FAIT Committee Meeting

STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Monday, April 26, 1999

• 0900

[English]

The Acting Chairman (Ms. Sarmite Bulte (Parkdale—High Park, Lib.)): Good morning, ladies and gentlemen. I'd like to call the Standing Committee on Foreign Affairs and International Trade to order.

Pursuant to Standing Order 108(2), the main committee is conducting an examination of Canada's trade objectives in the forthcoming agenda of the World Trade Organization. In addition, pursuant to that standing order, the Subcommittee on International Trade, Trade Disputes and Investments is also conducting an examination of Canada's primary interest in the free trade area of the Americas.

[Translation]

I welcome our guests and sincerely thank them. It is an honour for us to be with you today.

[English]

The public hearings our committee is holding across the country on key aspects of Canada's future international trade policy come at a time when countries are facing some crucial choices and decisions to the corporate negotiating processes being conducted both multilaterally, under the auspices of the World Trade Organization, and in developing regional forums, such as the proposed free trade area of the Americas.

In undertaking these wide-ranging public consultations on Canadian interests in both the WTO and the FTAA negotiations, the committee and its trade subcommittee strongly agree with the Minister for International Trade, Sergio Marchi, on a subsidy to provide Canadians with more opportunities to have input into the positions the Government of Canada takes going into such negotiations.

In March, the committee travelled to Quebec and the Atlantic provinces. This week, while one-half of the committee is holding hearings in the three western provinces, the other half of the committee is having similar hearings in Ontario and Manitoba. We hope to benefit from this broad cross-section of Canadian opinion as much possible, and reflect that in a report we hope to table in the House of Commons before the summer, and in advance of the major international trade meetings taking place later this year.

Leading up to this phase of cross-country consultations, the committee, in February, heard first from the minister and his senior officials. Following that, a number of successful round tables were convened in Ottawa prior to the start of the cross-country hearings. By mid-April, we had heard from more than 100 witnesses, who made substantive presentations to the committee, addressing a broad range of critical issues and concerns.

As Minister Marchi stated in his opening presentation to the committee, international trade has now become a local issue. What happens at the negotiating table has consequences here at home at the kitchen table and in all other areas of our daily lives. As this trend deepens, as a result of globalization, the making of trade policy cannot be left to only a few officials in back rooms, but needs to engage the whole of society and governments at all levels.

Members of the committee therefore welcome these hearings as one step in contributing toward that goal. We have been deeply impressed by the quality of the testimony and written submissions, beyond the formal hearings, and this must be an ongoing learning and listening process.

In that regard, we have just added to our committee's website a series of discussion notes with questions for public consideration. We are also planning to include in our report a citizens' guide to the WTO. We encourage citizens in all parts of Canada to continue to participate and follow the progress of our parliamentary study process in the coming weeks and months.

At this time I'd like to welcome Ms. Smallwood, Mr. Hart and Mr. Sinclair. You'll be our first panellists today. But before we hear your presentations, I would like to ask the members of the committee to quickly introduce themselves to you.

Mr. Darrel Stinson (Okanagan—Shuswap, Ref.): My name is Darrel Stinson. I'm a Reform representative for Okanagan—Shuswap for the federal government.

Mr. Werner Schmidt (Kelowna, Ref.): I'm Werner Schmidt, MP from Kelowna.

[Translation]

Mr. Benoît Sauvageau (Repentigny, BQ): Good morning. I'm Benoît Sauvageau. I'm the Bloc Québécois MP for Repentigny. I'm also a spokesperson for International Trade.

[English]

Ms. Colleen Beaumier (Brampton West—Mississauga, Lib.): I'm Colleen Beaumier, Liberal MP for Brampton West—Mississauga.

The Acting Chairman (Ms. Sarmite Bulte): I'm Sarmite Bulte. I have the honour and the privilege of chairing these meetings out west. I'm also the chair of the Subcommittee of International Trade, Trade Disputes and Investments and I'm the member of Parliament for Parkdale—Hyde Park in Toronto.

Welcome.

• 0905

Joan, may I ask you to start.

Ms. Joan Smallwood (Chair, Special Committee on the Multilateral Agreement on Investment, and MLA for Surrey—Whalley, Province of British Columbia): Thank you. I'd like to start by thanking the committee for the opportunity to present to you and say how pleased I am to start off a Monday morning with you.

Having chaired the legislative committee for British Columbia, I know what a choice time this is to be able to speak to you first thing in the morning rather than last thing on the last day of the last week.

As chair for the B.C. legislative assembly Special Committee on the Multilateral Agreement on Investment, I'd like to welcome you formally.

Many British Columbians were disappointed that the federal committee studying the MAI held abbreviated hearings last year and only in Ottawa. B.C. citizens are gratified that your committee is now consulting British Columbians on these important issues here in British Columbia. So thank you for coming. It's taken as a sign of hope, and we're looking forward to your report.

In the very short time available today, I'd like to briefly describe the work of B.C.'s Special Committee on the MAI and outline just a few of the many fundamental concerns B.C. citizens have about the proposed MAI and on existing NAFTA investment provisions upon which it was based.

I'll explain why to date the federal government's proposal for addressing these concerns is unsatisfactory, and I will highlight the widespread public concern about the fact that NAFTA's investment rules have enabled a California investor to bypass British Columbia's court to challenge B.C.'s environmental policy preventing bulk water removal from the province.

Finally, I'll communicate to you a vitally important message from the many British Columbians who spoke to our committee, that there is another, much better way ahead than the unbalanced approach to international agreements now being used. It's time Canada took a leadership role in pursuing international rules that strengthen rather than weaken our communities and that reinforce democratic governance at all levels.

The multiparty Special Committee on the MAI was appointed by a unanimous vote of the British Columbia legislature on April 27, 1998, to review the MAI and related international issues and to increase public awareness about them.

The committee has conducted itself in two stages. During the first stage we held last fall, the committee heard over 80 expert witnesses, not only from British Columbia but from across Canada and the United States, as well as from France and the European Union. Copies of the committee's first report, which was issued in January, are being provided to each of you today.

The second stage of the committee's work involved engaging British Columbia in a dialogue about the MAI and related international investment issues. The committee was privileged to have very thoughtful presentations from citizens in Terrace, Prince George, Nelson, Courtenay, Surrey, Kelowna, Kamloops, Victoria, and at UBC in Vancouver and in Burnaby.

The committee's second stage report will be tabled in the legislature later this spring. Reports from all of the proceedings of the committee are available free to the public through the clerk of committees and on our committee's website.

British Columbians have grave concerns about the provisions that were proposed in the MAI and actively supported during extensive negotiations by the Government of Canada.

Let me emphasize one of the main conclusions of the committee. The MAI is fundamentally flawed and should be discarded in favour of a fresh approach for future international negotiations. Moreover, MAI's style provisions should be removed from the existing North America Free Trade Agreement.

Let me try to make this abundantly clear by putting it in a slightly different way. You may have received suggestions that the main elements of the MAI, which failed at the OECD, should essentially be transferred intact for consideration during the World Trade Organization negotiations. Indeed, Canada, Japan, and the European Commission have reportedly been pushing just such an approach. Our conclusion, based on the most extensive public hearings on these matters to date, is that this would be a grave mistake.

• 0910

During the negotiations on the MAI, Canada's position was that NAFTA's investment chapter should serve as a model for the MAI. Canadian representatives repeatedly referred to their intention of replicating NAFTA.

There is every indication that Canada has not changed this negotiation position for the WTO or for the FTAA. Again, many British Columbians told us this approach would be simply unacceptable. While the world clearly needs international rules for investment, rules like those contained in the MAI and in the NAFTA investment chapter are headed in the wrong direction.

In the FTAA and the WTO negotiations, Canada's dogged, single-minded pursuit of unbalanced, inappropriate and discredited MAI-style investment rules is a recipe for failure. The Canadian government should stop pushing for the negotiations of the MAI and NAFTA-style investment rules in the WTO. Canada should fix the NAFTA investment chapter's very serious flaws, instead of seeking to expand these investment rules to all of the Americas through the FTAA.

If there were more time, I would have liked to expand on the many ways in which MAI-style rules not only undermine government's ability to provide certainty for international investors, but also undermine citizens' democratic control over their communities. I urge you to examine the committee's first report and the expert testimony, where many of these issues are considered in detail.

Here are just a few of the highlights of the committee's report on some important provisions in the MAI that enjoyed, and by all accounts still enjoy, strong support from the Canadian government.

First, on national treatment, the committee recommends that the MAI's top-down approach, in which all sectors measured are covered by the agreement unless specifically exempted, should be discarded in favour of the traditional bottom-up approach, in which governments negotiate positive lists of industries or sectors that will be covered.

On performance requirements, extensive restrictions on performance requirements are unacceptable. Governments must be free to negotiate for local, provincial or national economic benefits, and to apply specific conditions aimed, for example, at job creation or improved environmental protection.

On investment protection, investor protection provisions of the MAI extend well beyond domestic law. Adopting these provisions would constitute an unacceptable, unnecessary, even reckless surrender of sovereignty and democratic accountability.

On investor state dispute procedure, this process, which enables a foreign affiliated investor to bypass the domestic court system and challenge government's measures before international arbitral panels, subverts the rules of law and undermines domestic processes.

Although we are somewhat encouraged by the Canadian initiative with its NAFTA partners to narrow the meaning of expropriation and bring greater transparency to NAFTA's investor state process, these initiatives do not go nearly far enough. In the view of our committee and the great majority of British Columbians from whom we have heard, NAFTA's investor state mechanism should be eliminated and should not serve as a model for any future international agreement.

On general exceptions and reservations, country-specific reservations provide only limited and temporary protection and are therefore inadequate to protect vital Canadian and British Columbian interests. Provisions that fully safeguard democratically elected governments' freedom to protect the environment, conserve natural resources and provide health care, education and other social services, strengthen its culture and achieve its citizens' economic development priority must not be relegated to afterthoughts in the treaty negotiation process. Future negotiations should exclude the concepts of standstill and rollback.

• 0915

It is these and many other substantive concerns that spurred the committee to reject the fundamental basis of the MAI negotiations and call for a set of guiding principles for a more balanced approach to international trade and investment agreements.

Before we consider the importance of these alternative approaches, I'd like to share one example of how NAFTA's rules can be used and are being used by a U.S. investor to attack B.C.'s protection of its vital fresh water. The Sun Belt NAFTA case, as it is commonly known, came up again and again in our public hearings. To many citizens it crystallizes some of the most objectionable features of NAFTA's investment chapter.

I'd like to spend a little time on this, because British Columbians know that the control of our province's fresh water is of critical import and we take that very seriously. At this point it is useful to review some history, and I'll be brief.

B.C. has always shown a keen interest in protecting fresh water in this province. Ever since the fierce debate over water inclusion in the Canada-U.S. free trade debate in the 1987-88 round, British Columbia has demonstrated their strong opposition to bulk water exports and to schemes to divert B.C.'s rivers to California.

When then Premier Bill Van der Zalm's Social Credit government issued several licences for bulk water export by marine bulk tanker in 1991, determined opposition caused the government to backtrack and place a moratorium on bulk water shipments. This moratorium was extended, broadened, and made permanent in 1995 when Premier Harcourt's New Democrat government passed the Water Protection Act to prohibit bulk water removals and large-scale water diversions. It's also important to recall that in the lead-up to the 1993 federal election, the B.C. government repeatedly highlighted NAFTA's treatment of Canada's control over water.

British Columbia ministers repeatedly urged then federal Liberal leader Jean Chrétien to fulfil his party's promise to renegotiate NAFTA, in part to exempt water. When NAFTA was passed unchanged, B.C. urged newly elected Prime Minister Chrétien not to proclaim Canada's NAFTA implementation legislation without obtaining first full protection of water. As we all know, no meaningful protection for water was obtained, and the NAFTA was adopted without a single change. Now the chickens are coming home to roost.

Just last December California-based Sun Belt Water Inc. announced its intention to use NAFTA's investment rules to seek compensation for damages allegedly arising from B.C.'s environmental prohibition against bulk water removals. This action is separate from the company's domestic legal case. This case is historic. It is the first challenge of a provincial measure by an investor using NAFTA's investor state dispute process.

I raise it here for your consideration because this case starkly highlights the risk to provincial legislative authority of the federal government's continuing support for broadly worded investor protections backed up by the investor state dispute process.

Whether this extrajudicial challenge to B.C.'s water protection policy ultimately succeeds or not, it raises many disturbing questions. How is it that the federal government can expose provincial measures to binding international arbitration without the province's consent? How can a valid provincial policy that addresses a vital environmental issue and that enjoys overwhelming public support come under direct attack in this way? Who will pay if the provincial measure is found to violate the federal government's treaty obligations? If a provincial government maintains an inconsistent measure, might the federal government be required to pay ongoing damages?

Setting aside the jurisdictional issues, is it fiscally responsible for the federal government to negotiate an agreement that exposes it to open-ended liability for provincial government measures? Faced with an adverse ruling, what step might the federal government take to try to force provinces, municipalities, or first nations to remove offending measures? What role will provincial, local, and regional governments and first nations have in NAFTA cases concerning measures these governments have implemented? These are important issues.

• 0920

The committee is also concerned about the potential of future international lawsuits using NAFTA's investor state provision to exert a chilling effect on provincial and other governments' ability to govern in the public interest. It's sobering to think that the Sun Belt case will be just the first of a long string of NAFTA challenges attacking the public interest of our province and of Canada. B.C. didn't negotiate NAFTA; the federal government did. B.C. warned about NAFTA's threat to water; the federal government didn't listen.

To address this specific concern, B.C. passed legislation to safeguard our water, and now, because of NAFTA investment rules, the B.C. government is forced to spend valuable time and resources defending the provincial interest. It even has to fight with the federal government about the provinces' legitimate role in the NAFTA process.

And who pays for all of this? Taxpayers do. Canadians are threatened with a claim for well over $100 million. That's another reason many British Columbians are so personally offended by the Sun Belt NAFTA challenge. More broadly, the committee believes the practical effect of the NAFTA investor state dispute process is to alter the balance of Canada's constitutional division of powers.

This NAFTA provision creates an effective constraint on British Columbia's legislative and executive authority and on its political sovereignty. Your committee should know that B.C. takes these issues very seriously, as they go to the heart of how we govern ourselves.

I would like to draw your attention to the recommendation of B.C.'s legislative committee on the MAI that when negotiating any future investment treaty such as the FTAA or WTO, the federal government must ensure the agreement does not apply to matters within provincial jurisdiction, including local government matters, without the express consent of the Legislative Assembly of British Columbia. If the federal government fails to provide for such consent, then the provincial government should explore all means, including legal action, to defend vigorously its own jurisdictional rights and those of local governments to represent the interests of British Columbians.

I'd like to conclude by encouraging your committee to examine new approaches to international investment agreements. Developing such alternative approaches animated many British Columbians during the second stage of our regional public hearings. Many citizens rose to the challenge of examining approaches that would define clear objectives, build on a firmer foundation than NAFTA's investment rules, use democratic negotiation processes, and respect provincial government jurisdiction. In a nutshell, they began to define the essential preconditions for any future international investment agreements negotiated by the federal government.

British Columbians began defining an entirely new international approach. Much of this testimony is as exceptional as it is compelling, and I urge you to review the committee transcripts. Witnesses focused on a need for international agreements that would help people address the everyday challenges they face in their communities. Such agreements should be designed to increase the quality of their lives and the lives of citizens everywhere. They should strengthen Canadian culture and public health, education, and social services. They should bolster environmental protection, natural resource management, and conservation. They should enhance human and labour rights, respect the authority of first nations and provincial and local governments, and strengthen democratic institutions.

In short, the current model of negotiation should be abandoned in favour of an entirely new and constructive approach. This is a vision of future investment agreements that we would like you to take from British Columbia back to Ottawa for further deliberations and action.

• 0925

Thank you again for the opportunity to speak to you today. We will ensure that each of you receives the final report of our committee.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Ms. Smallwood.

Mr. Sinclair, do you have anything to add before we go into questions?

Mr. Scott Sinclair (Senior Policy Adviser, International Branch, Economic Development Division, Ministry of Employment and Investment, Government of British Columbia): No.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Hart, I understand you're in our next round.

Colleagues, we have approximately 20 minutes to ask questions, so perhaps we could go to one question and then possibly go to a second round.

Mr. Stinson.

Mr. Darrel Stinson: Yes, just—-

[Translation]

Mr. Benoît Sauvageau: Excuse me. Madam Chair, are the three witnesses together?

[English]

The Acting Chairman (Ms. Sarmite Bulte): No. Ms. Smallwood and Mr. Sinclair are together and Mr. Hart will be in the next round of discussions.

[Translation]

Mr. Benoît Sauvageau: Thank you.

[English]

Mr. Darrel Stinson: Throughout this report here, it seems as if what you're saying is that there's been, basically, a lack of consultation between the federal government and the provincial government. We hear so often that this consultation is going on, and then we come here and read reports like this and we find out this is just not the case.

You stated here it was the federal government that negotiated these agreements, and in many cases I have to agree with you that it seems like intrusion into provincial areas by the federal government. If you could just confirm that this is your fear here of what has taken place, I would appreciate that.

Ms. Joan Smallwood: Thank you for the question.

That is absolutely the case, and I'll go a step further. Our committee was very interested also and asked the question repeatedly of presenters representing the Union of B.C. Municipalities, and presenters representing first nations or representing school boards, as to whether they had been consulted. In our expert witness round in particular, we asked different sectoral presenters whether they had been involved in a consultation process, and each and every question was met with the answer no. I think that was compounded by a sense that there was not an encouragement, even in the public realm, of a public debate through the popular media.

Mr. Darrel Stinson: Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Schmidt.

Mr. Werner Schmidt: I want to thank you for appearing before the committee. I think it's really very good that you're here, and some of the points you've made are very significant.

I'd like to ask you, how would you delineate clearly the intrusion into these various areas? You make the point over and over again and you make it very effectively. You just verified that. The point now is, with regard to water, to use a specific case that you mentioned—and you do a good job of presenting it—how would you delineate clearly the jurisdiction of the first nations and of the municipal, provincial, and federal governments? Could you give us some suggestion as to how you would do that?

Ms. Joan Smallwood: Well, I'll speak first to the constitutional responsibilities of the province. It was particularly interesting for the committee to have explained to it some of the implications that MAI would have with respect to resource management, and water would be one case study. Our ability in this province—and we're in a very privileged position as citizens of this province—to own our resource and then have the constitutional responsibility of husbanding our resources would be undermined by an agreement such as this. The agreement would undermine our ability to do that through a number of different provisions—the issue, specifically, of performance requirements.

Let me give you some examples of how in this province we have, for instance, tied the use of our resources to some of those performance measures.

• 0930

For example, in the forest industry, where we require a forest company wanting access to our timber resources to actually provide jobs, to saw the first cut within the region in which they have the timber licence, we require them to adhere to specific environmental tests to protect the resource and to protect communities around it. Agreements such as the MAI would challenge our ability in this province to execute our constitutional authority.

Mr. Werner Schmidt: I'd like to come back to water. I think the shift to the forestry industry is a very interesting one, but I'd like to come back to water.

The issue here, it seems to me, is whether in fact water ought to be sold in the first place. It seems to me that's the fundamental issue here. And if that's the issue, that's quite different from the forestry one. So is it your contention that whether a natural resource is even to be sold or not is a provincial jurisdiction and not a federal one?

Ms. Joan Smallwood: No. I'd submit that the question is not whether it is to be sold or not.

Mr. Werner Schmidt: I see.

Ms. Joan Smallwood: The question here is whether the province has the authority to govern that resource in which it is constitutionally mandated and which it is responsible for. In the specific case of Sun Belt, the province has, in order to protect that resource and its ability to manage that resource, brought in a piece of legislation. The Sun Belt case is challenging that and using the investor state process to do that outside of the ability of this province to even defend itself.

Mr. Werner Schmidt: No, I understand—

The Acting Chairman (Ms. Sarmite Bulte): I'm sorry to interrupt, but I know all my colleagues want to ask questions. If we have time, I will come back to you.

[Translation]

Mr. Sauvageau.

Mr. Benoît Sauvageau: Thank you for being here. I also thank you for writing your submission in both official languages. I must often say this on committees. I had started to read it in English, and then I noticed that it was available in French. I want to point this out and thank you for it.

I saw Mr. Hart shaking his head disapprovingly as he was listening to your answer, but we cannot ask him any questions. We will ask them later.

On page 15 of the French version of your document, speaking of the federal government, you say:

... it will have to ensure that this agreement does not include areas of activity of provincial jurisdiction,...

You know that this is a critical issue to me.

... without the express consent of the British Columbia Legislative Assembly.

I know this comes from British Columbia, but the phrase “and any other province” should be added. Is this what you mean?

[English]

Ms. Joan Smallwood: Our committee actually went as far with one of our recommendations as to suggest that future agreements must be approved by the legislature.

[Translation]

Mr. Benoît Sauvageau: You know that Québec has asked the federal government to recognize that, when an international agreement discussion topic is or could be of provincial jurisdiction, it would be desirable—I weigh my words—that this province be represented at the negotiations. This could involve, for example, culture and education issues. It could also involve environment issues, as this is a shared jurisdiction. The intent is to involve provincial legislatures or make them accountable when they are affected by international negotiations.

What is your opinion on this?

[English]

Ms. Joan Smallwood: I'd like to bring to your attention one of the other recommendations because I believe it relates to the point you make.

The committee recommends that future negotiations take on the more traditional role of a bottom-up approach, based on its strengths, rather than being all-encompassing and requiring provinces, whether it's municipalities or first nations, to identify and exempt areas of concern to them. We believe that through this process the committee learned a great deal from speaking to some of our expert witnesses. They brought to our attention legislation—I'm thinking of an example of education—that pointed out very clearly that the province's, and indeed Canada's, public education system would be at risk if certain provisions were not taken care of. And because it was the first time we'd heard comments like that in any of the material we'd read, or any of the testimony, it simply pointed out that no jurisdiction could have the comfort in such all-encompassing agreement to fully understand what it was they were signing.

• 0935

I believe most people now feel that even with NAFTA we're still learning, and most of the experts we heard from would state that, would indicate to us that we didn't have enough experience under our belt to be able to say this is the way to go. I know that's a roundabout way to answer your specific question, but I think it tends to direct our thinking more in the direction the committee was headed.

The Acting Chairman (Ms. Sarmite Bulte): Thank you. If we have a chance we'll have to come back, because we're very limited in time. I'm sorry, I'm going to have to be very strict with everybody. I apologize.

Mr. Speller and then Madame Beaumier.

Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.): Thank you very much, Madam Chair, and I want to thank Ms. Smallwood for appearing before our committee today.

On the issue of the MAI, you're not, as I told you this morning, the first member of your legislature to appear before this committee. In fact, the committee I chaired, which Mr. Sauvageau was on also, specifically on the MAI had an opportunity of not only hearing Ian Waddell, a colleague of yours, but also hearing from the province a deputy minister I believe in the area of international trade or federal-provincial relations.

So I was surprised that when Mr. Stinson brought up the whole issue of consultations you mentioned that one of the problems you had was in the area of consultations, because this deputy minister, when asked the same question at our MAI committee, said that he was very pleased in fact with the level of consultations that his department had had with the federal government on this issue.

I'm also surprised when I read your Special Committee on the Multilateral Agreement on Investment report, which was actually started not only after our foreign affairs committee had produced its report but also in fact after the federal government had tabled in the House of Commons a response to that committee report in which it agreed to all of the recommendations of the standing committee, that you make no mention of this in here. As a matter of fact, a lot of issues you talk about in here are the same issues we dealt with, and in fact when I look at your witness list I note that we saw most of the same witnesses you saw in that committee and we heard quite a bit of the same issues.

We had what you are calling abbreviated committee hearings, and as I explained to you this morning, sometimes we have those abbreviated committee hearings because it's hard for the House and all of the parties to come to agreement to travel across the country, given the size of committees and given the nature of the House.

But at that time, all those groups we heard essentially laid out a lot of the same problems you did. We reported those problems, and in fact the federal government responded to them. So I was somewhat surprised. It seems as if you were starting all over again from the first, without outlining in your report in fact what had already been done not only by our committee but in the response by the federal government.

The other area is that I remembered what Christy Clark was talking about today. As I told you, on the news she was in fact talking about that new investment of 400 or so jobs that are coming into the province by an American firm investing. My question to you would be, is it the position of your government that we shouldn't be trying to fix investment rules as they stand now, that in fact we shouldn't have these rules? Or is it your position...I'm not quite sure it's a position, because I would think a group that would want to invest in your province today would want to have some sort of investment rules.

• 0940

Before you answer that, because I only get one shot at the can, I will say that when you talk about Sun Belt I'm also somewhat surprised, because my understanding of the Sun Belt case is that in fact it isn't a case as to whether or not the province should have the right to stop the export of bulk water, but it was about fair treatment. In fact what Sun Belt was doing was bringing into question the fact that the Province of British Columbia compensated one group and they didn't get their own compensation, and they were not challenging the fact that the British Columbia government could make rules in terms of bulk water exports.

Ms. Joan Smallwood: Let me first respond to the questions with respect to consultation. Here in British Columbia, and I'm sure the members representing British Columbia ridings will agree, we're very sensitive about the dialogue between ourselves and Ottawa. For that reason I'm very insistent that we have the opportunity for full consultation and an opportunity to express our concerns. I'm sure the committee, now having the opportunity to sit in our beautiful province and hear from people in British Columbia, will agree that there is significant interest. I understand you've extended your hearings to be able to accommodate some of that, and I also understand there are a number of people who have yet to be able to fit into the committee's agenda.

So this province, whether it is the groups that represent the different constituent makeup or the provincial government itself, not only expects to be consulted but expects to be heard and to have that reflected in the work of the federal government.

With respect to the ongoing work of this committee, we appreciated having the federal negotiator, Mr. Dymond, make available to us on a couple of different occasions his expertise, and we have thanked him and the federal government for that. It has helped in the dialogue in this province.

With respect to the Sun Belt case, the points you make are dealing with different components of their argument. The issues I raised with the committee are of a particular concern to this province, and our committee will be encouraging the government to pursue those particular aspects of the Sun Belt case.

I'm sorry if there was another question I've missed.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

We've run out of time. Again, we have a very large group of witnesses we want to hear from. I want to thank you very much for coming.

I have a couple of questions that I'd like you to take away with you, if at all possible. I'd also like you to see that your appearing before this committee is only the beginning of our consultation. This is not the end of the consultation; it's the beginning of the dialogue. If there are additional concerns you have, as you speak to people in British Columbia, that you want to bring to the committee's attention, please do so.

If I could, I would have you take two things away and perhaps respond at a later date.

You've stated, in my understanding, that the NAFTA investment provision should be eliminated. You also did acknowledge that this last weekend there were discussions between the three NAFTA partners, led by Minister Marchi, about trying to change the definition of expropriation.

But we've also read in the media, whether correctly or incorrectly, that Mexico and the U.S. don't seem to want to be party to that. Are you suggesting that we withdraw from NAFTA completely? If the Americans and the Mexicans don't seem to want to change chapter 11, then how do we best protect Canadian investment in those countries? I believe in your report on page 5 you stated it was important that the world did have investment rules.

• 0945

Again, maybe it's in your report—I haven't seen it—but what would these rules look like? What should this new approach be? Again, maybe it's in the report, but how and where should they be negotiated? Should it be, again, with the 34 countries, or 33 other countries, of the FTA? Or how do we get 133 other countries of the WTO? I would appreciate it, if you have a chance to think about those, if you would please contact the committee and let us know, if you wish.

Again, I thank you on behalf of the committee as well for coming here today. Thank you for being succinct, and I apologize for our limited time period. Thank you for being first. Thank you very much.

Ms. Joan Smallwood: Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Okay, Mr. Hart, you stay right there.

I would like to call upon Dr. William Saywell, Mr. Woo, Mr. Lee, and Ms. Cohen to also come to the table, please.

Welcome to our committee meetings. We're delighted to have you here with us. Because our time is very limited and we want to be on time and we want to, wherever possible, allow questions, we'd like to start right now with, first, the Asia Pacific Foundation of Canada, Dr. Saywell and Mr. Woo. Who will be making the presentation?

Dr. William Saywell (President, Asia Pacific Foundation of Canada): Madam Chair, my colleague Yuen Pau Woo will make the body of the presentation. I'd like to make a few introductory comments first, if I may.

Mr. Woo is an economist who is the director of research at the Asia Pacific Foundation. He was with the Monetary Authority of Singapore for a long time and knows the economics of regionalism in Asia inside out.

But I wanted to make a couple of comments with regard to Chinese accession to the WTO, which I think is probably the most critical issue facing both the WTO and, in some ways, political and economic stability in Asia, and therefore the rest of us, in the next year or two. Let me make two or three points.

First, although our eyes are on the Balkans now and other areas of political and economic difficulties in the world, strategically the two powers that really count now are China and the United States, and to the extent that the Sino-American relationship is stable, is good, is based on economic fundamentals, so will the Asian region, and therefore international peace and stability and prosperity for us, grow apace.

Regrettably, there is much in the Sino-American relationship today that is frightening, that is potentially destabilizing. You've all read about the difficulties with regard to technical transfer and nuclear secrets, and all of that—and of course the trade imbalance within China itself, the difficulties facing the Chinese economy and potential social instability there.

The big plus in the Chinese-American relationship is the economic relationship, and to the extent that can be consolidated and solidified through accession to the WTO, I think it's a very positive thing for all of us. Clearly, during Zhu Rongji's visit a good deal of progress was made. The insiders in Washington believe that accession from the American point of view will be approved by the year's end. But going into an American election cycle, with all of the other difficulties facing that relationship, it's terribly important that Canada take as positive a role, both bilaterally with the United States as well as with China and multilaterally in the WTO, to push forward the Chinese accession.

Chinese accession will also encourage the continued reform movement within China, the move toward a rules-based economy and the rule of law generally. So whether one is looking at the bilateral relationship, which is the most important one in the world today, the China-American one, or whether one is looking at multilateralism within the Asian community, or whether one is looking at international peace and security and economic development, accession is terribly important.

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With that, what may appear as a tangential remark as my introduction, I'll turn it over to my colleague, Mr. Woo, to talk more generally about economic multilateralism.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Dr. Saywell, for your comments.

Mr. Woo.

Mr. Yuen Pau Woo (Director of Research and Analysis, Asia Pacific Foundation of Canada): Good morning, members of the committee. The brief will focus on a very narrow aspect of Canadian interests in future international trade negotiations. It stems from the interest of the foundation as an organization that has been promoting Canada-Asian relations for many years, and more particularly it has been following the progress of regional cooperation efforts, including regional trade cooperation efforts, as in the APEC body, Asia Pacific Economic Cooperation.

Specifically, then, what we'd like to talk about is the question of balancing our interests in APEC vis-à-vis the WTO. It's a related issue. Dr. Saywell has already mentioned the question of accession of Chinese membership in the WTO. Related to that is the membership of the other APEC members who are not yet members of the WTO. They have a lower priority, but their membership in the WTO is important in order to get all of the members of APEC into the multilateral forum.

I will start with a little bit of background on APEC to give you the context. As I'm sure you know, APEC is not a free trade area in the NAFTA sense, nor is it a customs union. It does not fall under GATT article 24 exemptions for regional trading areas; it's just not qualified. Instead, APEC practises what they call open regionalism, which is a form of trade liberalization that is done through unilateral efforts of member economies. The sum of unilateral liberalization is called concerted unilateralism. They are guided by an overall very broad target of liberalization. In the case of APEC it's called the Bogor targets of 2010 and 2020, the goal being free and open trade by the year 2010 for the developed members and 2020 for the less developed members.

In addition, APEC-style liberalization is taken on a non-discriminatory basis—in other words, a most favoured nation basis. As a result, the APEC process has been seen to be complementary to that of GATT and the WTO.

APEC's trade liberalization agenda was stalled at the last leaders' meeting in Kuala Lumpur. In particular, the initiative that is known as early voluntary sectoral liberalization did not make any progress and has been brought to Geneva in another form, which they call accelerated trade liberalization. I won't go into the details of EVSL or the accelerated trade liberalization initiative, except to say that we don't expect any progress to be made on accelerated trade liberalization in Geneva. Within APEC itself, it's our opinion that the trade liberalization agenda has very little to offer this year, mostly because of the focus on WTO. This is not to say that the relationship between APEC and WTO and the GATT has been a negative one; in fact, it's important to recall that in the past there has been a positive and mutually reinforcing relationship between regional organizations, and APEC in particular, and the multilateral organizations.

In the early 1980s, APEC played a role, we think, in getting the GATT round restarted, along with threats from the Canada-U.S. Free Trade Agreement, which got the Europeans finally to agree to the Uruguay Round. In the early to mid-1990s, APEC was seen to be a factor in getting the conclusion of the Uruguay Round of the GATT. We think there's the potential for APEC to play a similar role in the future should WTO negotiations break down. For the time being, though, the trade agenda in APEC is simply to support and encourage the WTO process.

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This does not imply that Canada should disengage from APEC because the trade agenda is stalling, because APEC is still the only regional forum for Canada to establish its Asia-Pacific credentials. There is a danger, however, that with the APEC trade agenda moving to Geneva, certainly APEC member economies, especially the United States, will lose interest to the extent that they see APEC primarily as a vehicle for their trade efforts. This will then lead to a period of drift in the organization and diminution of the regional forum's importance.

At the same time, though, we think it's dangerous for APEC to try to revive the trade liberalization agenda in the short term, such as the New Zealand hosts are attempting, because this would be counter-productive. We don't see any progress being made, given that the WTO has taken the initiative, and in fact this may lead to greater disappointment and disillusionment in APEC.

Hence, APEC, we think, needs to champion a new cause. This new cause, I think, has a correlation with WTO, and I'm getting now to the linkage with the WTO negotiations. There's a growing recognition in the WTO that the agenda has to be broadened in order to take into account the many concerns that developing countries have. The outgoing director general, Ruggiero, has spoken of the need for a coherent and integrated strategy. I'll quote him. He says:

An ambitious integrated approach to technical assistance and debt relief—together with full market access in the advanced economies—should be a third pillar of a new effort in favour of least-developed countries in the trade field.

This is where the connection with APEC comes in. APEC's own third pillar is economic and technical cooperation, or what they call ecotech. This can be a model for WTO's efforts to broaden its agenda. Ecotech activities have a strong trade business facilitation emphasis, and they're based on the principles of pooled resources as well as a mutuality of interest. As a result, the direct cost of mounting ecotech activities, of which there are hundreds in any given year, is very minimal for APEC as an organization. Hence, we think there's a potential not only for ecotech principles to be adopted by the WTO, but for specific APEC ecotech activities to be expanded into a global multilateral arena such as WTO.

The benefits for APEC, I think, are obvious too. Ecotech and its subset of trade and business facilitation activities are further potential for APEC to provide leadership at the WTO and to restore APEC's credibility as a catalyst for multilateral cooperation. Ecotech, therefore, can be a new raison d'être for APEC, which is increasingly becoming irrelevant in the trade liberalization arena.

Let me just summarize the implications for Canada's approach to APEC vis-à-vis WTO, the balance between the regional and the multilateral negotiations.

First of all, there is no conflict of interest between APEC and the WTO. If anything, APEC's trade liberalization agenda has, for the immediate future, taken a back seat to the WTO. Canada should therefore concentrate its efforts on Geneva while ensuring that APEC remains supportive of the WTO. If, however, the WTO round is seen to falter in the years ahead, APEC's historic role in stimulating fresh progress can be revived.

Secondly, Canada's interest in APEC goes well beyond the trade agenda, and it is very important for Canada that the trade liberalization fatigue in APEC does not lead to APEC's slow death. Canada has to make sure this does not happen. There's an urgent need for APEC, therefore, to refocus on an area where it has comparative advantage.

This area of competitive advantage, we think, is ecotech and its subset of trade-business facilitation initiatives. By focusing on these initiatives, APEC can show leadership in areas that WTO itself wants to move into. This is the intimate linkage that APEC has with WTO. By doing this, APEC preserves its principle of open regionalism, and this also preserves Canada's involvement in APEC without compromising its multilateral objectives.

Institutional weaknesses in APEC, as well as a reluctance to abandon the trade agenda by some of the APEC members, will make it difficult for ecotech to become more fully developed in the APEC process. Traditionally, the Asian members of APEC have championed ecotech, compared to the more industrialized economies. Canada has a role here to shift its support to the side of ecotech, while encouraging greater rigour and coherence in the development of specific ecotech activities. This new focus can be developed, can be spun, you might say, not simply as a goal of APEC, but as a goal that can support the WTO process in a catalytic fashion.

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Thank you, Madam Chairman.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Woo.

Next is Mr. Lee, from the Canadian Centre for Policy Alternatives.

Mr. Marc Lee (Research Economist, Canadian Centre for Policy Alternatives): Thank you for having me.

Madam Chair, I'd just like to note that I grew up in your riding of Parkdale—High Park, so welcome to Vancouver.

The comments I'll be making are a shortened version of the more detailed submission I've made, which you may actually have in front of you.

We believe that rather than a new millennium round, what the global economy needs right now is a new focus for international negotiations. I believe we need a shift in emphasis from regulating governments in order to increase trade and investment toward regulating capital.

I'd like to start by noting how difficult it is to actually find evidence to support the proposition that Canadian living standards have improved since we embarked on our current trade liberalization course. Trade pundits frequently point to the increase in overall trade itself as the benchmark of success, but this should be expected in the aftermath of a trade deal such as the U.S.-Canada Free Trade Agreement.

Over the 1990s we've actually witnessed a deterioration in Canadian living standards. Real GDP per capita has declined since the onset of free trade. We've seen a growing gap between the rich and the poor, with fewer people in the middle. And the traditional social supports of the post-war era have been deeply cut back.

On a worldwide basis, the prevailing international order of liberalized trade investment is showing signs of instability and volatility. In the past few years, financial crises, beginning in Asia, have spread, to Russia, and most recently Brazil. Canada was side-swiped by the turmoil last summer, as was a major U.S. hedge fund in long-term capital management. Here in B.C., we're in the midst of a recession, due in large part to the collapse of Asian markets for our exports and low international commodity prices. Recent WTO rulings have challenged industrial development programs like Technology Partnerships Canada, as well as the dairy and cultural industries in recent times. In addition, Canada has faced challenges under chapter 11 of NAFTA that restrict our ability to ensure a safe and healthy environment.

All these recent examples point to the dangers posed by a simplistic pursuit of wide-open trade investment liberalization. A number of mainstream commentators have joined the fray. World Bank chief economist Joseph Stiglitz notes the important role played by regulation and competition policy in shaping and fostering competitive markets. MIT's Paul Krugman points toward capital controls in response to the volatility of capital markets. And even the world's foremost speculator, George Soros, warns against the perils of unfettered markets.

Ultimately, markets need a regulatory framework to operate in. Without such a framework, capitalism effectively can't deliver the goods, and they actually cause harm, as has been the case in many poor countries. With globalization increasingly the norm, we now need a global framework that replicates what to date has only been seen on a national level. Thus, the focus of international negotiations should not be on regulating governments, but on regulating capital. A fundamental aim of future negotiations should be to effectively regulate and set minimum performance standards for transnational corporations and to regulate short-term and longer-term investment flows. That is, given the fact that production and finance have become global, there's a need for counterweights at a global level to balance the power of these new actors.

Some attempts have been made to enlarge the scope of trade agreements and organizations themselves through factors like labour and the environment, or to negotiate specific reservations. We believe this is not the way to proceed. The overwhelming focus of bodies like the WTO is on reducing barriers posed by governments. As such, it's an inappropriate forum for discussion of other issues that we may deem to have priority over trade.

As a building block, we should strive to establish a credible process by which the international community negotiates and which takes precedence over current trade investments for us. Imperative are principles of transparency, accountability, and democracy that have not yet been extended to this level. A UN body such as UNCTAD might be tasked to be a forum for such negotiations.

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Future negotiations should consider more specifically, first, measures to deter destabilizing speculative capital inflows, such as the acceptance of national capital controls or the Tobin tax on international financial transactions.

Secondly, it should consider measures to ensure that responsibilities and obligations are specified for longer-term investment, including negotiated minimum performance standards for transnational corporations.

Thirdly, it should consider measures to protect the environment and workers from adverse impacts of trade and investment. In both these cases, labour and the environment, the primary thrust of worldwide production has been for companies to actually offset their costs to externalize them as much as possible. We don't believe this is the right way to proceed or that efficient markets are the outcome of those types of processes.

Fourthly, we need protections to ensure that globalization will not adversely affect native people. An exemption should be negotiated to protect the rights and freedoms of indigenous peoples, not just in Canada but around the world.

Finally, competition policy at an international level is required to address areas such as predatory pricing, collusion and monopolization. Current trends in mergers and acquisitions point towards an increasing concentration of power in global oligopolies and monopolies, particularly in the areas of banking and finance, media and entertainment, and information and communications technologies.

Above all, a renewed framework should ensure respect for a diversity of national economic approaches. One of the greatest conceits of the past century has been the presumption that we found a single model that will spawn economic success wherever applied. The call for economic pluralism recognizes that each country needs tools at their disposal to address the problems particular to their own circumstances. In different approaches, we actually derive new sources of comparative advantage that create the conditions for gains from trade. For Canada, this might mean provisions to enable countries to maintain key sectors, such as health and education, in the public sphere.

In particular, Canada should not endorse any proposals that would extend the NAFTA chapter 11 investor state provisions to either the FTAA or the WTO. This would further undermine sovereignty in unacceptable ways.

Canada is a trading nation. It is in our interest to have institutions and rules for the proper conduct of commerce, but both private and public sectors need these frameworks. Without them, for most of the world's people, the global economy will fail to deliver. Future initiatives must clearly be in the broad public interest, not just the interest of a narrow set of actors. At the very minimum, for the upcoming negotiations on the WTO and FTAA, it's important that the draft text be made available for public review. The scope of these agreements is so large that it is imperative that there be full disclosure and democratic debate.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Lee.

Now we'll hear Mr. Michael Hart, from the Centre for Trade Policy and Law, who has been waiting patiently since 9 a.m. Welcome, Mr. Hart.

Mr. Michael Hart (Senior Associate, Centre for Trade Policy and Law): Thank you very much, Madam Chairman. It's a pleasure and an honour to be here. I'm sorry I was not able to respond to your initial call for me to be at your hearings in Ottawa in March. Unfortunately, I teach in California during the winter months because of the superiority of the California climate during the winter, therefore I'm testifying here in Vancouver rather than my normal venue, which would be Ottawa.

I think it goes without saying that my perspective is slightly different from some of the earlier witnesses you've heard. My perspective is that of someone who practised trade policy and trade law with the federal government for 22 years and has been teaching it for the last 10 years. In fact, I understand that one of my students is helping the committee, and I hope she will be able to apply some of the things she learned in my classes.

I start off with the premise that we're looking back, first of all, at 50 years of very successful trade negotiations. While it is true that there have been some ups and downs, and if you look at it on a year-by-year basis I think it would not be difficult to see that there have been problems, if you look at it from a broad perspective of 50 years there has been a tremendous amount of success in implementing a trading system that works—not a trading system that provides for unfettered markets or that's based on a simplistic pursuit of free markets, but a trading system that is based on governments working collectively to put in place a set of rules that provide for some very simple fundamental principles. Those principles include transparency, non-discrimination, due process, progressive liberalization, and retaining enough room for governments to deal with specific problems they may have with opening their markets to greater competition.

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The success of that is indicated in the extent of world trade today, and Canada is one of the largest beneficiaries of that trade. I think the strength of the Canadian economy is largely due to the fact that we have become very successful world traders, not just in our traditional exports of resource-based products but increasingly in a wide array of higher-processed products. I think we have become a very successful world trader, particularly in North America but also on a broader scale.

It's also indicated by a very charged trade agenda today. I think there has never been a time in Canada's history where there were as many initiatives to pursue Canadian interests as there are today. The WTO, of course, has pride of place because it is the multilateral trading system that provides the broad framework of rules within which the other initiatives take place. But in addition to that, as Mr. Saywell and his colleagues have indicated, there's a lot of work ongoing in the Asia-Pacific area. There have been earlier allusions to work going on in Latin America through the FTAA process. There are ongoing negotiations with the remaining members of the European Free Trade Association.

There's a long list of these things, all of which are very much complementary to the efforts by the Canadian government and the 133 other members of the WTO to build a trading system that is geared increasingly to the reality of a global economic system and to put in place rules that work and that ensure that Canadian firms have the opportunity to compete on an equal footing within that global system and that Canadian consumers have the opportunity to have access to the best products at the best prices from the best sources. I think that is the purpose of those rules, to provide that kind of opportunity.

The work that's going on can be looked at from about three different perspectives.

First of all, some of the work that's going on is in consolidating the gains that have been achieved and in looking for areas in these agreements where there is room for improvement.

Secondly, there is a tremendous amount of work in expanding the scope of this agreement. At the Centre for Trade Policy and Law, we have the privilege of working with quite a number of countries that are in the process of joining the system, not just China and Russia but also many of the countries that were part of the former Soviet Union, such as Kazakhstan, Azerbaijan, and similar countries, together with Vietnam and Saudi Arabia, all of whom have decided that in order for them to benefit from this open global trading system, they must become members of the WTO. We spend a lot of time counselling them on what they need to do in order to bring their trade regimes into conformity with the rules of the WTO.

Thirdly, I think we're seeing the beginning of a deepening of the rules of the international trading system. The trading system, as it has emerged over the past 50 years, is very much geared toward facilitating trade between interdependent countries. What I think we're seeing now is the beginning of a movement toward putting in place rules that allow for the governance of a global economy. That means that many of the issues that were traditionally considered to be part of domestic policy are now finding their way onto the agenda of international trade negotiations, with the WTO increasingly being the forum where these negotiations take place.

I think one of the lessons we should take away from the failure to conclude an MAI at the OECD is that the OECD is a good place to do homework and preparatory work, but it is not the right place to negotiate an agreement that will have an impact on many more countries than can participate in OECD negotiations.

But the lesson we should not take away from that is that it's inappropriate to negotiate investment rules. I think in the kind of world we live in today, it is very appropriate to have investment rules and to continue to deepen the impact of rules on what governments can do.

So the next round of trade negotiations, which I think will be launched at the Seattle ministerial meeting at the end of November, is likely to include four areas on the agenda. The first will be the traditional area, that is, dealing with the existing rules and finding areas where there's need for improvement and where there is still scope for liberalization. For example, on the tariff front I think we will see an effort to negotiate a number of agreements similar to the information technology agreement, where there was agreement on 95% of the volume of trade in that area to liberalize trade to zero tariffs and to deal with a number of non-tariff barriers in that area.

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I think we will see similar efforts during this round. For example, I've already seen calls by people to have a similar agreement in the auto sector and other sectors of the economy, trying to deal with the remaining tariffs that are still there, trying to improve the government procurement agreement, to widen its scope and to include more members in it, dealing with existing problems that may have been identified in the area of trade remedy law and to dumping and countervailing duties, safeguards applications, and similar things.

This is the area of trade negotiations that has been well planned. It's the area that has been the bread and butter of GATT negotiations before the WTO and will continue to be important to the WTO negotiations, but these are not the areas where I think we will find the greatest challenges. The biggest challenges will come in dealing with this issue of governing a global economy. In fact, the WTO's success in expanding the reach of the rules to services and intellectual property protection, I think, was the beginning of that process. We will see that deepen as the WTO struggles with negotiating rules about competition policy and about investment issues.

One of the areas that have been part of the past, but which I think will become more important in the future, is the whole area of standards, of dealing with the basic standards that underlie the production of products, the standards within the products themselves, the way in which governments can recognize each other's standards and ensure that there's a high quality to the products and processes that are part of the international trading system.

This has already received, I think, quite a lot of preparatory work. A lot of intellectual work has gone into that in the OECD, in member governments, identifying what are some very difficult areas to deal with. That's one of the reasons I think this new round will be a long and difficult round and that the American call for concluding it in three years is somewhat optimistic and naive.

It's even more optimistic and naive if we consider the fact that this round will also have to deal with an even more difficult area, and that is trying to find a balance between equity and efficiency. Much of what the trade negotiations of the past have done is to emphasize the efficiency dimension of trade negotiations—that is, putting in place rules that enhance the capacity of governments to encourage the efficient production and distribution of goods and services.

What we see now, and I think you heard it in the testimony of Mr. Lee and some of the other witnesses who have appeared before you, is a need to begin to address the equity dimension of international trade—the kinds of issues that governments traditionally dealt with within in their own areas of competence. But because of the nature of the global economy, because of the breakdown of barriers within and between countries, I think it is now incumbent upon the world trading system to also address equity issues, by which I mean issues dealing with protection of the environment, with human rights, with labour rights, and to use the WTO as a vehicle not for establishing those rights—I think the WTO is not well suited to negotiating the details of those—but providing a bridge between the trading system and the existing international agreements that deal with those kinds of issues.

This would be a better bridge between the WTO and the International Labour Organisation, a better bridge between the WTO and the UN environmental program, in order to do the same kinds of things that were done on the TRIPS agreement, where a bridge was built between the various intellectual property protection agreements that exist, such as the World Intellectual Property Organization and the WTO, using the WTO as a vehicle for increasing transparency and increasing the enforceability of those international agreements.

Because of this charged agenda, including some very difficult issues, I think attention will also need to be paid in these negotiations to institutional and dispute settlement issues. Because of the increasing agenda that the WTO faces and the kinds of demands being placed upon it, I think governments are finding it increasingly difficult to see that done by a very small secretariat of only 500 people. I think it is one of the smallest, if one of the best, secretariats in the international system, but 500 people is obviously inadequate. The kinds of pressures being placed upon the dispute settlement system have indicated some of this inadequacy.

To date the WTO, in a matter of less than five years, has looked at 168 disputes among member governments, some of which have gone to panels, others of which have been dealt with on a consultation basis, but we have almost done in the first five years of the WTO what the GATT did in its first 45 years. I think that's indicative of the extent to which governments have confidence in the system, but also placing demands on the system that are going to be very difficult to discharge. An important part of the upcoming negotiations will be to address these systemic types of issues.

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From a Canadian perspective, I think all these matters are of utmost importance. I think it is critically important that Canada prepare for these negotiations. I think the work of this committee is critical to that. In past negotiations one of the things that Canadians learned is that we can be influential, we can have an important influence on the outcome of negotiations, but that influence comes early in the negotiations rather than at the end, and it comes as a result of superior preparation, innovative thinking, and imaginative deployment of those ideas. So the work of this committee is critical in helping the government prepare for these negotiations, to ensure that Canadian interests are discharged and put into place early in the negotiations, and that we put in place the best team we can to follow through and ensure that they become part of the closing part of those negotiations.

Thank you very much, Madam Chairman.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Hart.

Are there questions? Mr. Schmidt.

Mr. Werner Schmidt: Thank you very much, Madam Chair.

Thank you, gentlemen, for your appearance here this morning. I have one word to describe what you just gave to us in about 20 minutes: Wow! That is one tremendous presentation.

I would like to ask you what encouraged you to move in such a dramatic way away from what has been the case before, to the whole shift towards the control of capital and the flow of capital and how it moves, rather than the strict liberalization of trade—shifting the emphasis from one to the other. I would like to ask whoever wants to address that one to suggest exactly why you believe that will be a more significant issue in the next matter, in terms of controlling what happens in the global market, than has been the emphasis in the previous trade negotiations.

Mr. Michael Hart: If I may, I can begin.

Mr. Werner Schmidt: I thought you would.

Mr. Michael Hart: I think it was more Mr. Lee's point than mine—

Mr. Werner Schmidt: It was Mr. Lee's point, but I think you're all in agreement.

Mr. Michael Hart: —that the emphasis would be on the controlling capital. I think the next round of negotiations will continue to be negotiations among governments. The outcome of those negotiations will be rules that provide the basis for the regulation by governments of capital. I do not think we are ready yet to have a global governance system that will be based on the direct effect of those roles upon the governed, that is, on people and firms. I think the intermediary role of national governments will continue to be important, but the issues that governments will negotiate rules about—and that's what the WTO really is all about; they are rules that impact on governments. They provide the basis upon which governments will then address the issue of how to rule capital, human rights, or what have you. I think it's because the ability of governments to do this strictly on a national basis, without reference to the broader rules of the international system, has been eroded by the reality of globalization.

We have reached the point where frontiers, borders, are so porous that it is necessary for governments, in order to provide what Mr. Lee and his colleagues find so important.... Democratic oversight over the way the market works requires that they work collectively on a system of rules that applies not only in Canada or in the United States but on a global basis.

Mr. Werner Schmidt: I think that is a very critical observation, but I would like to really ask Mr. Lee, how do you ever control capital? Capital apparently knows no allegiance to anybody. It flows very quickly and very freely. How do you actually get serious about doing the kinds of things Professor Hart has just talked about?

Mr. Marc Lee: It depends on the type of capital you're talking about. That's why I made the distinction between the short-term, what you might call portfolio capital, as opposed to longer-term direct investment. I think what you're addressing is more the short-term variety. There have been a number of different approaches suggested as to how—

Mr. Werner Schmidt: But the two are related. To simply put one in one category and one in the other and say there is some sort of an impervious wall between them is totally unrealistic. Short-term and long-term do have relationship to one another. I really think we need to recognize that.

Mr. Marc Lee: I think there's a big difference between investment that goes into a country to build a factory that then actually produces real things and mutual fund money that goes in seeking to make a 30% return.

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Mr. Werner Schmidt: I wasn't thinking about mutual fund money at all.

Mr. Marc Lee: On the shorter-term side, one suggestion you may have just voted on yourself is this notion of a Tobin tax. Some have said this is very unworkable in the international system, given the way capital is, but it seems that more and more there are major hubs through which these transactions are being made. So even though there's a huge decentralization in the ability of traders to log into the system, a lot of the trades pass through a single point. If you look at how the NASDAQ works, for example, it's all largely through one centralized computer system.

Another approach is the Chilean approach. They put a 30% tax on investment that came into the county, which was redeemable after one year. It meant if you were serious about investing for the longer term, you could put that money in without any worries, but if you only wanted to put it in for about a week, you stood to make a pretty steep loss. So there are models that have been tried.

In terms of longer-term investment and this notion of linking responsibilities and obligations to rights, my favourite approach would be to have this forum where you could negotiate minimum performance standards that transnational corporations would adhere to. Those that actually passed the bar would be given what you might call a most favoured investor status. By virtue of that status they would derive certain privileges, perhaps some of the ones they are seeking through negotiations like the MAI, such as national treatment or access to some kind of dispute resolution mechanism. I'm just describing the broad framework. There are a lot of details that could be hammered out there.

Mr. Werner Schmidt: I guess that's all the time I have, or do I have some more?

The Acting Chairman (Ms. Sarmite Bulte): You still have time for another question.

Mr. Werner Schmidt: I'd like to move into the related area of intellectual property, the competition rules, and the monopoly and oligopoly type situations. These are integrally related to the kinds of things we're talking about here, and the business of standards is so significant. How do we get serious about these kinds of things, given that we'll put that into the context now of the control of the flow of capital?

Mr. Marc Lee: On the competition policy side, one of the reasons I think this is so important is that if you look at the recent trends in mergers and acquisitions, for example, they're quite stark. KPMG did a study recently that said the value of international mergers and acquisitions in 1998 was about $544 billion U.S. This is a jump of about 60% over 1997. So we have to recognize shifts can take place, and we have scope for massive concentration of ownership and power at an international level. It happens more or less, depending on the industry you look at.

There is this possibility of monopolization and oligopolization. Oligopolies tend to be much more common, but with monopolies, particularly in the information technology area, because the nature of competition is in different types of technologies, you have massive potential for what are called lock-in effects. Take Microsoft Windows, for example. Once Windows got ahead to a certain extent in the market, a lot of forces served to reinforce the fact that it was ahead. Users wanted to buy Windows because other people they wanted to communicate with were also using Windows. Developers who were building software products for the Windows platform wanted to build for Windows rather than Mac because this was the standard they wanted to go to.

So those types of technological forces—and there's a big literature on this—tend to reinforce these traditional moves toward concentration of power. That's why I wanted to highlight that as a potentially troublesome area. Also, in telecommunications, we're seeing much more consolidation. It looks as if we're moving to a number of global firms that exert immense meta-market power in the media industries and banking.

Mr. Werner Schmidt: I don't think I need a catalogue of what the issue is. I want to know how you resolve this thing. It's all very well that that's the problem. I know that; we all know that as a committee, but we're looking to you as an expert to tell us how to deal with this sort of thing.

Mr. Marc Lee: I think there are a few things, such as the anti-trust policies we currently see at the national level. We could see some scope for applying those internationally. Measures to protect consumers would also be an important step in that direction.

• 1030

You have to remember we have a wealth of models to look at, in terms of how governments have chosen to regulate this problem at the national level. We could use them as a framework to move forward on a more global level.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

Mr. Woo.

Mr. Yuen Pau Woo: On the question of MNAs and competition policy, I just want to add a clarification to the issue of cross-border MNAs and their relationship to competition policy.

In Asia, which we follow the most closely, the huge rush in mergers and acquisitions into Asia is actually pro-competitive rather than anti-competitive. It actually breaks up monopolies in Asia that previously could not be broken up because of monopolistic control over the economies, or other government regulations.

So I would not draw the conclusion that the promotion of competition policy or competitive principles in Asia is antithetical to an increase in cross-border flows of mergers and acquisitions. In fact, I would say the opposite. If there's any move in the WTO to talk about the free flow of international capital, such as in MNAs, I think we need to tie that to the improvement of the competitive environment in developing and developed economies, so capital can flow more freely. It's pro-cyclical rather than antithetical.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

[Translation]

Mr. Sauvageau, do you have any questions?

Mr. Benoît Sauvageau: Good morning, gentlemen. First, I have a comment for Mr. Lee. If he wants to respond, he may do so. As for my questions, they are addressed to Mr. Hart.

Mr. Lee, you said that at the House of Commons, there was recently a vote on the Tobin tax. If I am not mistaken, the motion presented by one of the opposition parties was consistent with the wording of the Tobin tax definition, i.e. to tax speculation on exchange rate variations. However, this amendment was defeated, and we voted at the House of Commons on a tax on international financial transactions, which is much broader and dangerous than the Tobin tax. I wanted to make this clear. This is what we voted on. We had proposed an amendment consistent with the Tobin tax definition, and this amendment was defeated by the majority party. Therefore, we did not vote on the Tobin tax, but on a tax on international financial transactions. This is my first comment.

Mr. Hart, the first paragraph of your document reads:

Furthermore, the Asian financial crisis has convinced the Finance ministers to consider a whole range of proposals for reinforcing the overall surveillance of financial institutions and markets.

I recently read an article in a Francophone media, where it was said that the UN was looking at a new international institution that would have the same rules or criteria as the WTO but would monitor variations in exchange rates and international finances. Could you tell me how much work has been done on this?

We recently heard that, within the free trade area of the Americas, Canada was very “aggressive” and very optimistic, and even maybe a little too much so. It wants to negotiate all at once the WTO agreement, where there is an important round of negotiations, as you pointed out, the free trade area of the Americas, a free trade agreement with certain Northern Europe countries, and other bilateral free trade agreements. There is a French proverb which goes: "He who grasps at too much loses all." Is that not Canada's position with the negotiators and with the other countries it is negotiating with? El Salvador, Guatemala, and other countries like these may not have the same number of negotiators as the Canadian government or the American government to negotiate with us in all these forums.

[English]

Mr. Michael Hart: Thank you, Mr. Sauvageau.

On the issue of the work ongoing in the IMF and some of the sister organizations, I think governments have long recognized the benefits of specialization. So just as we have different departments of government in Ottawa, there are different organizations internationally that specialize in dealing with their kinds of problems.

• 1035

In order to deal with exchange rates and monetary markets, we have the International Monetary Fund. I know Mr. Martin has been quite aggressive at the IMF in promoting a greater degree of surveillance on the movement of short-term capital. I think there has been some reluctance on the part of other governments to go as far as he's willing to go. It's hard to keep up with things in every organization and I concentrate on the trading system, but I know he has succeeded so far in engaging his partners in the IMF in these kinds of issues, and I think this will take some time.

My real interest in pointing that out is to indicate that the international system is made up of many parts. There's work ongoing in all of those parts, and they all gear toward the same basic set of values and objectives: to provide a set of rules that provide a better basis for governing a global economy. That includes such issues as exchange rates and short-term monetary movements.

It also includes the much more detailed work going on in the WTO. That's why there are, for instance, very important crosswalks between the WTO, the IMF and the World Bank in Washington. Governments were not satisfied with how those crosswalks worked during the GATT years, but they have been strengthened in the WTO years and provide a better basis for the director general of the WTO, for example, to work with the IMF, and for the managing director of the IMF to work with the WTO. I think it's still a little early to see how those kinds of crosswalks work.

If I may take your time, I'd like to briefly respond to Mr. Schmidt's problem on competition.

Mr. Benoît Sauvageau: Could you answer my second question?

Mr. Michael Hart: Remind me.

[Translation]

Mr. Benoît Sauvageau: Are we not negotiating too many free trade agreements?

[English]

Mr. Michael Hart: Okay. Obviously if you take on too much you may lose. That's why we have specialized forums to deal with different kinds of things. The fact that on the trade front we have so many irons in the fire gives the wrong picture. It may seem like these are all disparate activities that are trying to achieve different objectives. As a matter of fact, they are not. I think they are a kind of hierarchy of initiatives that tend to be very complementary.

The work in the FTAA and the APEC forums, for instance, is very much geared toward a combination of technical assistance and trade facilitation. One of the problems you pointed out, for instance, that a country like Guatemala does not have the resources to negotiate as effectively as a country like Canada, is very true. One of the big benefits of the FTAA and the APEC processes is to try to increase the capacity of countries like Guatemala to participate more effectively in these kinds of negotiations.

In the end, because they are multilateral negotiations, these countries have to learn—and they are learning—the importance of building coalitions. So Guatemala doesn't work alone; it works together with 20 or 30 other countries that share similar objectives. In that way they are able to inject their interests more effectively into a multilateral negotiating process. That comes in large part from the kind of work that's ongoing in the FTAA. Similarly, for some of the smaller countries in the APEC region, the APEC process is very helpful in that regard.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Hart just wants to go back to answer Mr. Schmidt's question while he's at the microphone. I'll come back to you.

Mr. Michael Hart: On the issue of competition policies, some of the WTO agreements already contain provisions on competition policy. The GATS, the General Agreement on Trade and Services, has many competition-like provisions in it because it was recognized from the very beginning that the nature of the barriers that exist in trade and services are of a competition type. A good example of that is that in the telecommunications negotiations there is a reference paper attached to the fourth protocol—now, this is all very technical—that is, in effect, a paper on competition principles governments will use in implementing their obligations under that agreement.

What I see happening over the next ten years is twofold. Similar to what happened in the area of intellectual property, competition law at the domestic level is very uneven. The United States has a very aggressive, large and long history of implementing competition law. Many other countries don't even have competition laws. Canada has a competition law, but it wasn't effective until about ten years ago.

We had a very weak anti-combines act that was finally replaced by a much more effective competition law. In fact, the strongest competition laws tend to be in countries that have British Anglo-Saxon common law kinds of traditions. This is less so in civil law countries, but we're beginning to see the application of civil law principles to competition in an increasing number of jurisdictions. In the EU, for instance, the fact that the EU agreed in the Treaty of Rome, to make competition part of that treaty rather than having it at the national level, has had major impacts on competition within the EU.

• 1040

But what we will see then is an increasing requirement on countries to apply competition principles within their domestic law. Then the next stage, which will be a very difficult stage, will be an agreement—within the WTO would be my guess—that is similar to the TRIPS agreement, an agreement on what the basic principles are that all members of the WTO must apply within their domestic law that can form the basis of a justiciable or dispute-settlement kind of issue to make sure these countries are applying these basic competition principles within their domestic law.

So we will create at a minimum a ground beyond which members of the WTO cannot go. I think that's the next stage, and it will apply not only to services but to a wider range of international transactions.

[Translation]

The Acting Chairman (Ms. Sarmite Bulte): Mr. Sauvageau, do you have another question?

Mr. Benoît Sauvageau: Yes, a short question on culture.

Certain Canadian negotiators told us that cultural exclusion should be excluded from negotiations and that an international charter of cultural rights should be developed.

As a former Canadian negotiator, what is your position on culture? Should we, at the WTO and the free trade area of the Americas, put culture on the table and try to organize and regulate it, or keep cultural exclusion as we have it today? Mainly within the free trade area of the Americas, should the federal government negotiate this aspect of culture or, as the British Columbia representative mentioned a moment ago, should the provinces have something to say in this?

[English]

The Acting Chairman (Ms. Sarmite Bulte): Who is that question for?

A voice: Mr. Hart.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Hart.

Mr. Michael Hart: That's a very complicated question, with a lot of dimensions to it. First of all, I think it would not be wise for Canada to get into negotiating international agreements between the provinces and the rest of the system. I think the federal government should have the competence to negotiate, as it does have to negotiate international agreements, and the obligation to implement those agreements.

The federal government, in turn, has a responsibility to ensure that in areas where it is a matter of provincial competence, it speaks on behalf of Canada as a whole, including its provinces. I think that's an internal matter for Canada to settle, rather than saddle the rest of the world with delegations made up of both federal and provincial officials. I think that's an internal matter that we have to solve.

I'm of two minds on what we should be solving. I understand the real problems of cultural diversity, of having in place policies that make it possible for Canada to promote the kinds of policies that make it possible for Canadians to have their own cultural products available to them. But at the same time, I tend to be rather skeptical about the usefulness of discriminatory measures.

So if the federal government is able to gain a broad consensus internationally—and I think it is working on that—to move toward a constructive set of principles for the kinds of things the government should be able to do to promote cultural diversity.... I think that kind of consensus is capable of being forged. If it is a kind of anti-U.S. entertainment industry coalition, the idea of which is to try to beat back the success they have had, I think that will backfire, because one of the reasons the entertainment industry in Hollywood is so successful is that people like it. And if governments go about and say “We're not going to let you consume those kinds of products”, I think they will find that it backfires.

So I think the challenge is to have a constructive, positive set of rules that allow governments to promote these kinds of policies. And that may require a very difficult thing. That may require that governments be able to get tight-fisted finance ministers to make some money available, because I think that would be the easiest way to do it.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Lee.

Mr. Marc Lee: I think cultural policy is again an area in which we need to have a broad respect for diversity of national approaches. The Americans tend not to see culture as a reflection of the people and who they are—as a mirror, you might call it—the way Canadians do. The Americans see culture as a business; it's entertainment. The reason a lot of American films and TV shows have been so popular around the world has a lot to do with marketing. These guys have a lot of money that they can pour into huge marketing budgets.

• 1045

We see this problem in Canada. We are the prototypes of the world, as a matter of fact. Something like 90% of our film screens are controlled by U.S. distributors. It doesn't take a whole lot to look across the spectrum of media and see the American presence there. And I'm sure, monsieur, your concerns in Quebec would be reflective of that as well, even though you seem to have done a better job of protecting your culture than we have ours.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

Madam Beaumier.

Ms. Colleen Beaumier: Thank you.

I have to confess that with all of these different agreements you alluded to before—the GATT, NAFTA, and the free trade agreement—it's still quite confusing to me. However, the good news is that a year ago it was just a total blur.

I think we've determined that the WTO is going to be dealing basically with the reduction of trade barriers. Yet you allude to other organizations in which we have to deal with the destabilizing effects of short-term investments, the destruction of the environment, and labour practices that are totally abhorrent to Canadians. The WTO does not seem to be the vehicle in which we can address these issues.

You're talking about the WTO building links to other organizations. It was suggested the other day that the UN should be handling these. But we all know that at least in the short term, trade agreements are going to take precedence over anything the UN addresses in terms of social policy or the environment, because the mood right now is trade.

I, for one, don't believe that's always going to be the case. I think after we've made this new great pot of wealth, we're going to sit back and reflect upon what our souls and our consciences need as we leave this earth. I just think that's a natural progression for humans.

I am, I suppose, at the age where I'd like to deal with that now, and I am extremely concerned about our own social policy here in Canada. I'm concerned about what we, as Canadians, want to have for our society, which we hopefully can extend to the rest of the world. I would like to know how you think we can protect that and promote it with a little bit of clout, so that when the rest of the world has caught up to me and is in the latter half of their life, there will be those vehicles in place that can move quickly.

The Acting Chairman (Ms. Sarmite Bulte): Is your question to anyone in particular?

Ms. Colleen Beaumier: To Mr. Lee.

Actually, I have a feeling that Mr. Woo is probably still very young and is focusing more on the trade aspects. Yet you can't deny that the other one exists and does have to be addressed.

Mr. Yuen Pau Woo: I'll take that as praise, thank you, as a compliment.

Ms. Colleen Beaumier: It was certainly not meant as an insult.

If we have time, I'd like all three of you to address that.

Mr. Marc Lee: I guess I'm starting.

I thought you were actually asking a question of Mr. Hart, but it's okay, I'm up to it.

Ms. Colleen Beaumier: Well, sometimes when I'm asking this question, I think I'm asking it of God, because no one seems to be able to address it.

Mr. Marc Lee: I think what you're pointing toward is that internationally we need to move away from this trade uber alles perspective that has dominated the scene for at least the past decade and longer.

In terms of how we go ahead with other institutions, we may want to build on existing institutions, as Mr. Hart suggested, such as the ILO. The key issue in all of that has to do with the teeth those institutions have. For example, the ILO is fairly weak in terms of the teeth it has.

If we look at the environment, there is a huge number of what they call multilateral environmental agreements—the Montreal Protocol, the Basel Convention—that address a wide number of areas. But consistently what we see is that these important objectives that signatories have signed on to tend to get trumped by the trade priorities. I think that's something we need to stop. There are areas where other objectives should trump trade, and we need to be clearer and really think about what those areas are. I think I've pointed to a few: labour issues, the environment, and possibly culture.

• 1050

Ms. Colleen Beaumier: But how do we give them teeth? What are the vehicles? Mr. Hart was talking before about building the bridges between these groups. How do we give them a little bit of teeth—at least baby teeth?

Mr. Marc Lee: That's why I was talking about having some kind of most favoured investor status that you could use as a carrot to entice the corporations, to make it in their interest to adhere to high levels of standards, because they would get additional protections in the various markets within which they operate. That's one example.

The difficulty, I think, is that some approaches might tend to be looking toward trying to put in mechanisms at the WTO itself in order to take advantage of the dispute resolution mechanism there, which, granted, is very strong. I would posit that's not the approach we should be going toward. If you look at the issue of the environment, we have article XX of the GATT, which actually has some fairly strong wording on environmental protection. But again, any time it has come into conflict with some of the supposedly more important articles, in terms of national treatment and most favoured nation, environment has consistently lost. It has yet to win a dispute in that realm. And that's why I believe we need another broader element of an international framework to address these issues.

Mr. Michael Hart: Could I respond?

The Acting Chairman (Ms. Sarmite Bulte): By all means.

Mr. Michael Hart: Needless to say, I don't share Mr. Lee's view that it's the trade uber alles approach. Trade agreements and all the other international regimes have been negotiated by sovereign governments. Sovereign governments have decided on what they are prepared to see ruled on the basis of international agreements. They have looked to find ways to solve common problems.

One of the things I teach my students is that governments do not enter into international agreements unless two conditions are met. It's either that there is a problem they cannot solve by domestic action alone, that can only be solved by cooperative action together, or they see an opportunity that cannot be achieved by domestic action alone, and they see that it can be achieved by cooperative action. But every time governments negotiate an international agreement, they are, in effect, pooling their sovereignty. They are agreeing that rather than giving them the capacity to act unilaterally on their own, they will act cooperatively on the basis of a set of rules.

What makes the trading system so interesting is that it's in the trading system that—I think Larry Herman, when he testified before this committee in March, made a big point of this—for the first time, governments have agreed to a set of binding dispute settlement provisions in the WTO. This is the first international regime in which governments have agreed to do that. And governments agreed to do that, particularly the U.S. government, because they realized that the complexity of what was happening in the international trading system required that there be a set of rules that would be enforceable.

What that has meant for some of the other regimes, which are not enforceable, which are based much more on a kind of comity in political relations rather than law, is that there's now an effort being made to see what can be done to use the binding enforcement provisions of the WTO to ensure that some of these other regimes become binding.

Governments are not prepared to give the ILO or the UN system, and so on, the same kinds of powers they have given to the trading system, because they don't have the confidence yet in that system. The GATT system of dispute settlement is the result of 50 years of very pragmatic development, of trying things out and saying, this works, and this doesn't work, with safeguards built into it. That's why I think one of the things we will see is trying to see if bridges can be built between these other regimes to use the WTO as part of the enforcement mechanism to ensure we meet objectives in the environmental, human rights, and labour areas, etc. I think that will be a very big challenge.

But the template for that was in many ways set by the agreement at the end of the Uruguay Round to conclude an international agreement for the protection of international property. In effect, that says that the international property regime that exists, some of which is much older than the GATT—some of it goes back to the 1850s—will now be enforced by the use of WTO dispute settlement.

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The Acting Chairman (Ms. Sarmite Bulte): Do you have any questions, Madam Beaumier?

Ms. Colleen Beaumier: We don't have time.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Speller.

In this round we have a little bit more time.

Mr. Bob Speller: Thank you, Madam Chair.

I want to thank the presenters. It's good to see you again, Mr. Hart.

I want to say, Madam Chair, I really like this idea where you have—and I may be walking out on a limb here—people who fundamentally disagree on issues and you try to get the two together and, as Ms. Beaumier says, try to get a better understanding of what's really happening out there.

My first question, though, before I ask a question of both Mr. Lee and Mr. Hart, goes to our young Mr. Woo.

I appreciate your presentation here, but I have one question on it. I understand what you're saying in terms of the importance of APEC and the importance of trade liberalization in it, and I understand what you're saying about the focus now moving more toward the WTO, given what's coming up in November with the trade ministers meeting to try to kick off a bigger round of the WTO.

• 1100

I'm not sure, though, and I'm wondering if you could explain a little bit more clearly, why you're scared of New Zealand's effort to continue on the trade liberalization front at APEC. I understand that at the same time that's going on there are still committees, and an emphasis on, as you call it, ecotech work, going on, because it is fundamental that trade liberalization issues are discussed at the same time as trade facilitation issues, which are primary, particularly in areas of APEC. I'm wondering why one would all of a sudden hurt the other. I'm not sure if I understand that.

Mr. Yuen Pau Woo: Thank you for the question.

The APEC agenda is divided into three pillars, the trade liberalization agenda, the trade investment agenda, and ecotech. The first pillar, trade investment liberalization, has traditionally dealt with tariff reduction issues—tariff and non-tariff measures. They're trying to move a little into services as well, dabbling with investment principles and so on. Most notably, last year the early voluntary sectoral liberalization initiative, which is primarily tariff reduction—it also has facilitation initiatives and so on—failed. It failed miserably.

• 1105

When I refer to the New Zealanders trying to revive the trade liberalization agenda, I refer primarily to that first pillar and, specifically, to a reincarnation of the early voluntary sectoral liberalization initiative. They have rechristened it the accelerated tariff reduction initiative, ATL, and have apparently brought it to Geneva in some form or shape. It will fail there, to my mind.

I think it is unproductive because there is no way the APEC economies, in particular the bureaucracy of the APEC member economies, will divert attention from the preparations for Seattle to what will seem to be peripheral discussions in APEC. As a matter of strategy, I think we're wasting our time. I think Canada has to recognize this not simply because it doesn't want to waste its time or the time of its bureaucrats but because there's a lot more at stake here.

I think the continued failure of APEC to make progress on the liberalization agenda, say, in Auckland in September will paint a very dismal picture of APEC and will jeopardize a forum that is extremely important for Canada's interests in the region. It is for this reason, I think, that we have a very direct interest in shifting APEC to an area where, in the short term anyway, it can produce a lot more results.

Mr. Bob Speller: Mr. Lee, I was reading through your paper, and you say that the trade-driven 1990s have been a grim decade for Canadians. As one who has lived through that period and who has been around the House for a few years, I look at unemployment coming down during that period, I look at interest rates coming down during that period, and I look at inflation during that period being the lowest it has ever been. I'm not relating all of that to trade liberalization, obviously, as you're not relating all of the problems to trade. You say in your brief “Of course, not all of this can be blamed on trade”.

But on the next page you seem to say that liberalized trade and investment has created the Asian crisis, the Brazil crisis, and the B.C. recession. You talk about the dangers of the simplistic pursuit of wide-open trade.

Wouldn't you agree, though, that having trade rules and some sort of secure access to foreign markets would be of some benefit to Canadians and in particular a province like British Columbia?

I'm wondering, Mr. Hart, if you'd like to respond afterwards.

Mr. Marc Lee: On the first part of your question, if you look at the average unemployment rate for each decade, you'll see that we haven't seen this high average level of unemployment since the 1930s, so the fact that it has come down somewhat isn't really to be applauded too much. Interest rates have come down, but in real terms, when you actually subtract inflation, they're still very high by historical standards. Part of the reason—and I emphasize this in the brief—we've had a bad time in Canada during the 1990s is the pursuit of 0% inflation through very tight monetary policies, particularly in the early part of this decade. This had a devastating impact on the business sector of this country and therefore employment. So I don't think these are factors we can readily ignore.

My point wasn't so much to give the complete analysis of the 1990s in two paragraphs, it was just to point to the fact that when you look at the standard indicators of what people might call a standard of living, it's very difficult to make the case that all of this increased trade we've seen over this time period has actually increased standards of living. We have seen a decline in averages of real incomes and a widening gap between the rich and the poor. If anything, trade has probably exacerbated those conditions.

The second part—and I said this at the end of my brief—is that we do need rules. Canada is a trading nation. We support rules for commerce. To date the effect of those rules has been focused on regulating government and their actions and restricting the ability of government to act in certain areas. I'm saying that we have gone a long way down that road and that we actually need to start looking at this other area, which is regulating capital.

• 1110

So far I haven't heard a compelling case as to why there needs to be a millennium round of negotiations. I think the Uruguay Round was quite expansive in its scope. When Mr. Hart talks about 50 years of trade liberalization and all of that, you have to remember that the first round of the GATT was focused only on tariff barriers and goods. Then we started to move toward non-tariff barriers, and then we started to move toward services. The Uruguay Round was incredibly expansive. It encompassed investment, intellectual property rights, food and health standards—a full gamut of things.

So I think we need to sit back and take a look at what the impact of that has been on a huge variety of areas, rather than just saying trade has gone up, investment has gone up, toodle-oo.

Mr. Michael Hart: I'm going to make a couple of points. First, on the decade of the 1990s, I don't share Mr. Lee's point that it has been a miserable decade.

A voice: You must have mutual funds.

Mr. Michael Hart: I do. I have a good pension, I have three good jobs, and I benefit from all of this.

But I don't look at it from a personal point of view. I look at what the Canadian economy has been doing for the last 15 years, and the Canadian economy has been going through some wrenching changes, as we are adjusting to the fact that we were a relatively sheltered economy.

During the first 50 years of coordinated progressive trade liberalization, starting with the Roosevelt good neighbour policy in the 1930s through the 1970s, Canada played its cards very reluctantly. We were very happy to open up our markets to the things we were good at, that is, to quantities, but we were not very happy to open up our markets to manufactured products and services.

What we've done during the last 15 years is to realize that kind of strategy was no longer sustainable in an increasingly competitive and integrated global economy and that we had to make adjustments. We made those adjustments first with our principal trading partner, where there was a lot in common, on the basis of a bilateral agreement, which was extended to a trilateral agreement and which was then extended to a multilateral agreement.

All of this, I think, was part of the same effort to try to provide a basis of both sticks and carrots. The carrot is telling Canadians and Canadian firms that if we become more open and more competitive, there are rewards in being able to serve markets around the world. The stick is that if we fail to open up and become competitive, increasingly we will find that we are not able to keep up; we will find foreign firms and foreign goods servicing our market, and we will then see a spiral of decline.

Canadian firms have responded quite positively to that. I think there has been a tremendous amount of adjustment in the Canadian economy over the last 15 years as, first, Canadian firms rethought their strategy about whether they were Canadian companies or North American companies and now, increasingly, they look upon themselves as being North American companies competing in a global economy.

In fact, I am firmly convinced—and some of the experts at Statistics Canada agree—that the statistics of Canada-U.S. trade overstate Canada-U.S. trade and understate global trade, because in fact by their participation in the U.S. market, Canadian firms are participating in global markets, so that we are more of a global trader than I think the statistics seem to suggest. I think Canadian companies are realizing that in the kinds of strategies they are adopting.

Now, when you're going through a period of fundamental change and adjusting to a new set of circumstances—and they are not just trade circumstances; there are also technological issues, broader macroeconomic issues, social policy issues, and so on—there is likely to be adjustment, and that adjustment is sometimes very painful for individual Canadians and individual firms. That has put strains on the social network, and therefore it is not difficult to come up with stories of individual pain. But I think if we were not prepared to make those kinds of adjustments, we would then be delaying it and creating even bigger problems for the future.

So on balance I look upon the last fifteen years as having been a very successful decade. We saw the first seven or eight years of that as being the most difficult, but the foundation that was built during that period has created a much better basis for us to become world traders. I think that's one of the reasons we should be very bullish and very aggressive about ensuring that this next round of WTO negotiations provides a very firm foundation of rules for Canadian participation in the global trading system. As a relatively small player—and we are a relatively small player compared to the very large players of the United States and the EU—we are deeply dependent on a fair set of rules.

• 1115

I was asked by a journalist recently to explain why this was important. I pointed out that in 1993 and 1994 Canada was bullied by the United States into putting controls on its exports of wheat because the United States wanted that. In 1995, we were able to tell the Americans to take a hike because we had a set of rules we could use to tell them we were not going to listen to their bullying, whereas in 1993-94 we didn't have them.

So every time the Americans succeed in bullying us, it is not difficult to find the reason. It's because the rules are yet inadequate. It's an area where the rules have not yet been fully developed. We need those rules, particularly because we live next door to the most dynamic and also sometimes the most bullying economy in the world.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Hart.

I just have a few questions, then we'll have time for a second round.

I'm sorry Dr. Saywell had to leave. Perhaps you can help me out with one of my questions, Mr. Woo.

In your paper you state that Canada should strongly support China's bid to be a member of the WTO as soon as possible. My question is on what conditions? Bear in mind Mr. Hart said in this next round of negotiations we must balance between equity and efficiency, with a focus on equity. We talked about things like equity, human rights, and the environment. While your position is that we should welcome welcome China into the WTO with open arms, what conditions should there be?

Mr. Yuen Pau Woo: China's membership in the WTO should be on the basis of the members who are already in the WTO, and human rights and other issues should not factor in at this time. It would be unfair to impose those sorts of conditions on China, when the other members have not had to cross those hurdles.

In saying that China should join on the terms the other members have joined, one has to recognize that the biggest stumbling block to China's accession to the WTO is the United States. It's a bilateral relationship between the U.S. and China, and I think this is where Canada's role is important.

Canada has to provide some clarity of thinking in pushing the bilateral relationship, so other issues in the U.S.-China relationship do not provide a stumbling block to China's membership issues, such as the question of secrets being stolen and the question of funding of political parties—essentially peripheral issues that Congress might bring forward to jettison China's bid. Our approach has to be that membership is on a clear and transparent basis and not impeded by peripheral issues.

The Acting Chairman (Ms. Sarmite Bulte): Thank you, Mr. Woo.

Mr. Lee and Mr. Hart, do you have any comments?

Mr. Marc Lee: There are issues we should keep in mind when we're talking about China and coming toward the WTO. China has some major environmental problems right now. I was there a couple of years ago, and I'd say the country is on the verge of an ecological collapse. You can't walk around one of the cities there without having your lungs clogged up by fumes. There are enormous problems with issues like forced labour and essentially slavery-type conditions. If we just say that kind of stuff doesn't matter and we should allow China in because we want trade with them, I don't believe that's the approach to take.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Hart.

Mr. Michael Hart: On Chinese accession, I was still in government when the process started, and I remember reviewing the first submissions China made to the GATT at that time on its accession. My conclusion was that the Chinese weren't serious. They were not prepared to make the kinds of concessions that would make them a useful member of the GATT at that time. The Chinese learned from that and the rest of the GATT membership learned from that, in order to maintain the pressure.

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I think that process peaked around 1993-94, by which time the Chinese had gotten kind of sick and tired of answering the questions. The last time I looked, they had answered 4,000 questions from WTO members. They had tried as much as they could, but they were beginning to get the view that maybe membership in the WTO wasn't everything it was cracked up to be. And I think there's a realization among the remaining WTO members that this may be the case.

One of the things that make it difficult to make judgments about this is that both in the GATT and the WTO the rules about accession are very ambiguous. The rule is a very simple one. It is that new members can join on terms to be agreed on. So you can put in anything that other members want, and if the terms are not agreed on by the United States, China won't become a member. I think Canada has been ready to welcome China for some time. I think the EU has been ready. But the United States has not. The fact that the United States appears now to have overcome its most pressing problems and that the Clinton administration is prepared to see China welcomed to the WTO at the ministerial in Seattle is a good sign.

There are two dimensions to this. I think it is important that China be a member of this organization so that the organization can have influence on Chinese policies. At the same time, I think it is important when China joins that those policies be meaningful to China; in other words, that China has taken the necessary steps to implement the rules of the WTO in its domestic policy.

I think that stage has now been reached. Does that mean we should hold it up because China doesn't meet the highest standards of human rights and environmental protection and so on? I think that would be a non-starter, because there are other members of the WTO who would have equal difficulty meeting some of those standards. I think that is an area where there has to be collective action, collective will by the membership as a whole, rather than singling out one of the most important countries in the world and saying, until you live up to standards that the rest of us don't have to live up to, you can't be a member of the club. I think they have to be member of the club in order to use the club as a basis for improving those standards.

The Acting Chairman (Ms. Sarmite Bulte): Thank you, Mr. Hart.

Ms. Beaumier, you had a piggyback question.

Ms. Colleen Beaumier: Yes, I just wanted to piggyback on that, and I'm going to use two examples. One is 30 years old. And I'm going to use the United States and China, not that the rest of us are not guilty.

For example, when DDT was banned in North America, the United States dumped all of the remaining DDT into China because China did not have any law prohibiting the use of DDT. We are now seeing the effects of that. It is coming across the poles and we're now seeing that DDT still has an environmentally detrimental effect on the ecology of the entire world. So when you're talking about allowing them in and we're not including environmental standards, how do we see that this does not happen again?

The other issue is organ donors. We know that China has a policy of removing organs from criminals and political prisoners. How do we prevent this sort of mass...? You could have a trade in organs that have been taken.... We can talk about labour standards as being human rights, but when you get into organs, how do you address those kinds of issues? I'd like Mr. Woo to tackle that.

Mr. Yuen Pau Woo: I won't comment on the DDT case; I'm not familiar with that.

I'm not very familiar with the organ trading issue either, except to say that one could come up a whole list of problems that one has with China that are morally repugnant perhaps, depending on your perspective. But one has to ask if one could also come up with problematic issues in any of the other existing members in the WTO, and whether it would be legitimate to bring up these issues specifically to China and not to the other countries.

My point is that by not admitting China into the WTO, are you likely to make the situation better or worse? There's no reason to expect that organ trading would cease if they did not become a WTO member, but there is some small hope to expect that by bringing them into the fold, one can begin to engage in discussion of principles and practices of the world trading system that would disallow them from carrying out these practices.

Ms. Colleen Beaumier: I don't disagree with you. And as I say, I'm only using China and the United States because they happen to be the big players. However, should things be built into the WTO that prohibit such things as these...what we would consider repugnant commodities?

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Mr. Yuen Pau Woo: On the specific issue, I think there are certain types of trade that one has to consider regulating—for example, trade in endangered species—and that discussion has been going on and has been very successful. So I think there are precedents for the treatment of products that are problematic in the trading world, and the way to deal with them is by bringing China and other economies that practise this trade into the fold. There's no incompatibility, in other words, with the problems that you bring up.

The Acting Chairman (Ms. Sarmite Bulte): We have ten minutes, so Mr. Schmidt and Mr. Sauvageau are next. Mr. Schmidt will go first.

Mr. Werner Schmidt: Thank you very much, Madam Chair.

I'd like to come back, if I could, to the ecotech business. It strikes me that although we had accounts given before of all the monopolistic and those kinds of developments—and the telecommunications industry in particular—and the growth that's going to be taking place here, at the heart of a large part of this international or global trade issue and economic development is the communications industry, because it is the heart of this whole development now. It does involve the intellectual property and it clearly involves competition and transparency.

It seems to me that one of the points that were not made by Mr. Hart or Mr. Lee or Mr. Woo is that we need to go away from APEC, which really has that ecotech thing. Somehow, it seems to me, we ought to shift that very thing. Now, you may have meant exactly that—that this has to go to the WTO now. I wonder if you could comment a little bit more specifically and a little more completely.

I think each of you should address this one, because the communications business, which involves this whole area of e-commerce and the encryption, the privacy, the preservation of confidentiality, is critical to this whole area. It seems to me that this may have more to do with it than anything we've talked about so far. It's an area that many of us shy away from, and yet it's an area that I think is at the growing edge and will determine more, if you really want to have a single variable, than any other variable.

I wonder if you could comment on that.

A witness: I think that's a very good example of the complementarity between two different places, where similar issues are being discussed. In APEC, ecotech and some of the other committees that have been there are working on these kinds of issues. They have committees of experts working together, involving not secretariats but member government officials—and often government officials who go well beyond the trade ministries to include the more technical ministries—dealing with what kinds of problems are there, sharing experiences, looking at benefits.

Some people dismiss APEC as being nothing else but an opportunity for travel by civil servants. I think that's its strength—that it provides the networks, the relationships, the opportunities to share experiences and so on that have taken place over the last seven or eight years. But APEC is not well suited to negotiate binding agreements. It is an association of member countries that are looking for ways to cooperate, and they've come up with this interesting phrase called “unilateral concertation”; that is, they will take unilateral measures in a kind of cooperative way.

The WTO is the place where you do these things on a binding contractual basis. So much of the homework that's done in APEC or in the FTAA or in Europe and so on helps to develop a better consensus on these issues before you go into a technical negotiation.

Now, in the particular case of e-commerce and the basic infrastructure you need for that, 55 contracting parties to the WTO signed the basic telecommunications agreement, and that includes all the members of the EU, so in effect it's 69 countries. We say that's very good, because those 69 countries combined have something like 95% or 96% of the world trade in these products.

But missing from that are another 65 countries that have not signed the basic telecommunications agreement. Now, is it because they are reluctant to open their markets? No, I think it's because they don't have the technical capacity to deal with these kinds of issues.

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So part of the job we in Canada have—and I think some of this is being done through the Canadian International Development Agency, APEC and similar kinds of things—is to help these countries build to capacity. Many don't have these kinds of infrastructures that are critical to building up.

One of my students did a presentation on India a couple of weeks ago, and he indicated that the telephone density in India is 1.38 telephones per 1,000, whereas in Canada it's something like 70 or 80 times as dense. Given that, it's very difficult for India to get the full benefits of this system of electronic commerce that's developing and all the communications it has made possible, without having a basic infrastructure.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Sauvageau, this will be your last question.

[Translation]

Mr. Benoît Sauvageau: I will say jokingly to my friend and colleague Speller that if we want to further reduce the unemployment rate in Canada, we could simply tighten things up, as we did with recent legislation. You would further reduce the unemployment rate if you reduce the possibilities of benefiting from the system, as it has been done before.

I now turn to Mr. Hart, because we are not playing politics. It would have been a joke if I had said it, but I will not say it. Mr. Hart, you forgot something in the two recommendations you made to your students regarding the international agreement negotiations, i.e. it is politically incorrect to withdraw after initiating a round of negotiations. For example, if Canada wanted to withdraw from the negotiations on the free trade area of the Americas, it would pay the political price for it. Therefore, if we realize, once the process has been initiated, that we may have gone too far, it is then dangerous to withdraw.

I would like to ask Mr. Hart two questions. Could you tell us why we spend so much time and energy negotiating free trade agreements with countries from the Americas and the whole world, while it is more difficult to trade between Canadian provinces than it is between two sovereign countries?

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Secondly, you seem very optimistic and enthusiastic about all these international agreements. Why do groups and individuals such as Mr. Lee become increasingly popular and better equipped to face a structured defence? Why and how could the Multilateral Agreement on Investment be killed just with the Internet? Is there not something wrong with your marketing?

[English]

The Acting Chairman (Ms. Sarmite Bulte): I will give you a few minutes to answer.

Mr. Michael Hart: I don't know whether it's a problem. Obviously, when governments negotiate to achieve one of those two objectives that I mentioned, either to achieve something that can't be done domestically, or to solve a problem that can't be done domestically, they will also have a bottom line. They will be prepared to pull out when it is clear that the problem or the opportunity they are seeking is available at too high a price.

In fact, we saw an example of that during the original Canada-U.S. free trade negotiations when the federal government made the determination in September 1987 that what the United States was prepared to offer wasn't good enough. We walked out, and walking out had a rather useful impact on the United States. The United States came back with a greater willingness to negotiate an agreement.

So the willingness to walk out is an important part of participating in negotiations, but as for such things as the FTAA and so on, I'm prepared to make a little side bet with you that there never will be an FTAA. The FTAA is a very important process of education, of consensus-building, of technical assistance and so on, but it will be rolled into the multilateral negotiations within the next few years. And many of my colleagues in government agree with that.

That doesn't mean that they go to these meetings with a cynical attitude. They look upon the FTAA as an important process of preparing, of building consensus, of creating coalitions, of working collectively in that forum for solutions to common problems. So they're very important.

In the end, the Government of Canada must decide where it wants to place its energies. Partly, it's put some of its energies into areas that I find questionable. If I was the Minister for International Trade—and I'm not—I would not be spending any energy on negotiating the free trade agreement with the remaining members of the FTA. That's majoring in minors, but that's a political decision that the current government has made, and it has the sovereign right to make that decision. I would not pursue that particular issue, because I think that energy can be used more effectively elsewhere.

You point at the end of your remarks to a very interesting problem, which I think needs to be studied more. During the first 40 years of GATT the political economy of the trade negotiations was quite simple. It was trying to find a balance between import and export interests. So firms with primarily an import interest came and testified about their worries about opening the market, and firms primarily with an export interest came about the new opportunities they were seeking as a result of those negotiations. So the job of government officials and their political masters was to try to find a balance largely within the business community between export and import interests.

What we have today is pretty well a single voice from business. Business has come to the conclusion that international trade agreements are critical to their future. They're no longer worried about competition on the home market, except in some minor areas, but generally the business community thinks that negotiating international rules and negotiating better rules of access and so on is in their interest.

Opposition now comes from people like Mr. Lee, from a much wider segment of society, who worry about the impacts of these kinds of agreements on broader issues that trade negotiators 10 years ago dismissed. I remember very well writing speeches and answers to ministerial questions and so on on trade and social policy, and so I was dismissing...that it had nothing to do with trade agreements. We were wrong, because these kinds of issues do have something to do with trade agreements, but it's a very difficult issue to deal with.

That's why I mentioned in my opening remarks that one of the big challenges governments face is to now collectively find the balance between equity and efficiency. We have made a lot of progress on the efficiency side, but it is not good enough any more to say that the equity side is strictly a domestic issue and we'll deal with it domestically. The repercussions internationally are such that it is now a problem as well as an opportunity that can only be addressed through collective action.

So the big challenge is to find ways to use the authority of the WTO, its ability to enforce international obligations to an extent that was never possible before, to achieve some of the things that have already been widely agreed on internationally. There is wide agreement on human rights. There is wide agreement on basic international labour standards. There's wide agreement on environmental protection. What's missing is the capacity to implement those agreements in domestic law and make them stick. The key to that is to find that bridge between the WTO's enforcement mechanism and these other international agreements, and that's a big challenge.

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The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Hart.

Unfortunately, we're out of time. On behalf of the committee, I would like to thank you all for joining us today, for your presentations, for your answers and for your input. As I said previously, this is just the beginning of our ongoing consultations with you. You see this as the first stepping stone to continuing negotiations and as a relationship between the committee and yourselves and your members.

Thank you very much for coming.

I'd like to call Dr. Douglas Seeley before the the committee, please.

Welcome, Dr. Seeley. You are a systems specialist in supply chains for commodity export and a director of Inter-Dynamics P/L.

Dr. Douglas Seeley (Individual Presentation): Thank you, Madam Chair.

I speak to you today as an individual, not as a representative of my company. My company does give me a commercial and, more importantly, a whole systems perspective on some of these issues. I am speaking on behalf of what I feel are the rights of my grandchildren and my great-grandchildren to live in a free and democratic society, which I think current developments in international trade have threatened.

My presentation is based on four arguments against international trade agreements in the manner that they have been recently pursued by this country, as they are anticipated in the millennial round of negotiations, and as they are currently embodied in the operations of the World Trade Organization.

My perspective is one of a modern systems theory in the practice of clarifying complex systems. I will use the export of Canadian grain as an example. These arguments are briefly:

- the fallibility and intellectual poverty of the free marketplace religion, especially from the perspective of systems theory and practice;

- the application of the user-pay principle to the privatization of the essential infrastructure of a culture in a belief that the marketplace will benefit everyone, in my view, inevitably ensures the culture's impoverishment and collapse;

- the domination of the sovereign rights of citizens by corporate power and commercial law ensures a return to feudal society;

- the surrender of the local determination of Canadian life, economics and democracy to a non-franchised, secretive and non-accountable institution such as the WTO violates the principles and charters of Canadian governance and is a betrayal of the Canadian people.

I will also make a positive proposal based upon a systems approach to a sustainable economy, a sustainable culture, and a deeper form of democracy.

I just want to give you my credentials. I was a professor of computer science previously, before I became involved in the commercial world. I founded a company that specializes in decision-support software over the Internet for commodity export chains as well as other industries in Australia, South Africa and Sweden.

In our company we have saved millions of dollars for the export grain, coal, iron ore, nickel and sugar supply chains in Australia. I'm a Canadian citizen, but I was working there. We understand global supply chains in the so-called borderless economy.

I'm not anti-business. My conclusions flow from the successful application of a whole systems approach to commerce. My commercial experience has shown, without a shadow of doubt, that the model of free trade in which completely independent organizations maximize their self-interests, performs poorly.

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From a systems modelling approach, it became clear to me that one cannot compete effectively without the collaboration of all stakeholders in a supply chain delivering quality to the ultimate buyer. While some restructuring and downsizing is valid, a large percentage is unfounded, counter-productive and based upon narrow-minded hyper-efficiencies rather than upon the performance of the whole company.

An ideology that proposes the maximization of overall benefits by each stakeholder company, maximizing their own narrow self-interests, actually leads to demonstrably poorer productivity. This applies to entire export chains and, hence, to the performance of regional economies. I call that observation the fragmentation effect.

For example, in the export of Canadian grain there are many stakeholders, from the farmers, the boutique railways, the Wheat Board, the Grain Commission, the various grain pools, the agribusiness players, the individual ports and shippers to the major railways...as well as the interests of several provinces. Everyone has a stake in the success of this export supply chain. However, by promoting the quick profit-taking of each of the independent fragments, we end up with a poorly performing supply chain. I've given some examples there, which in the interests of time I will skip over.

More importantly, there are no contractual and competitive incentives for any of the stakeholders to support their clients' clients. Hence, in this particular chain there is little support created to sustain the farmers' markets by enabling the on-time, effective delivery of a product. In contrast, in western Australia we've facilitated the coordination of the stakeholders in grain export to such an extent that they were able to quickly capitalize on Canada's unfortunate grain and supply log jam that occurred in early 1997. This made many millions of dollars that were shared amongst all of the stakeholders, including the farmers.

Our work has unequivocally found a global performance that does not result from the independent maximization of fragmented parts, but from a harmonious coordination between all of the parts. I refer to this observation as a synergy principle.

A grain or any other export commodity chain should be viewed in a system sense not as a chain but as a circuit or cycle. These commodity cycles expand the chain to include the relationship between the buyer and the producer. These export cycles are sustained when the stakeholder businesses are sustained. These businesses have their own production cycles that are sustained, in turn, in a similar manner.

Moreover, all of the cycles require a sustainable supply of healthy, educated, skilled and motivated citizens. The result, of course, is a highly interdependent web of economic and social relationships that sustains a culture and a way of life.

By taking the laissez-faire marketplace so consistently in recent times as a position, western democracies, I believe, are breaking these sustaining cycles. In the process they are widening economic gaps, expanding a culture of scarcity within their own countries and removing the essential infrastructure that supports the citizens upon whom the markets depend. Interdependent webs of relationships just don't gradually fade away. Rather, systems theory shows us that there is an increasing slippage until the entire web collapses catastrophically.

I maintain that these observations apply not just to the businesses and supply chains that we have had as clients but also to the entire global economy and into the very fabric of our society.

Within that context, I want to speak a bit about the mechanisms that I see at play here and why I feel there is a growing corporate domination of our lives.

Like many of you here, native born or willingly migrated, I was proud to be a Canadian. I thought I was in the freest, most democratic country in the world. For a dozen years living overseas, I kept this identification. Upon my return three years ago, I found some glaring changes had occurred.

Consider the following structural relationships in our society: The only objective of corporations is to maximize the returns to their investors. Legally, corporations have tended to be treated as persons, with claims to be treated with the same rights as citizens. Under tort law, any business can claim interference from citizens if there is any suggestion that their ability to make a present or future profit is jeopardized. Under present international trade agreements and those under negotiation, transnational corporations can sue our government if our local laws are seen to inhibit their ability to make profits or if they are perceived to be protectionist. Citizens have very limited ability to gain injunctions, fund lawsuits, and fund defences against pre-emptive SLAP suits.

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Systemically, these mechanisms have eroded most of the democratic processes I always believed we had. In effect, self-governance has been replaced by corporate rule. With the single-minded corporate agenda that everything must be privatized, there is no space for sustainability, a healthy environment, biodiversity, preventive health, or a vital, well-educated public. All that now matters is that we continue to be good consumers.

From my perspective, as a result of this we no longer have the right to preserve our own health. Corporations are forcing us to breath brain toxins like MMT because of the chapter 11 conditions of NAFTA. We no longer have the right to fresh, locally grown food, because corporations want us to drink milk with bovine hormones for the sake of better shelf life.

We have greatly diminished rights to our own minds, because American corporations and the WTO are forcing us to read only magazines that rip off Canadian advertising dollars from our own economy, impoverishing our culture's ability to express itself.

We no longer have the right to preserve our environment. The chapters 11 of trade agreements ensure that protecting the environment can be interpreted as appropriating the profit-making ability of corporations.

The world is on the brink of making water a commodity. In my view, this will kill Canada through the dependencies it will create through the world, especially with the United States. It will quicken global environmental collapse, because water will not be conserved in an appropriate manner.

Finally, we no longer have the right to enjoy nature itself. There's one agribusiness company that is so powerful it vows to own nature herself, through its control of seeds and the use of the terminator gene. Its massive lobbying influence with governments has stifled dissent, and control of water and air complete the picture.

How far will this be allowed to go? Will organizations promoting breast-feeding be sued for limiting the profit-making of formula milk producers? Will we be charged with economic sedition if we advocate economic systems that are alternative to the free market religion, as some are threatening to do in New Zealand?

My question to you is, who gave away our rights as citizens? The mechanisms and examples given show that democracy and the sovereign rights of citizens are being systematically replaced by the universal and all-embracing right of corporations to make profits.

Corporations are not humane entities. They have no objectives to preserve health, preserve the environment, foster educated citizens, treat the weak kindly, or fall in love. Their only objective is maximizing return on investment.

When did Parliament vote to abrogate our rights as citizens and our respect as human beings, in favour of the rights of transnational corporations? When did Parliament pass a law removing our Charter of Rights and Freedoms? It appears the approval of international trade agreements, with chapter 11-like clauses negotiated in secrecy, which were thankfully exposed in the MAI negotiations, has had this effect.

Who in Parliament is responsible for giving away our rights under the guise of trade agreements? Is it not understandable that the responsible ministers and negotiators of such deals are regarded as something like traitors by some Canadian citizens? Do the ministers and negotiators not care that their grandchildren live with democratic rights in a free country? If everyone cares for their grandchildren's well-being, why is this gross giveaway of our democratic rights and a healthy planet to corporate power happening? Are we collectively really that dumb?

I believe there's a mythology of free trade and robust economies. The ones who control the measurements by which decisions are made have the true power in an organization. The politics of information control is one of the pockets of resistance our work with systems modelling has to overcome in business. The same applies on a much grander scale when it comes to the health of the economy. Economic measurement is extremely biased and distorted, and it favours only a very selected view of reality.

Free trade makes the home bases of transnational corporations more prosperous, while promoting the economic colonization of developing countries and the marginalization of the initiative of their people. The benefits to these countries are only channelled into the local plutocracy, and the IMF ensures there are no social safety nets left. Free trade is also having the same effect in the northern countries, only the impact is less apparent.

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In contrast to one of the previous speaker's three jobs, there are a lot of fishermen, lumbermen and other resource industry people in British Columbia who don't have jobs as a result of some of these impacts. There are widening gaps, homes mortgaged to support self-employment, increasing family debt and increasing levels of work near the minimum wage, but these don't show up in the macroeconomic measures. The highly aggregated statistics wipe out any subtlety, avoid important social issues, and make it look like the whole is prospering when large areas are suffering.

The highly selective statistics do not reflect the whole picture of a society and the myriad ways people are productive for themselves. There are no corrective measures in our economic engines that provide the feedback necessary to adjust our path. The breakdowns in families, with their damage to children's lives; the levels of personal debt required to be a good consumer, while levels of depression, attention disorders and chronic immune dysfunction climb; the levels of homeless; and the waiting lines for surgery—none of these tragedies show up in the GDP, the stock market, or other key economic measures until it is far too late.

The Acting Chairman (Ms. Sarmite Bulte): Dr. Seeley, could I ask you to go to your recommendations? If there is some time we could have one or two questions.

Dr. Douglas Seeley: All right.

What can be done? Canada can take the leadership in transforming international trade agreements away from their current objectives of satisfying corporations and the voracious appetites of transnational companies through the doctrine of liberalized cross-border trade. Instead, Canada can promote a direction in international trade based upon cooperation at the level of citizens, mutual empowerment in the emerging area of information abundance, preservation of our biosphere and our planet, and a mutual respect for cultural diversity.

We can say no to the chapter 11s in our trade agreements. We can, more importantly, affirm the sovereignty of the citizen in law, with priority over corporations, and create a deeper democracy in which respect for the rights of others, respect for families and communities, and respect for watersheds and the vibrancy of local economies is sustained.

As a sovereign community, we can maintain an essential infrastructure for homes, energy, transport, communications, education, health, and access to information, which would become a platform for great achievement. We can sustain a distinct culture that does not have to be swallowed up by the religion of consumerism.

Canadian governments can take a new role as guardians of essential infrastructure and facilitators that mediate the coordination of our interdependent web of supply chains. They can sustain and mediate a dynamic balance between competition and cooperation. They can ensure that social measurements have a corrective impact upon the way the economy develops. They can declare a new dominion of civility and empower its citizens. In these sectarian and consumerist times, creating such a deep democracy, in my view, is also a spiritual mission—a mission to preserve the human spirit of our own people.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Dr. Seeley, for a very well-thought-out and detailed paper. I'm sorry I had to rush you there at the end.

Dr. Douglas Seeley: I anticipated it.

The Acting Chairman (Ms. Sarmite Bulte): The complete document will be there on the record. We are also posting submissions on the website.

Dr. Douglas Seeley: Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Perhaps for the sake of time, unless my colleagues have some questions, I could just ask some very quick questions myself.

Dr. Seeley, I understand what your concern is and where you're coming from—the dominance of corporate rights. But you do say in your paper that Canada has a role in international trade agreements. Do you agree we should continue to stay at the negotiating table at the FTA and the WTO? Secondly, what is the role Canada should play, more specifically than you've stated in your paper?

Dr. Douglas Seeley: I'll answer both questions at the same time, Madam Chair.

With the concern that exists in this country over human rights, social issues, environmental issues and labour issues, Canada can take a role in creating a new model for trade and sustainable economies, displacing the role of New Zealand by showing how these concerns can be integrated in a holistic manner with the concerns of commerce and the natural advancement of our economy. It's a matter that at the moment there have been no checks and balances to support these other issues, as some of the earlier speakers mentioned.

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Canada can take a very useful role in showing how that can be done, in ensuring that rights are not given away and ensuring that when you speak democracy to a southern country they don't automatically cringe because democracy to them means economic colonization.

The Acting Chairman (Ms. Sarmite Bulte): I know you were in the room before when Mr. Hart was speaking, and he stressed the importance of the focus on a balance between equity and efficiency. Would you concur that it's the role we should be taking?

Dr. Douglas Seeley: With one proviso, Madam Chair, I would. The sake of efficiency, I think, has been totally misunderstood. It's what I call hyper-efficiency, and as I mentioned in the background to my professional situation, we have seen over and over again, both in businesses and in supply chains, that the normal approaches to efficiency backfire because they don't look at the threads of cause and effect that result in production of services and goods, and they don't look at the coordination between the stages in this production that are so necessary to be competitive and to perform well.

So everything I've seen in terms of efficiency has been this other paradigm of what I call the religion of the free marketplace, which is of everyone maximizing their self-interest independently, and that just is not so. That leads to wasteful situations, both within companies and within supply chains.

The Acting Chairman (Ms. Sarmite Bulte): With my colleagues' permission, I have one very quick question.

Again, based on your paper and the position you're coming from, how do you see China's accession into the WTO, especially given your focus on the human rights, the social rights, labour, and the environment? And do you see any benefit by bringing China to the WTO to address the concerns that Ms. Beaumier talked about, the organs and the human rights?

Dr. Douglas Seeley: Yes, I think in this case I agree with Mr. Woo and Mr. Hart. I don't think we should be excluding China for those things that we are actually deteriorating in our own countries. I see human rights going down the tubes because as a citizen I can't have any power against a commercial development in my neighbourhood, or in my province or in my country. Those are similar kinds of human rights to me.

So I agree, I think it should be taken to these organizations, and I think Canada could take the lead there in showing how the integration of human rights can proceed.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much.

We're out of time. Unless my colleagues have anything else, I'd like to thank on behalf of the committee—

Mr. Bob Speller: I have one quick question.

The Acting Chairman (Ms. Sarmite Bulte): Very quick, Mr. Speller.

Mr. Bob Speller: On page 5 here you say: “Will gene matching companies outlaw romantic love?” I'm a little concerned about this.

Dr. Douglas Seeley: I'm just concerned by the extent to which both tort law and trade agreements can be used to support the efforts of commercial interests at the expense of the individual interests. It's meant to highlight that.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much. Is there anything else?

Mr. Bob Speller: I did actually have another question, now that you ask.

You say here in the end what can be done, and I'm trying to get a better understanding of what you're saying. You're saying we shouldn't be satisfying corporations; we should affirm sovereignty of citizens, deeper democracy, respect for others' human rights, families, and socially accountable commerce. Those are very important goals certainly for any government negotiations. But what about on a practical level? You seem to be more looking at it on a philosophical level rather than in terms of a practical thing that governments could do.

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Dr. Douglas Seeley: Right. I appreciate your remarks. And I know they do look like philosophical positions. That's perhaps a very similar comment to those made sometimes with regard to the way my business operates. When we look at the big picture of a railway and show how interdependent it is on the operations of the mines and the operations of the port and the behaviour of the ultimate buyer, and show how they all interrelate, this big picture sometimes has the effect of making people think we're being philosophical. We're not. We're really looking at systems as they work as an entirety, rather than in the kind of conditioning that has been so prevalent in the past, which focuses on individual units in maximizing their efficiency, in maximizing their performance.

So what I am advocating here is that if you study how the goods and services are created, you can support the commodity cycles that exist there, rather than trying to maximize what the individual parts do. That, when we apply it in businesses, works. It worked in the western Australian grain industry. It works in the Queensland coal industry. It could work here in Canada, in British Columbia, and in other parts of Canada.

The issue in the paper I didn't get a chance to dwell too much on was that of measurement. Measurements self-organize behaviour all around them. We can take measurements that take into account these factors of social concerns, of environmental concerns, and the like, and integrate them with the measures we use to direct and correct the development of our economies. That's a matter of just becoming, from our perspective, non-traditional and more systems-oriented in approach. That's about as far as I can go on that, but I appreciate your comment.

Mr. Bob Speller: Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Seeley and Mr. Speller.

Thank you again, Dr. Seeley for coming. As I've stated to the other witnesses, please, even as an individual, see this as the beginning of our consultation. If there are others issues you wish to bring to our attention, please do not hesitate to do so.

Dr. Douglas Seeley: I'll mail it to you.

The Acting Chairman (Ms. Sarmite Bulte): Yes, please file them with the clerk.

Dr. Douglas Seeley: Very good.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much. On behalf of my colleagues, thank you for coming.

I would like to take this opportunity to adjourn this morning and we'll be back at one o'clock. We'll start sharply at one. Thank you very much.

AFTERNOON SITTING

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The Acting Chairman (Ms. Sarmite Bulte): Ladies and gentlemen, I'd like to bring back to order this meeting of the Standing Committee on Foreign Affairs and International Trade.

We will welcome our witnesses this afternoon. First we have Mr. Jef Keighley, national president of the Canadian Auto Workers Union.

Mr. Jef Keighley (National Representative, Canadian Auto Workers Union): Buzz Hargrove might be insulted by that. It's national representative.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

We also have Mr. Duncan McLean, vice-president, British Columbia Council, Canadian Council of Unions.

Mr. Duncan McLean (Vice-President, British Columbia Council, Confederation of Canadian Unions): Actually, it's the Confederation of Canadian Unions.

The Acting Chairman (Ms. Sarmite Bulte): Okay, thank you.

We have Gary Worth. And Gary, you are with...?

Mr. Gary Worth (President, Pulp, Paper and Woodworkers of Canada): I'm with Duncan, just to give him moral support.

The Acting Chairman (Ms. Sarmite Bulte): Perfect. Thank you very much for joining us this afternoon.

Who will begin? Mr. McLean.

Mr. Duncan McLean: Good afternoon. The Confederation of Canadian Unions, or the CCU, as I'll refer to it, is pleased to have this opportunity to present our concerns on the negotiations around the World Trade Organization and the free trade area of the Americas.

As the chair said, my name is Duncan McLean. I am an average Canadian wage earner employed at the SeaBus. I hope that some of you who are from out of town take the opportunity to ride on our SeaBus, a nice harbour ride. I am also the second vice-president of the Independent Canadian Transit Union, Local 2. And as the chair said, I'm also privileged to serve as the vice-president of the B.C. Council of the CCU.

The council, which met with community leaders in Prince George over the weekend, also discussed, and unanimously affirmed, the message I am asked to convey here.

Accompanying me is Gary Worth. He is, besides moral support, the national president of the Pulp, Paper and Woodworkers of Canada, PPWC. Gary is on the national executive board of the CCU.

The CCU was founded thirty years ago this year to help stimulate and build a sovereign Canadian labour movement that is democratically controlled by Canadian workers. Today the CCU continues to represent a range of proud and determinedly independent Canadian unions, from the east coast of Nova Scotia to the west coast of Vancouver Island.

Our membership, though modest, is nonetheless representative of all major sectors of the Canadian economy. And from coast to coast we're hearing the same message. After more than 50 years of struggle to achieve a fair and just society, Canadians are witnessing a mounting assault on things fundamental to a flourishing Canada: universal medicare, public education, unemployment insurance, social assistance, pensions, public transit, and the renewal of our fisheries and forests.

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If the committee members leave this nice hotel for a walk, watch your step so as not to trip over homeless street persons, within whose eyes, if you don't avert yours, you'll see no future.

What is happening to our country? We join with the many organizations and persons that point to unregulated economic globalization and so-called trade agreements as being major factors. The position of the CCU is that Canada must not move further down this road before a peoples' judgment and balance sheet is drawn up and the effects on ordinary Canadians are weighed, instead of just the flow of capital and the growth of profits, a kind of victims' impact assessment, if you will.

What might such an assessment reveal? Since the free trade agreement came into effect on January 1, 1989, Canadians have witnessed the disappearance of jobs, the erosion of social programs and public services, and the creeping loss of our sovereignty. In fact, since 1988, 33 of the 47 corporations operating in Canada, which were tracked by the Canadian Centre for Policy Alternatives, have cut their workforce by 216,000. During this same period these 33 corporations have seen their combined annual revenues soar by more than $40 billion, an increase of more than 34%. As a worker about to vote on a new contract that promises my revenues will increase by 0%, which I can at least have retroactively to April 1, 1998, I can only wonder. The brief that goes with this presentation supplies examples of rude awakenings in the areas of environment and public health under so-called free trade.

The multilateral agreement on investment was a massive trade deal that had been negotiated, for the most part, in secret. The MAI would have granted tremendous freedom and privileges to transnational corporations and powers similar to, or even exceeding, that of nation-states. Trade experts would have decided all disputes to the MAI in secret, with no public input. There was to be no opportunity for governments, small business, community groups, unions, or individuals to participate in challenges to corporate decisions and conduct affecting them.

The B.C. government has stated flatly: “The MAI would restrict the legitimate roles of democratically elected governments to represent the interests of their constituents.” Alas, for the purveyors of this assault, too much of the cat got out of the bag, and it was necessary to proceed in a new guise, which brings us to now, to the World Trade Organization and the free trade area of the Americas. Lo and behold, the themes are back, and it seems with a vengeance.

The WTO is a group of non-elected trade representatives who have the power to override economic, social, and environmental laws and regulations of any member nation-state and its elected government. The WTO is to have the power to rule on corporate objections to laws passed by national and subnational governments. A WTO tribunal is struck, the hearings are in secret, and the decision is binding on the government and cannot be appealed. These deals involve a massive transfer of decision-making power away from citizens and governments to the tiny class and tiny concerns of the corporate elite and major shareholders. These trade agreements are in fact constitutions to undermine democracy.

So democracy and sovereignty, are they Y2K compliant or not? We understand that the so-called millennium round of the WTO decision-making process is expected to be launched at the third ministerial conference of the WTO in December 1999. Are the lights to then go out on democracy and sovereignty, like some hidden Y2K glitch?

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The Confederation of Canadian Unions is committed to working with others to ensure that the year 2000 is brought in with citizens' rights entrenched and protected. Our members, their families, and the citizens of the communities in which we live have been attempting to survive the consequences of these deals. They bring ever greater privatization and deregulation. While speculative billions of capital—which working people, after all, created with their labour—flow unchecked around the globe each day, permanent plant closures, whole town closures, and all the other globalization-linked impacts on our social fabric are taking a tragic toll on the country.

It doesn't have to be this way. We demand that our government cease negotiating any more MAI-like trade deals and commit itself to protecting Canada's sovereignty, our public services, and the resources and environment of this planet.

We end by emphasizing that this limited and discreetly advertised hearing cannot be a substitute for real broad-based public consultation. Ordinary Canadians must be given the opportunity to express their concerns and desires in a meaningful dialogue. There has been little genuine public debate as to whether Canada should even participate in the WTO. Once Canadians know the facts, they will, we're sure, want nothing to do with it. Therefore, before any further trade agreements are negotiated, there must be a full local and global public accounting of the impact of the current agreements. Until then, there should be no more of them.

I can imagine the conflicting pressures on this committee. However, with history watching, we wish you the strength and courage to raise the cautionary alarm before Parliament and the people of Canada, and we wish you well in that.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. McLean.

Mr. Worth, do you have anything to add to that presentation at this time?

Mr. Gary Worth: No. I just wholeheartedly support what Duncan and the Confederation of Canadian Unions have put forward to this committee.

I think it's fair to say that the effects of free trade have certainly been felt by the workers I represent in the forest industry, particularly the pulp and paper sector. We're under very extreme pressure right not not only from the North American free trade deal but also from world trade issues and the impacts of competition around the world. Canada has the resources. Canada has the people and the skills to maintain our own industries. I think these kinds of trade deals certainly have negative impacts on the people in the forest industry in British Columbia.

The Acting Chairman (Ms. Sarmite Bulte): Thank you, Mr. Worth. Perhaps you can give us your input as well when we go the question and answer session.

Mr. Keighley, please.

Mr. Jef Keighley: Thank you.

Chairperson Bulte and committee members, on behalf of our 27,000 members in British Columbia and our 230,000 members from coast to coast to coast and on behalf of our national president, Buzz Hargrove, who I identified earlier, and our national executive board, I'd like to thank you for the opportunity to present our views here with regard to the upcoming negotiations regarding the WTO and the FTAA. I understand there will be a presentation in the Toronto hearings as well.

Mr. Bob Speller: I think Bob White might be appearing.

Mr. Jef Keighley: But I think Buzz Hargrove is going to be making a presentation.

The CAW is Canada's largest predominantly private sector union. I say predominantly private sector because we now have some public sector workers involved, and that's a growing minority within our union. Our members work and live in every province of the country and now all three territories. We're strongly representative in the automotive and transportation sectors, manufacturing, mining and smelting, the hospitality and service sectors, as well as being a presence in the public sector.

The CAW defines itself as a social union, that is, we recognize that while we're based in the workplace, our responsibilities go beyond that into the communities in which we live. If we're responsible for a toxic product, it doesn't stay within the chain-link fence. It flows out into the watercourses. Our members are part and parcel of the community.

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As a result of the highly charged public debates around the Canada-U.S. Free Trade Agreement, the North American Free Trade Agreement, and most recently the multilateral agreement on investment, literally hundreds of thousands of Canadians have become both knowledgeable of and politically active around issues of international trade and investment liberalization. The activity around the Asia-Pacific Economic Cooperation and the ongoing aftermath in 1998, the APEC Vancouver meetings, have further highlighted public consciousness of these issues.

The economic meltdown in Asia, Latin America, and elsewhere and the real-life consequences of the same in Canada have called into question the wisdom of placing too much confidence in the self-serving free market rhetoric of international business and their political minions. On this coast we were particularly hard hit during the recession of ten years ago. We patted ourselves on the back and said “Aren't we wonderful?” when the rest of the country was mired in recession. We were tied to the Asian market and we did rather well. Now we're still tied to the Asian market and we're suffering the consequences of that connection. But you take the good with the bad and life goes on.

The CAW is proud to have played, and continues to play, an active role in all of the above debates within Canadian and international civil society. In each of those debates we observed governing political parties siding with international business, displaying callous disregard for the opinions and interests of its citizenry. We also observed that the depths of analysis and quality of debate were and are strongest and most cogent on the part of civil society, with governments and businesses packaging and repackaging threadbare clichés about the allegedly creative forces of globalization. One only looks to the comments of France in terms of their decision to pull out of the MAI to recognize who was in fact the most cogent, the most spot on.

Increasingly, civil society, which has borne and is bearing the heaviest burden of globalization, is working internationally to raise criticism of and organize opposition to unfettered globalization. I emphasize “unfettered”. We're not opposed to international trade. The recent derailment of the MAI through the exemplary efforts of civil society internationally has hopefully convinced both politicians and international business once and for all that the days of secretive backroom dealings are over. Your committee findings, and what the federal government decides to do with respect to both the WTO and FTAA in the name of the people of Canada, will be carefully watched with a skeptical eye.

The CAW supports fair international trade and investment. What we oppose is unfettered globalization, where corporations, in their zeal for maximum profit, sacrifice people and the environment at the altar of liberalization. We believe that international trade and investment agreements and relationships, whether it is the WTO, the FTAA, or for that matter other arrangements, should be governed by basic values and principles that are founded in the recognition that communities are superior to corporations.

Roger Peters, president of the Saskatchewan Environmental Society and a member of the Community Coalition Against the MAI in Saskatchewan, has compiled a positive outline of the values and principles with respect to trade and investment that have been discussed within civil society over the past years, which we would endorse. I say these aren't his own creative thoughts; this is the distillation of the thinking within civil society both in Canada and internationally.

I'd like to read those into the record. One could quibble with some of the details, but really we don't have any objection to the overall view.

Rules governing trade and investment should be based on the following values: democratic decision-making and government accountability to a nation's citizens; social citizenship and the collective responsibility for our fellow human beings....

I hear people say we ought not to burden trade with issues of human rights. One only has to look at the NATO actions in Kosovo, Yugoslavia, where we're actually going to war on the issue of human rights. Surely to God, trade must be tied with human rights as well.

To continue our list of values for rules governing trade and investment, there is the need to preserve and protect our environment; the subordination of private corporations and property rights to the common good; and the ability to reasonably benefit from our labour and investment.

The principles governing trade and investment should be as follows:

1. It is the democratic right of communities, through their governments, to set the rules regulating all international trade and investment, and to approve these rules through legally binding national and local consultation.

2. All investment would be treated equally and be covered by a common set of rules, but would be required to meet legally binding international standards and performance requirements. A comprehensive set of international standards should be established that govern all trade, investment, and business practices. These standards would be based on international agreements that seek the highest standards for the following community values: protection of human rights as set out in the UN Universal Declaration of Human Rights; universal access to education, health care and social services; a living wage; a safe and equitable workplace; protection and repair of the world's environment as set out in Agenda 21; public health and safety; protection and community ownership of land and natural resources; the rights of aboriginal peoples; control of hazardous and dangerous products (including land mines, chemical weapons, nuclear waste, etc.); and the right of collective action.

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3. In addition, communities and countries, through their governments, should be able to make policies that provide special protection of, or incentives for, local development and protection of natural resources. This would include financial and economic policies and budgets that serve community needs; limitations on property rights and intellectual property; provision of publicly funded education, health care, energy, and public services; preferential treatment for local businesses, public corporations, cooperatives, agriculture, etc.; allocation of land and resources as parks and reserves; the special rights of aboriginal peoples; control of the movement of capital; rights to reward environmental and social responsibility over and above international standards, i.e. a special designation of high-efficiency products or EcoLogo and preferential buying policies—in B.C. we have the wonderful example of Ballard Technologies, who are really the wave of the future—regulation of the sale and content of products based on social impact, environmental impact, and public health and safety, e.g. minimum recycled-material content—we now have California demanding newsprint contain a certain amount of recycled fibre, which in our view is a good thing, and the banning of MMT, which I think was a travesty in the way it unfolded in Ottawa—and preferred treatment of local cultural industries.

Communities, through their government, should be able to set legal performance requirements for domestic and international investment, business practices, and the development of regulations to meet the above standards. Communities would also be free to penalize other governments and corporations that do not meet these standards and are not in compliance with UN and other international declaration laws and agreements.

Any disputes between communities, national governments, and investors would be referred to a fully independent disputes tribunal, which would hear and resolve the dispute in the community or country affected through an open and democratic public process, not the kind of star chamber that's envisioned under the MAI.

In conclusion, Canada is a trading nation and Canadians are fair-minded people. We want to engage in trade and investment that truly values people and the environment. We have a responsibility to engage in genuinely sustainable development, that is development that meets the needs of current generations without sacrificing the needs of future generations to come. Unbridled trade and investment liberalization is not capable of achieving sustainable development.

Corporations have a short-term perspective directed to maximum profitability. That perspective may be very successful in pushing up corporate share values, but it is ill-suited to the planning necessary to design a fair and equitable sustainable future. Public democratic structures, both nationally and internationally, whatever their failings—and we can all be better—are nevertheless better suited to coordinating the efforts of and for communities than corporations can ever be.

We would urge your committee to incorporate the values and principles noted above in your findings and recommendations.

We thank you for your time, and we'd be pleased to engage any questions and/or comments you may have.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Keighley.

Mr. Jef Keighley: Thank you.

The Acting Chairman (Ms. Sarmite Bulte): We'll start with questions. Mr. Stinson.

Mr. Darrel Stinson: First of all, I want to thank you for coming and putting these presentations forward.

I agree with many areas of what everybody has said so far here, especially in the so-called secrecy of ongoing negotiations, that they're not out front enough for the public to understand. Not only have I heard this from the public, but I've also heard it from parts of the industry, that these agreements are interpreted in different ways by different countries when you go into it. I think that should be clarified before any ongoing negotiations continue.

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We have to understand that Canada is a trading nation. We don't have the population here to be self-sustainable. I believe you mentioned that, Mr. Keighley, and I agree with that. We cannot be self-sustainable. We have many people who have worked towards supplementing their retirement years through investments in areas of trade. Some of the unions themselves have done that.

I have concerns about how we protect them if we don't go into some sort of agreement that protects these areas of investment. Even the Canadian government now is also putting pension plans out there into the foreign sector for a better income for ourselves. We know we have to go down this road—we know that—in order to survive.

We can't sustain the pulp and paper industry here in Canada. We have to ship a lot of that product out. You have to admit that.

In a perfect world, we could say that everybody's standard is the same as we go from world to world, but the fact of the matter is that what we see here as a right that we want to protect at all costs is not necessarily the same in another country. They may not have that same type of mental definition or the burning ambition of keeping that sector in that country, as we do here.

So how would you police this? How would you enforce this through any of these agreements in these other countries?

The Acting Chairman (Ms. Sarmite Bulte): Mr. McLean.

Mr. Duncan McLean: As you mentioned, it definitely is a global economy. It's a small planet, an increasingly small planet really, and of course the reality is that trade is international and that agreements have to be in place to regulate these matters.

I don't think anybody is suggesting from these presentations this afternoon that we shut down all agreements and put up huge walls around our country. What we're talking about here is the content of those agreements, the impact those agreements have on communities, and the ability of the sovereign countries, which you mentioned are different from place to place and have different values and may be distinct and be very much valued by the people in those areas—that those kinds of things are taken into account, that the measuring stick is not just whether or not industry or corporations or bottom lines of balance sheets can flourish better under this or that arrangement. It's also the impact on ordinary people, which we think is missed by the current process. And you alluded again to the secrecy of the process or the lack of proper process to get to these agreements. It certainly disenfranchises those concerns, to a degree that it calls on us to call for a halt to Canada's participation in any further agreements until that process is much more thorough and much more broadly based.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Keighley.

Mr. Jef Keighley: It's not a question of moving to international trade. Before white conquest, if you will, of the continent, native people traded with one another. That's how they lived. When we came here to scoop fish out of the waters off the Atlantic coast, or in terms of the fur trade, or timber for the British Navy, or coal in Vancouver Island, we were engaged in international trade. That's the foundation of the country. It's not something new at all.

The question isn't whether we want to trade. I get up in the morning and have my cereal. I put a banana on it, and I have a cup of coffee. I'm not aware of any bananas that grow in Canada, other than in hothouses—a few speculative ones—and I love my coffee. We all need and want the things that come through a healthy international trade.

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So the issue is not whether we want to trade. We always have and we always will. The issue is the fair conditions under which that trade takes place. If we say to the world it doesn't matter what the terms and conditions of the production are, trade is equally permissible, why then would we ever object to slave camps? What's wrong with slave camps if it produces cheaper goods? If the only issue is economics, the answer is there is nothing wrong with slave camps. There was nothing wrong with slavery then.

The question is, are there relatively fair balances? Not every country is going to drag themselves up to the standard of living in North America. There isn't enough petroleum. There aren't enough roads to drive all the cars on. If you put the same concentration of cars in China, you wouldn't have any room left for the people.

So how do you enforce it? Well, how we enforce it is by going back to the same kinds of mechanisms that international businesses spent well over a quarter century trying to obliterate, by maintaining the right to put punitive tariffs on the worst transgressors. The United States is wonderful. They say they don't believe in economic sanctions—unless it's Cuba. What brought about the human rights injustice in South Africa was economic sanctions, and there were efforts to break those sanctions. Some were successful; some were not. Most of them were not.

We as a world, as a people, said there are some human rights and some values, conditions of production, of living, that people are entitled to, and corporations are not given the God-given right to override all concerns so they can get the cheapest possible labour, the cheapest possible conditions, and the worst environmental regulations. It's now a fact that notwithstanding the international trade, fully two-thirds of international trade is effectively trade between the same corporations.

Mr. Darrel Stinson: But if you're not there at the negotiating table, how can you make sure this is even taking place? You're saying step back from it. The rest of the world is not going to do that.

Mr. Jef Keighley: I don't know where you heard me say step back from negotiating. I don't think Duncan said it either.

The question is the terms and conditions, the mandate given. We're not at all interested in having another example of any federal government of any stripe set forth an agenda and then tell us after the fact, only when they're caught with their pants down—oh my God, I guess we've got to fess up to it; we've been doing this for a while. We say that should start at the community level, at the provincial level, and at the national level. The national level is the appropriate place for negotiations to take place, but there had better be a very clear mandate that it genuinely has public support before they go forward.

Jimmy Pattison, one of B.C.'s great capitalists, said the worst deal you get is the one you feel you cannot walk away from.

I bargain for a living. I've spent 20 years bargaining for a living in the mining industry and in the manufacturing and hospitality sectors in this province. If you go into any set of negotiations saying no matter what happens, no matter what the conditions of this deal, I've got to come out of this at the end with a deal, you're going to end up with a bad deal. We've had a litany of governments do exactly that. If you can't get the terms and conditions that are satisfactory to Canada, Canada should walk away and say we're not signing because that is not consistent with what the Canadian population perceives as fair terms and conditions—not just for our population, right across the country, Quebec, English-speaking Canada, the Territories, native people, but for people in South America.

I used to do a lot of international development work years ago. Sisal was a huge crop in Africa, in Latin America, until the oil companies came along and said, gee, we need a new market for our polypropylene fibre. The best market for that was carpet backing, so they said all right; this doesn't work very well, because sisal is cheaper than polypropylene and it's a good market. So they went out and convinced the Canada building code people...they said if you use sisal carpet backing and your carpet gets wet and dry, wet and dry, sisal rots and your carpet falls apart, whereas if you have polypropylene backing, it doesn't rot. They said fine. They basically wiped out sisal and put in polypropylene backing. But how many people do you know who have their carpet wet and dry and wet and dry so that it rots?

Surely to God, fair trade would say we would like some sisal carpet backing. You people need jobs in the third world. We need a product here. What can we fairly exchange in a healthy manner that respects the development of peoples in all of the trading nations involved in any particular relationship.

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The issue is the terms and conditions under which trade is made—investment is made—not whether we have it. You use the very vehicle corporations are trying to get us to get rid of: the capacity to use our national will to say that under these conditions we'll trade fairly, and under these we won't. They want us to tie our hands behind our backs so the only cohesive voice on the international scene is the corporate voice. That is great for share values, but it doesn't really do very much for communities where we all live.

Mr. Gary Worth: I want to make one point. From a trade union perspective, we understand the conundrum you're in very well. We face that every day, in the sense that the owner of the business is going to implement his agenda that particular day, whether it's at the bargaining level or just at the committee level within the plant. They announce something and the union has a choice whether to just stand with its arms folded and say no, or actually get involved in the process and try to arrive at some outcomes that will ensure some of the union's principles and integrity issues.

We understand fully well what you're up against, but the MAI process was certainly not something anybody in Canada agreed with. Right? Those deals were made behind closed doors. It was all done before the public even had a chance to consult on it. So if we're going to get into this kind of process, we have to do it through the consultative process. Sure it's slow and takes a long time, but that's how it works in this democratic world.

On the forestry side, the pulp and paper industry is a producer of products that are sold around the world. But for too long now we've been into the commodity-type business. In British Columbia, particularly, we make two-by-fours and bales of pulp. Those are commodity products that go to other parts of the world to be manufactured into paper products, especially on the pulp side.

We have to push industry into more value-added production. If we have to do that through meeting standards in this country that we can't meet in other countries, i.e., environmental conditions in Indonesia and the Philippines where a lot of pulp and paper is being manufactured now, the labour conditions, the rates of pay—those are the kinds of things where, if we're going to go into world trade-type situations, there has to be a level playing field. So there have to be some links.

If corporations are going to make products out of Canadian resources, they have to be pushed to some kind of commitment to make a value-added product that can be sold around the world, not just a commodity product.

I'm sorry, but from our experience with the corporate shareholder, as has been mentioned a couple of times in briefs here, the share value of the corporation is what drives those corporations. We face it in bargaining in the pulp and paper industry all the time. Shareholder value dictates a lot of things. That will be the first consideration, not sustainability, environmental issues or value added.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

Mr. Schmidt.

Mr. Werner Schmidt: Thank you, Madam Chair.

Thank you, gentlemen, for appearing. I think there is always benefit in having a transparent and open discussion. Even when we don't agree on everything, it's good to have this transparent negotiation and conversation. I completely agree that these things should be open and above-board.

With regard to that in particular, I'd like to refer to page 6 of your document, item 4, where you say:

Communities, through their governments, should be able to set legal performance requirements for domestic and international investment, business practices and the development in the form of regulations to meet the above standards. Communities would also be free to penalize other governments and corporations which do not meet these standards and are not in compliance with UN and other international declarations, laws and agreements.

It seems to me we have two issues going on here. We have on the one hand the country and the communities in their own area, setting their laws and sovereignty in regard to that issue. In the second part, we subject that to the standards and regulations set up by an international body like the United Nations.

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At which point is the sovereignty exercised? Is it in the first instance or in the second instance, where you subject the whole thing to an international organization that has set standards for the world?

Mr. Jef Keighley: They're not mutually exclusive. A community can be fairly small. It can be almost province-sized—in some cases, like Prince Edward Island, it certainly is province-sized—and international.

In essence, when we put forward our delegates to the United Nations on various conventions we ratify through debate and support here in Canada, we say these are principles we ascribe to. We may ascribe to them as part of the world's people, such as the UN Declaration on Human Rights.

Within the community of Canada, we say we have some principles, and they also happen to dovetail with the United Nations, but if they're not going to be done under fair conditions with proper respect for the environment, we should reserve the right to put up some punitive tariffs.

At the end of the day, if some country is such a transgressor, what's the harm in saying “Look, we're not saying you can't trade with the other well over 100 countries. We're just saying under these terms or conditions, we don't approve of that. We're prepared to enforce our will within our national boundaries and put up tariffs. If you want to sell that stuff elsewhere, good luck to you, but we're not prepared to accept it here in this country.”

If that were generalized across more nations of the world, you'd all of a sudden find a genuine levelling. There wouldn't be equality. We're never going to get equality because resources are not equally distributed. It would be nice if they were, but they're not. We happen to be flush in fresh water for our own use; other countries don't have that. But quite frankly, equitability is not the same as equality.

We think it's fair to say we have a right to enforce the principles and values we ascribe to as a nation within our national boundaries. That doesn't mean we have a right to enforce them outside of the nation.

Mr. Werner Schmidt: That's all very well, but you still haven't answered my question. The question here is who enforces the United Nations regulations?

Mr. Jef Keighley: The United Nations hasn't been given the power to enforce its own regulations. NATO is enforcing the United States regulations.

Mr. Werner Schmidt: No, but seriously—

Mr. Jef Keighley: I am serious.

Mr. Werner Schmidt: So am I. The point here is a very significant one. On the one hand, you maintain that sovereignty is the issue, and I don't disagree with that. On the other hand, you subject that sovereignty to the United Nations. So does that mean the nation then becomes the enforcer of the United Nations regulations or guidelines? Is that what you're advocating?

Mr. Jef Keighley: Absent and effective UN mechanisms to do the very same...and there are all sorts of motions that can be passed. The sanctions against South Africa, by way of example, were in fact fully debated and endorsed at the level of the United Nations. Not every single nation signed on, as we know. But that debate took place there and was completely compatible with the national debate.

The United Nations didn't enforce sanctions against South Africa. They passed the mechanism and then it was up to the national governments to monitor what was going where. I was very actively involved in that since 1964. We as a nation, our government, to the credit of all of our national governments, both of Conservative and Liberal vintage in their time, recognized the responsibilities. Our national government undertook to ensure the UN sanctions against South Africa were enforced to the best of their ability. There was some leakage, but boy, it was a relatively effective mechanism. So yes, that's exactly how it works.

Mr. Werner Schmidt: So your answer is yes—the nation—because they enforced it in the United Nations.

Mr. Jef Keighley: To a certain extent, yes, it becomes part of the enforcement mechanism.

Mr. Werner Schmidt: Why do you object so strongly then to the enforcement provisions of the World Trade Organization?

Mr. Jef Keighley: The World Trade Organization systematically distances itself from issues of the environment, human rights, and labour rights. In fact it distances itself from the very things that most people find valuable. If you ask average Canadians what's more important to them, the environment of their local community or the right of some corporation to sell ACME widgets in Somalia, they would say the environment where they live and work is more important.

• 1345

Mr. Werner Schmidt: So that would mean, then, that if their jobs were cut they would be prepared to lose their jobs.

Mr. Jef Keighley: Jobs are cut, unfortunately, without regard to the issues of humanity. If we were in a situation where corporations would know ahead of time that if I head off to 30¢-an-hour labour I might in fact end up restricting my capacity to sell back into the same market the jobs escaped from, I would suggest to you very strongly that there wouldn't be as many runaway corporations.

One of the companies I used to deal with, Weiser Lock, used to have a manufacturing plant in Kuala Lumpur. They set it up for about four or five years. It was an unmitigated disaster. They eventually shut it down. With the just-in-time mechanism, they couldn't keep up with market changes fast enough. By the time they got the product here, it was no longer wanted because it was last year's style.

Businesses will not be so free to run off to the cheapest possible labour, to the worst possible environmental concerns, if they know a mechanism exists that potentially can be used as a block against entry back in the same market they left. Why they've left in such large numbers is because the World Trade Organization, the IMF, various world bodies that have seen the dollars, and the dollars only, say there is no effective sanction, no price to be paid for deep-sixing the jobs of Canadians, Americans, or the French. There is no price to be paid, so where is the police force?

We need to create the police force, as we once had quite handily, with the capacity not to have generalized tariffs—we've all agreed to bring those down—but to have punitive tariffs. It's like the radar trap: you don't abide by the speed limit simply because somebody put up a sign; you're worried there might be a cop there. We need to create the cop.

Mr. Gary Worth: I'm sorry, but I have to respond to that question. I think that's really an unfair question about what workers will do when their jobs are on the line.

The most recent example in British Columbia is when a large multinational American corporation took over their Canadian company. When Bowater took over Avenor in Canada, one of the assets they acquired was the Gold River Pulp Mill. Bowater didn't want to run that mill. It was unprofitable, too small, too far away from their larger production base and their market. It wasn't too far away from Korea, where a lot of the market is, but anyway they shut it down.

Those workers would have done anything to save their jobs. They would have worked for less wages. There would have been hooks to that in the sense of control of the company and partial employee ownership of the company and all those kinds of things.

You have to stay away from that kind of thing and avoid the situation a mill gets into when it's taken over by a large corporation. There have to be some stipulations and some control over what corporations can do when they merge and become bigger and workers' jobs are expendable in that process.

The Acting Chairman (Ms. Sarmite Bulte): Excuse me, I'm going to have to stop you. You can be on the second round, otherwise we're going to run out of time.

Mr. Werner Schmidt: I just want to commend Gary for coming in in this way, because the point here is that we should get away from the confrontation-type of thing, and that's exactly the point he's making. I think it's an excellent point. There's too much of “there is the bad corporation, here are the good workers”, or vice versa, “there are the bad workers, this is the good corporation”. Why can't we get this thing together? This is the part we need to do.

Mr. Gary Worth: Corporations don't answer to the government. That's the problem.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

Mr. Sauvageau.

[Translation]

Mr. Benoît Sauvageau: If you don't mind, I will not talk about sovereignty. I will leave it to Mr. Schmidt. I will address another issue.

You state your first principle on page 4 of your document,

[English]

where you say that it is the democratic right of communities to entrust their government to set and to approve these rules...legally binding national and local consultation.

[Translation]

So, as Mr. McLean, you would like to see more consultation.

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I will ask you a question. If I am wrong, you will correct me.

We decided to come to British Columbia to meet with you. After your witness group, we will meet people who will speak as individuals. This morning, we met with people from the government of British Columbia. We will now meet with union people and then with students. We will still be here tomorrow. For the WTO and the free trade area of the Americas, we will have come here, in British Columbia, and will have consulted the people of this province. Do we meet the conditions of your first principle? That is my first question.

[English]

Mr. Jef Keighley: The answer is no. You're doing the best the mandate has allowed you do. The fact of the matter is these consultations need to be far broader. In the west, in Quebec, and in the Atlantic provinces we're used to thinking about Ottawa as that faraway place, and we're on the receiving end. We think the same thing about Toronto. If you're in Prince George, they think the same thing about Vancouver. If you're in Smithers, they say the same thing about Prince George.

Future processes need to be far more embedded in the community. There should be a multi-tiered feedback. There should be a first round of gathering from the distillation of those thoughts. Then we should go back into the communities and say this is what we seem to be coming up against. Are we on the right track, or are we on the wrong track?

[Translation]

Mr. Benoît Sauvageau: I will first take the example of agriculture, and then that of MAI.

With respect to agriculture, if I am not mistaken, the federal government, which I rarely defend, has asked each province to consult their farmers, through the UPA in Québec and the Canadian Federation of Agriculture, or other organizations I know little about, in the rest of Canada. I will speak to you specifically about Québec.

In Québec, in the 17 administrative regions, there are regional divisions of UPA, and these regional divisions met with the farmers. We only talk of agriculture, but in all regions, even in the small region of Lanaudière, farmers were informed of the future WTO negotiations. The position of Lanaudière farmers is the same as that of Québec farmers, which is the same as that of Canadian farmers, which is the same as that of the Canadian Federation of Agriculture. Could we say that in terms of agriculture, your first principle has been met?

My second comment is about the Multilateral Agreement on Investment. Recommendation 3 of the committee which carried out a study on the Multilateral Agreement on Investment stated that there was to be consultations, and then negotiations, and that following these negotiations, we were to receive the report on the Multilateral Agreement on Investment, which has not been signed be Canada. Recommendation 3 stated that consultations were to resume, knowing that the document could not be modified, after which it would be decided whether we were to sign the report on not. This was the committee's position, if I am not mistaken, on the Multilateral Agreement on Investment.

Would you say, as regards the Multilateral Agreement on Investment, on which the Canadian government had many reservations, and as regards agriculture, that your first principle has been met? If it hasn't, what is, in your mind, the definition of the word “consultation”?

[English]

Mr. Jef Keighley: I'm not that familiar with the detail of the agricultural consultation that did go on, so I'm going to take what you say at face value as having taken place. It seems to me the logical process would be that before it had gone to the international level, if there had not been a second go-around with that same sector, saying this seems to be the emerging consensus, do we have it right.... If that process had taken place before it went to the international consultation level, then I would say that part of it would have been complete.

• 1355

When you say the problem is where somebody comes back with the document and says this is it, take it or leave it, that's a dramatic error, because we're not setting down something for the next five years. Even if the process seems ponderous, in coming back after the international negotiations and saying okay, here is the emerging process, so what do you think, with consultation back to the same base that you came from in the first place.... That takes time, but we're evolving a process that's supposed to last we think now virtually for the millennium, with changes as we go along. So I don't see that as a particularly ponderous process when you look at it stretched out. Our problem is that there really hasn't been any local consultation. There's been no attempt to bring things back.

I've been involved in probably two dozen examples of giving briefs to the federal government and sometimes to the provincial government, and I have yet to see very many examples where the ultimate project that emerges from that pays very much attention to the input at the grassroots level. It tends to be “Let's have a process so we can mollify the population so we can say we've consulted”. We know what the conclusions are going to be ahead of time. They arrive at those conclusions because they've most often been set down by the business community, and we go from there. That's where the error is.

I deal with businesses every day. That's my job. I'm not suggesting that the interests of business should be negated. I'm simply saying that the interests of business are simply one of the sets of interest, and they have to be respected. Business has a better idea of how the details work, but that can't be the trump in every single set of negotiations. It may well be that the agricultural consultations have been more extensive than in other sectors, and I would probably suggest that this is because of the strength of the agricultural voice in Quebec. They're very well organized.

Mr. Benoît Sauvageau: Everywhere in Canada....

Mr. Jef Keighley: Yes, and that's good, but that hasn't occurred in other sectors. I do like Quebec butter with a Fraser Valley package on the outside, by the way.

The Acting Chairman (Ms. Sarmite Bulte): Mr. McLean, you had a comment to add.

Mr. Duncan McLean: Yes, Madam Chair.

I'm glad we've come back to that question. In conclusion, perhaps, on the issue of public consultation and process, the Confederation of Canadian Unions feels that perhaps this is the most essential part of our brief...and our position that this condition has not been met. And we're in full agreement with the spokesperson for the CAW on that.

While I have a suit at home in my closet, I came here as just a guy in a T-shirt today to represent regular Canadians. Most ordinary Canadians at this point in time have probably not even heard of the WTO, let alone the impacts of the issues being debated and decided at that level. On what a proper public consultation would look like, I don't know too much about it, but I understand that in the last while there was a process that went around Quebec called Solidarité Québec. It was a big public townhall process where community groups and ordinary citizens were encouraged to give input into what kind of Quebec they wanted to live in, what kind of society they wanted to live in. That's the kind of process that Canadians right across the country deserve and require before we can say a proper input has been reached on issues such as this hearing is dealing with.

Again, I thank you for hearing our brief. We don't claim to be putting forward in our brief all the answers of what a trade agreement should contain. We're saying ordinary Canadians need to have input into those provisions, rather than just having them imposed from any of us particularly. We want to safeguard the process and the democracy.

• 1400

The Acting Chairman (Ms. Sarmite Bulte): As a point of information, Mr. McLean, we have added onto our website a series of discussion notes and questions for the public. This committee also plans to table the report before the summer, well before the negotiations commence. We're going to be including in our report a citizen's guide to the WTO to address the concerns you and others have raised. These needs and these concerns are slowly being addressed. The key is that they will be done before the summer, before the House rises, so that there will still be time for input after that time.

Mr. Speller.

Mr. Bob Speller: Thank you very much to the witnesses for your presentations. I note your skepticism, but I guess we'll do the best we can to not only try to inform Canadians as to what these deals are about, but to try to get the views of Canadians and try to get those views put into a Canadian position.

I have two questions, one for Mr. Worth. I just wanted you to follow up on what you were first talking about. You were talking about your industry and the impact of the free trade deal on your industry. I'm wondering if you would just go further. I'm from southwestern Ontario, and I'm not that familiar with your industry. I'd just like to know how free trade has impacted your industry specifically and how a deal like this would impact your industry. It would seem to me that particularly for an industry that's dependent on exports, as your industry is, some sort of set of rules or guaranteed access into foreign countries would actually be a benefit, and not a hindrance—some sort of rules-based system would be a benefit to your industry.

I have a question for Mr. Keighley too. On page 6 of your report you say “Any disputes between communities and national governments and investors would be referred to a fully independent disputes tribunal”. I'm wondering if you could explain what that means.

Mr. Gary Worth: I'll try with the forestry thing first.

On the commodity product side of the industry I think it has had a negative impact, in the sense that it has continued to go down that road of just manufacturing a commodity product—two-by-fours, pulp. There was no real incentive in the free trade agreement process for the corporations to go to a value-added product.

On the finished side of the product it has enhanced some of our business. We have one local that manufactures boxes, a box plant that makes boxes, and there was more work created or more product shipped. Before the free trade agreement there was a tariff for things that had to go down to the United States. That tariff was eliminated. Now they're moving products into Washington and Oregon out of the New Westminster plant. Those are finished products. A box plant is pretty much the end of the product for that kind of paper.

The American countervail duty process was partially a result of the free trade agreement. The Americans were saying that Canada was unfairly subsidizing—and especially in British Columbia—our forestry industry through lower stumpage rates, through issues that allowed the corporations to take these issues and use them as a tax dodge or whatever. That process I think was a result of the free trade arrangements. That has had a very negative impact on British Columbia. Now we have to be very careful with what our stumpage rates are. We can't be seen to be changing any regulations or stumpage in British Columbia without impacting on the softwood lumber agreement. We're very apprehensive about that when we make changes in British Columbia.

Mr. Bob Speller: The countervail and the Americans' ability to do that was actually far before the free trade deal.

Mr. Gary Worth: Right.

Mr. Bob Speller: That's something they've always sort of had. I would have thought that some rules might help mitigate that. In fact one of the things the free trade deal didn't do was to deal with anti-dumping and countervail. Maybe it's something it should have done in order to gain that access into the U.S. market. I just would have thought that for your industry some rules would have helped, a rules-based system, since most of your product is exported. If you didn't have the rules there, the Americans would just say.... I mean, they're like ten times the size we are. It would just seem that for a country our size and an industry that's so dependent on exports, as yours is, some sort of rules system would be better.

• 1405

Mr. Gary Worth: Well, the rules they're pushing now in British Columbia that are out of practices in the United States are on private land ownership. We're not interested in that.

Mr. Bob Speller: Mr. Keighley.

Mr. Jef Keighley: Just before I answer the question you put to me, when Trudeau used the analogy of living next door to the elephant, he wasn't kidding. No amount of talking to the elephant and saying please don't trample the grass is going to convince the elephant not to trample the grass.

What I say is that the United States is absolutely prepared to compete with anybody, anywhere, anytime who has a product more expensive than theirs, but if there is any mechanism by which they can't maintain an advantage, they simply don't abide by any rules except those they approve of. They don't even abide by the rules of the United Nation; they're $1.5 billion in arrears. The only rules they accept are ones that advantage them. That's the problem with negotiating with the elephant: no matter what the deal is, the elephant still walks away and tramples the grass.

Mr. Bob Speller: That's fine. I agree. I think that's why it's better to have a whole bunch of countries in the process, like the WTO, where you have the power of many countries against them. What you learn when you go to these trade meetings is that there's the United States, and then there's the rest of the world.

Mr. Jef Keighley: And I don't disagree with that relationship, but it does come back to the issues of the terms and conditions under which trade.... That side of the analogy I accept completely.

As to the dispute resolution mechanism, we were dumbfounded by the whole theory that came up, not just to a relatively modest extent in the U.S.-Canada Free Trade Agreement, but much more in force in NAFTA, and then this star chamber with the MAI.

Besides collective bargaining, I do the contract enforcement and the arbitration. When we sit down, we choose an arbitrator from a roster of people to be used for that process. We rely on past precedent and we rely on argument, but it's done in the complete open light of day. Even a labour and management arbitration is a public process: you're legally entitled to sit down and watch the fact that Gary got disciplined for sleeping on the job; you're legally entitled as a citizen of this country to walk in and observe the process. It doesn't happen very often, but you have that legal right to do so. You have the legal right to be in there so that justice is done and being seen to be done.

What these international panels have systematically made sure of is that it can't be seen. In many circumstances it can't even be talked about. The positions can't be revealed. That's anathema to democracy. The theory of democracy is that the issues are out there, they're debated, and we balance them up and weigh them out. You can have intelligent argument. It doesn't come because you're the elephant and you get the right to bully. If you can't win through the intelligence of your argument, you ought not to win. But the systems that have been set up have been set up so that the bully always has the advantage. And they get the advantage in secrecy, because I think too many of our nations have been supplicants and have said they don't want to be badly beaten up by the United States and have it publicly shown to their own citizens that they got a bad deal, so better to have it in quiet so that no politicians end up paying the price for having done a bad deal.

I think that's unacceptable. It has to be done in the full light of day. It has to be in open view. You're not going to get tens of thousands of people crowding into the room. There aren't rooms that big anyway. But it has to be open for the public to see. If the Canadian Labour Congress or the B.C. Federation of Labour or Quebec agriculture or the forest producers in the interior of B.C. want to have a representative there because their interests are being adjudicated, they should be there. There should be some process whereby they have input into that and at the end of the day there's a fair judgment that's open to all.

Over time there will be jurisprudence that builds up. There will be ups and downs, but over time, in any legal system where jurisprudence is a big piece of it, you tend to get a much more consistent understanding as time goes on, because the wacko decisions one way or another tend to get balanced out in the mix.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Keighley, would you be advocating the amicus curiae type of intervention at the WTO?

Mr. Jef Keighley: Can you elaborate on that?

• 1410

The Acting Chairman (Ms. Sarmite Bulte): Amicus curiae, where basically interest groups can make interventions.

Mr. Jef Keighley: I think any process should involve that. The interested parties ought to have the opportunity to be heard. But equally importantly, it has to be an open, publicly accessible, publicly viewable and appealable process.

The Acting Chairman (Ms. Sarmite Bulte): Mr. McLean, you wanted to add something.

Mr. Duncan McLean: Yes, thank you.

Getting back briefly to the point you raised on perhaps the need for regulations and so on in agreements in areas such as forestry, I think you raised excellent points. That is the whole point of our brief, in that deregulation seems to be a consistent theme running through these agreements, the lack of regulations, the so-called level playing fields or whatever. But as you pointed out, a level playing field with an elephant and a mosquito isn't really a level playing field.

I think you talked about forestry, but you can also speak about fisheries in the same way. My community is Steveston, which is an historical fishing community right back to the late 1800s, just in the mouth of the Fraser River here. It's a community that is devastated by what's gone on in the fisheries. You're all familiar with the trade disputes between Washington State and British Columbia and Canada and the U.S. in that area.

Certainly we recognize the need for regulation in an agreement. One of our criticisms of the content of the current agreements, and where the WTO seems to be going, is in terms of deregulation and the lack of proper checks and balances.

The Acting Chairman (Ms. Sarmite Bulte): Madam Beaumier.

Ms. Colleen Beaumier: Thank you.

Mr. Keighley, there were a couple of areas you touched on, one that I have been a little interested in pursuing.

I think first of all we have to state that those who are out there saying that globalization and multinational corporations moving into third world countries are going to fix social conditions.... They aren't. Multinational corporations are not social workers.

Having said that, though, when you look at our situation here in North America, it was the trade unions and the labour movement that brought about human rights conditions and equity in North America. That did not come from outside of our countries. So I believe we have to assist the processes of human rights and fair labour practices in these third world countries. However, the change has to come from within.

The area you mentioned that interested me was you were talking about Canadian or foreign companies who go into third world countries and invest using exploitative manufacturing practices, low wages, unsafe working conditions. You're saying that perhaps if they can't export their product back into a more consumer-oriented society, that will be a deterrent.

Are you proposing that we have...? I know you're not proposing this, but what I have gathered is that we can stop homegrown investors from exploitation by preventing their products from coming back into Canada or putting higher tariffs on them, but what about the manufacturers in these countries who are doing exactly the same thing? We can't possibly set a minimum wage standard, and we really can't set labour standards within a sovereign nation. So are we going to be talking about two different principles, one a set of principles for Canadian investors investing in third world countries, and another one from the nationals wanting to export into Canada? That was one issue.

• 1415

The other issue was sanctions. You keep referring to South Africa and saying how trade sanctions changed South Africa. I think sanctions were successful there only because the situation was at the peak and the sanctions helped push it over. Because had they not been ready to change there, I don't believe the sanctions would have helped there any more than they're helping in Iraq.

Mr. Jef Keighley: No, I'm not advocating two standards, one for Canadian corporations operating in Singapore and Singaporean corporations.

You can in fact—and it's been talked about through the ILO—and should in fact talk about core labour standards, environmental standards, etc. So there is something that can and should be done. For instance, on the right to organize, if you give workers the right to freely associate and organize, my bet is that they're not going to get together to reduce their wages. They're going to get together to increase their wages and their benefits and clean up their working conditions. And they will not go from third world working conditions to first world working conditions overnight. It will be in relation to what the comparitors in that society are.

Unfortunately, we're at the point now where we're actually going a distance from that. We actually have a situation now in one of the areas I am quite heavily involved in, mining, where around the world mining companies—Canadian mining companies—are hiring mercenary armies to not only hold onto their mineral reserves, but to enforce their terms and conditions of employment. These are private armies of mercenaries hired around the world. And Canadian mining companies aren't somehow unique: the Australians are doing the same thing; the Americans are doing the same thing. They don't do it everyplace, but where they can get away from it, they do.

So you can and should have core labour standards. We're not going to legislate the respective minimum wage in a particular country; you're absolutely right about that. But whatever the terms and conditions, if you're producing at 30¢ an hour it's driving down the price of that domestic labour. When you look at the maquiladora industries in Latin America, they have not elevated the standard of living of the average Mexican or Salvadoran. They've in fact driven it down, and it's driven people off the land, just like the highland clearances did in Scotland years ago. It's provided cheap labour for the maquiladora zones, and they're selling it back into the same area.

Most of these companies are not running to try to build a product or a service to sell in Papua, New Guinea, or to sell in Sierra Leone, or to sell in Bolivia. The people don't have any money; there is no purchasing power. They're all of them trying to sell back into the same western markets, one of which we live in; and we do have a right to say that if you want access to our market, it comes with certain conditions, and part of that is fairness, human rights, and environmental responsibility.

Ms. Colleen Beaumier: However, if Canadian consumers were really serious about that, would we be buying grapes from California? Would we be buying fruit and produce that is being picked by a labour force that has no minimum wage standards, has virtually no labour standards, many of them not even having any status there to protect them? If we were serious about this, would we be buying these products here in Canada?

Mr. Jef Keighley: I don't recall Safeway consulting me or anybody I've ever heard of as to where they should get their grapes and under what conditions. They put on the shelves what they put on the shelves and you either buy it or you don't. There isn't an awful lot of consumer consultation in the retail process.

Ms. Colleen Beaumier: But there is consumer choice, and we still buy it.

Mr. Jef Keighley: Yes, there's consumer choice, but by and large you won't often go into a place and have it clearly marked as to where it's coming from. And the reality is if you're a Canadian who's lost their job, if you're a Canadian who's been at the lower end of the income scale, because our standard of living has been undercut by this process, and you're looking after your kids, you might well bite your tongue and say I'd love to be able to buy Canadian, but I have to buy enough shirts to put on my kids' backs because of the circumstance I'm in, and you want to look for the cheapest product. And that's human nature.

But that doesn't mean you couldn't bring about a situation where you elevate the purchasing power of those Canadians and then they'd have that purchasing power to buy fairer produced products. they're not isolated examples. You can't simply say that the poverty in Canada has nothing to do with poverty in the third world.

• 1420

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

I would like to follow up on the question Ms. Beaumier asked about the public sanctions. I'm concerned about using sanctions. I understand the example of South Africa. I'll concur with my colleague here that I think they came at a time when the rest of the world said enough is enough.

I see that sanctions are one of the different mechanisms you had proposed to address the concerns that are important. And I, as do you, believe that trade should be a way to promote sustainability, not just an end in itself. That's where I'm starting from. But with respect to sanctions, right now the Americans—and again I'm talking about the white elephant—if they don't like something they threaten to retaliate, and they have their tricks—

Mr. Jef Keighley: And they do retaliate.

The Acting Chairman (Ms. Sarmite Bulte): In cases they threaten to retaliate, as in the magazine issue, where the threat is there, whether legally or illegally in the magazine area. And their trade sanctions now, their U.S. trade code—I believe it's 312 or 302—has now been brought up to the WTO and is also contrary to WTO rules.

Why would these sanctions work any better than the Americans' trade sanctions? Is there not a better way than sanctions? That then brings to mind what you said about the white elephant. How do we ever get the Americans to agree to something like that? Isn't it important that what we bear in mind when we go to the negotiating table and our negotiators go to the table is that we never forget the bullying impact the Americans have? It doesn't matter what the rule of law is or what the rules are, this is a mindset that is involved in the WTO dispute.

Mr. Jef Keighley: The problem is that your latter part is absolutely correct: there is nothing that is going to make the United States do what the United States doesn't want to do, and that's largely determined by what the U.S. business community wants to do. The business of the United States is business. They are going to do that. The question is, do we have to jointly subject ourselves to U.S. bullying and then, through other rules, tie our hands behind our back?

The reality is that we have no right to say to the United States that they can't do this inside their national territory. We do have a right to say there are certain things we will do or we are prepared to do as a nation inside our territory. We're not somehow hapless beings who must say we have to prostrate ourselves before the American bully on all issues when they bully us, and when they're not bullying us, tie our hands behind our backs with restraints that prevent us from working toward the best interests of our population.

We have a very bright population. People talk about the brain drain, and it's a bit of an exaggerated phenomenon, but some of it does take place. People aren't recruiting Canadians because we're stupid. They're not going down to the United States and picking up quite good jobs because they're inept. Our education system has produced one of the brightest, most competent populations in the world. But we produce a set of rules and regulations within our own society that say we're not going to take advantage of our own advantages. When we do have an advantage, we say come and get it boys, take whatever you want and leave the crumbs for us. That's just plain stupid. When people talk to me I say that must be designed by experts; the average human being couldn't mess things up that bad.

The Acting Chairman (Ms. Sarmite Bulte): Let me ask you three gentlemen another question on something that arose through our discussions today, which was China's accession to the World Trade Organization.

We had an economist with the Asia Pacific Foundation encourage us to try to support as early an accession as possible of China into the WTO. When I asked the question on what condition, things that are near and dear to most Canadians—our environment, our labour standards, our social policy—it seemed to be that there should be no conditions because there are other countries that were.... I'd like you to comment on how you see China's accession to the WTO and what, if any, conditions there should be on their accession, and what Canada's role should be.

• 1425

Mr. Jef Keighley: China's a huge, populous country, and at some point in the future it will take its place. But the reality is that to access the Canadian market China should have to abide by the same terms and conditions that we would advocate we place on all those who would access the Canadian market: fair conditions of labour, environmental responsibility, all those same things. China's not close to meeting those as yet. Some day they will. They have a huge internal market. There are many people trying to rush into there, but of course, again, you run into the purchasing power problem. They're making remarkable strides, but they're not yet at a point that you can in fact have fair trading conditions.

They have huge armies of manufacturing populations who are labouring under conditions that would be declared slave conditions if it weren't for the fact that the Chinese government doesn't want them classified as such. Really, they're a huge population labouring under conditions so akin to slavery that the only difference is they're not prepared to accept that label being put on it. But they're not fair labour conditions. The environmental problems are absolutely enormous. One can imagine this, given where they've come. They've come a remarkable distance in my lifetime, and I'm sure will do remarkably better over another lifetime. But they're not there yet.

The Acting Chairman (Ms. Sarmite Bulte): So our position should be, and Canada's role should be...?

Mr. Jef Keighley: That the terms and conditions we believe should be applicable to all should apply to China, as well. Again, we're not talking about absolute equality. There's a question of equitability. When I talk about the importance to have punitive sanctions, you don't go out and put sanctions on someone or a tariff on someone because they get 2% or 3% of a marketplace. You have to be realistic. There's a judgment call to be made.

And when you say to a country that you expect them to do the following, you don't expect that because you pronounce in April they're going to do it in June, but you do want and expect to have a reasonable expectation that there is a timetable set out for achieving and there are some measurable goals that one can levy and can measure against. If those are met, then that's fine. If they're not, then you come up with a penalty. All you're really saying is that's fine if you're not making that progress, but that doesn't mean we have an absolute requirement to give you access to our market. It's not there free for the asking. The international corporations say every country should be there for the picking. We don't agree with that.

The Acting Chairman (Ms. Sarmite Bulte): Thank you, Mr. Keighley.

I know, Mr. Sauvageau, you had another question, but we're just about out of time, and we have ten witnesses coming up.

Mr. Benoît Sauvageau: This is for the future.

[Translation]

Mr. Jef, I am not asking you to answer right now, but could you send us in writing your point of view on consultation and tell us what conditions should be met for it to be efficient, so that we will not brag about having carried out consultations based on a definition of consultation that would not be yours?

[English]

The Acting Chairman (Ms. Sarmite Bulte): I think that's a good question. Very quickly, Mr. McLean but it's meant more for you to perhaps get back to us. And just before I let you answer, one of the things I have been stressing in the committee since it traveled out east, and starting its consultations out west, is that this is just the beginning of our consultations. We don't see it as the end of our consultations. This is the beginning of creating a relationship that we hope will be ongoing. As issues that are important to your members arise, or in response to questions you hear today, please submit them to our clerk so they will form part of our report, and then we do have the benefit of things, because we can't discuss everything in five, ten, or fifteen minutes.

Very quickly, Mr. McLean.

Mr. Duncan McLean: Yes, I appreciate that. In fact I meant to get back to the question you posed to me, as well as my colleague, on the question of China. And certainly our comments on consultation are in no way meant to be a slap in the face of the efforts of this committee and your efforts. It's just in reference to the greater things we feel need to be done.

With respect, very briefly, to China, I hesitate to speak at all, as just the ordinary guy in the T-shirt, as to what your committee should recommend Canada do about the question of whether or not China should be in the WTO.

• 1430

In addition to the concerns Jef raised, there are other concerns that I think tie into the concerns of the people of Canada. If I were in China, I would have to be concerned about the fact that certain things could be demanded of China that might not be in the interest of ordinary Chinese under the world trade protocol, things similar to what we see the world monetary fund imposing on developing countries around the world, which we haven't really tied in today. We saw what was happening in South Korea, I think it was, on the news the other night, where there were masses of people in the streets. It's around the world monetary fund imposing conditions on their countries and their hardships.

We want to make sure that sovereign nations around the world have the right to protect things that are socialized, such as we have here in Canada with medicare, unemployment insurance, our ability to have stumpage protocols for our forests, and so on. I think these kind of things under the World Trade Organization are a great problem for all the ordinary people around the globe.

I hope that this process of consultations is extended so that we go slowly in getting ourselves involved deeper before Canadians find out what they've lost.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. McLean.

Mr. Duncan McLean: Thank you.

The Acting Chairman (Ms. Sarmite Bulte): On behalf of the committee and my colleagues, I'd like to thank you very much for coming today. I'm sorry the time has been so short, but please follow up with written submissions if you have additional comments. Perhaps you could address the question raised by Mr. Sauvageau about what you feel would be a full consultative process so that we, too, can be part of that and ensure that it does take place. I thank you again for coming.

Mr. Jef Keighley: Thank you.

Mr. Bob Speller: Just to let you know, Mr. McLean, when I get out of this suit and tie, I wear T-shirts and blue jeans too.

Some hon. members: Oh, oh.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

Mr. Gary Worth: This consultative process was longer than I thought it would be. I have a two o'clock meeting that I'm half an hour late for.

The Acting Chairman (Ms. Sarmite Bulte): There you go. Thank you very much.

Would the next group of witnesses please come to the table and bring their name tags with them: Herb Barbolet, Soonoo Engineer, Beryl Mottershead, Dorothy Goresky, Noel Armstrong, Murray Dobbin, Hugh Dempster, Lydia Sale, and Doris MacNab. Please take your seats.

• 1435

Good afternoon, ladies and gentlemen. Welcome to the Standing Committee on Foreign Affairs and International Trade consultations on the WTO and the FTAA.

We have 75 minutes within which to hear your presentations. I would like to make a proposal. I know you have been advised that each group can make a presentation of up to ten minutes in length. If you would like to perhaps cut your statement or summarize your key recommendations, that would allow us an opportunity to have questions and answers. It is up to you. Time does not permit us to have a question-and-answer period if each of you decides to take ten minutes. So I give you that option.

We'll watch the clock because there are so many of you and we want to give each person an opportunity. If you choose to take ten minutes, I will give you a one-minute warning sign and, unfortunately, I will have to cut you off. I do not mean to be rude, but many people have wanted to speak to us, and I want to be fair to each person who is here. The maximum is ten minutes. If you choose to be shorter and if there is time, that will allow for questions and answers.

First and foremost, on behalf of the committee I would like to welcome you here and thank you for taking the time to come and consult with us. If I pronounce your name wrong, please tell me, because I'm very sensitive about people mispronouncing my name.

Mr. Herb Barbolet, we'll start with you. Mr. Barbolet is the executive director of the FarmFolk/CityFolk Society.

Mr. Herb Barbolet (Individual Presentation): Thank you, honourable chairman of the committee.

After days of endless hours of hearing submissions, perhaps my contribution can be to give you an adrenalin boost. In a longer presentation I might be more moderate and qualify my remarks further. In this short space, and I hope to take less than ten minutes, this is what I wish to say.

The focus of FarmFolk/CityFolk's work is food democracy—that is, food security, policies which implement the UN resolution making access to food a basic human right, and sustainable agriculture to provide that food and nourishment.

The issue here is the World Trade Organization and so-called free trade. What is freer trade accomplishing? The argument is made that smaller and weaker countries benefit from there being trade rules and international agreements. This was certainly true in the past when bilateral and commodity-specific trade agreements and smaller trading blocs afforded some protection. The growth in size and power of corporations and of trading blocs has placed those safeguards in severe jeopardy.

The number of major players in the production and distribution of food is constantly and dramatically diminishing, and the size, power, and concentration of the corporations and trading blocs are dramatically increasing. The present juggernaut march toward only two or three trading blocs of any consequence is a prescription for disaster. The devastation being caused is far greater than its benefit.

Canada has seen that in the food and agriculture sector export subsidy and anti-dumping rulings in our favour are regularly either challenged or not honoured. Therefore, either stronger enforcement provisions must be put in place, which probably isn't politically possible, or Canada must look to being much more self-sufficient in food. The necessity to be more self-sufficient in food arises because trade agreements have resulted in such a high degree of corporate concentration in the food industry that Canadians are increasingly at the mercy of very few mega-corporations.

The plight of farmers and of seeds, the fundamental unit farmers work with, is an excellent example of the consequences of free trade. Transnational petrochemical and pharmaceutical companies now own every major seed company in the world, taking the seed out of the farmers' hands. The WTO and free trade agreement enshrine the protection of life patents granted by the U.S. Patent Office.

National governments could use intellectual property laws to prevent farmers from saving and exchanging seed, a 12,000-year-old custom, if they do not change their minds at the crucial negotiations taking place presently in Rome, where 161 countries are negotiating new rules covering the seeds of food crops and the rights of farmers at the Commission on Genetic Resources for Food and Agriculture at the FAO. If this text stands, it could be used to enshrine the primacy of patent laws over farmers' rights. Government negotiators at the FAO are legislating away the human rights and food security of 1.4 billion rural people to the monopoly interests of agribusiness. If this initiative fails in Rome, it will almost definitely be reintroduced in Seattle.

• 1440

Huge oligarchies are not the only areas of concentration and power. Where fifteen years ago or so there were no billionaires, now, as I'm sure you know, there are approximately 247 billionaires controlling the assets equal to half the world's population. In very blunt language, are we in this globalization crap shoot to see who will be the first obsessed and pathologically greedy individual to become a trillionaire?

The huge numbers of bankruptcies and farmer suicides in the United States and Canada, to say nothing of the epidemic number of suicides among farmers in India, points to a failure of globalization. Corporate concentration makes a lie of the expressed goals of free trade. To successfully compete in large-scale global trade, homogenization is necessary. Homogenization means death in biological terms. Diversity is health and life. Transnational, global traders are anathema to diversity.

If you can do nothing else going into the Seattle round of WTO, please, I implore you, do two things. First, protect the green box programs, at minimum by ensuring that there are so-called mouse holes for small-scale production of food and agriculture—agreements that provide for the freedom and survival of niche markets, organic producers, school-food programs, and the like. Second, do not put intellectual property rights and investments on the table to any greater degree than they already are. Preserve the opportunity for the small, the innovative, and the creative. Take back your responsibility to govern. Do not use the excuse that there's nothing we can do because we all live in a global economy.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Barbolet.

Next is Ms. Soonoo Engineer. You're the president of the Women's International League for Peace and Freedom.

Ms. Soonoo Engineer (Individual Presentation): I'm speaking on behalf of the Women's International League for Peace and Freedom and as the president of the local chapter of the World Conference on Religion and Peace. Both NGOs have a consultative status at the United Nations. I think my brief reflects their views on social justice.

Sixty years ago President Franklin D. Roosevelt warned:

The liberty of democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than the state itself. That, in essence, is fascism—ownership of government by an individual, by a group, or any controlling private power.

This has been gradually taking place in the last two decades. I've given you a sheet that shows the growth of the corporate agenda and how it was legislated in Canada.

In November 1999 the World Trade Organization's third ministerial conference will be held in Seattle with the aim to further expand trade liberalization, and to include areas such as investment, competition policy, and government procurement within its jurisdiction. The World Trade Organization is undemocratic, unaccountable to any authority, and operates in secrecy. It exists solely for the benefit of transnationals at the expense of national economies, workers, the environment, and people in general. If the World Trade Organization expands its power and scope, it will mean the virtual demise of democracy. It will not be the citizens who will have inalienable rights guaranteed by the constitution, but the huge transnational corporations, the big banks, and the financial houses.

• 1445

It is worth examining how the corporations got this powerful and how they're able to hold onto power despite the change of governments. At the time when the American colonists struggled against British rule, they condemned a part of the Hudson's Bay Company and the East India Company in their revolutionary pamphlets, stating that their power could be used “for the most tyrannical and cruel purposes”.

After independence, the American government wisely controlled corporate power: “No corporation shall engage in any business than that expressly authorized in its charter.” Governments limited corporate capital and property, held shareholders liable for corporate debts and injuries, and reserved the right to revoke their charters. This changed in 1886 when the U.S. Supreme Court granted the rights of national persons to corporate entities in a perverse interpretation of the 14th amendment. Thereafter, there was great accumulation of wealth and power in the hands of a few, the robber barons.

The wild and totally unregulated market-driven economy led to the 1929 crash and the Depression. Government soon realized that the state had a necessary role to play in controlling all kinds of economic activity and bringing about stability. This resulted in the birth of the welfare state and a more just and compassionate economic and social order.

After the 1950s, the significant role of lobbyists and pacts in the legislative process added to the power and wealth of corporations and the business elite. This was further enhanced in 1976 by the U.S. Supreme Court's decision, which unethically equated money spent on politics with political speech, making laws that limit campaign contributions unconstitutional.

In the last two decades, since the neo-liberal agenda was held by Thatcher, Reagan, and Mulroney, transnationals, big banking, and financial interests have literally hijacked governments, forcing them to pass free trade and NAFTA and to set up the World Trade Organization. With the help of the World Bank and the IMF, they have vastly advanced their interests worldwide.

Super technology, which enables capital to be transferred anywhere in the world instantaneously, along with world speculation in currencies to the extent of $1.5 trillion daily, has largely been responsible for the economic collapse of Southeast Asia, Russia, and Latin America. However, it has greatly enriched the super-rich.

Never since the Middle Ages has disparity of wealth been greater. The assets owned by 200 of the wealthiest billionaires represent more than possessed by 45% or roughly three billion people. Forbes estimates that with only 2% of the assets of the world's richest billionaires, absolute poverty around the globe could be eradicated.

While 60% of the U.S. population has taken a 20% cut in real wages in the last 20 years, the number of billionaires has risen from three to 250. The figures are similar for Canada. In 1973, the richest 10% had earnings 21 times greater than the poorest 10%. By 1996, that disparity had increased to 314 times.

There is more unemployment today, roughly 15% if one counts the discouraged and the partly employed. There is more homelessness, hunger, and poverty than ever before.

At the Uruguay Round five years ago, the World Trade Organization was proclaimed as a means of enhancing the creation of global wealth and promoting prosperity for all citizens of its member states. It has still to do so. NAFTA and the World Trade Organization have made inroads into national economies, eroded the power of governments to make decisions in the interests of their people, their resources, and the environment, and have increased poverty worldwide. It has benefited transnationals, the big banks, and the economic and social establishment.

• 1450

If the power of the scope of the World Trade Organization is further enhanced, Canada will cease to be the Canada we know and love. Our environment, our resources, will be totally at the mercy of big business and foreign interests. Our educational system and social services will deteriorate beyond recognition and our culture will be affected. Small business and trade unions will suffer, while the rich and the exporters become richer.

The world's economy is in a turmoil. The present euphoria on the stock market cannot last. The government should learn from the Great Depression of the thirties and revise our economic policy. George Soros, the billionaire, in his book Crisis in Global Capitalism, states: “Market fundamentalism is a greater threat to open society than any totalitarian ideology.” It has become so overwhelmingly predominant in our thinking that it is stifling the free flow of ideas at the very basis of democratic society. He warns: “Markets are so inherently unstable they require a degree of regulation if they're not inevitably to self-destruct.”

I urge that the government take no steps to further enhance the World Trade Organization and to bring about further trade liberalization.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Ms. Engineer.

We have Dorothy Goresky and Noel Armstrong, spokespersons for the Unitarian Church of Vancouver.

Ms. Dorothy Goresky (Individual Presentation): Thank you, Madam Chairman. Five minutes allows a very hasty thank you for holding these hearings.

I'm going to digress a little bit from the papers I've given you, because listening to the trade unions, I realize that they have spoken very fully about the Universal Declaration of Human Rights.

It is important to recall how, through the United Nations, human rights and democratic rights have been established and how these are now being eroded and destroyed by international trade treaties. I'm not going to speak about the Declaration of Human Rights, but I am going to say that attempts to include these articles in international trade treaties were scuttled by the United States. Instead, in 1948, the GATT was created to open up world markets for transnational corporations. Trade treaties have made no attempt to embody the principles set forth in the UN charter but instead clearly contravene them.

In 1983, 35 years after signing that declaration, Dr. T. Lambo, the deputy director of the World Health Organization at that time, spoke these words:

...in a world where the gigantic scientific and technological achievements command our admiration and almost fetish acceptance, we are witnessing an intolerable degradation of man. Our pride in belonging to a generation which, for the first time since the genesis of man, has set foot on another planet, cannot, however, disguise the awful truth that it may be easier to travel to the moon than to erase from the surface of the earth the image of poverty and human exploitation, injustice and the degradation of human welfare.

Another 15 years down the road his words are truer than ever.

I lay the charge that whatever international trade treaties have done to bring wealth to a small sector of the earth's population, at the same time they have been and are continuing to be largely responsible for the ever-increasing image of human degradation. To that must be added the exploitation and degradation of our environment and resources upon which all life on this planet earth depend.

• 1455

The second charter that I wanted to bring to your attention is the Charter of Economic Rights and Duties of States. I don't know if anyone has mentioned that before or not. This charter states that member nations have the inalienable right to regulate and exercise authority over foreign investment and that no state shall be compelled to grant preferential treatment to foreign investment.

It grants nations the right to regulate and supervise the activities of transnational corporations in the national interest, including performance requirements, and declares that transnational corporations shall not intervene in the internal affairs of the host state. It allows member states to nationalize, expropriate, or transfer ownership of foreign property.

All of you who have read the MAI will find that all of those things would have been abrogated by the MAI, had it gone through, and have largely been abrogated by other national treaties.

One hundred and twenty countries voted in favour of that charter. Six voted against it, including the U.K. and the United States. Ten countries abstained, including Canada.

The terms of that charter were clearly meant to protect the sovereignty of countries when governing in the interests of its citizens and to prevent foreign investment from being destructive to such interests.

Those who formulated the various UN charters clearly recognized that the well-being of the citizens of a country is dependent not only on the country's economy, but is inextricably bound to laws governing social, cultural, educational, and labour regulations.

Canadians, and people of the world, know the concepts embodied in these UN documents and in scores of other documents are ones we all strive to implement in order to halt and turn around the ecological and human disaster overtaking us.

The World Trade Organization and the free trade area of the Americas are not headed in the right direction.

Something that is astonishing to me is that the very corporations that seek good investment opportunities under secure and stable situations have yet to wake up to the fact that their policies are at the very heart of why there will never be stability, and why eventually the things on which their businesses depend—resources and people—will all too soon be destroyed. It's astonishing to me that this is not a recognition.

I believe we cannot hold ourselves irresponsible for making a turnaround just because other countries are not. I believe Canada can lead, and that much to our surprise, other countries would follow. If that charter for the rights, duties, and responsibilities of states were looked at and adhered to in any way, trade treaties would not be negotiated in their current venues.

Therefore, I would suggest to this committee that further steps to negotiate trade treaties should not proceed until principles such as the ones we've been speaking about are begun to be considered and embodied. And when developing these principles, we citizens expect to be at the table, not merely symbolically, but with power equal to those who sign and implement the treaties.

Lastly, until there is a turnaround to place the rights of people and the earth above the rights of multinational corporations, organizations like ours will be back. We're not going away.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much.

Mr. Armstrong.

Mr. Noel Armstrong (Individual Presentation): Thanks very much for being here. It's amazing. You people have had to sit around and listen and listen and listen, and most of you look nice and bright and cheery.

Mr. Werner Schmidt: That's because we're listening. If we weren't listening, we wouldn't be bright and cheerful.

Mr. Noel Armstrong: Okay, I've got twenty copies of these, and I hope you have one in front of you.

I've recently read Our Ecological Footprint by the UBC scholars Wackernagle and Rees—here's the book right here—and it's very, very illuminating. This book was sent to all the members of the cabinet, all the B.C. Legislature MLAs, and all the B.C. MPs. That would be about a year ago. I just picked it up a few months ago.

This book shows how much land area is required by Canadians for Canadians and others to live. So rather than using the conventional economic models of dollars, cents, interest rates, debt, and so forth to guide our economies, land usage in hectares is the basis.

• 1500

This method shows that Canada uses 4.3 hectares per capita to live—that's you and me in this room—for our standard of living. The United States is the greatest user in the world; they use 5.1 hectares to live. Britain comes up less, at 3 hectares. India has only 0.4 of a hectare on which to live. The world average is 1.8 hectares.

The United States and Britain, as with most industrialized countries, run a land deficit. That is, they don't have enough land to support their lifestyles. The United States is 80% in the hole; Britain is down 760%; and The Netherlands is one of the worst, as it is lacking in land by 1,400%.

To make up the shortfall and support their high living standards, like ours, these countries, mostly the OECDs, import. So whenever we eat a banana or drink tea or coffee, we are using somebody else's land. We're borrowing. I don't think we can go on borrowing or taking the use of another country's land forever. It seems to be going up and up.

The method the TNCs use to extract materials or food for our own use is not sustainable. An example of us misusing land is burning down the forests in Brazil and Sumatra for beef and vegetable oils. You may remember the huge amounts of smoke over Sumatra last summer, where the smoke was so heavy airplanes couldn't land.

In Canada we have gas flares. You see, we're not very innocent here in Canada. We have gas flares in Alberta, clear-cut logging in B.C., and dragnet fishing of the seas in B.C. and the Maritimes. There is all this destruction to satisfy expanding trade. While this trade increases the standard of living for the OECDs, it violently stresses the land and puts us into overshooting the carrying capacity of the planet.

To maintain our standard of living all over the world, we would have to have three planets, not just one. That's based on our Canadian standard.

With trade, monetary analyses show our accumulation of money wealth, but tell us little about the material flows around the world. Our Ecological Footprint shows how we in Europe, the United States, Canada, Japan and so forth are becoming increasingly dependent on imports. We get these imports cheap and sell our manufactured goods high. How long can this last? We must reduce the footprint in Canada and in other countries by getting by with less, lowering the birth rate, etc. There are all sorts of fronts on which we should be working hard.

Sustainability is necessary for our survival, and it is a hard sell. I am very comfortable, personally, at the moment. I have a game of golf a couple of times a week and so on, but I often wonder how long it's going to last. But a small footprint does not necessarily mean a low quality of life. Take, for example, Kerala, a small southern state of India about the size of Vancouver Island. Their per capita income is one dollar per day, and their life expectancy, infant mortality, and literacy rates are similar to OECD countries. They enjoy good health, good health care and schools, and have democracy along with a stable population. Their standard of living appears to be based more on social capital than manufactured capital. We have much to learn from Kerala.

• 1505

Increasing our trade may give us more things and widgets, but less happiness. I tell my grandchildren, “Look, if you have an ice cream cone today, wouldn't you rather have ten dollars tomorrow?” and that sort of thing.

This book was an incredible illumination to me. I would love to be able to give one to each of you, but I don't have the time nor the bucks. So thanks very much for listening.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Armstrong, for your presentation.

I want to let you know that as we're sitting here in Vancouver, the other half of our committee is in Winnipeg. One of the presenters in front of the other half of our committee is the International Institute for Sustainable Development, who will be bringing a paper on the exact issues you've brought forward.

Mr. Noel Armstrong: That's nice. Thanks.

The Acting Chairman (Ms. Sarmite Bulte): Just to let you know. Thank you.

Next is Mr. Murray Dobbin, a member of the Council of Canadians.

Mr. Murray Dobbin (National Board Member, Council of Canadians): Thank you. As just a small correction, I'm not just a member of the council, I'm a member of the national board and the national executive of the council and the B.C. spokesperson. So I'm here today speaking for 20,000 members of the council in British Columbia and its 25 local action groups.

These parliamentary hearings take place in a political, economic, and social environment that reflects some ground-breaking developments on the world stage. The Asian financial crisis, which now of course includes Russia and threatens Latin America, has resulted in even some of the leading promoters of global trade and liberalization backing away from their own chosen course.

The MAI, an agreement backed by 29 OECD countries and the most powerful transnational corporations in the world, was defeated in large part because the public rose up against it and informed their own governments, in many cases, how bad this agreement was, to the point where France and Australia withdrew, believing elements of the MAI were a threat to democracy.

Yet Canadians feel their government has learned nothing from these developments and is determined to increase, not decrease, the government's involvement in trade and investment liberalization, following the same disastrous course plotted by the MAI. Rulings of the World Trade Organization have challenged our sovereign ability to promote our own culture, protect our environment, and support sustainable communities, investments and job creation.

While trade liberalization has undoubtedly benefited the rich and powerful, it has damaged the quality of life and democratic rights of most Canadians. For many more in the world, economic globalization has had far worse consequences.

Against this backdrop, it seems difficult to understand why our government is pursuing dozens of new trade and investment deals, including the FTAA and the World Trade Organization expansion. Worse yet, the Canadian government appears to support an extension of the mandate of the WTO to include MAI-like provisions on investment and government procurement.

We are therefore taking this opportunity at the outset of the hearings to state our position clearly. The Government of Canada should immediately stop discussions aimed at furthering trade and investment liberalization, and engage in a genuine dialogue with Canadians about the consequences of this model of economic globalization. It should use the forthcoming millennium round of the WTO as an opportunity to push for serious examination of the real global record of trade and investment liberalization. Rather than expand the current model, Canada should insist on wide-ranging assessment of the economic, social, environmental, cultural and political impacts of globalization.

We have been asked to limit our comments to trade-related issues, implying that civil society is loading the trade agenda with too many unrelated issues. But it was not civil society that overloaded the trade agenda and negotiated treaties that now mean Canada cannot have a domestic magazine industry, cannot ban harmful substances for fear of being sued, and cannot ban the export of water. It is not civil society that has defined the meaning of trade and investment issues so broadly they encompass virtually every area of public policy making.

By way of example of how invasive trade goals have become in all spheres of the federal government, there was an in-depth investigation in the Toronto Star recently of the Canadian Food Inspection Agency, which has been severely criticized for its handling of two instances of serious food contamination. In both cases federal officials, with the life-and-death responsibility for keeping our food supplies safe, cited trade concerns when asked why they had waited so long to act when, in contrast, their Ontario and American counterparts took prompt action on a precautionary basis. Incredibly, the federal government has given a food inspection agency the explicit responsibility not just for food inspection, but for promoting trade.

The Council of Canadians and others have warned about the dangers of putting broad public policy through a trade lens, but we continue to be ignored and our warnings are dismissed.

• 1510

We see an altogether different appreciation of the quality of the work done by NGOs such as ours in the observations of European Member of Parliament Catherine Lalumiere and French Finance Ministry Inspector General Jean-Pierre Landau in their September 1998 report to the French government on the MAI, and I quote:

On a subject that is very technical, representatives of civil society appear to be fully informed, with critiques that are legally well-argued.

Lalumiere and Landau agreed with the critique from civil society that NAFTA-like provisions in the MAI allowing for investor-state disputes would be “opening the way to the creation through jurisprudence of new international law to the sole benefit of foreign corporations” and allow tribunals to rule against “all public legislation and regulations that reduce the economic value of a foreign economic investment.”

In contrast to this warning about negotiating investor-state clauses, the Canadian government officials have given sweeping assurances to this committee that NAFTA provisions could not be used to challenge legitimate government laws. They said further that the capacity of corporations to sue governments under NAFTA and in the proposed MAI were no different from what was already available to corporations under Canadian domestic law. The chair of this committee was pointedly told by those negotiating for Canada that there was no need to explicitly define the meaning of expropriation. As the Ethyl case subsequently proved, these reassurances were unfounded. Now that the Ethyl case is shown not to be an aberration, as we predicted, and Canada is facing a raft of NAFTA suits, the Canadian government is belatedly trying to narrow the scope of chapter 11 of NAFTA.

Despite the proliferation of NAFTA lawsuits, the minister and his officials continue to praise dispute settlement mechanisms and how well they have performed under NAFTA. These are the subject of negotiations in both the FTAA and WTO working groups. But what assurances are there that the trade officials, some of whom were the same ones involved in negotiating NAFTA and giving you reassurances, will not pursue dispute settlement processes identical to those that are now prompting so many lawsuits?

The trade minister has stated that he is pleased with the transfer of the MAI's investment negotiations to the WTO. While assurances are made that Canada's health, cultural, social services, and environmental programs will be protected, the WTO environment is one where everything is seen through the lens of liberalizing trade. Working papers prepared by the staff of the WTO argue that where there is a conflict between liberalizing trade and other government objectives, trade should triumph.

In the WTO working paper “Regulatory Economy and Multilateral Disciplines”, the case is discussed of what would happen when non-protectionist governments cannot prevent certain domestic policies from incidentally or accidentally discriminating against foreign competitors. The solution from the WTO's perspective “is to create a presumption in favour of the economically efficient policy measure, with departures inviting justification”. In other words, guilty until proven innocent. This ideology, which is institutionalized within the WTO, has resulted in every single environmental measure brought before it being struck down as an unfair barrier to trade.

The Lalumiere-Landau report to the French government roundly criticized the OECD secretariat for failing to bring key issues “to the attention of the Ministers, much less make them the subject of debates....” The secretive character of the negotiations is also criticized as unjustified, making it impossible to anticipate and resolve problems.

The testimony to date from Canadian officials on the upcoming agreement suffers from the same failings. Why, for example, have the committee and the minister not raised the agreement on forestry that Canada is now promoting with the Americans at the WTO? The agreement on forest products has been drafted in the U.S. with the input of giant forest transnationals, with no input whatsoever from environmental or labour organizations. According to Victor Menotti, director of the International Forum on Globalization Environmental Program, “while the current scope of talks covers only tariffs...negotiations are expected to introduce `non-tariffs,' which can refer to anything, even environmental laws.”

The World Commission on Forests concludes in a recent report that the pressures to deforest the world, generated by globalization, have already meant that “the decline is relentless. We suspect it could change the very character of the planet and of the human enterprise within a few years unless we make some choices.” But the choices that are being promoted by Canada through this new forestry agreement at the WTO promise only to accelerate global deforestation.

Canada is currently acquiescing to pressure by member nations party to the agreement on procurement in the WTO that all subcentral governments be covered. Potentially, all provincial and municipal governments, all hospitals and school boards will have to start posting their bids and procurement guidelines to the WTO.

• 1515

Yet no assessment has been done on the impacts of the federal government's existing procurement practices that have been given national treatment to foreign corporations. The simple question of whether Canadian businesses have experienced a net loss or a net gain from this decision has never been evaluated or even asked.

There was an interesting exchange on this at a DFAIT consultation meeting held here in Vancouver at the end of January. When asked if it wasn't a good idea to do some evaluation before expanding the agreement on procurement to governments at all levels in Canada, a ministry official said it wasn't a question of analysing actual outcomes. The point was to achieve more access to foreign markets. In other words, it appears to be department policy not to look at the downside of these international agreements, but only to seek information that will help sell them.

In terms of the General Agreement on Trade in Services, the same questions about oversight can be asked. A member of this committee noted in June 1998 that trade officials had been negotiating this agreement since 1995; yet last year was the first time any information on these negotiations had been presented to parliamentarians. The principle of the GATS, according to a Canadian official is “the first-ever set of multilateral legally-enforceable rules covering international trade in services” with “no discrimination in favour of national providers”. Since the WTO includes the health care sector under its definition of services, how is the public character of the Canadian health system to be preserved? More urgently, if Canada begins discussing health as a tradable service in the form of the WTO, this will assist American challenges to the Canadian health system under NAFTA.

In this committee's majority report on the MAI, there was a recommendation that the government undertake “a full impact analysis” and “include a discussion of foreseeable economic, environmental, social and cultural effects of the agreement and the obligations imposed by the final terms of the agreements”, to your credit. Minimally, this committee could ask that the federal departments responsible for these areas of public policy be given the capacity to undertake independent objective analyses of the proposed FTAA and WTO agreements. Ideally, you would recommend that these assessments be made public in their entirety and that the ministers responsible report to Parliament on the results. In this way, we might actually see a debate in the House of Commons about the impact, present and potential, of continuing down the road of trade investment liberalization.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Dobbin.

Just for the committee's clarification, on page 3 of your paper you said you were told to limit your input to trade issues for discussion at these hearings. I can assure you that this committee's terms of reference are much broader, and that is not the case at all. We have welcomed every comment, not just at this point but even subsequent comments. That is not the case for this committee in any of the literature that I am aware of that went out. If it is, please bring it to my attention, because we'll amend it immediately.

Mr. Murray Dobbin: I apologize for suggesting that this was the committee's restriction. This is the message we get, however, from many of the politicians and many of the trade officials commenting on criticism coming from civil society. I didn't mean to imply that the committee had tried to restrict testimony.

The Acting Chairman (Ms. Sarmite Bulte): This is the first time, actually, in the history of Parliament, especially in light of the WTO negotiations, which have not even started, that we are actually seeking public input and consultation before those negotiations even commence. We certainly have listened to civil society, and accordingly, the government is here today and will continue with the process.

Mr. Bob Speller: That's right. I can also speak on behalf of Sergio Marchi. In no way has he ever implied any limitations in terms of what we want to learn. We want to hear exactly what you're saying, what Canadians in all parts of the country are saying, about this.

Mr. Murray Dobbin: I'm glad to hear that. I'm also glad to hear that this is not the end of the process, because it seems to me that genuine consultations need to continue. These consultations would be useless if all of a sudden all the details of the negotiations at the WTO come out and there's no further consultation with civil society.

The Acting Chairman (Ms. Sarmite Bulte): Thank you, Mr. Dobbin, for your comment about the MAI subcommittee report, because there are actually three of us on this committee.... It was chaired by Mr. Speller, with Mr. Sauvageau and myself as part of that recommendation and process.

Mr. Werner Schmidt: A point of order, Madam Chair. Are we going to get into questions now?

The Acting Chairman (Ms. Sarmite Bulte): Yes. Thank you very much, Mr. Schmidt.

Mr. Dempster, please.

• 1520

Mr. Hugh Dempster (Individual Presentation): Thank you.

Just before proceeding I'd like to comment that I did have the opportunity of speaking to a previous incarnation of this committee on a very different issue. I know that over the years this committee has done some good work, work that impressed many of us out here. So I hope you'll keep that up and do some useful things.

I'm here to speak as an individual, but I am a lay member of the Anglican Church, and my reason for being here grows out of my involvement in discussions in the church about the multilateral agreement on investment. The Anglican Church did, in fact, make a presentation last fall to the B.C. legislature's hearing on the MAI. What I have to say here will be along very similar lines.

Neither I nor the church professes to have expertise on the intricacies of international trade and investment. As we did then, I will speak here in terms of general principles about human behaviour, if you like, and ethical principles that might guide the formation of trade and investment treaties. So it's at that level I'm trying to address the subject.

I've chosen as my starting point an idea that I suspect is familiar to this committee, that is, human security. A key undertaking of Canada's recent successful campaign for a seat on the Security Council was a promise to integrate issues of human security into the international peace and security agenda. That means that in this context it seems to focus less, or at least less exclusively, on the security of nation states and more on the security of people. It's an idea many in the peace movement have talked about for years, and I found it exciting to hear it put forward as a role for the Security Council itself, not only put forward but apparently accepted since Canada did win election to the seat.

Now, how do I connect that with international trade and investment? Human security to me, and I think to others, means meeting the real needs of people. Quite clearly, that includes, among other things, something that is probably rather high on the list for most people, that is, financial and economic security. In passing I just note that I was a participant in the national forum on Canada and the Security Council that was held in Vancouver not long ago, and all three of the subgroups we broke into raised that issue as part of their conclusions.

If this is Canada's agenda for the Security Council, should it not also be our agenda for international trade and investment negotiations? I would see that meaning an agenda that focuses less, or less exclusively, on the security of traders and investors and more on giving priority to the security of people.

The information I received by way of introduction to these hearings included a number of questions of concern to the committee, and one of these was this: How should the WTO address questions of linkage to major values-oriented goals? It went on to list among those goals cultural diversity; environmental, developmental, and social issues; and labour and other human rights. I would see all of these as falling under the label of human security, and it is my basic contention that these should be the primary concerns driving trade and investment policies.

In a supplementary question you asked how can Canada's national interests and the interests of small and weaker economies be safeguarded? Canada's national interests, I assume, are surely the interests and the welfare of Canada's people. But I think the term “human security” is broader than that. It includes equally the interests and the welfare of the people in smaller and weaker economies that are our trading partners. Trade is inherently an activity of two partners, both of which should benefit. When this is not the case, when one partner benefits but the other suffers, we're not dealing with trade but with exploitation.

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Ten Days for Global Justice is a national program of education and actions shared by the major Canadian churches. For the past two years that program has focused on fair trade, specifically looking at the coffee and garment industries. Too often, we've learned, consumers in rich countries benefit from inexpensive products while producers in poor countries suffer low wages, sweatshop working conditions, unstable employment, and a long list of other difficulties, no doubt. Meanwhile, the traders collect handsome profits.

The World Trade Organization, if it deserves the name, ought to be concerned about such abuses of international trade, which surely violate human security, at least in the producing countries. I would hope and expect that Canada would work in the WTO toward the development of policies and regulations that would prevent this kind of exploitation.

Regulation is a topic that became clear to us as a focus of the discussions around the MAI. We recognize the desire of entrepreneurs in international trade to minimize government regulation of their activities. That's understandable, because any restrictions perhaps potentially limit their profit-making ability. It certainly is reasonable to have some degree of uniformity and stability in regulations, what one often calls a level playing field, but if human security is an objective, the level of the playing field must not be set so low as to swap the genuine needs of people anywhere. It's surely a responsibility of government—I would say the primary responsibility of government—to establish regulations that ensure as far as possible the human security of its own people and, indeed, of people everywhere.

I don't think I need to detail the kinds of issues to be covered. Others, no doubt, have talked about them. Certainly labour rights, living conditions, health protection, social security, and care for the environment are included. Since in today's global economy an entrepreneur who finds the regulations in one country to be inconvenient can easily move elsewhere, it is important to maintain that level playing field, and thus effective regulation of commerce to protect human security with at least a degree of international uniformity needs to be a major concern of the World Trade Organization.

I just want to skip briefly over comments about two other specific issues, the whole currency speculation issue, which lately has caused some wild turmoil in the world, and the need for controlling that somehow. I notice that our Parliament has endorsed the idea of a Tobin tax. Hopefully, that idea can be developed somehow or other. Whether the WTO is the forum where that needs to happen, I don't know. But somehow that needs to be pursued if that is indeed an effective remedy for that problem.

With regard to the whole process of settling disputes, I don't need to go into details. Canada has supported the creation of a new international court for areas such as war crimes. I hope we can urge somehow or other the use of something similar to that to handle trade disputes in a more reasonable way while being sensitive to the needs of human security.

I haven't set out to deal in-depth with any of these specific issues. Most of the points are really used as examples of the kinds of questions and problems we face to which I hope the concept of human security and concern for the real needs of all the world's people can be successfully applied.

Fifty years ago, as you've no doubt heard, the world set out the basic requirements for human security in the Universal Declaration of Human Rights. Today we still need a universally accepted pattern of rules for international trade and investment, rules that indeed recognize the rights and needs of traders and investors but give equal prominence to their responsibilities and that give primary place to the needs of human security and human rights. My request to you is that you call on Canada to work toward the adoption of such rules through its influence in the World Trade Organization and in other international trade negotiations.

Thank you.

• 1530

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Dempster, for your very important presentation. You're absolutely right, Canada did campaign on a human securities issue agenda for its seat on the United Nations Security Council, and was successful in promoting that agenda. So I think your presentation is very timely and very relevant. Thank you very, very much.

Last but not least, we have Ms. Sayle and Ms. MacNab, spokespersons of the British Columbia Voice of Women. I must add that I know the Voice of Women very well. In my riding, Bruna Nota is a big spokesperson for the Voice of Women. I'm delighted that you're here.

Ms. Doris MacNab (Chair, British Columbia Voice of Women): Thank you very much.

I'll begin and then Lydia will carry on. I'm Doris MacNab, and I'm the chair of the B.C. Voice of Women. Lydia Sayle and I have been long-time members of VOW. We thank the Standing Committee on Foreign Affairs and International Trade for this opportunity to express our views on the FTAA and the WTO.

Voice of Women is a feminist network of thoughtful, committed women across Canada. VOW cooperates with women in Canada and other countries working for peace and social justice for all. We believe that militarism in all its various guises is the basic underlying cause of women's suffering and insecurity today.

I will start by quoting from a paper by Carol Stewart, and Lydia Sayle will then present our brief.

Carol Stewart wrote, in “Globalization: Its Impact on Women, the Environment and Human Rights”:

We have the resources and the vision to create an alternative economic development system that is based on global democracy, human rights and sustainability.

She suggests the UD development program, which publishes a yearly human development index that includes literacy, nutrition, gender, and health. The genuine progress indicator assigns value to the earth, environmental resources, and unpaid work. It recognizes that not all consumption spending is beneficial, and it includes social and environmental costs and benefits. Pollution and depletion of non-renewable resources are costs. Work done in the home and caring for children are benefits. And this is very close to our hearts, as Voice of Women.

If our governments used these instruments to measure the true cost of development, it would be clear how inadequate the present capitalist mode really is. As someone observed, our tragedy lies in the richness of the available alternatives and in the fact that so few of them are ever seriously explored.

Ms. Lydia Sayle (Spokesperson, British Columbia Voice of Women): I'm Lydia Sayle, and I've been a member of the Voice of Women since the 1960s, when the Cuban missile crisis brought together thousands of Canadian women to campaign for nuclear disarmament.

This year, prompted by your committee's landmark report on nuclear weapons, we joined with other peace groups in Vancouver to put out a brochure entitled “Nuclear Weapons and the Y2K Bug”. So I want to thank you for the inspiration. We have appreciated your work.

We see global trade negotiations, be they under the MAI, the FTAA, or the WTO, as a serious threat to any current and future measures to promote peace and justice. Under the rule of globalized trade, social and economic disparities between and within nations have widened. Structural adjustment policies have caused political and social upheaval in many countries. Some have exploded in civil unrest and conflict between various factions and ethnic sectors. There is an argument to be made here for the cases of Africa and Yugoslavia.

We have always spoken against the power of the military industrial complex, as it was first defined by President Eisenhower, and we have campaigned to get Canada out of military alliances such as NATO and NORAD.

We're appalled that our government is at present actively participating in NATO's aggressive bombing in Yugoslavia. The vast sums that are now being wasted in the Serbian bombing could remove many of the underlying causes of conflict elsewhere in the world. A better life, free from poverty, would end most of the conflicts in which so many people are now killed across the globe.

• 1535

We see the corporate funding for NATO's fiftieth anniversary that happened last week as a clear demonstration of the role that arms manufacturers such as Lockheed Martin and many others play in promoting the expansion of NATO. These corporations see big profits in re-arming Poland, Hungary, and the Czech Republic and in expanding NATO's realm at a heavy social cost to these countries and with a further destabilization of already volatile regions.

Under the WTO, agreements are negotiated behind closed doors. Only the corporations are the beneficiaries. The interests of other sectors of society are nowhere represented. As with the MAI, the goal of current WTO negotiations is to deregulate international trade and limit the capacity of governments to interfere in the activities of large corporations and foreign trade investments.

As you have heard this morning, this threatens nearly every sector of the Canadian social economy, such as health care, education, culture, and environmental protection. The only subsidy that a global economy allows for is military spending. Negotiators are in complete agreement that it must continue to enjoy government support without any interference. Specifically, this includes government spending for military research, weapon development and production, and the direct support of weapons corporations and other corporations that supply materials for weapons as well.

As a direct result of this, the only way a government will be able to use a subsidy without the fear of legal challenge will be under the cover of national security. This will elevate the importance of military spending to new heights in Canada, and the military corporate complex will be poised to grab an even larger share of public spending from the civil sector.

The U.S. is our largest trading partner and it is the controlling power within our military alliances. It dominates most, if not all, of our global treaties and agreements. It is no wonder that Canada, as a member of NATO and other U.S.-dominated alliances, does not find the political will to act independently.

Although governments around the globe have recently decided that they can no longer act in the national interest when it comes to the so-called global economy, we say governments are not impotent. They can act in the best interests of society if they so choose. We call on our government to address the continuing lack of democracy and transparency that has placed more and more power in the hands of transnational corporations at the expense of civil society. We want Canada to be a leader of other governments and multilateral institutions. We must acknowledge the true causes of war. We must create international agreements that promote democracy, meet basic human needs, and respect human rights.

Destructive trade investment agreements, which do not enhance the vital contribution of social programs, must be replaced with international agreements that discourage the causes of war and build institutions for peace and justice. In this case, the British Columbia Voice of Women would completely agree with Dorothy Goresky's proposition that we go back to the United Nations and its agreements and support them.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much.

Colleagues, we have five minutes, so if you all agree to be succinct, you can have one minute per comment or question.

Mr. Schmidt.

Mr. Werner Schmidt: Thank you, Madam Chair.

Thank you all very much for coming. There's such a diversity of opinion, yet there's also a common element in all of this.

I'm going to restrict myself to one question having to do with the comparison of the statement about happiness by Mr. Armstrong and the one dollar a day and the life expectancy of the Kerala group.

• 1540

With regard to that and the human security issue that Mr. Dempster presented to us, is happiness a function of income and money, or is happiness a function of something else? It has to do with the B.C. Voice of Women as well. Could you explain something about peace, happiness, and harmony? How does all of this work together?

The Acting Chairman (Ms. Sarmite Bulte): Mr. Schmidt has gone to three of you. I feel like the Speaker in question period, where we try to limit the answers as well as the questions so we all get a chance. Would you mind cooperating in that way?

We'll start with you, Mr. Armstrong, then we'll go to Mr. Dempster and then to the B.C. Voice of Women.

Mr. Noel Armstrong: When television came into vogue in the 1960s I thought there was something funny about this with my own three children. I thought, let's just limit how much television they see. So they had to get outside and generate their own entertainment.

In my own life, I find my own entertainment. I play a game of golf. That's an activity I do for myself. I play the cello. No one imposes that on me such as television does, you see.

That's what the people in Kerala are doing. There is a lot of social manufacturing going on. These people aren't using modern technology to entertain themselves with a CD or a video cassette recorder and that sort of thing. So they are having to generate their own entertainment, which is far more fulfilling to human beings.

The Acting Chairman (Ms. Sarmite Bulte): Dr. Dempster.

Mr. Hugh Dempster: That's an interesting question. I suppose my first reaction is to say that human security describes the basic conditions one needs to have in order to be happy. Happiness has more to do with that than with how you respond to it. At the same time, something niggles at me in saying yes, I can imagine some people being happy even in very insecure situations, and some completely secure people being grumpy and bored. So it's a complex contrast.

The Acting Chairman (Ms. Sarmite Bulte): Ms. Sayle and Ms. MacNab, would you like to comment on that please.

Ms. Doris MacNab: I would very much like to comment.

The main thing in happiness is community and a sense of people working together, almost like a small town where everyone knows everyone else and the children almost have multiple parents. The children can grow up. Sometimes church communities have this. They have family evenings when the children and parents come together.

Having a roof over your head and having something to eat each day contributes to happiness.

I would say our particular society in Canada is deteriorating rapidly because of television. I grew up before television, and I played hopscotch and jacks and those sorts of things. I limited television to my own children. Television today is toxic. It does not inform.

I could go on for half an hour on this subject. It misinforms. It's used for propaganda. As for children, it's even turning children against their parents. This goes on to videos and so on. Parents are very careful about the food they feed their children. What about what goes into their minds? It's one of the biggest things that's happening.

I went to a great environment thing last Saturday. There were hundreds and hundreds of people there. There were sixty tables of people who were concerned about the environment. There was music. There were Indian drummers and Indian dancers and of course the infamous Raging Grannies, of which I'm one. We should have come today. On the news on the television and in the media there was not a word about it, but lots about crime, lots about murders, lots about tragedies in some other country.

• 1545

As I say, I could go on, but I will quit. I think happiness is turning off the TV forever.

The Acting Chairman (Ms. Sarmite Bulte): Thank you, Ms. MacNab.

Ms. Lydia Sayle: May I have a few words?

The Acting Chairman (Ms. Sarmite Bulte): We're running out of time. Perhaps in the next round, because I still have three other colleagues who.... I'm sorry.

[Translation]

Mr. Sauvageau.

Mr. Benoît Sauvageau: I was quoting a famous writer, but I will set aside our collective happiness to ask a far more down-to-earth question to Mr. Dobbin. This question was inspired by the previous witness, Mr. Jef, whom I saw leave a moment ago, unfortunately.

You say you represent more than 20,000 people?

[English]

Mr. Murray Dobbin: Yes.

[Translation]

Mr. Benoît Sauvageau: We must speak on behalf of twenty odd million people. Could you provide some explanation of the consultation process? This is the position of 20,000 people and of the other 27,000 represented by Mr. Jef. There are therefore at least 47,000. I want to make sure we are consulting appropriately. So, what was the consultation process of the Council of Canadians before arriving at such a position?

[English]

Mr. Murray Dobbin: The process has actually been going on since the beginning of the founding of the Council of Canadians. The Council of Canadians was founded in opposition to the free trade agreement. That was in 1985. So for three years, up until the election of 1988, members joined the Council of Canadians on the basis of being opposed to the free trade agreement. Other members joined on the basis of opposition to NAFTA. And certainly over a two-year period from fall 1997 until last fall, when the MAI, at the OECD level, met its demise, the Council of Canadians members have been as active as we can get them to be, and we have certainly received information on that. We probably had 10,000 people nation-wide join the Council of Canadians on the basis of opposition to the MAI.

While I can't say that every one of the 20,000 members was consulted.... We have 25 local action groups in British Columbia, with an average active membership in each of those of probably 100 to 150. Other members are not involved in groups but they are involved with the council in terms of letter-writing campaigns. So certainly it's fair to say that on this issue, perhaps more than any other issue the council has been involved in, we have a consensus of our membership.

[Translation]

Mr. Benoît Sauvageau: Once again, I rarely defend the federal government, but I must say that Mr. Marchi, in San José, Costa Rica, was the proud defender of consultations with the civil society. When you say that the government refuses to hear the civil society, I think, as the Chair said, that this may be a wrong perception, at least here. Our presence should be proof to the contrary. That was a comment.

[English]

Mr. Murray Dobbin: The proof will be in the pudding, as they say. We keep hearing from Mr. Marchi that the MAI was not a threat, even after criticism about the protection for culture, the protection for medicare, and the protection of other elements of Canadian public policy.

At the end of the day, when these agreements are signed, just as you were reassured that NAFTA wasn't a threat and that chapter 11 wasn't a threat and it didn't give corporations any more power to sue.... I don't want to get those reassurances that the WTO and the FTAA are just fine and then find out two years down the road that in fact they're not just fine.

It's all very well to say that Mr. Marchi welcomes civil society consultations, but consultations have to be substantive and they have to result in something, not just be motherhood statements by Mr. Marchi. There have to be changes in the approach that Canada takes in negotiating these agreements.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Dobbin.

On behalf of my colleagues, I would like to thank each and every one of you for coming, for your presentations. I wish we had weeks and weeks to have these consultations go on. Again, I ask you to excuse me if I wasn't able to have you continue, but we're here until nine o'clock tonight, and we'll be starting again tomorrow. Thank you again.

• 1550

As I have said to everyone who has come before us, this is not the end of the consultative process; this is the beginning of our relationship. Please feel free to contact the committee or any individual committee member. If there are issues that come to your members' attention that are important, please let us know. This is not the end; it's just the beginning. Thank you all for coming.

Next I'd like to call upon Uri Strauss, of the University of British Columbia's Students Against the MAI; Langara Students' Union Association; Mr. Damien McCombs; and the Canadian Federation of Students.

[Translation]

Mr. Benoît Sauvageau: [Editor's Note: Inaudible]... through respect for our witnesses.

[English]

The Acting Chairman (Ms. Sarmite Bulte): I agree. Why don't we just take a break?

• 1552

• 1557

The Acting Chairman (Ms. Sarmite Bulte): Please take your seats so we can get started.

I'm delighted to welcome our student panel here to the Standing Committee on Foreign Affairs and International Trade, as we examine Canada's objectives of the World Trade Organization and the FTAA, as we enter those negotiations. Welcome.

We have half an hour slotted for you. What we find works the best is if there is an ability for us to answer some questions. There are four groups, so technically you each get 7.5 minutes. You may choose to do as you please, either present your entire brief or give us the key recommendations so that we can have some dialogue—whatever you feel is best. Getting a little bit of dialogue going, even if it's at the end, I always find works very well. But I am in your hands.

We start with the University of British Columbia's Students Against the MAI, Mr. Strauss. Welcome.

Mr. Uri Strauss (Individual Presentation): Thank you.

I think I'll just read from this, because that would make me the least nervous of all the options.

The Acting Chairman (Ms. Sarmite Bulte): And I will give you a one-minute signal so that everybody has a chance to make their entire statement.

Mr. Uri Strauss: Okay, thank you.

I'm Uri Strauss, a student at the University of British Columbia. I'm active with the Students Against the Multilateral Agreement on Investment and a new group known as Activists Against Apathy, but this presentation is my own.

I should introduce my presentation by saying that although I'm presenting to a federal government committee today, I don't believe for a second that the government is interested in listening to the concerns of citizens who believe in values such as democracy or humanist ethics, or in adopting a sensible long-term approach to economic policy that takes notions like sustainability into account. The hearings, in my understanding, are about getting input from the business community about the particulars of Canada's position, and are being orchestrated as a public hearing for cosmetic purposes. So if this presentation strikes you as being somewhat polemical, please keep in mind the reason for that, which is that I'm not taking this institution at face value.

I think I and the many people who briefed me about this have some very good reasons for being confident in our brief. Some of the reasons will come up in the presentation. I'll also talk about what you do, as members of Parliament, if you disagree with us and you want to convince us that you're being serious about listening to Canadians. If you're offended by the polemics, I'll ask you to bear with it, because there is some substance to the presentation as well.

The presentation will be more about basic issues of democracy and less about pragmatic matters like what sectors do I think our negotiators should focus on, which presupposes that the government's enthusiastic embrace of neo-liberalism, and particularly the shifting of power to transnational corporations—it's called free trade—is legitimate. The purpose of my presentation is to argue that the entire process is illegitimate and to put forward two challenges to the government.

The first challenge will be for the government to prove its legitimacy, and especially to prove that it has a mandate to continue on with its neo-liberal policies. I may be wrong when I say neo-liberalism has been extremely destructive, and I may be wrong about the government not having a mandate for its policies, but I've never come across any reasonable arguments presented in public in the spirit of inquiry against my position, and I've looked for such arguments.

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By “reasonable”, I mean an argument regarding public policy that addresses realistically the range of concerns that a decent, sensible society might be expected to have—for instance, the effect of a policy on the environment or economic sustainability, or human rights or equality. By “in the spirit of inquiry”, I mean the argument is presented in a respectful, non-condescending manner, to be contrasted, for instance, with columns written by economic analysts in the National Post.

So if someone is looking for an articulation of the government's position in reasonable terms and can't find it, it's a sign that the government's not communicating properly with the public. It's true that the government is holding public hearings, but they haven't been very well publicized; I've heard these hearings being referred as “secret public hearings”. It could be that the government has articulated its position in some medium I'm not tuned into, but if the government is serious about consulting its public, it has to go beyond holding an occasional public hearing and writing an op-ed in a national newspaper once every month. It has to consult its public on an ongoing basis, and it has to consult the public about the basic direction of its policies and not do what our current government appears to be doing, which is to make a commitment to an organization whose basic purpose is at odds with the public interest, and then in an effort to pacify a public, whom they believe will react negatively for reasons that are completely justified, pretend to be serious about consulting the public and ask them for input about the fine details of the matter.

My conclusion is that the government cannot pretend it has a mandate to proceed with the expansion of NAFTA or expand the negotiations at the WTO, or to be more accurate an expanded hijacking of the WTO agenda by north countries to reflect their interests. It could be that the government disagrees with me and that it would like to make the case that it consults and communicates with the public. If that's the case, let the government know that there are many other people who feel the same way I do, and that if the government wishes to rectify these misconceptions, it had better find a way to communicate with these people.

I'd like to cover brief suggestions about how the government can communicate with the public in case it wishes to seriously take up this challenge. One is to use the Internet more—for instance, to hold virtual town-hall type meetings where policy-makers interact directly with the public. Of course many of the Canadians who have the most to contribute don't have Internet access or computer skills, which is why I suggest that the government should be holding actual town-hall type meetings as well. At the very least the government could adopt a less condescending tone when dealing with the public, so that the public feels more confident about talking to its government.

Let me relate to you a personal experience. About two years ago I became very concerned with the human rights situation in Burma and the Canadian government's typical indifference. I wrote a letter to Lloyd Axworthy, and in response I received a form letter whose tone was quite condescending, and whose text contained some outright lies, such as the claim that the Canadian government is concerned about human rights abroad. This can be contrasted with the respectful treatment I've received when I've contacted my member of Parliament, Ted McWhinney, or when I've contacted the B.C. provincial government.

In order to give some substance to my challenge, let me give some reasons why I think this government has earned the mistrust of the public and why it bears the burden of proving its legitimacy. First and foremost is the fact that the government participated in negotiations of the multilateral agreement on investment, which were secret before they were leaked to the public on the Internet. This document appears to be one of the most radical, if not the most radical, transfers of power to transnational corporations in history. That the government could negotiate this in secret and intend to impose it with no consultation is enough to justify extreme concern about the relationship of the government to the public.

In addition, the broken promises to abrogate NAFTA, to repeal the GST, and to maintain CBC spending have shown that the government is not as good as its word, which is another reason to distrust it. Its refusal to investigate RCMP violence at Gustafsen Lake and its attempt to undermine the APEC hearings show that it cannot be trusted to defend values like human rights, which are widely held among the public.

In short, this is not a government that can claim to act in the best interest of its public. I suggest that you prove me wrong before going further along in your liberal path.

My second challenge is probably a sub-part of the first one, and it is that I challenge the government and advocates of neo-liberal policy generally to set definite objectives and clear criteria by which to evaluate the social and economic policy. These criteria would be clear enough so that it could be determined with reasonable ease whether a policy has met the criteria or not. I leave it up to those to whom I propose this challenge to come up with the exact formulation, but I'll give you an idea of what I have in mind.

My suggestion is to take the date of a major policy, for instance NAFTA, which came into effect on the memorable day of January 1, 1994, and pick a timespan, for instance five years. Then take some social and economic measures—for instance, average wage in real dollars, average rate of unemployment, average GDP per capita, the rate of incarceration, the rate of capital flight, hospital beds for a person and so on—the more meaningful indicators the better, and set a level of improvement in the indicators, such as the rate of violent crime should go down by 2% in a given timespan and the percentage of unemployed people eligible for unemployment insurance should remain stable and so on. And set levels of change for the worst as well, such as a decrease in health spending per capita of 5% and an increase in personal indebtedness of 5%. And set a threshold of how many of the indicators must improve at the level chosen without being offset by a decrease in other indicators.

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If the threshold is not met, there will be a clear indication that the policy has failed. The public can then decide whether it wants the policy continued or not. They might want to continue the policy if they think the measures are arbitrary, or that a phenomenal increase in a few measures more than balances out small increases in other measures. The advantage of the idea lies in having a clear standard that a policy must meet if it is to be considered a success. If a policy falls short of a standard, the government that initiated it could proceed with it, but only at great cost to its credibility.

I haven't done this exercise, but I believe that if this had been done five years ago with NAFTA, then either it would have fallen far short of the criteria or the standards would have been set very low. We should see our government and all the ideologues who trumpeted NAFTA and derided its opponents apologizing for their arrogance. But instead what we see are columnists like Diane Francis proudly proclaiming the success of NAFTA and deriding its opponents based on a single indicator; namely, the value of exports.

It might be that my idea for setting criteria for measuring the success of a policy is arbitrary or foolish, in which case I challenge this committee and the government to come up with a better solution. It might even be the case that there are such criteria that have been proposed and are being measured. But again, I'm a fairly active citizen, and nothing like this has ever come to my attention.

To conclude, I challenge the government first to demonstrate that it can legitimately represent the public when it sets its policy in the neo-liberal direction, which is what it has done in negotiating free trade deals like NAFTA, the MAI, the WTO, and the FTAA, and also with its internal policies, like slashing social programs, and even in the way it displays contempt for the public in ways I've described, which is practically a necessary characteristic of neo-liberal governments. Second, I challenge the government to come up with a set of criteria that, if not satisfied, can be taken as an objective measure of failure of a government's policy.

If the government wishes to try to meet these challenges, I welcome it. If it does not, I'd like it to explain why, not just to me, but in public to all Canadians who feel alienated from the government. If it does not do either of these things, the establishment cannot expect us to remain quiet and passive. I let you know that a vigorous resistance to the WTO and Canada's participation in it is in the making, which will be bigger, smarter, and more radical than the successful campaign against the MAI. Those who plan to continue to push forward these neo-liberal policies and expect the public to turn the other cheek have some nasty surprises coming their way.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Strauss.

As a point of information, this morning when I gave my opening remarks I noted that we should get more involved in the Internet. Just as a point of information, the committee has posted onto our website a series of discussion notes and quick questions for public consideration. Also, part of our report, which will be tabled in the summer well before the negotiations start, will be a citizen's guide to the WTO.

Next, from the Langara Students' Union Association, we have Mr. Nagai and Ms. Kuitenbrouwer. Which one of you wants to start?

Mr. Rob Nagai (Spokesperson, Langara Students' Union Association): I will go first.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

Mr. Rob Nagai: Good afternoon. My name is Rob Nagai. I would like to thank the committee for this opportunity to speak.

When I learned of the new millennium round of talks, I felt it was important to voice my opposition to Canada's furthering globalization through the World Trade Organization. The WTO's mandate is based upon neo-liberal policies of globalization, trade at any and every cost. The WTO seeks to limit trade barriers, yet trade barriers are often social and environmental standards.

A good example of this is the WTO panel that condemned the measures by Ottawa to protect the Canadian magazine industry. But it is not magazines that are in jeopardy. What is at stake today is Canadian culture. Neo-liberal policies and institutions have reduced the standard of living for Canadians and limited democracy, all while improving the economic conditions for corporations.

The International Monetary Fund will often give loans to countries in need as long as they are willing to conform to the IMF's economic restructuring plans. The IMF formula for restructuring is as follows: cut government funding, privatize, lay off workers, and curtail services. Canada has been using this formula since the mid-1970s without getting the assistance of the IMF.

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From 1973 to 1996 the proportion of families, with children, earning between $24,500 and $65,000 fell from 60% to 44% of the population. Between 1994 and 1996 workers' average wages increased by 2% or less. That is less than the rate of inflation. Meanwhile, the average Canadian CEO pocketed a salary increase of 39%. The average salary of a CEO in 1996 was $862,000. The richest 1% of Canadians own more than the bottom 80% today.

These are disturbing trends. This is why I am opposed to the free trade of the Americas agreement or any other agreement that would further the agenda of corporations while limiting the rights of citizens.

Michael Walker of the Fraser Institute describes the trade deals as simply limiting the extent to which the U.S. or other signatory governments can respond to pressure from their citizens. Limiting democracy is not something I can support. The FTAA would essentially expand the Northern American Free Trade Agreement. When Canada tried to protect the environment by not allowing the gasoline additive MMT this was struck down under NAFTA. Canadians were also promised that water would not be included under NAFTA. Currently the British Columbia government is being sued by Sun Belt Water Inc., a California company, for loss of profits.

My country is about protecting citizens, social values, resources, and environmental standards. As a Canadian, I am calling upon my government to not enter into any further talks until a genuine dialogue about the consequences of economic globalization has been discussed. So I challenge the Canadian government to use the new round of talks to examine the social and environmental price the world has paid for globalization. Getting these issues on the agenda would be a Canadian victory.

Finally, let me leave you with the words of U.S. financier George Soros: “Unfettered capitalism has replaced communism and fascism as the greatest threat to open societies”.

Thank you for your time.

Ms. Winnie Kuitenbrouwer (Spokesperson, Langara Students' Union Association): Good afternoon. My name is Winnie Kuitenbrouwer, and I'm here today to speak to the issue of multilateral trade agreements and their hidden costs.

The free trade area of the Americas includes all North, South, and Central American countries, with a wide variety of social and economic needs. The World Trade Organization, composed of 134 countries representing global business interests, has overseen the development of the FTAA. Leaders in the FTAA have been meeting in the summits of the Americas in order to expand free-market economic development. This trade liberalization process has not been limited to the Americas, however. A number of negotiating arenas include such avenues as the Asia Pacific Economic Cooperation forum and the Organization for Economic Co-operation and Development. These processes are directed by corporate business interests and they're implemented through institutions such as the International Monetary Fund, the Inter-American Development Bank, and the World Bank.

These institutions are a reflection of the global economic policies now contributing to the economic crisis in the developing nations of North, Central and South America.

The North American Free Trade Agreement has had a detrimental effect on domestic economic well-being in the Americas. In Canada and the United States corporations are downsizing as they look to cheap labour in Mexico and the countries in Central America, where an exploited workforce produces everything from automobile parts to clothing in factories and maquiladoras, all developed through the chief free trade zones through the NAFTA agreement.

The workforce is frequently made up of young women who are being paid an equivalent of about $15 a day. They can be subjected to physical and/or sexual abuse by their supervisors because the governments in power are unwilling or unable to enforce fair labour practices. Despite the argument that trade liberalization has led to better working conditions and protection from exploitation associated with developed nations such as Canada, there is little evidence to suggest that exploitation has diminished as a result of neo-liberal policies, nor that living conditions or education opportunities have improved for the poor in all the Americas.

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Global economic restructuring has also had a detrimental effect on Canada's infrastructure. The most telling example of Canada's domestic deterioration is the widening gap between the rich and the poor. Contributing factors are an increasing dependency on foreign investment at the expense of domestic economic development and the decentralization and privatization of Canada's social services sector.

The Liberal federal government has cut transfer payments to the provinces, and as a result, institutions such as Langara College, Capilano College, and the University of British Columbia, among others, have looked to corporate sponsorship to cover operating costs. The privatization of the federal student loan program has students paying 5% plus prime on their student loans. The banks administering these loan agreements are not only making a profit from students who already cannot afford the interest payments, but they have increasing control over who will be eligible to receive loans.

Elementary, secondary, and post-secondary education is being restructured as the private sector provides financial incentives to institutions in return for advertising rights and curriculum development. The continued reliance on private sector funding, combined with reduced government funding for public education in Canada, will mark the end of public educational institutes.

There are inherent inequalities that exist in so-called partnerships between the business sector and public institutions. In a report put out by the Canadian Centre for Policy Alternatives, Erika Shaker points out that the partnerships between the corporate sector and the public school system are becoming an acceptable way of filling gaps in government funding. She points out that according to Statistics Canada, restructuring and downsizing tactics have led to record-breaking year-end profits for corporations and financial institutions. According to CCPA, six major banks earned over $6 billion in 1996.

The following trends in public education across Canada were noted: a reduction in the number of school boards; the redefinition of school board duties and powers; centralization of power at the provincial or territorial level; and redirection of some responsibilities to school-based parent or community groups. The restructuring of the elementary secondary school system through corporate funding comes at the expense of a young and captive audience of present and future consumers rather than helping to develop critical thinkers. It is within this economic climate of the restructuring of elementary, secondary, and post-secondary education that the free trade area of the Americas, under the direction of the World Trade Organization, will further its mandate of unrestricted free trade, fortified by anti-competition policies that will restrict alternative economic developments.

In a similar fashion, the Inter-American Program of Education, sponsored by the Organization of American States and directed by the ministers of education and in some cases resource development, has developed a series of policies aimed at improving the quality of life for the FTAA nations' citizens.

Larry Kuehn, the director of resources and technology for the BCTF, has pointed out the many positive objectives of the ministerial meetings, including the promotion of educational policies aimed at improving human rights, indigenous rights, educational development programs for at-risk youths, and educational training for teachers in the field of technology and sustainable development. However, he critiques its vague terminology, suggesting that standardized testing aimed at cost-cutting measures, training of a docile workforce, and the use of videos and computerized teacher training programs will replace what is now state-directed educational training.

The most significant critique is that the Inter-American Program of Education failed to mention the Inter-American Development Bank, the World Bank, or the International Monetary Fund, all of which have considerable influence over the financial backing of policy development.

The Summit of the Americas' plan of action is a clear direction towards future liberalization of trade within the Americas. Specific clauses, such as the competition policy, which guarantees that the benefit of the FTAA liberalization process not be undermined by anti-competitive business practices, are further emphasized by specific objectives to develop mechanisms that facilitate and promote the development of competition policy and guarantee the enforcement of regulations on free competition among and within the countries of the hemisphere.

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Canada's belief in engaging in the ministerial summit is a positive look at attempting to adapt to and influence the educational policies under the FTAA. I strongly feel, however, that we must continue to fight the trade policies and corporate expansionism that has led to exploitive working conditions in Mexico, Central, and South America, as well as deteriorating social programs, health care, and publicly funded education systems here in Canada.

People must begin to look to alternative business practices that prevent corporations from profiting at the expense of a vulnerable workforce.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Our next witness is Mr. McCombs.

Mr. Damien McCombs (Individual Presentation): Good afternoon. My name is Damien McCombs. I am a student at UBC. I am also a member of Activists Against Apathy and Students Against the MAI. Thank you for hearing us today, and I shall begin.

As a Canadian, I'm proud and extremely appreciative to live in a country that is run democratically. I do not take for granted that I have not only the right to express my own opinion, but the right to vote for who I wish to be governed by.

Canadians did not have the opportunity to democratically decide whether or not they wished to be governed by the World Trade Organization. The WTO is a threat to the rights of all Canadians because it operates undemocratically and is made up of members who were not elected by Canadians.

The Canadian government should refuse to be controlled by the WTO as well as push to have the WTO's powers eliminated.

Although the WTO is made up of members who were not elected by Canadians, the World Trade Organization has the ability to challenge the democratic decisions of the Canadian government. The WTO has the power to force the Canadian government to remove or prevent the implementation of regulations that involve not only trade issues, but regulations that promote human rights, health and safety conditions, tax subsidies, environmental standards, copyright and patent laws, cultural protection and diversity laws, and governmental regulation of services. The World Trade Organization does this by threatening governments with sanctions that are too severe for even the wealthiest nation to ignore.

One example of the WTO influence on Canadian culture is illustrated in an incident regarding so-called split-run magazines. These magazines are American magazines reproduced in Canada with little to no editing costs. This enables the magazine to offer reduced prices for advertising. The WTO was responsible for the elimination of a tax placed by the Canadian government in order to deter split-run magazines. As a result, U.S. companies unfairly threaten Canadian competing businesses, jeopardizing Canadian jobs.

In a democratic country one organization should not be able to impose measures on Canadians who did not consent to be governed by it. Other countries have already been challenged with more severe actions. The United States of America was forced by the WTO to remove the Clean Air Act regulations or be faced with retaliatory trade sanctions in the order of $150 million a year.

It would be difficult to conceive a less democratic model of negotiating trade agreements. The tactics utilized by the WTO to bully governments have been and will be used to deregulate decisions made democratically by Canadians.

It is necessary for the Canadian government to inhibit the WTO because members within the organization do not operate democratically.

Although the World Trade Organization is made up of approximately 135 countries from whom a consensus is derived, most, if not all, of the WTO's key decisions are worked out in informal meetings. In many cases, only a few countries are invited to these meetings. These private discussions decide on issues before they are taken to the WTO meetings where they are approved. Most of the time the largest developed countries get the decisions they want. A few big countries are able to veto the issues or decisions they do not want, even if a vast majority of the countries agree to them. Such activities should not be condoned by the Canadian government, but should be publicly criticized and deemed unacceptable.

One of the WTO's practices is for major countries like the United States to prevent certain topics to be included in the agenda of formal meetings.

The vast majority of developing countries have very little say in the WTO system. Many lack the financial and human resources to adequately participate in the formal meetings, let alone many of the informal meetings to which they are not invited.

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Sometimes pressure may also be exerted on selected developing countries to get them to go along with decisions or positions they may have originally opposed. Especially vulnerable are the developing countries that are indebted and rely upon bilateral aid—the International Monetary Fund and World Bank loans. As a result, the decisions and agreements of the WTO tend to be biased against developing countries' interests.

During the Singapore ministerial conference, these techniques became apparent when many smaller developing countries were not in agreement with topics involving investment, competition and government procurement. The result was that these countries were excluded from small informal group discussions that, despite their disapproval, led to the acceptance of these topics. Where these meetings took place, when, who attended, as well as the positions taken by the various countries are not made known.

Canada's government should not allow itself to be subjected to the influence of an organization that is operated with such blatantly undemocratic procedures. The Canadian government should be responsible for representing Canadians by maintaining our democratic rights. The growing influence of the WTO is directly jeopardizing Canadians' future. The WTO is an organization that the Canadian government should not be a part of, as it practises undemocratic procedures and tactics. For the well-being of Canadians and in order to set an example for other countries, Canada should push to reduce the WTO's power as well as cease to be associated with it.

Thank you very much.

The Acting Chairman (Ms. Sarmite Bulte): Last but not least, Mr. Veerkamp.

Mr. Mark Veerkamp (Chairperson, National Office, Canadian Federation of Students): I'd like to thank the committee this afternoon for giving us the time and the opportunity to present. My name is Mark Veerkamp and I'm a fourth-year economics and sociology student at Simon Fraser. I'm here today to present on behalf of the Canadian Federation of Students, which is an alliance of more than 60 colleges and university student unions across Canada, with a combined membership of 400,000 students, including more than 100,000 here in B.C. So this mission today is on behalf of our members here in British Columbia.

First of all, I'd like to say that the Canadian Federation of Students is opposed to the investment and trade liberalization agenda that's being pursued at the World Trade Organization, based on concern not only for its potential to undermine public post-secondary education but also for its promise to damage the environment, health care, social services, cultural protection, and to exacerbate economic inequality. So we share some of the concerns that have been voiced by some of the presenters who have spoken today.

I think what's really at stake is the public nature of our post-secondary education system, so for the first few comments, I'm just going to confine myself to talking about education.

We have a system in Canada that has been increasingly encroached on by a private system through what has been primarily a public system. The public system has been very crucial in providing things like workforce and economic planning, and providing its citizens with the skills to be proper and skilled democratic participants. Also, in national development, the public education system has been crucial in providing support for these in a way that the private system can't, and possibly never will, given the for-profit nature of it. There is no democratic control over the private system and there is no curricula control in terms of Canadian content or the kinds of things that Canadians need to be participants in society.

What we'd like to do is voice some recommendations for the protection of public post-secondary education.

If Canada proceeds with the trade and investment liberalization through the World Trade Organization, it must do so without compromising in any way the democratic rights of the Canadian government to fund, plan, and act as the primary sole delivery agent for post-secondary education in Canada.

Canada must reject the definition of education as a commodity, and any argument against public funding and control of education, and it must carefully review any and all sections of any agreements to ensure that public post-secondary education is clearly protected.

The following principles must be protected in any agreements:

The right of government to fund post-secondary education: Government must have the right to fund all aspects of public post-secondary education, and it must retain the discretion over how and whether it funds directly or indirectly private education institutions. Private education institutions can be funded indirectly through grants, not only through our granting councils federally but also through provincial grants that we provide here in B.C. and in other provinces. So those institutions are funded indirectly through those mechanisms. Where these rights are exerted, governments must not be penalized or required to pay compensation to any private organization.

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Government must retain the right to provide student loans and determine regulations for the provision of student loans.

The right of government to deliver education and determine who is able to deliver education is also a key recommendation. Government must retain the right to charter, own and operate post-secondary institutions and to act as a monopoly in the delivery of education.

A third key recommendation is the right of government to control education delivery. Government must have the right to exclusively determine eligibility to deliver education and must not be subject to penalty for refusal to provide such eligibility to any private organization.

Government must retain the right to exclusively determine authority to issue credentials and must not be subject to penalty for refusal to provide such authority to any private organization.

Government and public institutions must retain the right to determine curriculum, program offerings and research priorities and must retain the right to refuse contributions from any private organization.

Canada must not proceed with any trade agreement or investment agreement that does not clearly and explicitly protect the above principles.

I'd also like to share some of the general concerns, aside from public education, that we have about trade and investment liberalization. Students are more than just students, but are active and concerned members of the community.

Like many of the other presenters, students are concerned about Canada's involvement in negotiating trade and investment agreements that limit government's ability to establish or improve things like labour rights; social rights, such as quality health care, public education, social assistance, retirement pensions, and other special services that meet particular social needs; environmental standards; and cultural development. In addition, students are concerned that liberalization of trade and investment will lead to the destabilization of our economy and the inability of Canada to support the development of Canadian-owned companies.

The Canadian Federation of Students particularly supports a Tobin tax, which should help to serve to regulate currency speculation. In the upcoming World Trade Organization negotiations, we believe strongly that Canada should pursue a tax on currency speculation and any and all other measures that can be introduced to stabilize the global investment climate. Given the recent economic crashes in Asia and the resulting slowdown of the B.C. economy, Canada must pursue a more stable investment climate to ensure that the vagaries of the market do not result in speculation runs that destabilize entire regional economies.

Given some of these concerns that we've outlined—and I hope the committee takes the time to read through the brief that we've provided for you—we'd like to recommend that Canada insist on these following points: a comprehensive assessment of the effects of trade and investment liberalization, including their social, economic, and environmental impacts; a stable investment climate, including implementation of a tax on currency speculation; Canada's right to create jobs for its citizens, improve environmental regulations, protect Canadian culture, protect and improve publicly funded social programs such as health care and social services, and protect and enhance the public post-secondary education system in Canada.

We're not just discussing the public nature of the post-secondary education system, but the public nature of a lot of the services the Canadian government provides, including health care. When we look at the provision of public goods, we can see particularly in the case of education that there is a market standard that the public system provides that cannot be provided through the private system. If we look at the private system here in Canada, we can see that students who are not able to repay their student loans...do so, when they're attending private institutions, at twice the rate of those attending public institutions. So public institutions are providing a standard and quality of education that can be democratically controlled, but it is also much higher than private institutions.

Specifically for education, anything that is pursued in these agreements must protect the higher-quality education and the democratic nature of the education system.

We would like to thank you and the Government of Canada and members of the committee for the opportunity to present today. We would welcome any questions.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much. Mr. Veerkamp, I can assure you that your brief will not only be read but will also be part of the entire record. Notwithstanding the fact that you've shortened your presentation, the entire brief will qualify as part of the record.

On behalf of my colleagues, I would like to thank each and every one of you for your very thoughtful presentations. We've heard your messages loud and clear. We look forward to ongoing dialogue with you. This is the beginning of our consultation. Please feel free to provide additional material to the clerk or to members of the committee if there are other issues that become relevant to your membership and to the students.

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Thank you very much for coming.

Mr. Ridley is the first vice-president of the Hospital Employees' Union. Thank you, Mr. Ridley, for joining us. I'm sorry, we're running a little bit late, so please proceed with your presentation.

Mr. David Ridley (First Vice-President, Hospital Employees' Union): Thank you.

First of all, my name is David Ridley and I'm the first vice-president of the Hospital Employees' Union, also a health care worker at the Royal Jubilee Hospital in Victoria. I'd just like to say that when an elderly activist such as me follows a group of activists as we've just heard and the message is the same, I find that particularly encouraging, because I know that when I'm no longer an activist their voice will carry on the message.

The World Trade Organization was supposed to create global wealth and prosperity and enhance the well-being of all people. It seems to us that the results are the opposite: concentrated wealth for a select few, increased poverty for most of the world's population, and unsustainable patterns of production and consumption. We expect the same devastating results if the free trade area of the Americas becomes a reality.

The Hospital Employees' Union represents 44,000 members and it joins the call for a moratorium on multinational trade deals. Before the FTAA is negotiated or the WTO is expanded, we must first assess the impact of liberalized trade on development, democracy, health, the environment, human rights, labour rights, and the rights of women and children. In this, Canada should take the lead. We had hoped that the public response to the MAI would have already given the government this clear message. The Canadian electorate will not tolerate fixed agendas, lack of democratic debates, or proposals that serve only narrow corporate interests.

Sergio Marchi says an MAI-type trade agreement is still the goal, and we know from a leaked document that the European Union is advocating the same for the World Trade Organization. They note that these issues will be controversial and the ideal result may not be in the final deal, but the main point is to get the investment rules fairly implanted in the WTO, and that further improvements of these rules and additional liberalization can be part of future agendas.

HEU, not surprisingly, is extremely concerned about the potential devastation of medicare through these agreements. Multinational corporations want more profits from a $73-billion-a-year public health care system. Expanded trade rights could hand this to them if they are not handled correctly. Hospitals faced with severe funding cuts have already turned to corporate partners, who demand that their interests are served rather than those of the patients or the public.

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One-third of our health care system, including some long-term care, home care, hospital laundries, food services, clinics, labs and many other health services, are already delivered through private for-profit enterprise. This existing mixture of private-public participation in our health care system makes it particularly vulnerable to further privatization.

In addition to breaking down medicare, business could block improvements in public health. For example, a national pharmacare program would probably be impossible. It certainly would have been under MAI. B.C.'s efforts to control tobacco sales and advertising would likely be prohibited. Broader expropriation compensation would compensate companies for lost profit potential and invite charges that medicare itself is an unfair government subsidy.

Performance requirements, as indicated in the MAI, would mean our government could not require the use of local labour or goods, or transfer technology to a local agency. This particularly has significant implications for health information systems and who owns and controls the software that contains patient information. Issues including confidentiality, selling of information for market development, ownership of these databases and software, all need to be considered.

The Canadian government seems unconcerned about this. With $155 million from Industry Canada, an Ottawa business consortium called CANARIE, which is the Canadian Network for Advancement of Research, Industry and Education, wants to develop a national health information highway with gateways to international markets. The government's role should be to protect the Canadian public, but here it seems to be attempting to remove trade barriers and subsidize research and development, to the detriment of public interest.

There are many unanswered questions about the World Trade Organization and the FTAA's impact on health care. A moratorium would enable a full examination of these questions and an opportunity to make educated decisions. The WTO working group on the agreement on government procurement is considering the right of foreign suppliers to have equal rights to bid on contracts for sub-central governments. What would this mean for a hospital or a health board? What about the impact of that on our communities? The only question our government is asking is through a market-access study about how Canadian exporters might benefit. But what about the benefits to the public?

We take no comfort from our experience to date. Under NAFTA, Canada paid the U.S. manufacturer, Ethyl Corporation, $19.3 million in compensation after our government banned their gasoline additive MMT. We even found a statement that MMT is safe, despite the ban being imposed to protect the health of Canadians.

Under the World Trade Organization, the European Union was ordered to lift its ban on beef containing artificial hormones, and the U.S. was forced to rescind provisions of its Clean Air Act. While our federal government declared Canada's health care safe under a reservation in NAFTA, even they were later persuaded that the reservations could not protect health care, and negotiated separate letters of agreement with both the U.S. and Mexico to explicitly exempt health care.

We say health care must be explicitly and unconditionally exempted from any trade agreement. Canada's medicare was not built on market principles, nor should it be. The two are simply not compatible.

Our responsibility is not just to Canadians, but to citizens of other countries that trade with us. We can't fight the negative effects of a global economy country by country. There is always a lower bidder; there is always some other country that will participate voluntarily, or through military oppression, in the exploitation of their own citizens. Meanwhile, the gap between the haves and the have-nots widens and whole economies are collapsing.

The richest 20% of the world's population gets 150 times more than the poorest 20%. Most people, 3.5 billion, share only 5.6% of the global income. Globalization has forced many countries into such deep debt that economic recovery is unimaginable. The policies of the IMF have resulted in many countries selling off public assets and the removal of currency safeguards. Their social programs and infrastructures have been completely undermined by the lowest common denominator policies.

These countries require some chance of financial stability. Labour, churches, community groups and other organizations have established the Jubilee 2000 campaign to cancel third world debt. It encourages the world's richest countries to make a once-off cancellation of the debt repayments, which in fact have been repaid many times over through heavy interest charges.

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Canadian corporations have invested heavily in countries where they get the best deals, like the mining operations in Nicaragua, Brazil, Chile, Indonesia and other countries, where workers are exploited terribly, human rights are abused, and environmental concerns are ignored.

Virtual slavery exists in many parts of the world, and child labour is on the increase. One common workplace for children is in mines. Today in Colombia six-year-olds carry water, pack coal, and lead mules through the mines. This is the new competition for Canada. Children are sold to pay their families' debts or they work to keep their families from starving, while their parents are denied work because employers prefer children. Children also work in factories, as domestic servants, on farms, in brothels, in armies, in construction and in sweat shops.

After an intense international campaign, Nike stopped working 12- and 13-year-olds in their factories. It costs Nike $3 to produce a pair of shoes; they pay Vietnamese workers $1.50 a day. If this is what we get from an international company that is responding to public outcry, imagine the conditions of those exploited by corporations not similarly exposed.

Globalized trade is also closely linked with militarization, both between countries and within them. Workers and their representatives, human rights advocates and others who resist or speak out against corporate abuses, are subject to intimidation, assault, torture and murder by the military of their own countries, or the private militia hired by foreign companies.

Canadian officials who testified before this panel on March 9 asserted that liberalized trade and privatization have benefited Latin America. The suggestion that privatization has been good because it gives government officials fewer opportunities to be corrupt completely ignores the blatant abuses of human rights and the environment by many corporations.

In conclusion, we believe we need to take a step back and have a full and transparent examination of the consequences of this model of economic globalization, both internally for Canada and externally for the poorer countries.

The upcoming millennium round of the World Trade Organization is an opportunity for Canada to seek a moratorium to allow this examination. We ask you to take this larger view and undertake this initiative on behalf of the Canada public.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Ridley.

Mr. Schmidt.

Mr. Werner Schmidt: Thank you, Madam Chair.

I want to thank you for appearing before the committee, Mr. Ridley. In terms of the private-public partnership that exists in a variety of areas in the health care system, you suggest this will ultimately destroy, or has the potential to destroy the health care system as we know it today.

You and I and everybody know there is a shortage of funds to do some of the things that need to be done. One of the ways these things have been done is through private-public partnerships of one kind or another, and they take very many different forms. Sometimes they are direct partnerships; in other cases something is done by contract, like contracting out for laundry services and things of that sort.

Could you be a little more explicit about exactly how this is a threat to the medicare system, as we understand it in Canada today?

Mr. David Ridley: Thank you for your question.

Certainly that issue is very much in the front at this time. Let me see if I can give you an example.

Let's say a hospital has dilapidated equipment and wishes to examine the whole issue of food production. Along comes a company that says “We can do a deal for you. We'll fund the complete refurbishing of your kitchens. We'll give you all the equipment you need and also provide the food. We'll give you rethermalization units. The food goes into your rethermalization units and the problems you have with raising capital will be gone.” What power does this give over that company? There has to be a five-year contract. At the end of that contract this company still owns the equipment, which gives the company incredible power over the particular hospital board that's in this deal. If the hospital board does not re-sign a deal, then that equipment is withdrawn and you have no new equipment.

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You can translate this to labs. If the company owns the equipment, then the company has a lot of power. Because a company is in the business of making a profit, then it also has that power. What you will find is the quality will drop. Certainly we've had that experience in British Columbia in terms of companies such as Versa Food coming in and reducing the food for patients. It may seem like a core service, separate from health, but it's not. Food is very important, and the quality of food is very important.

So in a small way that is a reduction of the quality of health care. And the more health care is reduced in quality, the greater the danger of further privatization and in fact of people going to alternatives to the public system.

I firmly believe that the Canada Health Act, which talks about publicly administered, publicly funded...that we stand behind that. I wonder if that doesn't necessarily address public-private partnerships. I think it's very important to follow the spirit of that, because the more private companies get hold of our health care system then the harder it is to maintain it as a socialized health care system.

Mr. Werner Schmidt: You raise a very significant issue, and it's highly controversial, I agree. The short question is, how should the health care system be financed?

Mr. David Ridley: There are many innovative ways in which the health care system can be financed. For example, and I guess this gets political, if you want to look at long-term-care homes in Victoria, we have a waiting list of 900 people. We built 75 long-term-care homes for the capital health region this year, and we need to build 75 next year. The problem is twofold. First, how do you finance the staff? The answer to that is you can in fact do it because a lot of people who should be in long-term care are currently in acute care. They block the acute-care system, which is much more expensive than the long-term care.

So where do you get the capital from? There are alternatives. There are union pension funds that perhaps could be used that way. If a company can come along and raise the capital and get a profit on that capital to build long-term-care homes, then it should be possible for provincial governments to raise that money at a lower rate. I said it gets political because this goes on to the provincial debt; it gets all involved in the budget. In actual fact, if you're borrowing money and you're paying for that building out of health care funds, which is possible, or our western companies wouldn't come in, why can't it be the government that provides the money? They can get the money at a low interest rate. There are better bucks to banks. Head those health care dollars to B.C. rather than farming them out to the multinationals.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

Madam Beaumier.

Ms. Colleen Beaumier: I just have a comment to make when you're talking about long-term care. In Ontario we have Dr. William Malloy, and I believe the provincial government is going to begin to do some of the work. In Canada we have the leading expert in geriatric care. He speaks in the United States. Japan has adopted his system; Germany has adopted his system. It's cheaper than what we're running here, and somehow or other we as Canadians should be giving him a little more attention and looking more seriously at what he's proposing. I don't know why I've said that, except that I do know we have the expertise here in this country.

Mr. David Ridley: Could I just ask for the doctor's name?

Ms. Colleen Beaumier: Yes, I'll give it to you afterwards.

Mr. David Ridley: Thank you. I would appreciate that.

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The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Ridley. On behalf of my colleagues, I would like to thank you for coming and making your presentation. I certainly have put some big stars beside some of your recommendations. We appreciate the importance of your specific recommendations, because that's what we hope to do with our report this spring—not just general recommendations, but specific recommendations to the minister and ultimately to our negotiators as we continue our consultative process.

As I said before, this is the beginning of our ongoing consultations. Please feel free to contact the committee with any additional issues you feel we should address. Thank you very much for coming.

Mr. David Ridley: Thank you, Madam Chair, and thank you, committee members.

The Acting Chairman (Ms. Sarmite Bulte): The meeting is adjourned until 6 p.m. sharp.

EVENING SITTING

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The Acting Chairman (Ms. Sarmite Bulte): Good evening, ladies and gentlemen. I'd like to bring this meeting of the Standing Committee on Foreign Affairs and International Trade to order and welcome all of our witnesses here with us this evening.

We have allocated an hour for you this evening to make your presentations. Ten minutes per presentation is the maximum, we would ask. If you would just like to read your recommendations, or even provide a summary of your presentation, we would encourage you to do so, because we find that questions and answers work best. If we have an opportunity to have some of my colleagues ask questions, we will do so. However, if you just wish to stick to your written submissions, please feel free to do so. I am in your hands. After ten minutes I will give you a one-minute signal so that we do have an opportunity to hear everybody, because I know everybody has worked hard to make their presentation.

I welcome you on behalf of the committee. Thank you very much for coming this evening and taking the time from your families to be with us here tonight.

We will start with Connie Fogal, president of the Canadian Action Party.

Mr. Bob Speller: Madam Chair, before you begin, could people also indicate if they have presented us with a paper? I have a few here that don't have names on them, and I'd like to kind of follow through.

Ms. Connie Fogal (President, Canadian Action Party): Yes. My name is Connie Fogal, and I am president of the Canadian Action Party. I apologize for not having a written brief for you. I will try to get something to you subsequently. You probably have transcribers, in any case.

What I am going to be doing primarily is following some of the presentation that Mr. Paul Hellyer, the leader of the Canadian Action Party, made to the legislative committee for the Province of British Columbia. Those ideas would be easy for me to put together, and not just try to remember what I say to you. I will try to get some of that to you, because it might be different from what you hear from a lot of other speakers.

My first concern is to express to you my frustration that there does not appear to exist written text of the free trade agreement of the Americas. It's very difficult to come to a body and talk to you about our concerns about the free trade agreement of the Americas when we don't have a text to deal with. It doesn't exist on the website. We have written and phoned and tried to get copies, and don't have them. If you have them, we'd sure like to have that.

Mr. Bob Speller: There isn't one.

Ms. Connie Fogal: That's the point. How can our trade minister, Mr. Marchi, be doing negotiating? We know he's been to various meetings, and we know they're talking about terms. He's told us that he wants to model the free trade agreement of the Americas on the NAFTA, as well as on a lot of the investment terms of the multilateral agreement on investment. So all we can do as we come before you is talk to you about our concerns with regard to that overall process of globalization or corporatization.

We're in the same box we were in under the multilateral agreement on investment. We're caught, because we can't really fight it through the courts, since we don't have a text. We don't get a text. Something might be settled before we have a text to deal with.

So I put to you my request as a citizen, and my request as the president of the Canadian Action Party, that it is absolutely fundamentally essential that citizens have an opportunity to read this text. It's sort of an absurd situation to be coming to you and talking about that when we don't know the terms.

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For instance, we presume, as a result of information Mr. Marchi has given from time to time publicly, that it is going to be modelled on the NAFTA and that it is going to incorporate a lot of the terms of the multilateral agreement on investment. We've heard him say he wants to fast-track those kinds of terms. So we have concerns.

What's the obligation time going to be on the free trade agreement of the Americas? Is there going to be national standing again for corporations? Are there going to be secret tribunals outside of the legal parameters of Canada once again? Are we talking again, which I'm sure we would be, about the loss of sovereignty, the kinds of capacities for us as a nation to make decisions in our interests?

You know the box you're in with regard to NAFTA and the challenges we've seen with some cases you've already had before you, like the Ethyl Corporation. We've got a water challenge right now emanating from the Province of British Columbia. It's ongoing. But in those tribunals none of us can know what they're talking about, where they're talking, what's likely going to be the case.

You as parliamentarians can make the laws under NAFTA, and under the MAI it would have been the same, and I presume the same under the free trade agreement of the Americas. But if you do, and it violates what we've agreed to in these agreements, we as taxpayers are going to have to pay. We're going to be punished. So you, in effect, as our representatives, are useless: you can't perform your duty even if you wanted to, because if you do, we are going to be punished as citizens because you're going to be violating those agreements.

There are some fundamental concerns. We are coming before you to say that this time around, under the free trade agreement of the Americas, there are some major questions that were raised under the multilateral agreement on investment. Many of you have heard these; you have had some hearings on that. Those concerns remain under the free trade agreement of the Americas. We absolutely have to have that information on the terms.

The issue of globalization and corporatization being a fait accompli is something that we as citizens of the various nations of the world and we as nations existing on the globe have no choice about: we have to accept; it's here, and we have to function within it. Well, the Canadian Action Party's view is that this is not true. That's the dream of an elite, one percent core of the world. That's what that one percent wants, but that's not what I want, that's not what the Canadian Action Party wants, and it's not what the majority of Canadians want. And it's not true that we have to live with it. It's true that we live differently, and we must live differently in the future, because if we don't we're into absolute chaos.

I'm going to now read some of the information Mr. Paul Hellyer presented to the provincial body on the issue of globalization, on the issue of the chaos it creates, and on the issue of money, basically.

It's my submission that the same terms apply on the free trade agreement of the Americas: that globalization is not inevitable and that it's not good. When it comes to financial services, it's definitely a bad thing. And if it's inevitable, then God help the world. Where do we think the chaos that has been happening throughout the world in the various economies that have been crashing has been coming form? It's been coming from the globalization of financial services. All these agreements you see are about financial service. It's all about investments.

You can't get an international watchdog. That's impossible. If you read the stuff coming out of the International Monetary Fund and the Federal Reserve and the World Bank, there wasn't one of them that anticipated the extent of the problems we were going to have and are experiencing. But if they had read their economic history they would have known what was going to happen, because under our system the debt was increasing twice as fast as the real economy, and if the debt load gets to the point where it can no longer be carried, it crashes. It did that in all the years after the Industrial Revolution, right up until the Great Depression, and then we changed the system.

Right now, after 25 years of the system we created in the world working, we changed it and we're back to a reincarnation of the pre-Depression system. What's happening? The world's biggest banks are not only creditors, they're speculators. They do things like looking at a currency, like the Thai baht, and say they think it's overvalued a little bit, so they'll bet on its falling. Then they sell the currency and make it fall. They have the power to make their predictions come true and to win their bet. The currency crashes, and the country's economy crashes with it. The IMF comes running to the rescue and brings in gobs of taxpayers' money to bail them out. But it's not the citizens of those communities and those countries that get the money; the money goes to the creditors. It's the international investors who gain the benefit.

• 1810

So this money speculation has destroyed countries and it has created as much damage to as many people, if you multiply it out, as happened during the Great Depression. And it's just starting. Then people like General Motors are able to go in and buy up the assets at bargain basement prices. For example, there was a group of America's biggest banks that went into Indonesia to decide what public enterprises should be nationalized, and then they decided who they were going to sell them to and what should be sold.

Professor Chossudovsky, an economist from the University of Ottawa, talks about General Electric in the United States buying out the only aircraft manufacturing plant in the Soviet Union, the one that supplies the whole Soviet empire. They bought it for $360,000, which is the price of about one engine. You see, they can decide how much they're going to pay and they can target industries.

Paul Hellyer's description of that situation is that it's evil. And our currency is not immune either. These guys can target any currency, and will target that currency, and in so doing will drive the prices down. He said we're looking at 1928 all over again. It's the same kind of thing that crashed the system before.

I know I'm tight on time here. There's a little bit more information in this presentation made by Mr. Hellyer, and we'll get that to you. He urges parliamentarians to do some homework. He's not the only one who's writing on the subject of what's happening financially internationally; there are a number of academics and good writers in the area.

But it's my plea to you as a citizen, and it's my request to you, coming to you as another registered party, to say, please, in the interest of all of us, you have to do your homework on what it is you're committing us to. You have to rely on your officials to help you, but they're not doing the job well enough. They're not giving you the information you need.

How many of you, for instance, if you were there when the NAFTA was signed, had read the agreement and knew what it said? We know that many of the American congressmen have said “If I had read that agreement, I would never have signed it.” You didn't really understand; your officials didn't tell you what it really meant. Now you know, because you can see the ticket we're having to pay.

I'll end on that point, and I'll try to get something in writing to you. I urge you, in the interest of all of us, to please take the time that we, as citizens, need to have you do this right.

The Acting Chairman (Ms. Sarmite Bulte): Thank you, Ms. Fogal.

On a point of information, one of the reasons this committee has been seized to conduct these consultations on the upcoming negotiations, both multilaterally and regionally, is to try to do it, for the first time in parliamentary history, before the negotiations commence.

Ms. Connie Fogal: Well, we know that the negotiations have commenced, of course, and the fact of the matter is that many citizens can't be here today because the system you've set up is kind of prohibitive. A lot of them are not used to writing. A lot of them were told they couldn't be here unless they presented written briefs. We didn't know where the specific locale was until a week ago. So you haven't really done your job well enough in terms of helping these citizens get to you.

The Acting Chairman (Ms. Sarmite Bulte): We appreciate your comments and we'll definitely take them under advisement.

Next on our list are Mr. Jordan and Mr. Peeling of the Defence of Canadian Liberty Committee.

Mr. Jim Jordan (Defence of Canadian Liberty Committee): Thank you, Madam Chair and members of the committee.

It is my pleasure to be here to talk about the Defence of Canadian Liberty Committee. Our theme will be international trade values, the Constitution and the law. I will be cutting down my time on my presentation so that you can hear our legal counsel, Mr. Peeling, who has some very important things to say with regard to the legal matters we are dealing with in court.

But I would like to start by saying that the Constitution of Canada does not belong either to Parliament or to the legislatures; it belongs to the country. And it is there that the citizens of the country will find the protection of the rights to which they are entitled. This is a decision of the Supreme Court of Canada, Nova Scotia (Attorney General) v. Canada (Attorney General), 1951.

I would also like to point out that trade issues are real in a way that, short of war itself, world politics in not. When American statesmen consider what is politically possible, they would do well to remember this fact: for the average citizen, the consequences of international trading decisions, even those by supranational institutions, are increasingly vivid and real. Most of the other changes in the world are merely things that happen on the nightly news.

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The Defence of Canadian Liberty Committee is a group of very concerned citizens who are deeply concerned about the broad scope of international trade and investment agreements and their potential to undermine Canada's Constitution, sovereignty, and individual rights and freedoms. The Defence of Canadian Liberty Committee is a registered non-profit society in the province of British Columbia and is a Vancouver-based organization.

The primary purpose of the committee is to contest by way of the courts the Canadian government's right to commit Canada to international trade and investment agreements that we believe infringe on our Constitution, sovereignty, rights and freedoms and rule of law. Our secondary purpose is to inform and educate the public of Canada about the consequences of government actions that commit us to these international trade and investment agreements.

To this end, the committee launched a lawsuit in the Federal Court of Canada on April 23, 1998, which is ongoing at the present time. Attached to my brief to you is the original application and motion to the court. The committee also has a website in which further information can be found about the committee and its legal challenge. The address of the committee website is www.canadianliberty.bc.ca.

The Defence of Canadian Liberty Committee receives its funding and other support from thousands of like-minded Canadians from all parts of Canada who feel their elected representatives are failing them and therefore they must turn to the courts for the protection of their rights, to which they are entitled.

I would like to speak about some quotes that you'll find in our brief made by Sylvia Ostry, who was Canada's ambassador to the GATT. In those three quotes, you will find that she is outlining the state in which she sees the World Trade Organization negotiations—the fact that they're groping to try to find a new international order, but it's shrouded in a fog of uncertainty. They have this grand vision, but it requires visionary political leadership, which we feel there is not.

I'd like to jump to the values of the Constitution and rule of law. The most important thing we are fighting this court case on is the usurping of Canadian values. In a letter addressed to the chairperson of the Defence of Canadian Liberty Committee on August 27, 1998, the Honourable Sergio Marchi stated: “It should be clearly understood that the government will not sign any agreement (MAI) unless it advances and protects our national interests and values.”

In another statement given to the OECD ministerial meeting in Paris, France, on April 27, 1998, Mr. Marchi said: “The only satisfactory MAI for Canada is one that will serve Canada's interests and support Canadian values.”

We feel it's commendable that Mr. Marchi places such importance upon Canadian values and interests, and will not sign until they are protected and advanced. However, he has not defined what Canadian values are. As Parliament and the government have yet to define Canadian values, the Defence of Canadian Liberty Committee believes it's appropriate to recommend to this committee that the basis for any future international or national negotiations regarding the definition of shared values be that contained in the Supreme Court decision regarding the reference to the court on Quebec secession from Canada on August 20, 1998.

• 1820

The definition of the values is what the Defence of Canadian Liberties Committees is all about. In its unanimous decision, the court states that the shared values are:

In the 131 years since Confederation, the people of the provinces and territories have created close ties of interdependence (economically, socially, politically and culturally) based on shared values that include federalism, democracy, constitutionalism and the rule of law, and respect for minorities.

In closing my portion, the Defence of Canadian Liberty Committee believes that the shared values of Canadians defined by the Supreme Court of Canada best exemplify those values the committee is trying to protect, and other Canadians along with us, through its court challenge. These are the values of sovereignty, democracy, respect for the Constitution and the rule of law. It is our hope that our government and Parliament will respect and protect these values, as stated by Mr. Marchi, when negotiating international global trade agreements.

I would now like to turn the floor over to Mr. Peeling.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Jordan, for your very concrete recommendations.

Mr. Peeling.

Mr. Albert Peeling (Defence of Canadian Liberty Committee): Thank you.

I do have a paper here that is attached to the one Mr. Jordan has.

The Acting Chairman (Ms. Sarmite Bulte): Yes, it is. Could you perhaps highlight the highlights of that paper, Mr. Peeling, so that we can get through this within the next four minutes.

Mr. Albert Peeling: Yes. I will try to be as brief as possible.

There are basically four concerns I have outlined in this paper that arise from a legal analysis of the NAFTA agreement, which I understand is the model for the negotiations we're talking about tonight. Those concerns centre on federalism, on equality before the law, on the enforcement of those agreements and the surrender of Canadian sovereignty.

First of all, with respect to federalism, it's fundamental that while the federal government has jurisdiction over trade and commerce, that jurisdiction does not extend to interprovincial trade and commerce. So any free trade agreement that purports to give foreign investors and foreign traders immunity from local provincial laws is moving beyond the scope of federal jurisdiction. And I believe that in the free trade agreement, the NAFTA, there is just that problem.

The second concern is equality before the law. That has two aspects to it: to the extent that these agreements purport to give exemptions by way of defining expropriation broadly so that foreign investors can complain when governments take action that adversely affect their investments, the executive is not acting within its competence; and to the extent that Parliament purports to give those exemptions to foreign investors, it arguably is acting in a way contrary to the principle of equality before the law, which is enshrined in the Canadian Charter of Rights and Freedoms. So any such exceptions must be justified. It is unlikely that the wholesale type of exemptions envisaged in these free trade agreements could ever be justified. That flows from the principles enunciated by the Supreme Court, where there has to be a rational, proportional test. It has to be a carefully designed infringement of the principle of equality.

The procedural concern with equality comes from the setting up of international tribunals to decide disputes arising out of these agreements. Foreign investors, for the first time in these agreements, are given rights to complain before international tribunals when they feel their treaty rights have been infringed. Treaties have never been enforceable by individuals. They are agreements between states, so this is an extension of international law into what was formerly an exclusively domestic law.

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It would be open in international law for a country to complain when another country injures its investors, but that's not what is done here. Those tribunals give foreign investors rights that we as citizens of this country don't have. They give them rights in an international tribunal, and that in itself violates, in my submission, the provisions of the Constitution, specifically sections 96 and 101 of the Constitution, which assign to the federal government the power to appoint superior court judges. In my submission, the treatment of investors, be they foreign or citizens of this country, is a matter for our domestic law, and to the extent that this jurisdiction is given over to an international tribunal, it violates the provisions of the Constitution.

The ultimate effect of these agreements is to inhibit the ability of the Canadian government to govern Canada. We have seen this in the dispute between the Ethyl Corporation in Canada, where the Parliament had enacted law that prohibited the interprovincial transportation of a substance harmful to human health and to the environment, and when Ethyl Corporation sued before the NAFTA tribunal, the law was repealed.

This chilling effect on the ability of the Canadian government to act in the public interest and the interest of its citizens is something that is truly remarkable and frightening. It is something that amounts to a surrender of Canadian sovereignty to foreign corporations particularly, and is something, again, that the Constitution of our country doesn't permit.

I must say that it's been said to me that it's only a treaty and it needs to be ratified in domestic law before the courts here will recognize it. But the most important thing about these treaties is that they have their own enforcement provisions.

A treaty that Canada signs in international law can bind Canada, whether or not it is recognized as a treaty by our domestic courts, at the tribunal that is deciding the dispute. So if a tribunal set up under one of these agreements decides that Canada is bound by the agreement, it doesn't matter whether our domestic law says Canada is bound, because the dispute is to be determined at the international level.

That represents a fundamental shift in sovereignty away from the nation-state towards the sovereignty of corporations, and it is a step that I submit you as parliamentarians, as our elected representatives, should be very wary of. I don't believe you were elected to allow that to happen.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much.

Next is Mr. Argue, from the Working Group on Poverty. Welcome.

Mr. John Argue (Working Group on Poverty; Amnesty International): Thank you very much.

My name is John Argue. I'm with a group called the Working Group on Poverty. And to tell you in less than a minute what we're about, we're a number of organizations, both community agencies and government offices, that are concerned to cooperate in the lower mainland and throughout B.C. to try to eradicate, if possible, or least reduce, the poverty, in particular, of immigrants and refugees.

• 1830

There are other anti-poverty organizations in the province. However, they are concerned with general concerns with poverty, which we identify with and support, but we formed because different community agencies, and some government offices too, were really concerned that immigrants and refugees were falling through the cracks. So that's why we formed.

We're here tonight because we're concerned as well with international agreements and their possible effect, thinking that poverty is influenced by international, national and local factors. In respect of international trade liberalization and the potential effects of trade agreements on Canadian programs and policies, the member groups of this network, this coalition of the working group on poverty, are really fearful of the potential effects. We just don't know.

I have a rather simple brief to make, really. We want to state that fear.

I should say, first of all, that we're really pleased this committee is travelling around the country. I appreciate the statement the chair made a little earlier, that this is the first time in parliamentary history. We approve that, and we are very pleased to be able to state our concern about these issues.

Also, however, we would express our hope that the committee doesn't just make a report to the government and the government proceed to agree to some international agreement. I hope that the committee's having hearings throughout the country is an indication that there will be a continuing conversation and consultation with people throughout the country, and hopefully we'll know before Canada agrees to a particular international agreement that would affect the programs or the laws that are concerned.

The Acting Chairman (Ms. Sarmite Bulte): On a point of information, one the things I stated this morning, but I didn't restate it every time we met, is that we have actually posted on the website a number of questions and discussions for the public. As well, when we bring in the report before the House recesses in the summer, we hope there will be a citizens' guide on the WTO attached to the report. There will still be ample time then to make additional submissions.

I didn't mean to interrupt, but I had that point of information.

Mr. John Argue: No, I appreciate that. I think I can reflect the members' approval of that and pleasure at hearing it, too. We'll look at the website in more detail and submit our concerns there too. Thank you.

I want to note that the B.C. part of the Council of Canadians is a member of our network, and we wish to give them credit, because I think the Council of Canadians has been particularly active in bringing forward concerns of ordinary people and different organizations throughout the country. Certainly they've advocated their concerns within our network, and we as a whole network would echo their concerns.

I'm not a lawyer, so I'm not going to get into analysis of things that I don't really understand. I give a couple of examples in the brief of concerns that different groups in our network have. I shouldn't even say brief; it's just a couple of pages. There are a number of organizations concerned with housing, or with health care, or with social services directly affecting immigrants and refugees.

I think, in sum, the concern of the respective groups, depending on their particular topic of expertise, is that any one of those enterprises, or any one of those areas of work, might be under threat by some private enterprise that would be concerned that most of them would have some kind of government funding and therefore threaten their profits and therefore engage in unfair competition; and I understand that would give them the right to bring them to court. That really scares a lot of the individual groups comprising the network of the Working Group on Poverty.

In sum, we urge the government to publicize its discussions; and you've already answered that. I'm glad it's on the website.

The second point is that we just want to emphasize our concern that the social safety net, comprising all those programs and various organizations' work and the various pieces of legislation in the federal government, be protected. Somebody earlier was saying that the international treaties potentially threaten the very values of Canadians, and I think that fairly reflects the concern of members of the working group. We don't want to see our social safety net eroded. We're really concerned that it be protected.

• 1835

The Acting Chairman (Ms. Sarmite Bulte): Thank you very, very much.

Ms. Wanczura, please.

Mr. John Argue: May I interrupt for one second? I'm here for two groups. I'm here for Amnesty International as well, in case you missed it.

The Acting Chairman (Ms. Sarmite Bulte): Are you continuing?

Mr. John Argue: It's a different presentation, that's all. But yes, I'd like to make it at some point.

The Acting Chairman (Ms. Sarmite Bulte): Yes, I'll come back to you, then. Thank you, Mr. Argue, for the point of order.

Ms. Angela Wanczura (Spokesperson, Education & Training Employees Association, and Local 99 of the College Institute Educators' Association of British Columbia): I have a couple of extra copies of my notes, if anyone else is interested in a copy.

I'm a teacher of ESL and vice-president of our teachers' union, the Education & Training Employees Association. It's a member of the College Institute Educators' Association, but we're the only private ESL school in there. Anyway, to tell you where I'm coming from, our school is a private company. All our students are fee payers and we have to give up the goods so....

What I'm going to say might sound environmentalist or anti-business, but it's absolutely not. My brother and sister, etc., have businesses.

Last month our union signed the call for a moratorium on further WTO trade agreements and a review of existing agreements. This was put out by Friends of the Earth, I think, but it doesn't matter who put it out. Social groups, unions, and environmental groups are all concerned because this does affect everybody.

Our reason for supporting this is a broad one. These agreements affect everyone, including workers, unionized or not, and unemployed citizens, whether they are actively and demonstrably contributing to society at this time or not. These rarefied things are affecting us from day to day. An example people always bring up, once they learn about it, is the NAFTA MMT thing. Well, gee, we're breathing that in every day. There are many, many things like that—social services and so on. Those are the general ones.

But there are two specific reasons. First, it seems the process by which these agreements have been made is undemocratic. It seems this has been pushed on us. As we know, NAFTA was the first one. And I don't care whether this is modelled after that or not, it means that's the precedent—there it is, we're stuck with it for now. That was pushed on us, and this puts business above government in terms of how the decisions are made, how decisions are reviewed or not, and how things can be appealed. The information is coming out, and although the MAI was the underreported story of the year last year, thanks to the work of so many good people and alternative media, it is coming out and people are starting to understand the effects.

If you look at my nice little diagram on the left side, it seems that this is what's going on. We have put money at the centre of power and relationships in our society. It's not because they invented money, but because right now we're giving them the power over it. And it's not our local communities and businesses; it's the big transnationals.

So people don't want these kinds of large agreements that take power away from the government and affect people in so many ways. In this diagram we have this idea of externalities, and whenever I explain this to anyone, my union members or anyone else, they get very angry that social and environmental factors are externalities, or they're externalized. Well, I'm sorry, but they aren't. They interpenetrate our lives. That is what life is. And you can't have a system that views life this way running things. That's what we have. We have this money at the middle controlled by the people.... This is a game board—we're controlled by the business that has been given the power to create the money, i.e. banks, and the power to change the rules of the game while you're playing.

In this system, people and the government are marginalized. They're pushed to the side. They're given less power and they're separated. More people don't care and don't want to be involved in the government; they don't vote. Well, gee, there's a good reason they lose faith, according to how this is working.

Of course, in our circle on the left, we have nature and biodiversity, all the things that make up life—energy, earth, air, water. This is brought into the system, into the game, and shoved outside the other side of the game as waste, toxics, pollution, trash, and monoculture. It's viewed as infinite, and then it comes out being valueless. We haven't created value; we've destroyed it in this system.

• 1840

I made this picture so people would understand the situation and how things seem to be working, how the average person doesn't understand the WTO, the MAI—and I'm talking about people who are educated, supposedly teachers; they have degrees; they are able to read the paper, and so on. They don't understand the WTO, the MAI, the GDP, let alone the BCNI, the NAIRU, the SAP, the GNP, the MNC, and the TNC. There are a bunch more, but my point here is I've spent a lot of time learning all those things, and I'm proud of it, and I can explain it to them. It's not because those people can't understand it; it's because it has not been reported properly in our newspapers. As we know, our newspapers are owned by the richest people in Canada. So that tells you something.

On the right-hand side is a vision, which is kind of my summary of the work of thousands of experts, scientists and researchers and business people, all over the world. A sustainable society—there is a place for business there. That object—it's not a very good drawing, but it's a brain. There's creativity there and productivity and competition, and that should be used not to jiggle money around and push people aside, but to create green jobs. People have a place. They have a way to contribute, both in democratic participation and in doing work, contributing to society in many different ways. The government has its role.

I think everyone here knows the expression “tax shift”, so I don't need to explain that in too much detail.

It seems as though everything works in this system and everyone gets something; in this system most people get nothing. I called it “exclusionomics”, although it's just neo-liberal economics, or whatever. It's the generic version of Reaganomics, I suppose. Anyway, it is, to be kind, unrealistic in the long run. I don't see how it would ever work, unless you want to keep killing a whole lot of people.

People are angry about the system working in this way, and they agree the system is working in this way. That's why I'm here today, and that's why we call for a moratorium on and a review of agreements. It's obvious the current system is not focused on well-being, which is what is at the centre of this.

That's all.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much.

Ms. Angela Wanczura: Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Because of the diagram, perhaps we can make copies to allow members of the public to enjoy it.

Ms. Angela Wanczura: If anybody wants a copy, they are welcome. I'll put it on my website.

The Acting Chairman (Ms. Sarmite Bulte): Great. Thank you very much.

Marc Bombois.

Mr. Marc Bombois (Individual Presentation): Hi. Thanks very much.

My name is Marc Bombois. I'm a resident of Squamish. I have in my possession a letter from our finance minister, Paul Martin, who I'm sure you all know and love. He wrote me in response to a letter I wrote to him about my concerns about our national and global financial systems. In his letter he assures me that the number one concern of the government is what is good for Canadians and the Canadian economy, and I've got his autograph here.

I can't believe him. I've been closely studying the financial system, NAFTA, the WTO, and the IMF, and the awareness I've arrived at is inescapable. All of these organizations and agreements are set up to benefit only the wealthy elite. All talk of doing what's best for Canadians or for the people of the world is just lip service. If it were true, he would never have signed the FTA and NAFTA. When the FTA was signed, the chief U.S. trade rep, Clayton Yeutter, said Canadians don't know what they have signed; in 20 years they will be sucked into the U.S. economy.

The Liberals were in opposition at the time, and they called the FTA the sale of Canada act, which is what it is; yet now they defend it, even after the incredible MMT scandal. How can they? They repealed the law and paid Ethyl Corp. $20 million. What a travesty. How come we're not pulling out of NAFTA? What happened to the number one concern of the government? NAFTA has given power over our nation to transnational corporations who don't give a damn about us or what we want. Are we to believe that things would be better under this WTO-FTAA? Of course not. These agreements, these organizations, are set up only to protect and increase the power and privilege of the wealthy elite.

Our wealthy senior politicians are in full collusion. On April 9 we witnessed the spectacle of our Prime Minister standing before the cameras with Ernesto Zedillo, President of Mexico, who heads one of the world's most corrupt governments. There they were extolling the virtues of NAFTA. Jean Chrétien said it had brought prosperity to Mexico. Well, what utter bunk. Mexico signed on January 1994. In December 1994 the peso collapsed. Almost overnight the U.S. and the IMF found $50 billion to bail out Mexico. No use. The collapse continued. In 1995 real GDP in Mexico fell 7%—a disaster. The peso lost half of its value, the annual inflation rate jumped to 52%, and more than a million people were laid off. The minimum real wage plummeted by 34%. Thousands lost their cars and homes. But no free trader calls this a depression.

• 1845

Meanwhile, how did the banks do? These IMF bailouts don't bail out ordinary people, as Connie Fogal pointed out earlier. They ensure that the wealthy continue to receive their interest payments. In a year when the poorest Mexicans lost their shirts and homes, Citibank, as just one example, managed to earn $81 million from its Mexican operations.

Here in Canada, after ten years of FTA and NAFTA, we are stuck with a feeble currency, huge debt, high joblessness, and, worst of all, hopelessness. The agenda of the wealthy elite has destroyed the hopes and dreams of hundreds of millions of people around the world, innocent people who place their trust in the powers that be and get screwed in return. Examples are legion. It's clear, and the results speak for themselves, that NAFTA, indeed globalization, is a conspiracy of wealthy elites to erode the sovereignty of nations and to fill their own pockets regardless of what happens to others. The results speak for themselves. Just look at the past actions and look at the results, and there it is for you.

There is no doubt in my mind that the WTO-FTAA is a part of this conspiracy. And I know “conspiracy” is a strong word, but the MAI really let the cat out of the bag, so we might as well call a spade a spade. Perhaps the greatest evil of this conspiracy is the international banking system. Sir Josiah Stamp, a director of the Bank of England from 1928 to 1941, said:

Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with a flick of the pen they will create enough money to buy it back again. However, take that power away from them and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of bankers, and pay the cost of your own slavery, let them continue to create money.

Henry Ford Sr. said:

If the people of the nation understood our banking and monetary system, I believe there would be a revolution before tomorrow morning.

And so do I. I've been a student of the financial system, national and global, for over five years now. I consider myself to be well informed, and I cannot remain quiet. I can assure you my conviction comes from looking at results, not just from listening to opinions. There's no doubt in my mind that if the people of Canada knew what I know about NAFTA, banking, the agenda of the wealthy elite, that revolution would be there in the street before tomorrow morning. And our politicians know it.

The bafflegab, the doublespeak, the misinformation, the mediocrity, and the incompetence we must endure is truly pathetic. For example, the other day I was checking out the website of the Department of Foreign Affairs and International Trade. On its page on the MAI, they state that negotiations on the MAI have ceased without any agreement being concluded. Well, fine. But then they say this brings clarity and closure to the issue. That's mendacious. The issue is not over by any means. The issue is being addressed at this hearing. The issue is that the wealthy elite seek to further consolidate their power and wealth through organizations and agreements like the WTO-FTAA. The issue is that compassion, caring, and consideration for others are absent from the agenda of the wealthy elite, from any WTO-FTAA negotiations.

As I mentioned earlier, the source of the immense power of the wealthy elite is the international banking system. The bankers have secured the privilege of creating money, which they do out of thin air. The national governments of the world must take over the creation and control of the money supply of their nations, and to do so for the good of all people, not just the powerful few.

So I, Marc Bombois, Canadian citizen and taxpayer in good standing, call upon Jean Chrétien, Paul Martin, Sergio Marchi, Lloyd Axworthy, and the Government of Canada to prove that the number one concern of the government is what is good for Canadians and the Canadian economy, by instituting monetary reform and taking over the creation and control of the money supply of Canada, by withdrawing immediately from NAFTA, by refusing to support or take part in the destructive actions of the IMF and to call for the winding up of this disgusting organization, and to set an example to the WTO and the world by demonstrating true compassionate leadership by bringing an end to the astounding injustices of the present system—this rule by the rich for the rich—and to stop paying lip service to democracy. Thank you.

[Editor's Note: Applause from the audience]

• 1850

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much for your very passionate intervention.

Next, Mr. Fenton and Ms. Bauer, you're sharing—

Ms. Sandra Bauer (Individual Presentation): No, I made it clear when we were asked originally to appear with Ms. Smallwood, the MLA from the provincial government, this morning that we were individual presenters and we were assured we would have 10 minutes each.

The Acting Chairman (Ms. Sarmite Bulte): All right. Thank you for that point of clarification. Ms. Bauer, please.

Mr. John Argue: May I interrupt? I have to excuse myself, I'm sorry. I have a written brief anyway.

The Acting Chairman (Ms. Sarmite Bulte): Mr. Argue, would you like to go now? I'm sorry, I didn't realize you had to leave. If you have to leave, I'd rather you present your comments.

Mr. John Argue: I appreciate your help.

Very simply, I'm representing Amnesty International. I'm on the board of directors of the Canadian English-speaking section of Amnesty. Amnesty, quite simply, is concerned that the topic of human rights is not discussed at international trade agreements. We really fear the result of that.

As you may know, Amnesty is an organization that's been around since 1961, and it is concerned with individual, political and civil human rights as its focus, as its clear mandate. What's going on now within the organization is it's evaluating how most effectively to ensure those rights throughout the world in the face of increasing power by the multinationals. The fact is that certain multinationals have more GNP than a certain number of states in the world, which raises the question about the effective way to protect human rights.

So the simple submission I have is that I really urge the Canadian government to, in turn, urge that any international agreement in which they participate, and also other organizations like the WTO or any other regional agreements that might result in the FTAA, consider human rights. Human rights are vitally important to the values not just of people all around the world, but also to most of the nations around the world that have just signed on to agreements, including the Universal Declaration of Human Rights and various other treaties and covenants that have elaborated the concern for human rights.

So we urge Canada and this government to include human rights in any discussion of treaties that have such significance for our lives. Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you, Mr. Argue. We're happy to accommodate everybody as best we can.

I apologize. Ms. Bauer, please.

Ms. Sandra Bauer: I'm a municipal councillor with the District of Squamish. As a fellow politician I also identify myself as a mother, a working nurse in long-term care, a citizen, and a member of civil society. It is in all these roles that I address you today.

Some of the things I have to say you've heard several times earlier today, but I think it's important that you hear the same concerns repeated.

According to one of your written notices, the objectives of this hearing are:

...to provide the Government with recommendations that will help shape Canadian policies and priority objectives during a crucial period coinciding with the extensive international process that is already underway preparatory to perspective World Trade Organization (WTO) negotiations.

Further, you state that this initiative:

...is indicative of Parliament's, and particularly the Committee's evolving role in providing a forum for democratic consultation with Canadians prior to negotiation of international agreements.

I ask that you consider these two statements very carefully. There must be more than lip service to the commitments of democratic consultation with the citizens of Canada. Until now we've sat by helplessly while our governments negotiated profoundly anti-democratic trade deals. We've long been on this path of so-called trade and investment liberalization with the various rounds of GATT, the Canada-U.S. trade agreement, NAFTA, APEC, and the failed attempt at the multilateral agreement on investment under the OECD, amongst others. The results have been stunningly disastrous.

• 1855

Countries around the world face financial crisis. Whole economies collapse. Foreign corporations now sue governments if legislation gets in the way of their profits, no matter how beneficial that legislation may be to individuals and communities.

A major characteristic of these various agreements and IMF-World Bank actions is their denial of democratic rights to non-corporate citizens and elected governments. Instead, these are subordinated to the rights of corporate investors.

In NAFTA, governments cannot take on new programs or functions. Any not presently asserted are to be left solely for the private sector. Transnational corporations have no responsibilities and none can be imposed on them. They lay off workers, abandon communities, damage the environment, and destroy local business at their discretion. They sue governments, and disagreements will be settled by unelected bodies, often in secret.

The WTO is one of the most non-transparent of international organizations. Most important decisions are made at small informal meetings, with only a few member countries involved. It's highly undemocratic.

Many have described the WTO rules as representing little more than an international bill of rights for transnational corporations. The WTO has already overturned domestic laws to protect clean air, endangered species, food safety, cultural diversity, public health and human rights.

The European Union was forced to lift its ban on beef containing artificial hormones. The ban, designed to protect human health, was deemed an illegal trade barrier. The U.S. was forced to withdraw provisions of its Clean Air Act when its gasoline cleanliness standards were deemed to violate trade rules. Canada has been prevented from protecting our magazine industry from U.S. split-run publications.

Citizens and governments are required to set aside all social and environmental goals in favour of greater trade and investment liberalization. While this benefits TNCs, it is counter to the public interest.

Specifically, on impacts on local governments and communities, NAFTA covers more than 80% of Canada's trade and it already restrains governments from supporting and enhancing our economies for the betterment of our communities. And although I referred earlier to the failed multilateral agreement on investment, we all acknowledge that the MAI is not dead.

Our government continues to pursue the same kinds of provisions in other international negotiations. Examples of the kinds of restrictions include: the ability to give preferential treatment to local suppliers, businesses, contractors; the ability to protect jobs in our forests through legislation such as the Forest Practices Code and the timber accord; the ability to protect and enhance the cooperative and non-profit sectors to protect our natural resources, our cultural industries; the ability to pass fair labour laws and environmental protection legislation; and the ability to control land use through official community plans and zoning by-laws.

Earlier this year the District of Squamish granted tax concessions to a major forest company in an effort to keep the local sawmill with its 185 employees open. Under proposed investment rules this subsidy would have to be made equally available to other foreign companies.

Squamish recently completed its revised official community plan. The community recognized that our waterfront has tremendous economic and environmental potential. A current planning process will likely determine that zoning changes are needed in order to achieve community benefit and planning objectives. However, the present corporate landowner would deem such rezoning a form of expropriation and demand compensation.

Britannia Beach is an unincorporated former mining town just outside of Squamish, part of the Squamish—Lillooet regional district. The community has been seeking a solution to the continuing contamination of Howe Sound caused by acid rock drainage. A current proposal calls for cleaning up discharged water and reclaiming mining contaminated lands by building and operating an acid rock drainage plant. Key to the proposal is a commercial landfill operation for the storage of metal-bearing soils, which will generate enough revenue to pay for the construction and operation of the ARD treatment facility.

Purportedly, the commercial landfill will accept only metal-bearing soils and only from within B.C. The material acceptable will be strictly specified and regulated by provincial permit. What if this commercial venture ends up in the hands of a transnational corporation? Could that TNC apply to bring in more hazardous materials and, if denied, sue for lost potential profit? There are those in the legal field who believe so.

As a municipal councillor, I sit on the Squamish public library board. The board concurs with the conclusions of the B.C. Library Association with regards to MAI-type agreements. It is possible that public libraries would disappear altogether. Under national treatment provisions foreign corporations have the right to the same treatment as national companies. They must not be discriminated against and they must receive the same perks as nationals. Libraries, of course, receive subsidies from government, primarily municipal in our case, and subsidies would have to be available to any foreign company offering similar services. Local governments couldn't afford this, and eliminating funding from libraries would be the only realistic option.

• 1900

Our federal government seems hell-bent on giving corporations rights and privileges that exceed those of individuals and governments. If there has been a complete lack of concurrent responsibility, we now have the absurdity, already mentioned, of corporations suing democratically elected governments for implementing laws and regulations on behalf of their citizens.

You're as familiar with the list as I am: Sun Belt Water Inc. suing on the export of water; Ethyl Corp's successful suit over the ban on MMT; and S.D. Myers' threatened suit against the Canadian government over the ban of transporter trade in toxic materials.

In the United States, wherein the European Union used the World Trade Organization system to overturn Massachusett's law restricting that state's business with Myanmar, the Tauro decision has led legal experts to predict that the ruling imperils numerous state and local laws, including such things as “buy local” programs, and even recycled content requirements.

So what should Canada do? The Government of Canada should cease talks that further trade and investment liberalization and first engage in a genuine dialogue with Canadians. International trade agreements must be made to serve all the people of the world, not just multinational corporations and not just the select elite. For this to happen, all affected parties, including all levels of government in civil society, must be at the table in a meaningful way.

At the forthcoming millennium round of the WTO, Canada should push for a serious assessment of the economic, social and environmental impacts of economic globalization. Further, Canada should address the continuing lack of democracy and transparency that has placed more and more power in the hands of TNCs at the expense of civil society.

Any proposal for changes to the WTO rules or new commitments on countries must be presented in draft form to the public at least six months before any decisions are made. Each country's civil society must have a full opportunity to study the proposals and the opportunity to influence their government's position. Controls must be devised to limit capital speculation, to make currencies more, not less, stable and to make corporations more, not less, accountable.

Trade and investment agreements cannot be negotiated in the closed environs of corporate lobbyists and trade officials. Citizens must have a genuine opportunity for input. Issues and policies on the table must be subjected to public debate and scrutiny. The view on civil society, including labour, business, the environment, food growers, health, and all other interests, should be actively sought and genuinely heard.

Surely we have learned something from the OECD's failure with the MAI. Do not think that you can go back behind closed doors and underground. We are aware now, and we will be vigilant. Thank you.

[Editor's Note: Applause from the audience]

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much for a very succinct presentation.

Mr. Fenton, you are last but not least.

Mr. Lyle Fenton (Individual Presentation): I thank you for the opportunity to present.

I'm a councillor with the District of Squamish. Our municipality is located at the end of an inlet on the west coast. Our community is very dependent on forestry as well as tourism and transportation, and we are presently diversifying our economy into the education sector.

I am here with the approval of my council, which took a strong stand against the manner in which the multilateral agreement on investment was being proposed and the process by which it was being drafted, as did many other B.C. municipalities.

At last year's annual convention of the Union of B.C. Municipalities, members passed a resolution urging Premier Clark to:

...intervene with the Federal Government immediately and demand that the federal negotiator file a permanent and explicit exemption in the MAI limiting its application to areas of federal jurisdiction; and to direct resources to the exploration of options that would safeguard the province, and thereby municipalities and regional districts which are the functions of provincial jurisdiction, against any erosion of provincial rights and powers resulting from the MAI as currently drafted;

After the French withdrawal from the MAI negotiations in October, the Union of B.C. Municipalities followed up with a letter on November 12, 1998, to the federal trade minister, Sergio Marchi, asking that Canada reconsider its participation in further talks on the MAI, either at the OECD or at the World Trade Organization. I'll quote from that letter, as follows:

Along with a large segment of the Canadian population, we agree with the view that private interests should not take precedence over the national interests of elected governments. It is unclear why your government would be willing to give up its right, and the rights of other sub-national governments, to enforce laws that reflect Canadian values and make this country one of the most sought-after places to live...

• 1905

I have attached a copy of this letter to my presentation, and I would encourage you to read it.

It is not easy for municipal councillors like me to keep up with all the new agreements the federal government seems to be constantly negotiating or to figure out what impacts they may have on our ability to democratically represent the interests of the people who voted for us. My concern is that we don't have yet enough information on the impacts of existing agreements, such as NAFTA, with its provision of investors being able to directly sue governments. B.C. is currently being sued under NAFTA because it banned water exports, and there seem to be more and more of these lawsuits being filed.

It is also hard to comment on how the free trade area of the Americas and the World Trade Organization agreements could affect us at the local level, because we have not been informed whether the same provisions for investor lawsuits are being put into these new agreements and whether municipalities are covered. If they are, local governments, under threat of litigation, will be restricted in their ability to set policy in the interests of the community and those who have elected them.

I understand that investment agreements are being pursued at both the free trade area of the Americas and the World Trade Organization negotiations. If these agreements provide national treatment to foreign investors and ban performance requirements, then people in Squamish will be negatively affected.

When we have local infrastructure projects go out to tender, often local contractors will come in just marginally above others. In many cases, while still protecting the interests of the local taxpayer, we would like to award these contracts to local contractors. Some of them donate their time and heavy equipment, which they have done in the past, to build sports facilities, ball fields, and that sort of thing. Some of them donate considerable sums of money to our food bank, and certainly most of them have a majority of workers who live in our community. So, again, our ability to maintain community stability and have a net gain to the community would be undermined by offering foreign investors equal or better treatment.

You may think that not too many people in B.C. really know about or care about such far-off things as the World Trade Organization or the FTAA negotiations. In my area, though, I can tell you that they do know and care about local development and making sure the community benefits from resource development.

Recently, 500 people, or thereabouts, including representatives of our local council and chamber of commerce, turned out to demand that the provincial Minister of Forests ensure that the province's appurtenance clause in the contract with Tree Farm Licence 38 is strictly enforced. This is a contractual agreement that guarantees that forest tenure in TFL 38 is on condition of maintaining the operation of a processing facility in our community. If it turns out that the federal government is off negotiating provisions in the World Trade Organization and the free trade area of the Americas agreements that will give foreign corporations the right to challenge and overturn these requirements or eliminate such conditions from being part of future forest tenure agreements, with no consideration of the potential negative impacts on businesses in places such as Squamish, then similar crowds would probably turn out in opposition to these agreements.

We cannot comment on the specific impacts on municipalities of the free trade area of the Americas agreement or the WTO because we do not have any draft text to work from. What we do have, though, are copies of briefing notes federal officials have prepared on WTO negotiations on the Agreement on Procurement. These briefing notes suggest that Canada is seeking the inclusion of all levels of government right down to the municipal level in this agreement, which bans any preference given to local businesses in government procurement. Yet aside from British Columbia, where a representative of the Union of British Columbia Municipalities was present at federal consultations at the request of the province, there has been no involvement of municipal governments in the discussion of these negotiations.

The problems experienced across Canada with the lack of consultation over the MAI seem to be repeated with the WTO. I would add that last fall, or further back, we wrote a letter to either Sergio Marchi or Mr. Dymond, the negotiator, stating that if negotiations were to continue with the MAI or like agreements, we wanted hearings in our region or area. Our council only found out about this a short time ago through a third party, the Council of Canadians. Our council didn't have time to go through and sort of fine-tune this brief. That's not really acceptable. I don't know why Ottawa didn't inform us.

• 1910

Anyway, I'll go on. When one reads the government's briefing documents on the Agreement on Procurement, it seems as if the federal government is trying to expand the World Trade Organization Agreement on Procurement to cover subcentral governments, because it is considering the issue almost exclusively from the perspective of potential benefits to Canadian exporters. The research that is going on with these negotiations will involve contacting 20 to 30 companies in each province that are potential exporters in order to determine their views. That's fine.

But apparently no one will be looking at the potential impacts on municipalities, even though it will put an additional burden of cost on local government administration by requiring staff to become educated on the World Trade Organization requirements so that they can apply them to the various ways and means we do business at the municipal level. During day-to-day operations, it will require staff time to constantly scrutinize activities to ensure they're in compliance with the Agreement on Procurement. It will require staff time and resources to inform the WTO of tenders to purchase goods and services. Senior levels of government should consider the fact that local government is not exempt from the cost of red tape created by these international trade and investment agreements.

Here are the proposed requirements that the expanded Agreement on Procurement would place on municipalities: publish notices of proposed procurement; publish procurement policies and procedures; by depositing copies, notify the WTO of procurement policies; publish notices of contract awards; include evaluation criteria in bid documents; and publish information on reasons for sole-source procurement.

As well, the government's briefing notes suggest that there could be provision in the expanded Agreement on Procurement for bid challenge and dispute resolution. You've already heard from people about these secret tribunals and how they operate. It just doesn't fit. Does this mean that the municipalities may become open to challenge from potential investors from any of the 134 World Trade Organization member countries if they approve contracts that appear to favour local contractors? Just the threat of such lawsuits could build in a bias for municipalities so that they choose foreign contractors over local ones just to be on the safe side. The legal department of the District of Squamish is focused on dealing with zoning problems, not the fine points of international trade and treaties.

It is unfair to municipal governments, which are already suffering from the impacts of cutbacks from senior levels of government, to be expected to undertake the burden of researching the impacts of these international agreements. These are federal initiatives, yet municipalities are expected to pick up the costs of finding out what they will mean for local government. In my view, the federal government has a responsibility not only to consult with municipalities but also to make sure these consultations are meaningful by giving municipal associations the resources to enable them to adequately research the advantages and disadvantages of these agreements.

So I put it to you, will time and resources be provided if you insist on proceeding along these lines? Will municipalities be given copies of the draft text of international agreements and allowed adequate time to review them before the federal government takes action on them?

I'll leave it at that. I had more, but I had to keep it to 10 minutes. I hope I haven't gone over.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mr. Fenton. I would like to applaud you specifically for bringing the area of procurement to our attention and raising those issues and concerns. I think it's very important. I think it's something the committee will consider, and the detail you brought to the table was truly appreciated. Thank you very much.

Mr. Lyle Fenton: If I could make a further comment, I had other more specific, close-to-home examples of where we'd be affected, but of course there's not enough time to mention them. However, I do think people look at these agreements as being national and international, way up over there, and they forget that it's the people on the ground who pay.

• 1915

Our official community plan calls for sustainable development. I could give you numerous examples.

The Acting Chairman (Ms. Sarmite Bulte): Actually, Ms. Bauer had a very good example. I appreciate those examples. But because we're limited in time in the presentation side, we do encourage each witness and each organization or group you represent, please, if there are issues that you feel need to be more specifically addressed, if you have more of those specific examples, local examples, please, don't hesitate to file them with the committee, with the members of the committee. Even though there's not time that permits us to ask you questions, I hope we will be available, as committee members, to also come to you with issues you have raised here. The process is one of ongoing consultation, and not just the ending consultation.

One of the things we've heard over and over again is it's a local issue. I think you should be aware that Minister Marchi did ask both the international trade subcommittee and the main committee on foreign affairs and international trade to seek public consultation on this. He actually stated in his speech that what happens at the negotiating table affects what we eat at the kitchen table and invades every part of our daily lives, and that it's no longer something that can be left to the back rooms.

So we have heard you, I think the minister has heard you, and that's why you're here. The process may not be perfect. We're still learning.

Mr. Fenton, I will take your comments with respect to notice back to the committee and try to make it better.

Mr. Roderick Louis (Individual Presentation): Do members of the public get a chance to present?

The Acting Chairman (Ms. Sarmite Bulte): Unfortunately, no. I have a list of 12 more. You certainly are free to make submissions through the clerk, and our clerk will take your name so that you can bring a presentation to the committee.

Mr. Roderick Louis: My name is Roderick Louis. My address is—

The Acting Chairman (Ms. Sarmite Bulte): Mr. Louis, I'm sorry, I don't mean to stop you, but I have a list of witnesses who have submitted briefs. We can't derogate from that this evening. We are hearing people tomorrow, so maybe if the clerk can see you perhaps she can fit you in tomorrow.

Mr. Roderick Louis: I apologize for interjecting without being on the list. My concern was that I and many people I know would like to have a chance to speak to this committee panel, and all I'm hearing is that there was very poor advertising to the public about this function this evening and in the last couple of days. I feel the whole process should be repeated, in fairness to Canadian citizens, so that everyone who might wish to speak to this could. I would like to. I'm an advocate for the mentally ill.

The Acting Chairman (Ms. Sarmite Bulte): Again, I take your comments. I would ask that you see the clerk. We'll make your comments part of the record.

With all due respect, I have 12 other people who have to be heard. I will try to accommodate you. I will send the clerk to speak to you, but I need to bring out our other 12 witnesses. The committee has been working since nine this morning, and if there is a need for further hearings we'll bring it back to the minister. But right now I have basic guidelines that I must follow.

Mr. Fenton, your closing comment, and then we meet our next lot of witnesses.

Mr. Lyle Fenton: Thank you, Madam Chair.

I appreciate the fact that you've been asking us to bring forward more concerns at the local level, but I think the fundamental question first should be what should go to the negotiating table. Once it's on the table, it's up to be lost or gained. So the process first should determine what's on the table. Once we take it there, we lose it. If we take health care there, we're bound to go backwards. So I really feel in a dilemma with the way this is going and the participation. I feel compelled to be here, but that's the first fundamental question: what is on the table?

Thanks.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much.

On behalf of all members of the committee, thank you for your comments and for your presentations. And please feel free to submit additional material to the committee, as you feel required.

I'd like to call our last set of presenters this evening. Please take a seat at the table.

• 1920

• 1922

The Acting Chairman (Ms. Sarmite Bulte): Good evening, ladies and gentlemen, and welcome to the Standing Committee on Foreign Affairs and International Trade.

As you know, we are conducting public consultations as to what Canada's position should be as we enter negotiations on a free trade of the Americas area and the World Trade Organization.

Thank you for coming this evening to join us. I apologize that we're running twenty minutes late. I apologize for your wait.

Again, we would encourage you to make ten-minute statements and to watch the clock so that there is a possibility that we are able to enter into some questions and answers. We would be delighted to do so.

Ms. Dean, you are first on my list. I welcome you to address the committee.

Ms. Elsie Dean (Individual Presentation): Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you.

Ms. Elsie Dean: Thank you for this opportunity to express my views on the proposed international trade and investment negotiations in the World Trade Organization and the free trade of the Americas.

Although the outcome of these negotiations will affect each one of us in our daily lives, we have had little opportunity to understand their content. We have not been informed by your government or the media on the nuts and bolts of these agreements.

In the list of the 1999 ten most censored stories, the story of the MAI has been chosen as the top project censored. The reason they chose that one is that the criteria were that “Some developments in the course of history have such potential to impact nations and humans that it would be irresponsible to ignore them.” The judges looked at the threat to the nation-state sovereignty by giving corporations nearly equal rights to nations and the potential to place profits ahead of human rights and social justice.

I have managed to read most of the hearings of September and October that were held by the B.C. legislature, and I know that the European Union, Japan, the United States, and Canada have all agreed to negotiations on an MAI-like agreement in the World Trade Organization. Many of these rules are being placed in the World Bank and the International Monetary Fund, the free trade of the Americas, APEC, etc.

I would like to say that it has become apparent that the present trend to empowering global institutions like the World Trade Organization, the IMF, the World Bank, and writing the rules for national economies into trade and investment agreements is affecting the lives of senior citizens in Canada and the world. It is on this question of their effect on senior citizens that I want to speak to you today, and in particular on social services, health, pensions, and housing; the dismantling of the course charted by present-day seniors for a more peaceful and just relationship between peoples of the world; and providing healthy, vibrant, and safe communities in which to live.

• 1925

Thirty years after Canadians built the publicly funded universal health care system, under the terms of these agreements, this cherished social program is in danger of being privatized. Seniors across this country have expressed their strong support for medicare and are determined that the Health Act and the five principles of medicare must be preserved. Liberalizing the rules of trade and investment agreements so that private investors can claim the right to operate our health care as a for-profit system will be strongly opposed.

The NAFTA inspired Bill C-91, an act to amend the Patent Act, covering the pharmaceutical industry, which has now been amended by your government to a 24-month delay indefinitely. It is estimated that that has cost many billions of dollars in extra health care costs. These are health care dollars that would have improved our access to health care. The five principles of medicare are at risk under NAFTA, but with the proposed investment treaty in the World Trade Organization, they could be challenged by would-be investors from around the world. Thirty percent of our health care is administered by private for-profit and not-for-profit organizations, generally locally, and some of them non-profit organizations. These sectors would have to be open to investors from all of the members of the World Trade Organization.

Seniors want to see a national program for home care with the same five principles that apply to medicare. If government implemented such a new publicly funded program, it would likely be challenged by private investors, backed up by NAFTA rules, allowing them to demand equal treatment with governments to administer it as a private for-profit publicly funded program or they may then sue for lost opportunity if they don't get it. Canada should use the six-month clause to get out of NAFTA or at least start by eliminating chapter 11, which allows this undemocratic, dictatorial situation to exist, and refrain from entering into any similar agreements in the future.

We have made a start at looking after people when they retire by providing pensions to everyone. We still have a long way to go before all retirees have adequate pensions. There are still over 50% of women who are economically poor.

Private investors are anxious to manage retirement funds. Terms, such as those contained in the MAI, open the doors to this type of privatization. The money seniors and others have paid into pensions, CPP, old age security, and RRSPs would have to be shared with for-profit investors and highly paid administrators. We should have a greater say in how our pension moneys are used. The vast majority of older persons have worked hard to develop our country so that all can have a good life. We see that deteriorating as unemployment rises and poverty increases. Perhaps we would choose to see our savings invested in Canada to help solve these problems.

Some say the next generation of seniors will be able to pay a greater share for services, but there's no evidence of this in today's economy. A study of older workers, 45-plus, done by the national organization, One Voice, found a high rate of long-term unemployment. This trend has not stopped as downsizing and job losses continue. Many have used up the RRSPs they had and are now in part-time non-traditional jobs with low pay and no benefits.

Another area of concern to seniors is the need for suitable affordable housing. Under MAI-like rules, this would have to be provided by private for-profit capital under market conditions and rented or sold on the market. This would not provide housing for low-income retired people or for poor people in general.

• 1930

There are many pensioners today who are sharing their homes and incomes with members of their families who are caught in the unemployment/low-income gap. This is the legacy we are experiencing as a result of the FTA and NAFTA. Entering into other agreements based on these conditions, such as the proposal in the free trade of the Americas, will accelerate the trend to high unemployment and the gap between the rich and the rest of us.

The obligations imposed on government would result in a greater loss of freedom to define and implement economic and social policies to correct this situation. Corporations have such power that they can demand governments to cut taxes, which has resulted in impoverishing government. Leaving everything to market trends and deregulation has proven to be wrong, as more and more people are experiencing falling incomes, poverty, and increased stress.

Profits are created by the activities of people in the process of producing goods and services for the satisfaction of their needs. This process must be controlled by responsible government in response to the needs of people and a sustainable environment. The creation of profit cannot be regarded as an aim in itself, yet the ultimate purpose of international agreements, such as trade and investment, is to increase the power and profits of large corporations, which number fewer than 300.

Dreams of multilateral international solutions to nation-state needs do not work for the people. We need governments that have the power and responsibility to govern in the best interests of the majority and the right of people to participate in that decision-making.

Some of us are old enough to remember the Depression of the 1930s. Then came the Second World War. Within days, the government managed to find the means to start the wheels of industry turning and to employ the unemployed, organize the military, and carry on a war against fascism. Again today, we are seeing governments finding money to participate in an undeclared war in violation of international law. The strength that government possesses is clear. Fascism has also made it clear to what depth of horror and deprivation governments can lead its people.

People everywhere knew we must and were capable of creating a world committed to a set of human rights as a common standard of achievement for all people and nations, as set out in the 1948 Declaration of Human Rights. Throughout the second half of this century, many treaties and conventions have been negotiated and signed by governments, setting out responsibilities of the international community, governments, and individuals to protect the rights of all peoples, the environment, children, and women, to eliminate all forms of discrimination, to protect sovereignty over natural resources, and many others.

The gap between the existence of rights and their effective enjoyment derives from a lack of commitment by governments in promoting and protecting those rights. The endeavour to create a culture of human rights and preserve a healthy environment is being derailed by governments when they enter into treaties on trade and investment with rules like the FTA, NAFTA, FTAA, the WTO, and others. We must make sure that all trade and investment agreements serve to buttress those rights, not negate them. The treaties, covenants, and agreements negotiated through the channels of the United Nations over the last 50 years should be paramount in world law.

One hundred and fifty Nordic NGOs have joined together and called upon the Governments of Sweden, Finland, Denmark, and Norway to press for all possible future negotiations on an investment agreement to take place within the UN framework and to be based on UN conventions. We in Canada should follow up on this proposal.

• 1935

We need fair trade and investment that will help implement the course that has been set for peace and equality and to establish healthy, vibrant communities in which to live. We need this for all people living in communities in all countries of the world. Governments must first recognize their obligations set out in the many treaties and conventions they have entered into over the last fifty years, including the United Nations charter and the human rights charter. These are the frameworks of international law and to which all other agreements must abide.

When seniors learn about the types of trade and investment agreements that your government is entering into, they say a resounding no.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Mrs. Dean. I also thank you specifically for bringing to our consideration the concerns of seniors. Certainly this is the first consultation I've been at where seniors' issues have been addressed. I thank you very much for that.

Next on our list is Ms. Pollen.

A voice: I'm a senior. I'm 78 years old, and you refuse to let me speak.

The Acting Chairman (Ms. Sarmite Bulte): I'm sorry, could you please see the clerk? We have a full list of people and we are already running late.

Ms. Pollen, please.

A voice: [Editor's Note: Inaudible]

The Acting Chairman (Ms. Sarmite Bulte): With all due respect, you're out of order. We have a full list of people. Please see the clerk.

Ms. Pollen, please.

Ms. Amy Pollen (Individual Presentation): Hello, and warm greetings to you all. Many thanks to our federal government for granting this opportunity to speak out. I'd like to inform you all that I do not possess a complete formal education, so I may not speak like someone who has a formal education. So please bear with me. When I say bear with me, I don't mean take off your clothes; I mean be patient with me.

My views are based on my experiences and what I have read. It is sincerely hoped that our government will listen to the voices of their citizens and implement their suggestions immediately. When I speak, I do so from my own humanitarian and Christian point of view. I join with others in calling for cancellation of the third world debt in such a way that neither Canadians nor other nations pick up the tab feeding the banks. I also call for cancellation of the free trade agreement, FTA, and the North American Free Trade Agreement, NAFTA, and negotiation of real trade agreements without national standing clauses.

The people of Canada demand the termination of the World Bank and the IMF.

Down with the present-day banking system. Banks create debts and political parties sign debts. It is the present international banking system that keeps all the nations of the earth in debt, taxes, inflation, unemployment, and poverty. All political parties, Liberals, Conservatives, Republicans, Democrats, Socialists, Reformers, Communists, all the political parties of the left, of the right, and of the centre, as well as the bureaucrats, they all keep the same corrupt banking system that rules us all.

I don't belong to any political party. I'm not a member of any pressure group. Therefore, I can speak freely from my conscience and my heart.

The eternal God made the goods of the earth for everyone. He didn't say give up your freedom and your rights and I will feed you. He didn't offer slavery in exchange for food, clothing, and lodging.

Canada is the second richest country in the world. Therefore, we should indicate how Benjamin Franklin made New England prosperous in 1750 by creating in America its own money. This was a sound and beneficial system that led to a content and happy nation. Our present taxing system paralyses rather than helps. It discourages production rather than stimulates it. It deprives people of purchasing power. It also obstructs the flow of goods from producers to consumers. Taxes also take away money that has been honestly gained and they despoil taxpayers of the fruit of their toil.

This money system as it exists today has created an unjust judicial system, problems with health care, and a voracious, unreasonable, inhuman real estate conglomerate, etc. The obstacle that prevents us from having access to the necessities of life is money and the present monetary system. We are all the victims of this system. So instead of fighting each other, let us all unite—English, French, native, and other nationalities. Canada does not belong to the bankers, who want to steal it from us; Canada belongs to all of us. These worldwide bankers and huge corporations are leaders of mad schemes, who desire to destroy our fair country and its people.

• 1940

Let me point out what the economists, the politicians, and bankers have done to us. They have implemented a subtle but very real corruptive influence against us, using avenues such as news media, schools, colleges. It is called brainwashing. That is why we have lost our spiritual equilibrium and inverted our values, so we now call evil good. We have ridiculed the time-honoured values of our forefathers and called it enlightenment.

Now I'd like to say a few words in French, in case you may have some French politicians here.

[Translation]

If you are looking for peace, go and see the poor. In the interest of the individual and of peace, it is critical that the required corrections be made to economic mechanisms if they are to guarantee a fairer and more equitable distribution of goods.

[English]

Redistribution must be in the hands of people, not of the state. Therefore I make an urgent call upon all citizens of Canada to wage war on the financial system. The present-day financial system destroys any future for our youth, starves millions of human beings, paralyses the producers, makes businesses bankrupt, ruins the farmers, dispossesses owners of their homes. It also implements more and more technology, causing more unemployment, brings in more and more immigrants to be exploited until they get wise. And this immigration displaces us in our own country and therefore brings down the standard of living for the working classes, while the money-makers exploit us more and more and then dare to call us lazy.

We should help other suffering nations by sending them money, food, clothing, medical supplies, and tools. But do close the door to immigration until our own woes are solved. We have taken in millions of immigrants in the last twenty years; now let other well-to-do countries open their doors to them.

So I say death to the microchip. We don't want it, and we don't need it. And death also to the corrupt financial system. Yes, I say death to the corrupt financial system.

Many thanks to the Quebec Michael newspaper, also to the Defence of Canadian Liberty Committee, and many thanks to the many others who have struggled to enlighten citizens in regard to this devastating problem. The citizens deserve to know the truth and to have a voice in decision-making.

To those involved in the World Trade Organization and the free trade area of the Americas, remember, all human beings alive, employed or unemployed, need food, clothing, housing, health care, clean fresh water, a safe environment, recreation, and an opportunity to use their God-given talents and gifts for the betterment of the human race, and not its destruction.

In closing, I ask God to please bless the men and women who have been elected by the people and ordained by God to govern this great country and to do so justly and compassionately. May our own blessed Lord grant them and us true wisdom to rule for the benefit of all citizens. I implore this from our Saviour, Jesus Christ. Amen.

And good night to you all. Thank you.

Mr. Benoît Sauvageau: What is Michael newspaper?

The Acting Chairman (Ms. Sarmite Bulte): Madame Pollen, Mr. Sauvageau has a quick question as a point of information.

Mr. Benoît Sauvageau: What is Michael newspaper, Madame?

Ms. Amy Pollen: Well, it's a journal, a newspaper that's put out in Quebec. They've been distributing it across the country for many, many years now. They deal with this problem. They've been dealing with this problem for a long time.

The Acting Chairman (Ms. Sarmite Bulte): Is it distributed in English?

Ms. Amy Pollen: It's in French and English.

[Translation]

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much for your declaration. I would like to say that, naturally, both languages are appropriate. You may use the one you prefer. Thank you very much.

[English]

Next is Isabel Minty.

Ms. Isabel Minty (Individual Presentation): Thank you for this opportunity to speak on the WTO and FTAA.

As you tour across Canada to hear citizens' views, you are charged with a responsibility to note our comments. What you do with the information is your concern—act on it, discard it, file it, ignore it. No presenter has any control over these results. All of us are here because we are optimists and we care passionately about our countrymen and our country's future—its sovereignty, its economic security, its environmental health, its moves to achieve social justice, and the survival and prospering of our democratic institutions.

• 1945

The FTA, NAFTA, WTO, FTAA, and MAI in the new world order are all links in the chain leading to globalization and the elimination of nation states. These matters aren't widely addressed in the mainstream media—quite the contrary. Information around them has been fairly limited. What is available generally stresses the positive and minimizes the negative consequences. Opposition comments and spokespersons are described as representing the views of special interest groups, minority opinions and lefties. The press council, charged with the responsibility of being the press watchdog, would describe this kind of coverage as not balanced or fair.

I hope your two days in our fair city will prove to be enlightening.

I don't intend to list the disasters that have occurred since the enactment of the FTA and the NAFTA. My presentation includes a small package that identifies some of them for your information.

With NAFTA's fifth birthday and their recent celebration in the U.S., a tallying of the score there revealed much the same kinds of consequences as happened in Canada soon after the FTA was signed. NAFTA's signing resulted in U.S. capital and industries moving out of the country, south and east. As here, it was the familiar plant closures, fleeing manufacturing industries, especially textiles, electronics and automobile parts, with the accompanying job losses and collapsing real estate market values Canada endured earlier with the FTA.

Globalization brings the unfettered movement of capital across national boundaries, both entering and exiting, so desired by the owners of capital. The sources of that capital are unquestioned. The proceeds of organized crime, the drug trade, theft, fraud and laundered money are treated with respect and, in almost all instances, without interdiction.

For some reasons not really apparent, the majority of the honourable members democratically elected to the House of Commons are quite prepared to accede to this absurd notion of the absolute sanctity and privilege of capital without any kind of responsibility. When voices are raised to protest, they are rarely heard. They are effectively marginalized by the mainstream media.

Some of these critics would put social or environmental price tags on profits leaving the country. No constraints on capital are to be considered that would recognize that other values are worth while, or even exist, other than those of capital.

The WTO hasn't sprung fully mature and all-conquering onto the world stage deus ex machina. These ideas have been nurtured and disseminated by the servants of capital over many decades. An early devotee was Freidrich August von Hayek. His 1944 book, The Road to Serfdom, put forward his foundation of the conservative revolution. Soon after, in 1947, he established the secretive Mount Pelerin Society, whose explicit purpose was to implement a new global feudalist order. His student, Milton Friedman, from his position at the Rockefeller Foundation-funded University of Chicago, advanced these ideas throughout the United States and Canada.

Today's Hayekians are in high places of influence, in the inner sanctums of elected officials, dominating positions in right-wing think-tanks such as the Heritage Foundation, Cato Institute, and in positions as deans and chancellors at universities and colleges. Having shown the right stuff, these persons have made their way into high offices and positions with the well-funded support and puff pieces arranged for them. Using them and countless others elected to public office, Hayekian ideas move into the practical world of politics and law-making.

• 1950

Capitalists like George Soros warned in an article called “The Capitalist Threat” in The Atlantic Monthly, February 1997...and later that year the ink-stained scribe championed the new world order—the return to feudalism and the rise of the city state. Robert Kaplan writes a cautionary tale in the December 1997 Atlantic Monthly article, “Was Democracy just a Moment?” Maybe.

Maybe it behooves decision-makers such as you to pause and reflect why there is this rush to approve documents that, as George Soros states, undermine the very values on which open and democratic societies depend. Hayekian Margaret Thatcher declared the U.K. could no longer afford taxpayer-owned and -funded public institutions. They had to be closed, privatized, sold off, or killed by death of a thousand cuts. Sound familiar?

In an article in The Washington Post in 1994, “The Economic Disaster Called GATT”, Sir James Goldsmith, the very affluent financier, deplored the secrecy that has surrounded the negotiations about the General Agreement on Tariffs and Trade. He steps into the battle for hearts and minds, warning that North Americans must stay alert to recognize what will accompany the World Trade Organization, the successor to GATT.

He states that it is impossible to conceive of an international agreement with deeper social consequences. He realizes there will be beneficiaries—in the main, transnational corporations with a need for an almost inexhaustible supply of very cheap labour. As he states, these corporations will be like winners in a poker game on the Titanic. The wounds they will inflict in the host nation to earn their win will cause brutal consequences.

He further states that countries should defend their citizens' quality of life by insisting on some rules restricting corporations, such as foreign corporations wishing to sell their products into the market. They would be required to build factories, employ locally, and bring their technology and capital with them. Goldsmith would apply these restrictions in the European Union, North and South America, and in Asia.

In Canada, none of the recent assaults on and thefts from our taxpayer assets could have occurred without the agreement and cooperation of our elected representatives in the House of Commons. One component of that acquiescence is a flattering uncritical media. The other is the constant urgings from and socializing with the staff of the well-funded public relations firms and the right-wing think-tanks.

Publicly owned taxpayer assets have to be moved into private hands. Those transfers are the forerunners to the WTO and the new world order. As you well know, these transfers have been approved increasingly in the House of Commons. In the context of globalization, the mantra that economic reforms are necessary for a successful transition is an excuse to emasculate sovereign nations' authority and their raison d'être.

Michel Chossudovsky, in his book The Globalization of Poverty, makes the case against this perfidy. In globalization, the only needs considered are those of capital. All resources, all environments, all citizens, all institutions and all goods are to be used and abused to serve those needs.

It is necessary that we look before we leap into the cauldron. Interconnected through their many associations outside the reach of any national governments, the oligarchs will rule, as they always have, from the top down in their 21st century feudal domains.

Looking briefly at who and what are pushing for the World Trade Organization, they are all members of: The Pelerin Society, the Round Table, the Club of Rome, the London Royal Institute of International Affairs, the Institute of Economic Affairs, the Bilderberger Group, the Trilateral Commission, the Council of Foreign Relations, etc.

• 1955

When you read or listen to someone from any of these groups, you know immediately what point of view is being pushed. For example, a former minister in the Mulroney cabinet, Barbara McDougall, is now hired by the CIIA. None of these gentlemen and women members give a rap about any of you—only that you will prove willing to bring dishonour on your country and denigration on your fellow countrymen.

They are counting on you, through the education, conditioning and brainwashing you have received by being on the mailing lists of these think-tanks and the public relations firms, to betray your nation's best interests. The oligarchs have envisioned, planned, spent lavishly and worked hard over the past seventy years of the 20th century to be in a position to totally dominate the 21st century, brooking no opposition. Witness what is proceeding against one small sovereign nation right now in Europe.

In Canada, you are amongst the chosen instruments to aid them in their trajectory or stop them in their tracks. As Canadians, I hope you choose to do the latter.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Ms. Minty.

Mr. Robichaud.

Mr. Serge Robichaud (Individual Presentation): My name is Serge Robichaud. I live in Maple Ridge, here in B.C. I work in the construction industry and have done so for 23 years.

I believe I have a fairly good understanding of global economics. I've been studying these issues for about 10 years now. I don't find it all that complicated. I've heard a very popular talk-show host here in B.C. say global economics are much too complicated for him and for all of us and we had best leave it all to the experts. Then I heard Noam Chomsky on Vancouver's Co-op Radio explain in fine detail how it all works—who pulls the strings, who gets the money, and who bears all the costs in the end. It's not that complicated. There's no advanced math here.

The problem with our popular talk-show host on his commercial-driven station is that a large number of his advertising clients are actually profiteering from globalization. I'm talking here about the investment dealers. They run countless advertisements on this station, telling us they can help us reap maximum benefit from the new global economy.

These ads are relentless. They dominate all media, be it radio, TV, newspapers or magazines. Many of them blatantly suggest we should be taking our money out of B.C., out of Canada, for a better return abroad. Then we see our government go begging on hands and knees for foreigners to invest here. There's something wrong with this picture.

We now beg with offers of greater tax breaks, subsidies, reduced labour costs and receding environmental regulations. We are trying hard to become a third world country. The investment dealers—many of them without realizing it—are performing the same service as foot soldiers. They are destroying their own country and paving the way to this new global government. Free trade and NAFTA were the gates that opened the way to this process. We do not need any more free trade deals; we need to get rid of two.

I blame much of our problems here on the media monopoly. In 1981 we had the Kent commission on newspaper and media concentration. It gave us a stern warning that democracy would be in dire straits if this trend were allowed to proceed.

Now we have people like Conrad Black, who is a member of several semi-secret global organizations. He has large control over our freedom of the press. Conrad Black is a member of the Trilateral Commission, the Bilderberger Group and the World Economic Forum. Some of these clubs are very contemptuous of the democratic process. They have very sinister ambitions for their own private global government. I say “semi-secret organization” because rare information can be found in some libraries. I say “secret” because of the way their dubious intentions and their sheer existence are never reported in the mainstream media.

• 2000

For a critical understanding of globalization, I suggest we turn to the United States, the country most in control of this process, and to some of their more respected dissidents. To name but a few here, Noam Chomsky, Holly Sklar, Christopher Simpson, Michael Parenti, Howard Zinn, Robert McChesney, and Ben Bagdikian. There are many others. Most of them are university professors in communication, history, and political economics. They are very credible and very articulate. You can find their work here in book form, taped lectures on audio cassette, and in the alternate press. You seldom ever hear them in the mainstream media of the United States, or Canada for that matter. This is why—I have six points here I'd like to list.

First, they talk about this most unfair trading practice called the CIA. It has countless interventions of covert action in third world countries, all to benefit American corporate interests, as well as countless interventions in overt military action. They have a false democracy—a puppet government—that works not for the people, but to serve the interests of the wealthiest family dynasties of the United States.

The American public is just another exploitable commodity, much like your natural resources. They are a great source of foot soldiers for fighting the war of the month, and a public who can be taxed to the max to help finance the military industrial complex. The media functions in concert with government to promote the war of the month and to keep the public in the dark on all other matters.

The American Constitution is routinely violated when necessary to obtain the objectives of the true government. And this true government in the United States is outside public view. The United States is governed by 400 or so of the wealthiest family dynasties. And the way they do it is through control of critical institutions such as media, universities, think-tanks, and financial institutions, including the Federal Reserve. Their private bureaucracy extends out of the United States to all these global institutions—the IMF, the World Bank, the Trilateral Commission, the Bilderberg Group, and others.

These American dissidents are labelled un-American by the mainstream press in the United States, and their information deemed unacceptable for the American public.

Canada broke away from colonialism many years ago. Most of us like it that way. We have no yearning to become a colony once again or to become colonizers. Not all Canadians, however, share this opinion. Here's part of their reasoning: should a Canadian company operating in the third world experience an economic setback because of a democratic process in that country, we do not have a CIA at the ready to intervene on their behalf.

A few years ago when Conrad Black was making speeches about how we were all envious of the Americans, I believe this is what he had in mind, that we should have the CIA or something similar to defend our corporations in the third world. Unfortunately, this sinister idea is becoming a reality in the 1990s. We have learned recently that Canadian mining companies have gone into the third world, made deals with corrupt governments, and then hired mercenaries to clear or kill off peasants from their homelands. None of this has been reported in the mainstream press. The press is in good hands indeed. This is unacceptable. The Canadian public would not accept this type of behaviour.

In World War II, thousands of Canadians put their lives on the line and went overseas to fight for freedom and democracy, they were told. They were told it was their duty and moral obligation, so they went. And 45,000 did not come back. Now we have a duty and a moral obligation to see that we are not doing unto others what we would not want done to us, especially for the mere sake of corporate profit. We owe it to those 45,000 soldiers who didn't come back. We cannot be the evil empire they fought against. That's what Remembrance Day is all about. That's why we wear the poppy on November 11. And that's why I'm here today.

• 2005

In conclusion, in your final analysis of these hearings, I hope you will side against the agreement on the free trade area of the Americas and other dubious collaborations with the World Trade Organization. Such a decision would be very unpopular with the business press; they would condemn you. Some of you may lose a job over it, or even a lucrative appointment. But it won't be anything like the treatment these peasants are receiving in the third world, or like sacrificing your life in World War II.

Just remember the poppy. I thank you for your consideration.

[Editor's Note: Applause from the audience]

The Acting Chairman (Ms. Sarmite Bulte): The next panellist is Mr. Stan Robertshaw. I see you have a paper here that you filed with us, Mr. Robertshaw. I'm a bit concerned that it's going to go more than 10 minutes.

Mr. Stan Robertshaw (Individual presentation): It won't go more than 10 minutes. I won't be using that paper. I'll be referring to it, but—

The Acting Chairman (Ms. Sarmite Bulte): Okay. I was just going to ask you to highlight.

Mr. Stan Robertshaw: I'll be summarizing, basically.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much. I just didn't want you to start, and then have to say that we're out of time.

Mr. Stan Robertshaw: I can't go through this document in 10 minutes, I know that.

The Acting Chairman (Ms. Sarmite Bulte): I know that. That's why I've looked at it. Thank you.

Mr. Stan Robertshaw: Thank you very much for giving me an opportunity to address the Standing Committee on Foreign Affairs and International Trade.

I'm simply going to refer to some of these ideas that I've brought up in this brief.

Many of the briefs you've heard so far deal with democracy and the redefinition of democracy. We live in a society and in a world that is a huge enigma. We have this structure that probably most of us depend on—well, except for the committee members, that is—called corporations, which have nothing to do with democracy in the sense that they're not structured on democracy. They're structured on a command economy, if you will. It's based on ownership. At one time they were in the business of nation building, and at one time our nation and other nations depended on these corporations to build our nations. We still do, to a large extent, depend on these large corporations.

Now, in that context, I really would like you to take a look at the WTO in the sense of what has been achieved so far by the FTAA and NAFTA. In this brief I've referred to a report called The Growing Gap Report.

We've been under the free trade agreement since 1988. There was a big debate about it. But I think this is one of the results of these policies. Certainly some committee members in this room might recall a little election in 1993. The Canadian voters threw out a party. That's how they vote. They always vote that way. They don't elect governments; they throw out old ones. They took a political party that had practically one or two members, I think it was—the Reform Party—and made it into an opposition party, gradually. They said, and I believe they're still saying, that these policies of the FTA, free trade, don't work. They don't breed equality. They don't bring any benefit to the people. And that can be proven by job loss, by subcontracting to third world countries, and by the maquiladora areas in Mexico and Central America. We have a different society from what we had 10 years ago, and free trade has unfortunately been responsible for that to a large degree.

• 2010

Now, amongst these so-called ventures, a unique thing has happened over the last 30 years. More than 92% of the tax revenue Ottawa receives each year comes from ordinary Canadians like me and everyone in this room, not from corporations. Less than 8% comes from corporations.

What was the difference 30 years ago? Thirty years ago 50% of the tax income Ottawa received each year came from corporations. They were still in the nation-building process, and our government held their feet to the fire. Our government and, unfortunately, members of this committee aren't holding their feet to the fire, not to build our nation and not to help our nation benefit. As a matter of fact, these corporations have eclipsed you as members of Parliament.

This redefinition of democracy includes you. In 30 years where the devil will you be? Will you be merely rubber-stamping acts that pertain to ordinary Canadians and not to corporations? You really have to ask yourself that question, I think. These agreements change the power you have, so what power will you have? You cannot bring in acts such as the Manganese Fuel Additives Act. You cannot use your own discretion to act in a way that would benefit the people who elected you to office. You're being restrained by these agreements.

Of the 100 most powerful economies, 51 are corporations. That's a big change from 20 years ago, and it's a huge change from 30 years ago. There's no regulation of corporations in any of these agreements, nor provisions to enforce human rights, environmental standards, and worker rights as we have in Canada.

More than 200,000 people, I believe it is, come to our country each year as new citizens to start a new life in Canada. That says a lot about what we have done in Canada during last 130-odd years. People come here expecting they will get the benefit of citizenship and will be able to achieve something. Instead, things are changing so that these people are mere consumers and workers, and their rights are being eroded each year by these agreements.

Workers have been displaced by these agreements in a huge way. There's a race to the bottom, if you will. We can't compete. Ordinary Canadian workers can't compete against slave labour in China. We can't compete against child labour in India, China, and Central America.

We have protection for workers in Canada. What we're asking is that as Canadians, as members of Parliament, you enact the same things that made our country great in the international sphere through these agreements. Make it so that workers have enforceable rights. Create agreements and create the World Trade Organization so that the people at the bottom benefit, because if you don't distribute the wealth properly, it's going to be concentrated, focused, and abused. Power will be accumulated by a very few people. It won't benefit the entire world. That's basically what we're talking about. We're talking about benefiting the world, not only ourselves. We have a big hand in this.

For some odd reason other people in other countries think we think differently, because we have worked so hard to benefit each other. We've made a society that is a caring, compassionate one. But in the last 10 years I've seen a huge change in that society. That's why this room is filled with people tonight, because they're also alarmed about these changes.

I went to my school board trustees about a month or two ago and presented a resolution to them that was against the MAI. My God, these people are not union people. They don't vote NDP. They might vote Liberal. They are very conservative people. Unanimously, they supported a motion against the MAI. This is what I'm talking about. These are people who have a conservative outlook, and they also see the change in this country. They voted conservatively in the sense that they brought in the Reform Party, because they wanted to go back to the way things were in the 1950s, when there was security and support for ordinary Canadians.

• 2015

I'll get to the conclusion now. This is a natural progression of power to huge transnational corporations, and if you don't do something now, you're going to have to do something later. The rights of ordinary Canadians and ordinary people who work in the maquiladoras and areas like that are being eroded and displaced. Eventually, you will become rubber-stampers, the power you hold will diminish, because these massive corporations are getting bigger. In 20 years' time they may not be 51 large economies, they may be 90.

I thank you again for allowing me to address this committee, Madam Chairman.

The Acting Chairman (Ms. Sarmite Bulte): Thank you, Mr. Robertshaw.

Ms. Schwartzkopf.

Ms. Olga Schwartzkopf (Water Caucus, B.C. Environmental Network): I'm representing the Water Caucus of the B.C. Environmental Network, and I'm also on the board of that organization. We consist of 250 to 300 members of environmental organizations across British Columbia. I'm also on the advisory board of the Burns Bog Conservation Society, which is concerned about the protection of wetlands across Canada and British Columbia and of Burns Bog in particular. I'm also on the executive of the Soil & Water Conservation Society, B.C. Branch. We're mainly concerned with agricultural issues related to soil and water.

I came here today on very short notice, so I've done a lot of quick research on these issues.

My main concern is the erosion of our sovereignty and control over our own water. Unfortunately, I do not trust our politicians when they say no, water is not in the free trade agreement. I don't believe them because water is in GATT, and WTO is GATT from the North American point of view.

Water is life itself. The world is contained in a drop of water. Water transfers, whether by pipeline or ocean tankers, involve the transfer of ecosystems and should be prohibited. Water is the issue of the 21st century.

On this issue that water is not in the trade agreements, in my research I discovered that it is a contentious issue in the world community as to whether water is an economic good. I've discovered that most nations and cultures do not believe water is an economic good, regardless of what the GATT says, what the WTO will inevitably say, and what the FTAA will probably tell us as well.

The discussions began in 1977 at a UN-sponsored conference on water at Mar del Plata. In 1992 the International Conference on Water and the Environment took place in Dublin, Ireland. From that conference came the Dublin Statement and the conference report on water. Canada was a participant and a signatory to those principles. These principles and recommendations have been incorporated into all subsequent international conference reports, including that of the summit at Rio de Janeiro in 1992. The Dublin Statement was incorporated into Agenda 21, in chapter 18, which involves water. Canada was a participant and a signatory to Agenda 21. However, it is not a legally binding agreement.

The participants at the conference called for:

fundamental new approaches to the assessment, development and management of freshwater resources, which can only be brought about through political commitment and involvement from the highest levels of government to the smallest communities.

• 2020

The Dublin Statement was presented at the United Nations conference at Rio de Janeiro in 1992, and the participants urged that all governments translate their recommendations from the Dublin conference into an urgent action program for water and sustainable development. The recommendation of the conference report is based on four guiding principles, and I've discovered that these four principles have made their way all the way through to the present day, to the World Water Council's initiative, which I'll talk about later.

The four guiding principles that are now described as the Dublin Statement are: one, fresh water is a finite and vulnerable resource, essential to sustain life, development, and the environment; two, water development and management should be based on a participatory approach involving users, planners, and policy-makers at all levels; three, women play a central role in the provision, management, and safeguarding of water; four, water has an economic value in all its competing uses and should be recognized as an economic good.

The fourth principle is the most contentious issue. The rationalization for this principle is explained as follows:

Within this principle, it is vital to recognize first the basic right of all human beings to have access to clean water and sanitation at an affordable price. Past failure to recognize the economic value of water has led to wasteful and environmentally damaging uses of the resource. Managing water as an economic good is an important way of achieving efficient and equitable use, and of encouraging conservation and protection of water resources.

My review of various academic and professional papers on this subject reveals that there is no consensus among communities and cultures to treat water as a commodity or economic good. If water is recognized as an economic good, and if that definition includes the privatization of water resources, then the basic right to affordable water cannot logically be assured.

It is the nature of private corporations to maximize profits, since that is their imperative. They're not concerned with moral or social obligations to community and to the province. The only way the moral and social obligations of a community can be satisfied is by maintaining our water resources as a public trust.

Water cannot be placed in the same category as goods traded in the global marketplace. Local wars have been and are being fought over water. Widespread wars will be fought over control of water resources in the future. War will not be declared over the availability and control of Seiko watches, Levi's blue jeans, Nike running shoes, or a Ford, or a Toyota, or even a Lada automobile. No human being can live beyond a few days without clean water. Humanity has survived thousands of years without Seiko watches, Levis, Nikes, or Ford, or Toyota, or the Lada.

Water is a local issue, a household issue, and it's the global collection of all households and local communities that has to make decisions about water resources.

Water must not be included as a tradeable good within the FTAA, especially since that agreement will be modelled after the NAFTA. NAFTA, with the supporting structure, the WTO, threatens our sovereignty over the water resources of this country. Our local legislation and regulations have been superseded by these trade agreements. These trade agreements have set up barriers to the democratic processes by which we have governed our commodities since this country was formed; for example, the right of Sun Belt Water Inc. to sue our governments for enacting laws at the request of the community. Lots has been said about that.

We're being forced to accept the erosion of our democratic processes because the WTO and NAFTA have decreed that there can be no barriers to free trade: free trade is global, and that's nirvana; it will eliminate poverty, and we will all prosper in the glow of corporate rule.

The NAFTA, with the aid of the WTO, will bring sanctions against Canada or any other member that does not eliminate policies or legislation that are perceived or interpreted by them to be a barrier to trade. At the same time, WTO will not recognize that some of their members are responsible for the enslavement of their respective citizens into the production of goods for the developed countries. Is this not a barrier to achieving the WTO's prescribed goals and stated reasons for existence, that is, to maintain peace in the world and bring prosperity to its inhabitants?

Water should not be relegated to trade agreements, whether it is AFTA, NAFTA, FTAA, WTO, the World Bank, or the International Monetary Fund. Water is too important to be left in the hands of politicians working in concert with trade experts, who usually come from the private sector, to whom all the benefits of the WTO rules flow.

There's been a lot of talk lately about Canada's vast freshwater supplies. We have more water than any other country in the world. One speaker said Canada has 40% of the global freshwater supply; another said 28%; and then another, 20%. There are usually no references given to support these statistics. Then follows a speech about our moral obligation to share this water with the rest of the world. It is discovered later that the person who is asserting this moral obligation is a peeved water entrepreneur who was thwarted from further increasing his profits in his water enterprise by the pronouncement of a moratorium on water exports.

• 2025

One of his fellow entrepreneurs will soon join the millionaires' club by providing water to Asian water boutiques with that bottle of Canadian water, which is appropriately labelled with a depiction of mountain streams flowing through narrow pristine forested valleys. You can have ice cubes that have just been flown in directly from Alberta's Rocky Mountain glaciers. These glaciers have been mined for designer ice cubes.

Environment Canada's publication Conserving Canada's Natural Legacy offers the following statistics: Canada has about 9% of the world's renewable freshwater supply; Brazil has 18%; the former Soviet Union has 13%; China has 9%, the same as Canada; the United States has 8%. Canada probably has more lake area than any other country in the world, with 565 lakes larger than 100 square kilometres. The Great Lakes straddling the United States-Canada border contain 25% of the world's fresh water in lakes, sharing first place with Lake Baykal in the U.S.S.R. Lake Baykal is the deepest lake in the world, and it holds the combined volume of fresh water of the Great Lakes. Lake Baykal was declared a world heritage sight a few years ago by the United Nations. I wonder if there are any wide-eyed water entrepreneurs negotiating a water pipeline for Lake Baykal to the parched areas in Mongolia or China, or maybe the Gobi desert, which is not too far south of that lake.

There has been consistent pressure to pipe water from B.C.'s interior to south of the border by a B.C. water entrepreneur. His justification is based on moral principles as well. After all, those water fountains in Las Vegas provide essential esthetic relief to travellers who emerge from gambling caverns on the main street. The gaming entrepreneur can afford to pay almost any price for that water. B.C. should continue its moratorium on the exploitation of water for export, including inter-base and transfers. Canada should impose a similar moratorium immediately. I think we would have international support for this move in light of the formation of the World Water Council, the World Water Vision Project, and the Global Water Partnership.

The Acting Chairman (Ms. Sarmite Bulte): If I could just stop you, you've already gone over your time. I know there are a lot of important things you have to say. Could I ask you to bring out the highlights of the World Water Council and the WTO recommendations?

Ms. Olga Schwartzkopf: The World Water Council has formed a non-profit organization, which is based in Paris. Through the World Water Council they have put together what is called a visioning project, which will take place in the Hague in March 2000, at which time various regional organizations across the planet, or around the planet, I hope, will be able to present their local visions for water supply in their jurisdictions.

Somehow all of these visions will be brought together to the Hague in 2000. Through the World Water Council there is also an organization called the Global Water Partnership, which is to take this vision that has been put together by all of these regional visions and implement a water strategy for the 21st century.

I am not sure, and I was not able to find out, what Canada's position or role is in these organizations, but I am hoping we are participants in this process. I would like to see the federal government support NGOs, municipal representatives, and people across this country to either go to the Hague to present their visions or at least publicize the fact that we have this opportunity to share in putting together a vision for the future in the global water supply and how that water is going to be distributed in the future.

We have an opportunity to do that, but it is nowhere advertised, and I think our government should do that. If nothing else, put it in the newspaper, and I think the vehicle through which these visions are put together is the International Water Secretariat in Montreal. I'm not sure, but I think that's the vehicle.

• 2030

I have a few comments about the WTO. In doing research on the WTO through their web pages, I was shocked by what I read there. In fact, they are trying to inform the public with these web pages.

There is a list of the 10 benefits of the WTO trading system. I have selected three of my favourites. Number one says that we should be thankful for the development of the WTO, because their justification for existing is that World War II occurred because of trade barriers among the countries in Europe. It was very difficult for me to reconcile Hitler's march into Poland, France, Holland, Scandinavia, and Russia because of barriers to trade. Then after the war tensions among the countries in Europe were eased by the formation of GATT, and GATT was so successful that we now have the WTO. Somehow this view of history escaped my teachers, because I never learned that when I was in school.

Number eight says:

The basic principles make the system economically more efficient, and they cut costs...they make life simpler for the enterprises directly involved in trade and for the producers of goods and services. Trade allows a division of labour between countries. It allows resources to be used more appropriately and effectively for production. But the WTO's trading system offers more than that. It helps increase efficiency and to cut costs even more because of important principles enshrined in the system.

Is this the division of labour that promotes food production in Mexico that is then harvested by young children—the more children a couple have, the more money the family can earn—and concentrates the manufacture of clothing and many durable goods in China, where a worker earns pennies a day for hard labour? The consequences of the appropriate and effective use of resources have resulted in policies that promote industrial development and divert water from food production to industrial uses.

Does that mean that the people in China will ultimately have to rely on the people of Mexico to produce their food? This system relies on cheap energy for the transport of these goods to distant markets. What will happen when our fossil fuels are depleted? The system squanders our renewable energy resources and is unsustainable.

I think I like nine the best.

Number nine says:

The system shields governments from narrow interests.... Governments are better-placed to defend themselves against lobbying from narrow interest groups by focusing on trade-offs that are made in the interests of everyone in the economy. One of the lessons of protectionism that dominated the early decades of the 20th century was the damage that can be caused if narrow sectorial interests gain an unbalanced share of political influence....

What bothers me here is the way the word “protectionism” is used throughout the WTO pages. It reminds me of the way the word “communism” was used in the early 1950s in North America. Do we still have highly paid lobbyists walking the halls of the U.S. Senate and entertaining congressmen, and similarly in the House of Commons? What is the most popular career for retired politicians in North America?

Number ten says:

The system encourages good government. Under WTO rules, once a commitment has been made to liberalize a sector of trade, it is difficult to reverse. The rules also discourage a range of unwise policies. For business, that means greater certainty and clarity about trading conditions. For governments it can often mean good discipline. The rules reduce opportunities for corruption. The rules include commitments not to backslide into unwise policies. Protectionism in general is unwise because of the damage it causes domestically and internationally, as we have already seen. Particular types of trade barriers cause additional damage because they provide opportunities for corruption and other forms of bad government....

Does that mean that our MPs and MLAs are not allowed to sit on various boards of private corporations while they're in office? Does bad government mean imposing a moratorium on the export of bulk water and interbasin water transfers? Does an unwise policy include providing for the energy needs of your citizens as a priority before export? What does good discipline mean when referring to the actions of a democratically elected member country acting in accordance with the wishes of its people? What does good discipline mean when referring to the actions of a member country that is a military dictatorship or that is ruled by an authority other than by election by its people?

• 2035

You may say that the answers to those question are not the concern of the WTO, that we should be asking our own governments for that. The WTO does not deal in moral issues. That sounds like a corporation to me. But as pointed out in benefit 9, the WTO does provide the answers for member governments to give to their citizens.

...the government can reject the protectionist pressure by arguing that it needs a broad-ranging agreement that will benefit all sectors of the economy.

That does sound familiar.

The laudable goals of the WTO—peace and prosperity for all—cannot be achieved without a moral imperative. I'm suggesting the WTO might achieve those goals by adding a code of ethical conduct to their agreements with members and the producers that the WTO rules protect. That code of conduct should be based upon the United Nations Universal Declaration of Human Rights, which now includes the right to a healthy environment.

Thank you very much for being so patient.

The Acting Chairman (Ms. Sarmite Bulte): We still have four more people who are going to make presentations to us. We are running a good half an hour behind. I would urge you, witnesses, to try to limit your comments to 10 minutes—if you have a prepared paper, your entire paper will form part of the record. Up to now I haven't been enforcing it, but we are running very late. So I would ask for your cooperation.

Dr. Koscielniak.

Dr. Shane Koscielniak (Individual Presentation): I had actually asked for an overhead projector. I have a beautiful set of slides that unfortunately I cannot share with you, but I've asked to have two of them reproduced.

Anyway, good evening, committee members. Allow me to introduce myself. I am a staff scientist at TRIUMF-UBC, which is a federally funded physics research laboratory in Vancouver.

This newspaper clipping from the North Shore News makes clear my position on a recent initiative of DFAIT. The MAI was certainly a threat to Canadian sovereignty. I didn't come to that conclusion by reading Maud Barlow's book or by joining David Orchard's campaign against NAFTA, but rather by reading the respective texts in their entirety—and NAFTA is a quarter of a million words—and by following NAFTA for five years and the MAI for the last couple of years.

Today I am here to discuss the WTO and the FTAA. The millennial round of the WTO seeks to extend the WTO agreement in directions similar to the MAI, and the FTAA hopes to bind all countries within the Americas with an expanded NAFTA-like agreement.

What is wrong? Well, the principal objection I have to the framework of all these agreements is the overriding assumption that trade is more important than any other human activity or the environmental health of our planet. This assumption is so much taken for granted by freetraders that they have completely forgotten that the assumption even has to be justified. But how else can you explain recent WTO actions that overturned domestic laws designed to protect clean air, endangered species, food safety, cultural diversity, public health, and human rights?

The WTO-GATT examples include the European ban on beef containing artificial hormones; the U.S. government being forced to withdraw provisions of the Clean Air Act; the WTO panel striking down Ottawa's attempt to protect our magazine industry from split-run American publications; and the GATT ruling against the limiting of tuna imports based on fishing practices that endangered dolphins in the U.S.

NAFTA has also furnished us with ample examples of where trade has been placed above environment, resources, and culture. There was Ethyl Corp. and the ban on MMT, which is essentially an issue of MMT profits versus public health. There was S.D. Myers and the ban on exportation of PCBs, which is actually NAFTA versus the Basel Convention on the transportation of toxic substances. And then there was recently the U.S. company, Sun Belt, launching a suit challenging B.C.'s water protection.

There are also the chill-effect examples—ones that didn't make it to the courts. For example, Ottawa's proposed legislation on plain cigarette packaging, opposed by U.S. companies under the NAFTA takings rule. The Liberal government conceded with its red book promise to extend a pharmacare system because of NAFTA problems with rights enshrined in chapter 17 of the NAFTA, dealing with intellectual property rights.

So this article of faith that trade is God is only matched in absurdity and obtuseness by the freetraders' assumption that access to markets is a God-given right, like the right of kings. In fact, access is a privilege that can be granted or withheld.

I'll move to trade as a bringer of jobs and prosperity. Adam Smith and his famous treatise An Inquiry Into the Nature and Causes of the Wealth of Nations made a convincing case for the benefits of trade: two countries, each with a comparative advantage in some particular industry, can usually benefit from trading those goods. So I think we essentially have a Faustian bargain. If these trade agreements can create enough jobs and make us wealthy, well, then we should consider it a worthy bargain to exchange sovereignty for prosperity.

• 2040

According to every pure trade-related indicator, the liberalization measures certainly have increased exports—and imports as well. But this is to miss the point. Based on prosperity and jobs, the increased trade has had no benefit whatsoever. That's a reality check, and I'm going to support that in more detail.

FDI is not necessarily an instrument of job creation. Sergio Marchi tells us that a $1 billion increase in foreign direct investment helps create an estimated 45,000 jobs over about five years. I'm not going to argue with that statement. Instead, I invite the panel to make a reality check. Sergio Marchi and Statistics Canada have obligingly provided us with another piece of information. FDI in Canada has grown from $96 billion in 1996 to $180 billion in 1996.

Grade-school arithmetic implies that investment should have created 3 million jobs. Yet here comes the reality check—it's shown on your graph. Basically, employment in Canada has remained constant for the last 10 years. All those billions of dollars did nothing to create jobs.

The resolution of this conundrum was given to us by Mel Hurtig in the Globe and Mail. The fact of the matter is that 94% of FDI goes toward purchasing existing Canadian companies—not creating new ones, and not introducing new technology into Canada.

Regarding the FTA and NAFTA experience with jobs, under both FTA and NAFTA, Canada lost jobs to the U.S. Under NAFTA, both the U.S. and Canada lost further jobs, in fact, to Mexican maquiladoras with low wages and low health and environmental standards. According to statistics, in the first three years of the FTA, 1.4 million jobs disappeared. As Statistics Canada records, following the FTA in 1989 unemployment jumped from 7.5% to 11.3% in 1992. Since the start of free trade, Ford has laid off 2,200 jobs. Allied Signal cut its workforce by 21%; United Technologies by 15%; GE by 35%; DuPont by 18%; and 3M by 11%. I think I've made the case.

Trade volume is usually used as an indicator of why these deals are so good, but I don't think it is an indicator of prosperity. Diane Francis recently wrote in the National Post that: “Canada's economic growth since 1989 has mostly had to do with the fact exports are up nearly 114%”. Again, the reality check is Canada's shameful jobless record.

So what went wrong with all those exports? Well, the answer is that roughly 70% of the trade between Canada and the U.S. is intercorporate trade. It's between U.S.-owned Canadian subsidiaries trading resources south to their parents and those parents then selling back the finished product to Canada.

Nevertheless, Adam Smith certainly did make a good case for trade in goods and services. But I want to make the point that TRIMs and TRIPs—these trade-related investment measures and international copyrights—are not really trade. In fact, they're about trading the means of production. They're about buying and selling comparative advantages. Those are things of which Adam Smith said nothing. They're much more abstract concepts.

I'm not trying to say that trade cannot in principle create jobs and prosperity. What I'm saying is that the brand of trade-related treaties we've brokered in the recent past has not had these effects.

So now I want to tell you what is right, what we should be doing.

These treaties and most legislation fall into a pattern. First you state an objective, then some detailed apparatus for achieving that goal. I'd like to give you principles for the millennial negotiations.

Have a narrow definition of investment, unlike the MAI. Make national treatment and most favoured nation treatment be granted as a privilege for continuing good behaviour. Regulate capital movements to counter currency speculations. Legitimize performance requirements as a means of job and prosperity creation. Replace all investor state mechanisms with state-to-state dispute resolution. We need reasonable compensation for expropriation, and we don't want a wide definition of expropriation. Finally, any agreement we have should have a no-strings-attached clause for withdrawal within six months.

Another thing I've noticed is that trade negotiators seem to clearly abuse and insult the intelligence of the general public regarding the use of the word “should” versus “shall”. The word “should” is a merely discretionary suggestion for appropriate behaviour. The word “shall” is an obligatory or mandatory imperative to adhere to and comply with regulations or requirements. So where do we make clear in these documents that the public good shall be protected and is absolutely exempted from these agreements?

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Doing the right thing: Based on experience with FTA and NAFTA, which has in fact been somewhat destructive to the junior economic partners, I'm forced to concede that although jobs will be lost here in Canada, there are economic advantages to Canada in extending NAFTA to the Latin American countries. They have more to lose and we more to gain. They have natural resources, and casual manual labour that's cheap. They have less stringent health standards. Further on the IMF-mandated forces have opened them up, selling off public assets and also removing their currency safeguards. But I think to attempt to inflict this type of piratical damage on another country for short-term economic gain is both immoral and profoundly un-Canadian. It should be to opposed by faith, labour, and public interest groups everywhere.

[Editor's Note: Applause from the audience]

Dr. Shane Koscielniak: Investors do have alternatives. DFAIT's position seems to me to have been that the MAI agreement, and those like it, are needed to protect Canadian investors abroad from the risk and insecurity there, even if that is at the cost of public cost. What is missed here is that investors do have a choice. They are free to choose between investing in Canada and abroad. When they invest abroad, there is definitely an opportunity cost in terms of what the capital could have done here in Canada. Canada is woefully short of investment capital in the areas of science and technology and R and D. This is a position that has to be reversed. The long-term economic future of Canada cannot continue to be based on resource extraction.

The committee on civil society: The FTAA has proposed to create a committee on civil society as an intermediary between negotiators and labour and environmental groups. Rather than appoint an intermediary, I think it would be much more effective to have civil society meet directly with negotiators. I propose too that this improved model for input by civil society be adopted as an essential component for the WTO millennium hearings.

I'm almost at the end here. More DFAIT hearings: I would like to request that this round of public hearings on treaties not be just the last, but rather the first of many. Although negotiation is about principles and integrity, it's also inevitably about concessions. Make no mistake, our negotiators will make concessions. It's imperative to let civil society inspect them and decide whether they're acceptable.

Selling whatever millennium treaty you come up with, DFAIT have really two tasks: first, to broker a treaty; and second, to sell that treaty to the Canadian public. When that time comes, the first thing I want Minister Marchi or his successor to do is to explain why a government that was elected on a promise to renegotiate or abrogate the NAFTA broke that promise, and secondly, I'd like him to explain why it is now so eager to broker deals, such as MAI, that are potentially even more destructive. So far no explanation of this volte-face has been given. Without it, there is no credibility in the present DFAIT strategy and plans regarding free trade.

[Editor's Note: Applause from the audience]

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Dr. Koscielniak. I thank you also for your very specific recommendations in pointing out how important language is in an agreement—“shall” and “should”, “and” and “and/or”, a couple of words. I think that's very important. Thank you very much.

Next is Ms. Parker, from the Council of Canadians, the Coquitlam chapter. Is that correct?

Ms. Eunice Parker (Member, Coquitlam Chapter, Council of Canadians): Yes. Thank you, Madam Chair and members of the committee.

There have been some excellent contributions here today, but I guess the mind can only absorb what your sheet can tolerate. In fact, I think may of these committees should sit in two shifts, so that one shift could be relieved before your eyes start to glaze over.

Anyway, my name is Eunice Parker. I'm a resident of Coquitlam, which is a neighbouring city to Vancouver and a part of the Greater Vancouver Regional District. We have been an active chapter of the Council of Canadians in Coquitlam. It was formed in response really to a concern about the multilateral agreement, and also the erosion in social programs.

I've spent much of my life in elected positions in local government, first as a school trustee and then as a city councillor for nine years. I recently made a submission to the B.C. legislative committee that asked for input on the MAI. My focus then was on municipal government and the impact that this kind of global treaty would have on municipal government.

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Our demand to the Canadian government has been for it to publicize and advertise its specific intentions with regard to trade and globalization. Instead, you're asking us to give our opinion on how trade policy should be addressed. I think we have already spoken loud and clear on how we view the provisions of the MAI and its undemocratic thrust. The federal government has not yet acknowledged our opposition to a global trade policy that is essentially on the agenda for corporate freedom, so that corporations are free to do what they want and nothing should interfere with their profitability. I think the MAI says that very clearly.

Now it's coming under a new name, the free trade area of the Americas, and it sounds like a finalization is being looked for by the World Trade Organization as early as fall of this year.

I think that Squamish really did an excellent job of outlining the dangers to municipal government in their submissions, but I would like to say that if we look at the proposals put forward in the MAI with regard to its effect on local government, this is really the government that is closest to the people. It's the government that's accessible in their community, that they can go and speak to. It doesn't always do what the community wants, but it's there. Its traditional role has been to support the businesses and use the resources within the community as much as possible.

In an unfettered market system, this could be considered unfair. If local government were to face regulatory action, or be faced with having to compensate a corporation, whether it was national or foreign, where would they find the funds for such compensation? The likelihood would be that it would be forced to end any practices that favour local business and instead provide a safe haven for transnational investment or suffer the consequences.

Is the thinking of the Fraser Institute a model for the world? We don't think so. We just recently had the governance of health care transferred to our local communities and managed by local people living in the community. This was put forward as a policy of closer-to-home governance being better, since presumably local communities are closer to, and better aware, of the needs. Now, MAI, or its clone, would arrive on the scene and our health and social service system would be subjected to an investment treaty that would be in competition, and the extent of public funding would be considered a subsidy and unfair to private health care providers.

Our education and health care systems are under extreme pressure because of the reduced federal transfer payments. The MAI, or provisions like it, would most certainly expand the movement to a two-tier health care system, and this is the service that Canadians value most highly. School boards, too, are now being approached for corporate sponsorships to have a monopoly to market their goods to kids in the school system. There's a lot of negativity to this. We've already seen examples of how this has played out in the United States.

As well, we've had some serious cutbacks at the community level. Parents are being asked to subsidize schools in a whole variety of ways now. Municipalities are raising the cost of using community play fields, pools, and community facilities, all of which we have already contributed to in capital costs and ongoing taxes.

In spite of the marvellous technological advances that we've had in this world and in these ages, there are more poor and disadvantaged people in the world than ever in human history. The rich have gotten richer, and the poor have gotten poorer. Isn't this a disgusting phenomenon in a world that has such riches in it? Why can our government not use its resources and its technology for the good of its citizens? Why can't our government set standards that benefit humanity and tell the rich corporations of the world that these are the rules?

I just happened to return from Indonesia two months ago, and there is a classic example of what has happened to a people in the currency crisis and the economic collapse that's followed, which they had absolutely nothing to do with. Now over 100 million people are living on less than $1 a day each, and they're working hard for it. All kinds of structures are half-built and abandoned. They are a people governed by a dictatorship in a tropical paradise where there is not even a compulsory education system. From grade one up, most people are paying the equivalent of four days' pay per month for their children to go to school. That cost rises if they're lucky enough to get up through the system.

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We should actively support the Tobin tax and the Jubilee 2000 debt campaign, which could bring some measure of relief to the terrible suffering of the people of the underdeveloped world. Transnational corporations should not be free to roam the world, exploiting the cheapest labour or the lowest taxes. Anything that hinders profit must be subordinated to the rights of trade and investment.

Where is the publicity about these policy discussions we're having here? There's nothing on TV; there's nothing on the radio; there are no ads in the paper; there are no feature articles about these policies that are under active consideration. Look at the room. It should be crowded with people. This is the most important thing we're going to decide in this century, and so few people know about it.

Are we to be just like mushrooms that are kept in the dark and covered with you-know-what?

Voices: Oh, oh!

Ms. Eunice Parker: How are people to know what the government and the global economy have in store for them when there is no information forthcoming, except when interested and aware organizations use their initiative to spread the word; and except for what comes on the Internet? You probably realize that everybody doesn't have the Internet. Lots of people don't even have computers. So that's not good enough.

Is this hearing just a facade for consultation, when the die has already been cast and the decisions have largely been made? I hope not. I hope you'll take this message back to the government, which you have heard today, will probably hear tomorrow, and will have likely heard in other areas of the country: please listen to Canadians and our plea for a democratic country that protects its social programs that we value so highly and are, in many cases, the envy of the world.

Thank you for your consideration.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Ms. Parker.

Now, last but not least, I am delighted to welcome Chief Stewart Phillip, president of the Union of British Columbia Indian Chiefs. Welcome, Chief Phillip.

Chief Stewart Phillip (President, Union of British Columbia Indian Chiefs): Thank you. On behalf of the union, I would like to extend our appreciation for this opportunity to speak to the standing committee.

Indigenous peoples are paying the price for the regionalization, nationalization and internationalization of our land and resources. The consequences of the current international trade initiatives on indigenous peoples will be severe.

Our people tell stories of enduring horrific conditions of poverty within their communities, while they helplessly watch the wealth and richness of the land flow out of their territories. More money flows out of our territories in one load of logs, harvested without our consent, than what a family of four relying upon social assistance receives in a year.

As indigenous peoples, we are the original owners of the land and resources, but you would never know it to see the poverty our people live in. All issues concerning aboriginal-titled territories, including lands, waters and resources, are crucially important to indigenous people. Our philosophy tells us the land is the people and the people are the land.

Since time immemorial, our peoples have been intimately connected to the land. Our cultures, languages, political organizations, and spiritual and economic well-being all flow from our relationship to the land. Without our strong connection to and responsibility for the land, our peoples would cease to exist. This connection to our land is our aboriginal title, therefore the very survival of our peoples is being threatened by the international trade initiatives Canada is considering.

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For the membership of the Union of B.C. Indian Chiefs, who have not signed any treaties or sold our aboriginal title territories to Canada, our aboriginal title and jurisdiction remain intact. Until we voluntarily sell or cede our interests in our aboriginal title lands to the federal crown, Canada does not have the jurisdiction or legal right to purport to grant any interest in our lands to any third party, including individuals or foreign corporations.

Canada is contemplating entering into international trade agreements and protocols that will ensure foreign investors have guaranteed access to our lands and resources. It is the view of the Union of B.C. Indian Chiefs that Canada will use international trade agreements and protocols to condone the legalized theft of our lands and resources and the denial of our right of self-determination.

Canada, in practice, has not recognized the aboriginal title of the original inhabitants of this land, and does not recognize the nation-to-nation relationship that exists between indigenous peoples and the crown. Canada has never honoured our inherent right of self-determination, our aboriginal title to the lands, waters and resources that comprise our traditional territories, or our international status as peoples.

Canada has proceeded as though it has the unilateral authority to enter into these trade agreements without the consent of indigenous peoples. Indigenous peoples have not been informed or consulted about these international trade initiatives. Aboriginal title has been treated as though it were invisible and did not exist.

The Supreme Court of Canada, in the Delgamuukw decision, December 11, 1997, made it abundantly clear that our legal interest and title to the lands and resources exist and are on a par with crown title. This means Canada has no unilateral power to grant or vest any interest in our aboriginal title lands without our full participation and consent.

The international trade initiatives may override section 35 of the Constitution Act, 1982, which constitutionally protects aboriginal title and rights. By granting an automatic interest in our lands and resources to foreign companies and interests, these international trade initiatives will recognize more rights to a CEO sitting in a foreign metropolis than to indigenous peoples, who are intimately connected with and depend upon the land and its resources.

A major focus of the current initiatives being considered by the Standing Committee on Foreign Affairs and International Trade is to eliminate the barriers to trade at an international level. Our unsurrendered aboriginal title is a barrier to trade. Our unsurrendered right of self-determination is a barrier to trade. Any initiatives designed to exploit or further commercialize our land and resources require our full informed consent, both in international law and in domestic Canadian law. Until Canada obtains this consent, it is not in a position to enter into any international trade agreements.

In the current trade laws under which Canada and the provinces operate, our aboriginal title and rights have been under attack. Within British Columbia, to use one example, the provincial government has increasingly off-loaded and granted interest in our lands and resources to third-party developers without our consent. Initiatives such as the permitting of non-timber forest products and marine resources and the streamlining of crown land acquisition policies all have the impact of minimizing our interests in our title territories.

Provisions of the free trade area of the Americas agreement would give corporations the power to sue national governments where domestic legislation restricts trade. At present, Canada's domestic laws do not go far enough in protecting lands and resources, and are entirely silent about protecting aboriginal title, rights and jurisdiction. Through the FTAA, Canada might be placed in a position of compensating foreign investors where Canadian environmental legislation or other policies, perhaps the recognition of aboriginal title and rights, limit investment opportunities.

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Despite years of unauthorized taking of our lands and resources, Canada has not once compensated indigenous peoples for the infringement of our lands and resources. Canada has still not recognized our aboriginal title. Will this recognition be precluded under the new investment and trade agreements?

The Union of British Columbia Indian Chiefs believes foreign companies could sue Canada for recognizing our title and rights to specific lands and resources. Certainly recognition of the jurisdiction of indigenous peoples would leave Canada open to liability where international companies feel this interferes with their free and easy access to resources.

The result of the international trade agreements will be to restrict and limit Canada's current recognition of aboriginal title and rights and to in fact tie Canada's hands towards any future broader recognition of our right of self-determination and aboriginal title. For practical purposes, the international trade agreements will give Canada a means of sidestepping our aboriginal title and rights by recognizing economic interests of foreign interests before and above our constitutionally protected aboriginal title and rights.

Such trade policies will only serve to further disconnect our peoples from the land and resources by granting an interest in the waters, lands, forests, minerals, plants, fish, and animals that sustain us to companies and investors who have never set foot upon our soil, who have never sustained and taken care of the land, who have no interest in the land aside from the money it can provide to them. The only way these foreign entities can acquire an interest in our lands and resources is if Canada sells out our people and negates its fiduciary responsibilities by entering into these international trade agreements. As the Standing Committee on Foreign Affairs and International Trade, you have the power to prevent this.

The Union of British Columbia Indian Chiefs is very concerned about the blatant hypocrisy Canada has displayed in the international arena. There are international covenants in place that recognize the right of self-determination for indigenous peoples and recognize that the theft of land equals genocide for indigenous peoples who are closely connected to the land.

Canada has fought recognition of indigenous nations as peoples internationally and has not implemented or honoured the rights of indigenous peoples at international law, yet Canada seeks to use international agreements in an attempt to further their claim against our land and resources.

Until Canada honours and fully implements international covenants recognizing the rights of indigenous peoples, Canada is not in a position to enter into any international agreements or trade concerning our lands and resources. Without surrender, without consent, indigenous peoples will never support any international trade initiatives that grant interests in our lands and resources to foreign entities.

If Canada's goal is to increase certainty and economic prosperity for Canadians, entering into these agreements without the consent of each and every indigenous nation whose titled territories will be affected, that is not the way to achieve this. No matter how many international agreements or protocols Canada signs, the resources will still have to be taken out of our backyards, and we will not allow this to happen. Our people are prepared to take a stand to prevent any further destruction and degradation of our territories. Canada is not acting honestly within the international community if it pretends that it has the jurisdiction and legal authority to unilaterally enter into trade agreements concerning our lands and resources without our consent.

We have seven recommendations.

First, until the land question is fully resolved to the satisfaction of indigenous peoples, Canada is not in a position to enter into any international trade agreements concerning the unceded aboriginal titled territories and resources within British Columbia.

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Second, any trade agreements or protocols that Canada enters into must be made explicitly subject to the aboriginal title or rights of indigenous peoples who hold title, rights, and jurisdiction to the lands and resources.

Third, indigenous peoples are nations in an international sense, and no agreements or protocols that Canada enters into, absent our consent, can override our nationhood and right of self-determination.

Fourth, before proceeding, all land use and resource extraction initiatives require the full and informed consent of the indigenous people whose territories are involved. All development must proceed in concert with indigenous peoples' own laws and traditions relating to the protection of land, water, and resources.

Fifth, any international trade agreements must contain provisions for the explicit recognition of the jurisdiction of indigenous peoples and that indigenous peoples' own laws cannot be overridden by any international trade agreements that Canada enters into, and foreign companies must agree to the application of indigenous peoples' laws as a precondition to any developments on our territories.

Sixth, all international trade agreements must contain provisions that recognize the right of indigenous peoples to benefit culturally, as well as economically, from any developments on our titled territories.

Finally, our seventh recommendation is that the United Nations or other international bodies be invited to send permanent representatives to Canada to ensure that the title and rights of all indigenous peoples are respected and honoured despite any international trade agreements that Canada is currently party to or may enter into in the future.

Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you very much, Chief Phillip. I appreciate your presentation, the issues that are of concern to you, and specifically, your seven recommendations, which we'll look at very carefully.

Ladies and gentlemen, I'm—

Chief Stewart Phillip: I'd like to make one final comment.

The Acting Chairman (Ms. Sarmite Bulte): Absolutely.

Chief Stewart Phillip: Out of the whole issue of lands and resources, water is our greatest concern, and I think it's a way and a means of addressing this notion that this country is considering exporting bulk water. Thank you.

The Acting Chairman (Ms. Sarmite Bulte): Thank you again for that. You reaffirmed the position taken by Ms. Schwartzkopf.

I want to thank each and every one of the witnesses who have appeared here before us with their very detailed presentations. We've heard a variety of issues, not just this evening but throughout the day. In fact, we've heard from 39 witnesses today, and we will be continuing our consultations tomorrow. By the time we leave Vancouver, the committee will have heard from 70 witnesses.

I understand there has been some concern about the amount of notice. Notice originally went out in February, two and a half months ago. We're trying to accommodate everyone. If you feel that you want more consultations, if you want the committee to come back, please let us know. Write to the clerk, and we will try to accommodate if at all possible.

In the meantime, if there are briefs that you would like to submit, additional briefs from the witnesses, as well as from people in the public who are here, please see Ms. Fisher, our clerk, from whom you can get an address. All your briefs will form part of the official record, which will be taken into consideration as we prepare our report.

Again, thank you for being patient with us.

I also want to say a big thank you to my committee members for their participation, and to our researcher and our clerk, and to the tremendous job done by the translators and the technicians, who were here much earlier than the committee members. Thank you all.

I would like to adjourn this meeting officially. Ladies and gentlemen, tomorrow we'll resume at 8.30 a.m., sharp. Thank you very much.