Minister Mélanie Joly (Ahuntsic-Cartierville, Que.) told Politico last month that the strategy will be released in the “coming weeks.” International Trade Minister Mary Ng (Markham-Thornhill, Ont.) has already launched bilateral trade talks with Indonesia, and Canada is set to start free trade talks with Association of Southeast Asian Nations (ASEAN) and work towards an interim trade deal with India. The potential trade agreements could alter Canada's path in the region and offer more trade diversification away from China. Ottawa has come under criticism for being absent from some initiatives in the region, such as the AUKUS defence and security pact between Australia, the United Kingdom, and the United States, as well as the Indo-Pacific Economic Framework for Prosperity—an agreement between the U.S. and 13 Indo-Pacific countries. Conservative MP Randy Hoback says Canada should be finishing Indo-Pacific trade talks expeditiously. The Hill Times photograph by Andrew Meade The House Committee on International Trade, chaired by Liberal MP Judy Sgro (Humber River-Black Creek, Ont.), has completed seven meetings looking into Indo-Pacific opportunities for Canadian businesses, hearing from business and industry representatives, labour voices, and government officials. As part of the study, MPs on the committee have also planned a visit to Singapore, which is a member of ASEAN and party to Canada’s Pacific Rim trade pact: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Most recently, the committee met on June 6 to hear from three Canadian ambassadors—posted to the Philippines, Singapore, and Vietnam—about growth opportunities in the fast-developing nations. Henry Chi-Hung Liu, executive director of the economic division at the Taipei Economic and Cultural Office in Canada, also appeared, trumpeting the merits of Taiwan’s inclusion into the CPTPP. In April, Canada-ASEAN Business Council president Wayne Farmer told the committee that increased links in the region were needed as it is “one of the world’s fastest-growing regions” and to “provide long-term risk diversification for Canada to hedge against geopolitical and supply chain concentration risks, and strengthen ties with a region fully supportive of global trade and the regulatory institutions that govern it.” Farmer said that Canadian trade with the ASEAN is “underperforming.” The Business Council of Canada’s Trevor Kennedy, vice-president of trade and international policy, told the committee in May that “most” of the world’s economic growth over the next “several decades” is expected to take place in the Indo-Pacific. “One way Canada can advance its regional interests is to release an Indo-Pacific strategy, and this should include a significant focus on trade and economic ties,” he said. “Within that strategy, we believe that trade negotiations can play an important role in building a bridge between Canadian and Indo-Pacific markets.” Kennedy noted that the CPTPP has been a “beneficial” agreement for Canadian exporters and can bring more opportunities through expansion. The United Kingdom, China, Taiwan, and Ecuador have formally applied to join the trade pact, with South Korea, Thailand, and the Philippines indicating an interest to join. Foreign Affairs Minister Mélanie Joly has said that the government's Indo-Pacific strategy is expected in the 'coming weeks.' The Hill Times photograph by Andrew Meade Conservative MP Randy Hoback (Prince Albert, Sask.), his party’s international trade critic, told The Hill Times that as part of the study, he is trying to bring forward the concerns and opportunities from stakeholders to address the targets that trade negotiators need to meet. “It gives us a good insight on what we can expect out of a properly negotiated deal and to get a good sense of ... how Canadians will benefit from this trade deal, and where some parallels will be and what they may look like,” he said. Hoback noted that the study would be “a lot easier” if the government had already released the Indo-Pacific strategy. “I kind of get the sense that they are holding it, waiting for the information to come from our committee before they release it instead of doing the opposite,” he said. “To me, it’s a little backwards.” He said it is important for Canada to gain a first-mover advantage in the region ahead of the United States, especially for agriculture exporters. “It’s important to do this properly, but quickly,” Hoback said. “A bad deal doesn’t help anybody, but a good deal done quickly—there’s nothing wrong with that.” He said the government needs to learn from some of its mistakes in previous trade agreements where agricultural exporters have been met with non-tariff barriers. Those non-tariff barriers can vary by region, which include halal certification for Canadian beef exported to Indonesia, as well as restrictions on greater exports on pulses to India. After the committee has heard from a handful of groups that see promise in increased trade in the Indo-Pacific, Hoback said he wants to hear from those that may have concerns with the initiative to give a broad perspective. The committee has increased ability to scrutinize trade negotiations after an agreement between the Liberal government and the NDP was reached when the new NAFTA was moving through Parliament. The agreement forces the government to table notices of intent and notices of objective before Canada enters into trade talks. Hoback said the committee needs to follow the Indo-Pacific talks throughout their negotiation. “When we get the deal at the end, we have no ability to make any modifications, so it’s either basically an up or down vote,” he said, noting that he wants to be part of the consultation process with trade negotiators so he can be aware of any potential hurdles. NDP MP Brian Masse says Canada should advance labour and environment protections with Indo-Pacific nations similar to what was agreed upon in the new NAFTA. The Hill Times photograph by Sam Garcia Canadian Agri-Food Trade Alliance executive director Claire Citeau told the committee that there is a need to diversify in the Indo-Pacific, as well as to address non-tariff barriers. Some witnesses called for the creation of an Indo-Pacific diversification office to track product access issues, including non-tariff access barriers. Canadian Labour Congress secretary-treasurer Lily Chang told the committee that it is important to ensure that trade agreements have the mechanisms to “enforce sustainable development commitments” and to “promote strong labour, social and environmental standards and protection.” She said that Canada’s trade policy must be consistent with domestic policy, including combatting forced and child labour in supply chains, as well as preventing violence against workers. “Fundamental human and labour rights, equity and environmental protection must be integral in trade negotiations,” she said. NDP MP Brian Masse (Windsor West, Ont.), his party’s international trade critic, told The Hill Times that he wants to see labour and environmental protections similar to what was agreed to under the new NAFTA. He spotlighted the previous dispute between Canada and the Philippines over a shipment of waste that was sent to Manila. Canadian Ambassador to the Philippines Peter MacArthur said the issue has been resolved and there haven't been any similar issues since. “There’s been some progress in standing up for these things and it actually enhanced our reputation,” Masse said, noting that as Canada expects Indo-Pacific countries to increase labour and environment standards, then Canadian businesses cannot take advantage of lax rules. He added that he is concerned that he didn’t get sufficient answers over what effect a trade deal could have on arms exports. When asked at committee, Global Affairs trade official Arun Alexander said that Canada has a “very rigorous arms export permit system,” which would be applied to any Indo-Pacific nation that Canada enters into a trade agreement with. Bloc Québécois MP Simon-Pierre Savard-Tremblay (Saint-Hyacinthe–Bagot, Que.), his party’s trade committee representative, raised his concern about the exports of palm oil from Indonesia, suggesting that a trade deal with Indonesia could lead to increased deforestation. Alexander told the committee in April that the export of palm oil is a “very important issue,” noting that in the first round of talks with Indonesia, Canada has highlighted the “importance of environmental stewardship.” Masse said the committee is “closing in” on being able to conclude its study and bring recommendations back to the House. But with a packed docket as the House is set to adjourn for the summer, he said it remains to be seen if a report can be tabled before the fall. nmoss@hilltimes.com The Hill Times

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Trade Committee explores boons and perils of increased Indo-Pacific ties as wait for feds’ strategy grows

Industry representatives told the House Trade Committee that the government needs to spotlight stronger ties in the Indo-Pacific as it is set to be one of the fastest-growing economic areas in the world.

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