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]

Friday, April 30, 1999

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[English]

The Vice-Chair (Ms. Colleen Beaumier (Brampton West—Mississauga, Lib.)): I call the round-table meetings to order.

You're going to have to forgive me. One of the things you learn travelling across this country is you should always do it in the spring or fall. It reminds you of the diversity. It was quite warm in Victoria this weekend, where I left my coat.

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 through the complex negotiating processes being conducted both multilaterally, under the auspices of the World Trade Organization, and in developing regional fora 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 Minister for International Trade Sergio Marchi on the necessity 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 half of the committee is holding hearings in the three western provinces, the other half of our committee is having similar hearings in Manitoba and Ontario. We hope to benefit from as broad a cross-section of Canadian opinion as possible and to reflect that in a report that we intend to table in Parliament before the summer, in advance of major international trade meetings taking place this year.

I think some of you have appeared in Ottawa and you know what the process has been. In leading up to this, we've heard from the minister and senior officials, and then a number of delegations were convened in Ottawa prior to the cross-country hearings.

By mid-April, more than a hundred witnesses had made substantive presentations to the committee, addressing a broad range of critical issues and concerns relating to the WTO itself and Canada's role in it and our objectives and strategies in the future round of multilateral negotiations, which are expected to be launched in the third ministerial conference of the WTO, with 134 member countries, to be held later this year in the United States.

As Minister Marchi stated in his opening presentation to us, international trade has now become a local issue. What happens at faraway negotiating tables has consequences that reach right into the kitchen table and to other domains of daily life. As this trend deepens as a result of globalization, the making of trade policy cannot be left only to a few officials in back rooms, but needs to engage the whole of society and governments of all levels.

Members of the committee therefore welcome these hearings as one step in contributing toward that goal. We have been impressed by the quality of the testimony and written submissions. Beyond the formal hearings, this must be an ongoing learning and listening process. In that regard, we have just added to our committee's Internet website a series of discussion notes with questions for public consideration, and we are planning to include in our report a citizens' guide to the WTO.

In encouraging all Canadians to come forward, it's my pleasure to welcome you this morning, and I think the views you'll be presenting today here will be perhaps a little different from many we've heard this past week.

This morning we have Dr. Sarkar, the director of University of Saskatchewan International and special adviser to the president. Welcome.

Dr. Foster, those of us on committee have had the pleasure of hearing you before, and we welcome you this morning.

I'm going to finish with the head table. Dr. Handy, I don't know what CALACS is.

Dr. Jim Handy (President, Canadian Association for Latin American and Caribbean Studies (CALACS); Individual Presentation): Canadian Association for Latin American and Caribbean Studies.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

And Dr. Peter Phillips, Van Vliet Chair, professor, faculty of agricultural economics. Welcome.

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I think we will introduce ourselves as well.

Mr. Charlie Penson (Peace River, Ref.): I'm Charlie Penson. I'm a member of Parliament for Peace River and the trade critic for the Reform Party, the official opposition.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): My name's Murray Calder. I am a member of Parliament from central Ontario. I'm also the vice-chair of the Standing Committee on Agriculture, and in my other life I'm an active poultry farmer.

The Vice-Chair (Ms. Colleen Beaumier): I'm Colleen Beaumier, member of Parliament from Brampton, outside of Toronto—not Toronto. I'm chairing this meeting because our chair has had to go to New York today.

Who's going to begin. Dr. Sarkar?

Dr. Asit Sarkar (Individual Presentation): Thank you, Madam Chairperson, members of the committee.

It's a special pleasure for us at the University of Saskatchewan to make presentations before your committee. I think whenever you see a panel from the university you would anticipate there would be a cross-section of views presented in the committee, and I am pretty sure this morning you will find at least some degree of diversity. But I hope also that within that diversity there will be a tone central to the interests of your committee, so that you will be able to take back some ideas from the committee.

I'm very pleased to be able to share some thoughts with you this morning on the negotiations toward the agreement of the free trade area of the Americas. I've been a professor of international business and I was a director of the university's Centre for International Business Studies prior to assuming my present position almost six years ago. So I'm well aware of the importance of moving toward the global marketplace where trade in goods and ideas can take place with minimal restriction.

Recognizing that FTAA economies represent significant opportunities for Canadian goods, services, and investment, I support the initiative of our government in moving toward such an agreement in a way that will be equitable for all the people in the hemisphere while at the same time protecting vital Canadian interests.

It has been suggested that the process of negotiation toward an FTAA has to be much more open than previous multilateral trade negotiations and has to take into consideration the views and concerns of more than just the government involved. This interest in seeking wider citizen participation is extremely laudable, since with the increased globalization of the world economy there has been a general shift of influence away from government to non-governmental organizations, the private sector, and individuals.

The rise of these non-state actors in the world economy, particularly the multinational enterprises, has been a matter of concern for a number of reasons, and I'm not necessarily going to refer to all of them.

Multinational enterprises contribute to private capital movements in a way that sometimes distorts the social priorities within specific country economies. Also, it has been suggested that private investment decisions of multinational enterprises sometimes bypass national laws on social health and safety.

As well, sometimes giving prominence to the strict trade agenda of multinational enterprises within multinational agreements may result in loss of sovereign-government control over non-trade issues. I realize the corporate agenda of the multinational enterprises may not always be in balance with the social and economic priorities of the individual countries where they have operations. They are there primarily to do their business and make profit, and when an investment opportunity is profitable that's where the enterprises move.

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However, in an attempt to control their behaviour one should be careful to ensure that the key objectives of achieving freer flow of goods and services are not hindered. We would not expect the private sector firms to take the responsibility for providing public goods. At the same time, the public goods delivery process should not make the trading environment so restrictive that private choices start working against the interest of these “restricted economies”.

An important element of any free trade agreement is a commitment to reduce tariff barriers. While there will always be concerns that a tariff reduction agenda is too swift, a free trade agreement will not be worth anything if it does not result in significant reduction and/or elimination of tariff and non-tariff barriers. The experience of NAFTA shows that Canadian companies in general have performed well in a low-tariff or no-tariff trading environment. We need to ensure, however, that the rules of the game are made clear at the outset, and that protection is provided against the user of unfair trade practices.

This particular agreement, the FTAA, will encompass a larger number of countries with much more uneven economic statuses than what we had foreseen in the FTA or NAFTA. Therefore, special consideration will be necessary for smaller and less economically developed countries of the hemisphere. Any such consideration should be temporary and should be sector specific. The ultimate commitment of every participant has to be toward a tariff-free trading environment.

The recognition given to the process of involving the civil society in the discussion leading up to the agreement has to be strengthened. The negotiation process is expected to be a long one, and during this period unforeseen changes within the hemisphere or other parts of the world economy could result in changes in outcome processes. There could always be changes in the individual national governments, which may work against not only the overall regional vertical interest, but also the human interest. There may also be unforeseen changes in the financial sector, as we saw most recently with respect to Brazil. Or things might happen in other parts of the world, which may again change the whole outlook of the trading environment within the region.

So we need to be flexible, and the consultation process also needs to be flexible. Just because a consultation has been done at the initial stage, it should not be the ultimate, in terms of consulting with Canadians. The non-government stakeholders need to be kept abreast of these changes at each important stage of the negotiation process and should be provided opportunity for providing new inputs. Therefore, the consultation process should be a continuing one, utilizing at a minimum the full potentials of Internet communications technology, and organizing virtual conferences.

In addition, it would be useful to establish a formal consultative process with non-government stakeholders so that the negotiating team can obtain quick feedback during the various stages of the negotiations.

There are also other important aspects in which Canada can take a lead. First, as an important player in the international development scene, Canada can play a very useful role in ensuring that smaller and less-developed economies in the hemisphere are not marginalized in the negotiation process. I'm aware that some of the negotiating team members from smaller economies have received training in Canada in the negotiation process, but that cannot be the only way that we help the smaller economy. We must also take steps to ensure that the views of the civil society in these countries are adequately represented during the negotiations. Ultimately, if we want this trade agreement to work for the people of the hemisphere, there needs to be adequate concern as to how the benefits of a more robust economy actually flow to the citizens of those countries.

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Second, Canada has an important stake in the knowledge industry. It can take the lead in ensuring that the knowledge industry is not subjected to various non-tariff barriers in the guise of protecting the national interests of individual countries. As has been evident in a number of countries in different parts of the world, access to the Internet and other elements of the information technology industry has been restricted by a number of governments, often for the purpose of restricting the freedom of expression. Canada can ensure that such restrictive elements do not get included in the agreement by seeking maximum possible freedom within the knowledge industry sector. Such a stance would also enable Canada to take a leadership role in the promotion of electronic commerce.

Third, there is the likelihood that elements of the FTAA will affect policies and standards that remain within the domain of provincial and local governments. It is therefore critical that provincial and local governments are brought into the key aspects of the negotiations involving such policies and standards. When approached together, it is more likely that common Canadian positions will evolve.

Finally, any FTAA ratification process should include a commitment by the government to provide annual reports on the impact of the FTAA on various aspects of the economy so that there is adequate understanding among all stakeholders as to the benefits as well as the problems that might ensue.

Thank you, Madam Chairperson. Those are my opening comments.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Dr. Foster, are you next?

Dr. John Foster (Individual Presentation): Madam Chair, members, and community friends, I will be addressing the FTAA issues, and my remarks are quite schematic because there are limitations of time. There are some references in my brief to further background material, should the committee be interested.

I'd like to talk a little bit about the context and investment and human rights and the social impact of an agreement like the proposed FTAA.

First of all, advocates of trade and investment agreements are prone to argue from the assumption that increased trade and investment will “raise all boats”, and this is by no means proven. The committee is aware, I'm sure, of studies on income distribution trends in the hemisphere indicating negative and polarizing trends leading to greater inequality and marginalization and coincident with the application of trade liberalization policies as well as other parts of what might be called the Washington consensus.

The work of Professor Albert Berry, of the University of Toronto, is a case in point. The broad protest in Peru this week is one visible expression of a reaction to the failure of ten years' application of such policies. This disruptive and divisive effect of trade and investment agreements and increased trade is not restricted to the poorer, more vulnerable, or smaller economies, but affects Americans and Canadians as well.

William Cline's study on trade and income distribution for the Washington-based Institute for International Economics documents the downward pressure on American wages and the widening disparity in the distribution of income related to increased trade liberalization. A number of recent studies have directed attention to similar effects in Canada.

The overall pattern might be summarized as integration for the few, dis-integration for the many: integration at an international and elite level, dis-integration, polarization, and impoverishment within individual societies. I don't have time to explore all the ramifications of this, simply to say it appears that trade and investment agreements of the current generation are likely to worsen these negative trends. The simple assertion that they will ameliorate conditions is quite insufficient. If there's disagreement over this, the most logical step to undertake is to thoroughly evaluate the social as well as the economic effects of NAFTA.

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If our concern is for overall social benefit, increased equity, reduced inequality, prosperity that is shared, as well as social peace, we need to design agreements that are directed toward and will facilitate those ends.

Where should such a reframing begin? Let me make a suggestion based on another agreement. In 1995 Canada and a number of our hemispheric partners signed the Copenhagen declaration and program of action at the World Summit for Social Development. We are committed to an extensive program to combat inequality, unemployment, and marginalization through such steps as comprehensive national programs for the elimination of poverty, with the direct participation of civil society organizations and those most seriously affected. The follow-through on our commitments will be reviewed next year at a special meeting of the General Assembly of the United Nations to be held in Geneva.

What better way to reach an overall agreement toward social development and social integration than to initiate a joint consultation in the Americas on the implementation of the Copenhagen commitments with the full participation of civil society actors? So my first recommendation is that Canada initiate as a framework, in a sense, for further negotiation a joint consultation among the governments of the Americas on the implementation of the declaration and program of action of the World Summit on Social Development, with the full participation of civil society actors, with the objective of developing agreements for more effective implementation of these agreements, including the provision of adequate resources and policy priority.

Within the polarization that is occurring in the Americas, one needs to take note, as the previous speaker did, of the effect of crises. The social and economic situation of the majorities in Latin America is currently worsened by the effects of the currency and broader financial crises, which seem to be endemic to the model of globalization currently being applied. The first crisis of the new generation was the so-called peso crisis in Mexico in 1994-95, but Brazil, Ecuador, and a number of other states are currently suffering a fresh round. This has led a number of authorities, from the notorious but quotable George Soros through to the Economic Commission for Latin America and the Caribbean, to call for measures that will strengthen the regulation of capital movements and will assist national governments to strengthen requirements.

Without going into detail, I simply want to remind the committee that one of the tests that should be applied to any prospective agreement is the extent to which it strengthens or weakens the instruments that will largely, but not totally, be at a national level to prevent and alleviate crises.

In this regard Canada's record is pretty ambiguous. In the 1996 negotiations with Chile, we pressed Chile to abandon its law on reserve requirements for foreign investors, but in the view of many observers, it was precisely that law that helped to isolate Chile from the worse aspects of the so-called tequila effect of the Mexican peso crisis.

So my second recommendation is that in any trade and investment agreement, including the proposed FTAA, Canada seek to strengthen national as well as international measures to regulate capital movements and investment so as to prevent and reduce financial crises.

On the issue of trade investment and rights, I know that you have heard a good deal, particularly from such bodies as the International Centre for Human Rights and Democratic Development. I would simply want to indicate that I agree with and would endorse the technical annex that they presented to the committee on the transcendence of human rights international law and its relationship to agreements.

I would say, however, that there continues to be a considerable danger that trade and investment agreements will subvert and offset our existing and potential human rights agreements, and this fact needs to be recognized, understood, and then corrected. I think there is a role for parliamentary bodies as well as renewed government study in this regard, and I make some suggestions in the written brief.

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I would say that a simple way of perhaps indicating this priority is to include in any trade and investment agreement a broad clause that links them to other existing commitments. The Europeans do this through what's call the standard human rights and democracy clause in trade agreements. I see no particular reason why Canada and its hemispheric partners could not agree to insert such a clause in the lead sections of the operative portion of any new agreement.

This doesn't obviate the need for further detailed human rights considerations related to an agreement. You will be aware of the joint social and labour declaration of the MERCOSUR heads of state last November, which gives quite detailed review of all their human rights commitments. So I'm recommending that the Canadian government undertake to negotiate a human rights and democracy clause in any new trade and investment agreement and that the Canadian government initiate a hemispheric conversation preparatory to a comprehensive joint agreement on social and labour rights in the hemisphere. The current agenda of the trade negotiations is not adequate in this regard.

With regard to investment, the inclusion of investment provisions in a new trade agreement is a matter of extreme concern. Canadian officials were busy last week laying groundwork for an investment chapter in the new agreement, while colleagues elsewhere were expressing concern about “a misunderstanding of what the intent of the expropriation provisions [of the existing Chapter 11 of NAFTA] involved, while denying there was an intent to reopen NAFTA”.

Having been bloodied in the Ethyl case, and with a number of other chapter 11 cases in train, the Canadian trade prizefighter staggers on willingly, seeking more damage. Instead of proceeding to expand NAFTA's approach to the hemisphere, Canada should be devoting its energies to the rewriting or rescinding of NAFTA chapter 11.

In the investment area, I believe our watchword should be “do no more harm” and we should seek to revise and reform those injurious aspects of the existing NAFTA. Why our negotiators are proceeding to recreate chapter 11 on a hemispheric basis amid the ruins and chards of the terminated multilateral agreement on investment makes one wonder if “learning” is a word that can meaningfully be applied at international trade.

The emerging literature on the multilateral agreement on investment fiasco, including the Lalumière-Landau report to the French ministry of finance and the report of the United Kingdom Parliament's environmental audit committee, indicate that both the process and the substance of that proposed agreement, which was built on the model of the chapter 11 of NAFTA, were deeply flawed.

So I am suggesting that the Canadian government undertake a thorough review, with full public participation, of the investment clause in NAFTA and comparable approaches in the MAI, and any draft FTAA text, to examine implications for Canada's ability to fulfil its international human rights, labour and environmental agreements, and that we not proceed with negotiations on an investment agreement in the Americas unless and until there are sufficient safeguards in place to ensure the primacy of human rights law and the preservation of the ability of states to regulate investment according to their own democratically determined priorities.

With regard to human rights directly and a proposed agreement, Canada needs to make clear that its commitment to human rights in the hemisphere is clear, indivisible, and unequivocal. Canada has not yet ratified either the American Convention on Human Rights, which parallels the international civil and political covenant, more or less, or the so-called San Salvador Protocol on Economic, Social and Cultural Rights, which parallels the International Covenant on Economic, Social and Cultural Rights.

There's significant debate over this. The Minister of Foreign Affairs has publicly stated his intentions to see Canada ratify. Nevertheless, a number of hurdles remain. The position of the government, its commitment, becomes more ambiguous as delay continues. Ratification of the economic and social protocol in particular would have quite a significant effect. My reading is that Canada's adherence would bring it off the table and into action.

What better way of signalling a considered and strong commitment to the indivisibility of human rights and of keeping our regional and multilateral commitments in some sort of order, and also of indicating that initiatives in trade and investment will not go ahead without a strengthening of the balancing institutionality defending the human interest?

There are a number of other steps I've outlined that Canada can undertake in this regard. And it should also be clear that ratification is only the beginning of the process, that we need to do a great deal to strengthen the application of these treaties and agreements in the hemisphere. That means resources and leadership in an international process of strengthening.

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I'm recommending that Canada ratify the American Convention on Human Rights, with a limited number of appropriate reservations, and the additional protocol to the American Convention on Human Rights in the area of economic, social and cultural rights, and that appropriate implementing legislation be prepared for Parliament, with encouragement to the provinces and territories to undertake similar steps, since much of the matter in these agreements falls under their jurisdiction.

I'm also recommending that Canada initiate, using the resources of parastatal and non-government agencies, a hemisphere project on the further development of effective access implementation and enforcement provisions.

Finally, I recommend that signature and ratification of the international covenants, the torture convention, the Convention on the Elimination of All Forms of Discrimination Against Women, and the American convention and additional protocol, should be made conditions of membership in any hemispheric trade and investment agreement.

In conclusion, let me say it's my position that the current threefold approach to negotiations in the Americas—that is, the OAS, the summit process, and the trade and investment process—not only need to be integrated much more thoroughly than they are now, but the trade and investment process needs to be put in the framework of an overall agreement that seeks an equitable, sustainable community in the Americas. The Minister of Foreign Affairs himself has cited that general objective of the construction of community in North America and the Americas.

I believe that noble objective could be reached, but we're not there yet, nor even close. And unless we put trade and investment agreements into an overall framework geared to social development, equity, and sustainability, as well as respect for human rights, we will undermine rather than reinforce the basis of community for the majority in the Americas. It's my sincere hope that the report of this committee will help us move from the one path to a new path.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Dr. Handy.

Dr. Jim Handy: I think we're seeing the diversity that Dr. Sarkar foretold in his presentation. Although much of what I would like to talk about echoes or touches upon many of the things John talked about in his presentation, my presentation will be shorter and a little vaguer because of that perhaps.

I start out with much the same assumption that John does. If we believe trade regimes and liberalizing trade should be designed for general social welfare, then the record of the existing trade agreements is not good in that regard. There are any number of studies that reflect increased inequality, growing levels of social unrest, increasing numbers of people around the world living in poverty, and most distressing to me, and to many others obviously, increasing numbers of people living in dire conditions of poverty around the world. Some of this worsening of conditions—not all, but some—is the result of current trade regulations and regimes.

So if we believe that to be the case, and if we seek to alter trade agreements to try to do a better job of promoting increased social well-being, the question then is how do we proceed? Clearly the only feasible way for Canada to proceed is to remain dedicated to international trade and to free trade, or freer trade, but to begin to try to alter those trade regimes in such a way as to address these issues. I would like to suggest that there are five broad categories Canada needs to approach in these trade negotiations. Some of these have been mentioned by both Dr. Sarkar and by John.

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The first category I'd like to mention is who do we bring to the table? I think, as Dr. Sarkar mentioned, we need to expand the scope of those people engaged in negotiations and in preparing for negotiations. As Minister Marchi said, international trade is a local issue. I think one of the immediate natural ramifications of that is that national governments solely cannot negotiate for all of these local interests.

The fact that the Canadian government is engaged in these consultations I think is a very good and important step. Not all other governments engage in such public consultations. Therefore, I don't think it is enough simply to have public consultations. I think we need to bring other actors to the table at negotiations.

In this context, we can think of many other sectors that could be represented at the negotiating table in a variety of different ways, but some obvious candidates are international NGOs, indigenous organizations, peasant and producers associations. It's difficult, clearly, bringing them to the table, but they have been brought to the table in other international fora in which formerly only states have been represented, particularly many of the things to do with the United Nations. I see no reason why it is more difficult to bring these non-state actors to the table in trade negotiation than it has been in some of the other international fora.

The second category I'd like to examine is restricting the reach of the markets. I have some opposition to Dr. Sarkar in this regard, and that won't surprise him, because I think there need to be provisions in future agreements that allow countries, or more local political structures, to prevent some things from being commodified.

One of the continuing effects of current trade instruments is to allow market forces to reach deeper into national and local societies. In many instances this is beneficial. In some instances it is not. What it has meant is it has the effect of commodifying things many people believe should not be commodified, and by doing so ensuring that some people do not have the ability to get access to these things because they can't pay for them.

This process, which is one that Vandana Shiva has called “the enclosure of the global commons”, continues. Countries and communities need to have the option of non-commodification. Certainly this is an issue that concerns Canada as we continue to struggle to keep medical care and education in the public domain. In other countries similar concerns encompass land, traditional or indigenous knowledge, and intellectual property.

The third category is the liquidity of capital, the mobility of capital. John commented on this at length. I'd like to make a couple of comments on this.

Certainly before we engage in any further negotiations about freeing investment around the world, we need something that controls international speculative capital, whether it's a Tobin tax or something like that. But I also believe national and local governments need to retain the right, if they wish, to put barriers in the way of certain types of investment or to place restrictions such as local partnerships and/or technology transfer on investments.

I promised I'd be shorter than John, or quicker than John—not shorter than John, I am shorter than John—so I will sum up fairly quickly here.

The fourth category is that we need some incentive in new negotiations on the trade liberalization that prevents decisions by international trade bodies that allow or force free trade agreements that are clearly detrimental to general social welfare. I would just point to one example on that, and that is the not so recent WTO rulings on the European Union and the banana trade. If it is continued through, the effect of that ruling will be to destroy banana production in the Caribbean and focus banana production even more solidly on mainland Latin America, controlled by the three big U.S. banana companies.

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Banana production in the Caribbean is not the most enlightened industry in the world, but it certainly looks like it when you compare it to mainland banana production controlled by the three big U.S. banana companies. It is less environmentally dangerous. It is better socially. It pays higher wages. It purchases from smaller producers. It does all of that. The recent WTO rulings will have a clear detrimental social impact, and it will be a disastrous impact.

I would suggest that recent WTO rulings on ensuring that the European market be open to rBGH cattle is a similar example.

Finally, I would like to echo again what John suggested. Free trade and liberalized investment regulations should not be constructed in such a way as to allow investors to avoid legitimate tax, wage, and environmental demands. Free trade agreements need to be linked to clearer commitments to observe human rights. These must be both political and civil rights and economic, social, and cultural rights. Freer trade and investment agreements should not be the engine for the race to the bottom.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

We have more time for questions, and we have two new members who have joined us.

Like the others, would you like to introduce yourself to the panel? I don't think Chris needs any introduction out here, but....

Mr. Jim Pankiw (Saskatoon—Humboldt, Ref.): Thank you. I'm Jim Pankiw, member of Parliament for the Saskatoon—Humboldt constituency.

Mr. Chris Axworthy (Saskatoon—Rosetown—Biggar, NDP): I'm Chris Axworthy, the MP for the Saskatoon—Rosetown—Biggar constituency.

The Vice-Chair (Ms. Colleen Beaumier): Thank you. We're glad you could join us.

Dr. Phillips, please.

Dr. Peter Phillips (Van Vliet Chair, Faculty of Agricultural Economics, University of Saskatchewan; Individual Presentation): Good morning. It's a pleasure to be here today, perhaps to provide a bookend to the presentations from the University of Saskatchewan. We started with a rather market-oriented comment from Asit, and we have shifted gears for the last two speakers. As an economist, I will try to bring us back to the market interests, particularly of this region and particularly of the agrifood sector.

As an economist, I have spent much of my life in and out of government and academia examining the development of policy and helping to implement policy. My observation is that there are always views on how trade does or doesn't work, but trade is only one of the policy mechanisms. Too often we anticipate or expect trade policy to achieve multiple objectives when usually you need multiple policies to achieve multiple objectives. So let me talk about how trade policy might assist with the agrifood development and commercial interests of western Canada.

Let me start by reminding you that the agrifood sector—not just farming, but the services and inputs to farming and the outputs and processed sectors—represent the single largest economic sector in Canada. It is actually one of the most dependent upon export activity of any sector in Canada. So our interests are not simply in one market or one region; they're global in nature.

Generally speaking, bilateral or regional trade agreements may have some benefits, but the biggest benefit likely will come from continued and sustained activity at the multilateral level.

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Although certain products are dominated by the Canada-U.S. trade relationship, in practice many of the new products and new areas to add value will be in markets outside of continental North America.

So what are our trade interests in the agrifood sector? I'm not going to dwell upon the traditional issues that I suspect you will have heard in your rounds so far. The traditional agenda of dealing with market access, tariffs, quotas, the tariffication process, minimum access, the production subsidy issue, the export subsidy issue, how much we should produce, whether it should be a green box, a blue box, all those issues that are out there are important, but, in my view, they will become less important as the years go on.

There are two areas that the committee will want to think a bit about as far as how it might advise the government to proceed. One is in terms of the expansion of existing international trade mechanisms. Many of our significant trading competitors and trading partners are not currently covered within agreements—China, Russia, and a wide variety of other countries. As long as they're outside of the agreement, the trade relationship and in effect the social and cultural policies my colleagues have been talking about will not be at all covered by norms and standards. So that's one area the committee may want to contemplate and perhaps ask questions about.

The other area is more commercial in nature. Agriculture is traditionally viewed as a low-tech, labour-intensive sector in North America. In fact they couldn't be further from the truth. It is now one of the most high-tech, capital-intensive, and knowledge-intensive sectors in North America. The advent of information technologies, remote sensing, various new agronomic techniques, and of course biotechnology have changed the fundamental base of where the industry will be over the next five to ten years.

That raises a whole set of new issues that have traditionally not been addressed in the area of agriculture. We tend to treat agriculture as a separate table within negotiations, and we talk about market access subsidies and domestic and export subsidies. Those issues may be somewhat important, but for a knowledge-based product where time is money and where in fact what you're selling is an intangible good that's been embedded in a food product, there are a whole bunch of other issues that need to be addressed in the context of the agrifood system, not simply in the context of broader economic objectives. Let me go through a couple of them.

If we go towards a knowledge-based agriculture, as we are in western Canada, quality, food safety, and intellectual property are going to be driving market forces and driving supply forces in the sector. That means we'll need to somehow come to grips with issues of standards.

We have various agreements under the WTO, the FTS system, and we have the Codex Alimentarius Commission for food safety. We have various ISO and HACCP systems that are being developed around the world. All of those have the great potential either to be a support to effective trade or to in fact be a barrier to trade. They are going to be more important probably in the longer term than whether the tariff is 5% or 3% on a processed food product.

Other issues that come into play that have the potential to impede or actually block any trade in agrifood products include the environment, current discussions, for example, with the bio-safety protocol, which have the potential to stop the transport or shipment of many of our primary and secondary products out of western Canada, and issues like ethical labelling of products.

We've had discussions at the Codex Alimentarius Commission. We've had discussions within various other food organizations looking at how we can start labelling products to achieve a certain market segmentation. Ethics is a subjective matter, and in many cases it becomes a tool for a trade barrier and not really a social or cultural mechanism.

There are other issues. As I mentioned, intellectual property rights and the creation and commercialization of knowledge are going to be a fundamental part of agriculture in the coming years. We are a signatory to instruments such as the UPOV system of 1991, TRIPS, and various international patent agreements, but those systems are not fully operating. In fact we're relying in many cases on U.S. patent law as either a barrier or the base for international trade in knowledge. I think we need to do some more examination of how we integrate that part of the negotiations into the agricultural trade agenda.

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Another area, which my colleagues have already alluded to and where I'll perhaps provide the contrary view, is that as the agrifood industry industrializes, no food chain will lie entirely within one country. You will see food systems investing in multiple countries, and hence investment rates, although they might appear to be a two-edged sword, will become a significant factor in the decision as to how to develop our agrifood system. As a result as well, competition policy will include issues that will flow into agriculture and the agrifood sector.

So what does this mean for government policies? There are a whole bunch of new issues out there. I have three points. One is that historically Canada has developed a negotiating table strategy that puts each of these issues at a different table with different specialists and often with very little crossover negotiating, strategizing, or information flow, and so the products of the negotiations have not always met the needs of the industry. Somehow we need to find both a vertical and horizontal way of managing negotiations in future rounds.

Second, these issues cut quite a few different ways. It may not be possible to pursue the negotiating strategy of the past where we pick a partner or a group of partners and align with them unambiguously and completely. We may find that some of our allies are outside of our traditional group of partners, such as the Cairns Group or the OECD bloc.

Finally, most of these issues will involve developing countries, and the capacity within the developing country community to negotiate in these areas is very thin. Canada may have some ability to assist the developing countries both to get the capacity to negotiate as groups and to implement any agreements that come out of these negotiations. The last round at times threatened to founder on the inability of the LDCs to engage in a substantive way. I think in future rounds where agrifood development and the markets are in many cases going to be outside of the developed world, there are going to be real pressures for us to somehow bring them more fully into the international trading system.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): We'll begin the questioning with Mr. Penson.

Mr. Charlie Penson: Thank you, Madam Chair.

First of all, welcome to the panel. The discussions we're having during our hearings across the country are going to be very beneficial to us when we put together the Canadian position going into both the WTO future negotiations and the FTAA process.

The FTAA process, in my mind, seems to be a much longer process. I think it was alluded to this morning that there is certainly an element of a better understanding on the part of at least some of the developing countries of what their interests might be, but it's a learning process to some extent as well.

I have three questions. The first has to do with civil society and the role they would play in these negotiations. It seems to me that it's pretty much taken for granted in Canada that we would consult civil society, but that's not necessarily the case in other countries, especially some of the developing countries in Latin America and South America.

I was at a conference in Mexico in December where several of the governments were suggesting that they don't intend to do that and that if they're forced to, they will not negotiate. To some extent it's hard to argue with what they're saying, because these are democratically elected governments, and some of them, I would just remind you, are fairly newly democratically elected governments, and so they're a little bit fragile.

I heard the comment this morning that we should bring civil society to the negotiating table, and I just can't imagine how that could possibly work.

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I was at the Singapore WTO ministerial, and there was a wide diversity of NGOs and interest groups there just to be briefed and consulted before the Canadian delegation went into the negotiating room. It seems to me that somebody has to carry that message forward as a single voice, because there isn't necessarily agreement. So that's one thing I would like a better understanding of.

On civil society itself, whatever that is, how do we know they're consulting properly? If governments are not consulting properly, how do we know if they're getting a wide view of their members' interests? So that's my first question.

The second has to do with the MAI, and it's more of a comment. In my mind, the talk about not going forward with any investment provisions in any of these future agreements is based on some faulty assumptions. I know a lot of people are championing the idea that they defeated the MAI because the public rose up and were against it. To some extent that's true, but also countries like the United States said that if we're going to exempt basically everything out of there—and I do believe countries should have the ability to exempt what they wish—why would we want one? That's the second point, I guess.

In Winnipeg on Monday we all heard from a number of groups.

The Vice-Chair (Ms. Colleen Beaumier): You know, we don't have that much time for questions, and all the preamble's taking up answers and....

Mr. Charlie Penson: And you're taking some of my time.

The Vice-Chair (Ms. Colleen Beaumier): Just get on with it, please.

Mr. Charlie Penson: Well, so much for consulting civil society.

Some hon. members: Oh, oh.

Mr. Charlie Penson: My last one is on sustainable development—the idea that some groups are not benefiting from this and we need to kind of resist the idea of further trade and investment liberalization.

We've heard a number of groups say that the public in developing countries would be far better served by having jobs and trade rather than aid; that we're misdirected in the aid aspect and we should be looking at lowering tariffs and lowering the problems with market access, in order to let those developing countries access our markets. They're also suggesting that even the environment would be better served, because a lot of times the subsidies in some of those countries are really deteriorating the environment. It can be shown even here in Canada, in terms of soil degradation, how subsidies have hurt Canadian topsoil in the farming industry.

I don't know if there's any time left for answers, but that's it.

Dr. Jim Handy: Perhaps I can begin by responding to your question about civil society and the various aspects of that question. To begin with, in my mind it is kind of perverse to suggest that a newly democratic government, because it is fragile, can't consult with civil society. Surely one of the ways of strengthening a democratic government is to have broad consultation with civil society. Clearly the argument from our trading partners that they can't consult with civil society is an old argument and bears no relationship to reality.

Mr. Charlie Penson: Dr. Handy, can I just interject?

Dr. Jim Handy: Sure.

Mr. Charlie Penson: That's what these governments or people are saying. You may have a different point of view from them, but if that really is the difference between them coming to the negotiating table on the FTAA or not, how would you handle that? Some of them are saying they won't do it if that criteria is put on them.

Dr. Jim Handy: That is exactly why I suggested we need to provide a mechanism for international civil society, if you like, to have a voice in negotiations. You said you can't imagine how they could be at the negotiating table. Perhaps I wasn't as clear as I could be in how this might be proposed.

• 1035

I don't necessarily mean that these sectors need to be at the negotiating table, but they certainly need to be both witnesses at the negotiating table and be able to present views and ideas, outside of presenting views and ideas to their individual governments. We have heard from you, and of course we all know, that many of these individual governments are not interested in hearing those views. So we need to provide a forum or fora in which these representatives of international civil society, if there's such a thing, can present their views to the negotiators from all countries involved.

Mr. Charlie Penson: Then would they sort of bypass their governments in that process?

Dr. Jim Handy: They've already bypassed their governments. Most representatives of civil society now have international NGOs, international indigenous associations and international peasant and producers associations that already have a voice in the United Nations, for example. When the food and agricultural organization met about food security in Rome, they asked the Via Campesina, among other international peasant and producer groups, to present and be witnesses. That's the kind of process that needs to go on, I believe, at any trade and investment negotiations.

Dr. John Foster: If I can make a couple of comments on your second and third items, Mr. Penson, the causes for the downfall of the MAI were probably many, with some internal as well as external. I think the report done for the French government on the concerns of civil society, not only on process but on substance, has a good deal of detail. There's also a very interesting speech from the former deputy to the chief negotiator on how some of these issues were treated inside, particularly how environmental concern was underestimated by the negotiators.

So I think that all speaks to transparency, and certainly with regard to the relationship between the WTO and non-governmental bodies, apart from business, transparency is a word we still cannot apply. So just in terms of the rules of the game for the next stage, we need to look very carefully at that, particularly vis-à-vis the WTO and the matter of negotiations.

On the MAI and any investment clause, I just point out two matters of substance that were of considerable concern in the French report and others. The first is the investor-state mechanism. From a legal point of view, a constitutional point of view, and a due process point of view, this is something we should simply oppose straight off the bat. It subverts due process and it certainly subverts civil society participation. Some people have called it a renewal of star chamber habits. We should get it out of the existing chapter 11 and we should not get into anything similar.

Mr. Charlie Penson: How would we do that?

Dr. John Foster: We have to negotiate. Of course, when the minister raised questions about the expropriation side of the interpretation of that clause, the Mexican minister basically said to forget it for the moment. But we will have to negotiate with those forces. They may be state governors in the United States or they may be other political parties in Mexico who are interested in change. This is a long-term thing. I can remember listening to a Brazilian member of Parliament in Santiago at the time of the summit who just sort of railed about how her counterparts in another country could have ever agreed to—as she put it—such a stupid clause.

We have been hammered by it already in the Ethyl case. The Mexican state government in San Luis Potosi is being hammered by it and we need to develop a strategy to change it. We should never have got into it. I say again, from a legal and due process point of view, it is totally regressive.

Mr. Charlie Penson: I would suggest to you that it takes all three parties to agree to do that.

Dr. John Foster: Yes, I agree. Therefore it takes a long-term strategy, but that's the way we have to hit.

The second thing has more to do with development issues Professor Handy was speaking of. When you talk to people about economic development from the community level up, many of the things they would like to see state, local, tribal or whatever governments apply, fall under the category of performance requirements. We want them to produce here. We want them to employ our people. We want their head office here. We want a certain amount of the production available locally, and so on.

Those are precisely the sorts of things that are forbidden in the draft MAI and that we need to watch out for in the FTAA. We need to allow governments at various levels to have the instruments that will encourage development and see that development is sustainable, involves employment and whatever other standards they want to put at a local and regional level.

• 1040

On the question of sustainable development, it seems to me that what's happening generally with the assumptions about kind of the one-size-fits-all economic requirements, whether they're from the IMF, the World Bank, or WTO, is that there are some risks in those assumptions. I refer particularly to the work of Dani Rodrik, a Harvard professor who is an adviser to the Group of 24, related to the World Bank, basically saying we have to leave much more room for national variations, for national applications. That means those clauses that restrict government from regulation and direction of development have to be reduced. We have to cut down on that sort of arbitrariness from a multilateral level and permit more variation and creativity at a national level.

The Vice-Chair (Ms. Colleen Beaumier): Dr. Sarkar, quickly, please.

Dr. Asit Sarkar: Thank you. I would like to address that aspect of civil society's participation.

First of all, civil society, particularly in trade negotiations, includes not only our traditional concepts of NGOs but also the private sector organizations, as well as the universities and other higher educational institutions that are concerned with trade and economic policy.

One of the effective ways in which Canada can help the countries in ensuring that civil societies can provide effective involvement is through.... Let me give you one example.

IDRC, of Canada, in its Latin American division program, has an excellent program on trade, employment, and competitiveness. We have not used these kinds of programs to enable the countries where the partnership-building and knowledge-sharing with Canadian institutions would really enhance the capacity of these countries. So I think these are ways we can selectively use our existing development initiatives to strengthen the capacity of developing countries.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

I think we have to point out that it's civil society that we've been elected to represent, so they should play a very large factor.

I really apologize. We don't have any more time for questions, and there are a couple of us who are extremely disappointed at that. Unfortunately, we can't convince the airlines to change their schedules for us.

Thank you so much for your presentation. I, for one, really enjoyed listening to the perspective. I'm sure everyone here did. I have to admit that many of my questions were answered in your presentations. I assume that any one of us can be free to write to any of you to get more clarification.

Dr. Asit Sarkar: Yes.

The Vice-Chair (Ms. Colleen Beaumier): Thank you very much.

Our next group is the Saskatchewan Council for International Cooperation and the Saskatchewan Health Coalition, John Derbowka and Warren Peterson.

Good morning, and thank you for coming. As you can see by our previous presenters, we've had some fairly significant and insightful presentations, and we're looking forward to hearing yours. As I said before, we're on a terrible time schedule, regretfully. So if you could keep your remarks to about ten minutes, it would leave more time for questions.

Please begin.

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Mr. John Derbowka (Board Member, Saskatchewan Council for International Cooperation): Thank you very much, Madam Chair.

I'd like to just briefly introduce myself. As a volunteer with the Canadian Hunger Foundation partners, I represent them on the Saskatchewan Council for International Cooperation, which is an umbrella agency of 30 Saskatchewan churches, institutions, and voluntary agencies active in international development and global justice issues.

If I might refer you to our submission, I'd like to quote fairly heavily from it. I would note the first two pages dealing with the global economy essentially identify that our current globalization of trade and finance is strengthening trends toward an economic order that is less equitable, less environmentally sustainable and therefore less economically sustainable in the face of rapidly increasing poverty.

Today there is greater and increasing disparity, not only between rich and poor nations, but also between the rich and poor groups within nations. At local, provincial, national and international levels, there is a need to develop, articulate and put into effect a practical and workable vision of a more just, equitable and sustainable economic order.

The World Trade Organization was created to enable the participation of smaller and weaker economies of the world in the development of global trade policy that inevitably affects them. However, since the defeat of the new international economic order 25 years ago, the purpose of the UNCTAD and the World Trade Organization has been increasingly to promote policies of trade liberalization, often over the objections of smaller and weaker economies.

As the Indian ambassador to the WTO general council remarked, “The implementation (of the WTO annual report) is that governments must give a higher priority to the profits of transnational corporations and the welfare and well-being of their people. Almost all governments in the world are democratically run and accountable to their people. It is the people, not governments that live out the harsh reality of the crisis”. As such, governments must be free to implement policies that protect their people from the harshest extremes of the market economy.

The attack in the WTO on the rights of national governments to observe local procurement practices is therefore a concern. While globalization focuses on international capital and development of global markets, United Nations Development Program identifies community economic development as a key priority in eradicating poverty. The UNDP recommends creating an enabling environment for small-scale agriculture and micro-enterprises in the information sector. These contribute to growth, since they generate income and employment at low cost, with few imported inputs and low management requirements.

The protection of fledging industries, although directly contrary to rules of trade liberalization, is also widely acknowledged to be a necessary step in the development of national economies and the reduction of poverty. Great Britain, the U.S.A., Taiwan and Japan—in fact most of the world's strongest economies—have gone through intensely protectionist phases in the development of their economies. Now that these countries and industries are looking for new markets in which to compete, they want to deny developing countries the right to institute the same protections.

Financial deregulation is another concern. Several times in the course of the Asian financial crisis and the ensuing crisis in Brazil, we saw the IMF demand further liberalization of financial markets in countries already in distress—steps that are now seen to have been a mistake—at great cost to the people of those countries.

Countries such as China and Malaysia, who intervened in financial markets by fixing their currencies and instituting some conditions on foreign investment, have experienced lesser degrees of economic crisis. It is important that national governments continue to have the freedom to adopt their own solutions, even if they involve market regulation.

Global trade liberalization has resulted to a great degree in the sacrifice of people's economic and environmental security, for the purpose of pursuing competitive advantage. Third World countries desperate to attract investment in many cases ignore their own labour and environmental legislation to please foreign businesses.

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Maquiladora workers from El Salvador who visited Saskatchewan recently described how government leaders in El Salvador had demanded their execution as traitors for the crime of organizing a union. Maintaining an environment for business that is entirely free of labour organization or workplace safety standards, liveable wage standards, or respect for workers' human rights is seen by governments to be essential to their participation in the global economy.

Rather than upholding countries' environmental or labour legislation, current free trade agreements make it easier for investors to challenge them. In Canada in 1998, U.S.A.'s Ethyl Corporation challenged Canada's environmental legislation and its challenge was upheld under NAFTA regulations. While the Canadian government could have invested millions in research to show that its democratically enacted legislation was environmentally justified, and was not merely a trade barrier in disguise, it opted instead to repeal the legislation. What environmental standards might third world countries be forced to repeal when challenged, lacking the resources to engage in legal defence and independent research?

In this instance, global economic theory is running entirely at odds with the objective of raising levels of human development and environmental sustainability. WTO must institute global labour and environmental standards that will allow countries to harmonize up, rather than spurring on what Mr. Romanow, here in Saskatchewan, has termed “a race to the bottom”.

The section on infrastructure goes on to note that there cannot be a level playing field for developing countries until they achieve the institutional support for education, health, and income security developed in industrialized countries, mainly again through government regulation, and would note that in that section.

The next-to-last section, dealing with sustainable markets, notes that over-reliance on exports can leave an economy vulnerable to international price fluctuations and unstable economies linked to falling human rights standards and increased poverty. Many industrialized countries have watched unemployment soar to levels not recorded since the 1930s and income inequality reach levels not recorded since the last century.

Perhaps I might just take up the last section, Canada's role. Canada, and Saskatchewan in particular, depends on trade, and trade depends on consumption. Neither trade nor consumption are harmful in themselves and are in fact the lifeblood of many human advances. However, example upon example, in both industrialized and third world countries, shows us that the benefits of economic growth are generally concentrated among few, and intervention in the market is generally required to ensure that wealth is distributed. Today, change is urgently needed to end economic policies that widen the gap between rich and poor, that cause people and resources to be sacrificed to global competitive advantage. Instead, there's an urgent need to develop a global economic system that sustains human development, now and in future generations.

I would just conclude by noting the recommendations. There are five basic recommendations:

(1) That Canada participate vigorously in the World Trade Organization in order to promote balanced world trade that recognizes the rights of citizens over their own national and local economies.

(2) That Canada promote development of global environmental and labour standards jointly among members of the World Trade Organization, and enforcement by the WTO of such standards.

(3) That Canada defend the role of government in development of people and infrastructure.

(4) That Canada promote trade policies that develop sustainable markets for export goods, rather than creating gluts of overproduction in the face of staggering poverty.

(5) That Canadian representatives be aware of parliamentary priorities related to the global economy and ensure congruence of Canada's position in the World Trade Organization with its overall foreign policy objectives.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Mr. Peterson.

Mr. Warren Peterson (Spokesperson, Saskatchewan Health Coalition): I represent the Canadian Health Coalition. I have personally been involved for years with health advocacy in Saskatchewan and in Canada itself and in fact internationally.

I want to start off with the lead statement in the paper before you. Today we are faced with the most fundamental of questions. Are societies and cultures to be determined by a single set of values? And if they are, can humankind, let alone humanity, survive?

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That is perhaps a dramatic introductory statement. What I will now do in the interest of brevity is go on and pick out certain key points in the brief that I have submitted.

Referring to the last paragraph of “The Same Old Story” section, the groundwork, of course, in secret and without fanfare, has been going on for a long time, particularly in Latin America and certainly with respect to government activities in North America. The WTO Working Group for Trade and Investment is in full swing with its education programs to sell its principles, while the San José ministerial declaration states it will follow the WTO principles while declaring also that the FTAA should improve on them.

As an example of the effectiveness of the WGTI, the December 1998 annual International Co-operative Alliance conference in Montevideo was dominated by World Trade Organization-dominated propaganda. There was no civil voice. Ironically, the theme of that conference was “the human face of the economy” and it lacked any civil participation. This was the International Co-operative Alliance's region of the Americas annual meeting in Montevideo.

Health care in the Americas itself is characterized, according to the Pan American Health Organization's most recent report, by decentralization, legal and administrative autonomy, new forms of financing—and we know what that means—emphasis on cost control and cost recovery, and the creation of basic packages of health services. The current thinking of the organization's health services system emphasizes in Latin America the influence of market economies, self-management, institutional pluralism, economic efficiency, cost control, and cost recovery. And so it goes.

These principles and practices enumerated in the PAHO report clearly reflect the liberalized trade agenda. To elaborate on just three of these, let me suggest that the practice of creating basic packages of services means that the private sector can assume for-profit delivery of any services not included in the basic package, including profitable queue-jumping access to services and high-tech care for those who can afford it. The basic package, of course, would include such items as care of the indigent and maintenance and promotion of public health, none of which are lucrative for the private sector.

Social participation, one of the other emphases in the principles package of health in the Americas, is broadly stated in policy but narrowly practised. In Canada this normally takes the form of an invitation for briefs on given issues and the formation of committees such as yours—full stop, in terms of where those briefs go.

Coordination of public and private sectors: This practice allows greater opportunity for private companies to profit from the delivery and ensuring of health care services. Look south to the United States.

The emphasis on cost recovery is particularly vicious and insidious. The practice of cost recovery for social programs will inevitably lead to a clamour from business interests for further tax reductions and heavy reliance on user pay, from which private insurers will reap a windfall profit. If this emphasis becomes formalized in the free trade area of the Americas, the public is particularly vulnerable to increased marginalization.

We've seen a lot of this happening in Canada already. It is happening with health care reform. It started happening with cuts to the health care budget. It started with calls for smaller government and larger private participation. It continued with downloading of administrative responsibilities and cost recovery responsibilities. While public service decreases and becomes localized, business increases in size and becomes huge and monopolizes world goods and services.

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I could go on and detail some of the aspects of how this was arrived at. For one thing, of course, the institution of the CHSA and the dismantling of the established programs funding system has resulted recently, in the 1999 federal budget, in the actual ignoring of the possibility of national programming. There is more money for health care, but it's within the CHSA system and there is no focus for designation and for coordinated effort in the efficient use of that funding. Oddly enough, and perhaps purposely coordinated, at that same time—just days earlier—the social union agreement was signed, which would further implement liberalized trade in Canada, particularly in services—a further decentralization of responsibilities.

Since the federal budget, in this framework, failed to mention any kind of national health program, and having also in earlier years upheld Bill C-91 and the extended patent protection to multinational pharmaceutical companies, the Government of Canada has literally made moot the question of whether we can develop national programs in social services, such as pharmacare, home care, child care. That is a significant degradation of Canada's traditional role of collective responsibility.

The public distrust of regional health authorities reflects the widespread regionalization.... Of course, I should have been reading my paper instead of talking off the top of my head.

The Vice-Chair (Ms. Colleen Beaumier): Could we get to your recommendations, because we're running out of time.

Mr. Warren Peterson: Yes. There are steps that Canada can take now to assure more socially benign trade agreements, or at least less dangerous ones:

- Acknowledge that civil society has a legitimate, constructive role to play in trade issues and act accordingly.

- Move to tighten the FTAA definition of NGOs to exclude business interests. This is what the earlier commentators were also saying. As a driving force behind liberalization, business interests are already powerfully represented.

- Include meaningful and equitable participation of civil society in the negotiating process itself by including NGO representation in each negotiating group. By far the largest groups to be affected by any free trade agreement are those excluded from the making of it.

- Acknowledge the frightening reality that measures taken in the FTAA without a full and exhaustive audit of their social and environmental consequences will inevitably lead to world disaster; and act accordingly.

- Move immediately on parliamentary motion M-239 to establish a Tobin tax on financial transactions. Involve and educate the public in such efforts.

- Finally, promote debt relief for highly indebted nations.

I'll just read the last paragraph. The idea that a common set of rules for trade and investment conflicts with social well-being should present an oxymoron. Sadly, it does not.

Continued exclusion of civil society from participation in decisions that so profoundly affect it not only risks bad trade agreements, it risks escalating civil unrest worldwide. Exclusion also has another more sinister dimension, that the single set of values prescribed by the principles and practices of trade liberalization will become the single set of social and cultural values. The thought of it conjures a nightmare. The mere attempt to imagine it is to enter a grey place of constant and senseless movement, without colour or hope or dimension, and dominated by the pounding question: Is this all there is?

Is this all there is?

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The Vice-Chair (Ms. Colleen Beaumier): Thank you.

I'm sorry, we don't have time for questions, but I know the clerk can locate you. For those of us who have questions, I'm sure you will welcome and respond to any of our questions.

Mr. Warren Peterson: I just want to express one concern on record. I'm concerned that we were given less time than the first set of witness and less time than the next set of witnesses.

The Vice-Chair (Ms. Colleen Beaumier): I believe that was based on.... I didn't set this. I don't know.

Mr. Warren Peterson: I want that on record.

The Vice-Chair (Ms. Colleen Beaumier): All right, it's so recorded.

Mr. Warren Peterson: Thank you. The questions would have been very important in this context.

The Vice-Chair (Ms. Colleen Beaumier): Okay.

Next we have Marvin Shauf and Jonathan Greuel, from the Saskatchewan Wheat Pool, and Noreen Johns, from the Saskatchewan Women Agricultural Network.

Good morning. Who would like to start and give a short introduction? As you can see, we're pressed for time. If you can compress your presentation, it will give us more time for questions.

Ms. Noreen Johns (Executive Secretary, Saskatchewan Women Agricultural Network (SWAN)): Sure.

The Vice-Chair (Ms. Colleen Beaumier): Thank you very much.

Ms. Noreen Johns: The Saskatchewan Women's Agricultural Network has asked me to read a statement from them, so I will be reading the text that I've provided for you.

We are a province-wide non-profit women-in-agriculture organization. SWAN began in 1985 as an educational support group for farm women in this province and has since become an advocate on many farm, farm family, and farm women's issues. We are pleased to have this opportunity to appear before this panel to discuss our views on the very complex and very important issue of world trade.

We appreciate the views of your minister that international trade has now become a local issue and that its consequences reach into the kitchen table and other domains of daily life. SWAN members experience first-hand the realities that farmers face today as part of a global marketplace. It is those realities that form the opinions that we present to you today as we reflect upon the implementation of existing agreements and upon the scope, content and processes of new negotiations under WTO.

SWAN members had the privilege of attending the focus group here in Saskatchewan, hosted by Saskatchewan Agriculture and Food, and the federal-provincial agricultural consultations held in Ottawa. We learned much from those discussion, and we thank you for this opportunity, then, to consolidate our thoughts and suggestions into this submission. We believe all of these are important processes to build understanding among agriculture sectors and geographies and to form a more united and stronger trade position for this country—and I might add, an agricultural trade position. We trust that the input gathered from those meetings and from these hearings will indeed receive voice in Canada's negotiating position.

SWAN's position is clear. Canadian negotiators must present from a position of strength, and the stability and profitability of Canadian farms must not be compromised in the next WTO round.

We all recognize the importance of trade to the health of the Canadian economy. Canada's agriculture is a major contributor. Here in Saskatchewan, agriculture accounts for 12% of our GDP, and 40% of our jobs in Saskatchewan are related to this industry; 80% of Saskatchewan's agriculture production is exported, which makes us very vulnerable to trade conditions.

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It is evident that the implementation and enforcement of the existing WTO agreement must receive strong consideration in any future talks. Other countries must first live up to their commitments of the past, as indeed we have, before any new discussions can proceed in good faith. While Minister Vanclief claims that Canada is making headway ahead of the target scheduled in agriculture, until other countries follow suit and the playing field is levelled, Canadian farmers are paying a price too dear.

Clearer definitions of the rules and terminology are required to prevent the self-interpretation that exists today around export subsidies, market access, and domestic support. We definitely need to know what is and what isn't an export subsidy.

There is need for an improved trade dispute resolution process to enforce WTO rules and to prevent trade harassment. Any such tribunal cannot be dominated by the major powers. Good policing policies and non-political, science-based rules must be central in any mediation.

I was very dismayed with the remarks of Dan Glickman of the United States, who at the April 19 banquet of the national conference suggested that Americans are doing no wrong on behalf of their farmers, and then he used our podium to attack the Canadian Wheat Board. I was equally dismayed that his remarks went unchallenged, in the polite Canadian way. As Minister Goodale stated at the Tuesday luncheon, the Canadian Wheat Board has been investigated six times and six times exonerated. Mr. Glickman's attack bordered on harassment, and our officials meekly accepted his remarks.

How we market is for Canadians to decide. We must mount a strong campaign to resist the unproven American allegations against the Canadian Wheat Board in the discussions around state trading enterprises and export monopolies. The Americans could better focus their attacks on the monopoly power and the lack of transparency of the multinational giants like Cargill. Canada must chose its negotiating allies wisely and as differing circumstances dictate. We would do best to present ourselves in our own positive, independent light, and not totally in the American shadow.

While we agree that value-adding is important to our province and to this country, the reality for Saskatchewan farmers is we are not receiving our fair share. Much of our value-adding is built upon cheap raw products. As one participant at the Ottawa consultation stated, the wealth of trade is not equally distributed to the farm. While agrifood exports have increased five-and-a-half-fold since 1975, realized net farm income on Canadian farms has declined 25%.

A worry for me as a primary producer is that at the bargaining table for reduced tariff on processed products, reduction of support for primary agriculture must not become the carrot. The emerging issues of health and sanitary restrictions offer more subjective and intangible trade barriers to complicate the millennium round of WTO. Where does science stop and politics begin? Can we combat fears with consumer awareness, communication, and trustworthy labelling of products? Does pricing have the power to change attitudes?

While Saskatchewan producers are encouraged to use the new GMO technologies, such as the transgenic canolas we use on our farm, how many markets will open up with a call for science-based proof of food safety concerns and how many will remain closed simply because of consumer choices not to purchase? Perceptions are often reality for our consumer customers. Canadian farmers must insist upon an open, honest, non-commercial evaluation of potential markets and risk of widespread use of GMOs. With dual products like our canola, the internal problems of segregation through the grain-handling system may put the large European market at risk.

Canada is well ahead of its WTO commitments, and I question whether Saskatchewan farmers who were hit with the loss of the Crow, rail deregulation, and a reduced federal safety net package were indeed the sacrificial lamb to satisfy a vague trade commitment in the past. Several times at the Ottawa consultation, questions were asked as to how much of the withdrawal of support for Canadian agriculture was domestic choice and treasury-based decisions, and how much was actually required under WTO commitments. We believe Canada must hold its cards much closer in this round of negotiations. Last time we led the world and sacrificed much. This time we must pull the rest of the world up to us. It is their time to catch up.

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As farmers, we lack confidence that prairie agriculture was not being traded off in the last round of negotiations. SWAN had likened Canada to someone who had taken off most of their clothing before approaching a strip poker game. This time Canada needs a long-term vision and a stronger position through to the end.

Decisions made at the negotiating table are affecting the future of our agriculture families. The competitive gains Saskatchewan farmers have made because of technological improvements have been taken away, because our federal government is not treating us as do the treasuries of other countries.

Farmers have invested heavily in our future through major expansion, education, new technologies, risky and often expensive diversification, and long hours of work both on the farm and in off-farm employment to support our farms. Farm cash receipts are up, while net farm income has declined. Much of Canadian agriculture is built upon the free labour of farm families, including farm women and children, and until Canada recognizes the value of this family resource, we cannot hope to succeed in the global economy. In a nutshell, Canada may be killing the goose that lays the golden egg.

I thank you for your attention.

The Vice-Chair (Ms. Colleen Beaumier): Thank you. I think you've made it very clear, and many have, that agriculture is important. Perhaps we will send the negotiators who don't want to fight for agriculture to the table either hungry or with a promise that unless they do well by agriculture, they won't get dinner.

Ms. Noreen Johns: That's very good. Thank you for that comment. I appreciate it.

The Vice-Chair (Ms. Colleen Beaumier): Are you going to split your time or are you both presenting?

Mr. Marvin Shauf (Vice-President, Saskatchewan Wheat Pool): I will be presenting.

Thank you for the opportunity to be here. I appreciate the fact that you've travelled across Canada to hear Canadians and their organizations and industries voice concerns and offer input into this very important issue.

As you're well aware, there was a conference in Ottawa about 10 days ago that was designed to deal with agricultural trade issues into the future, and about 500 people showed up for that conference. I think that speaks to the importance of agricultural trade issues in the next round of negotiations. I believe the future of our industry depends in large measure on how well we fare in the next negotiations, which begin this fall.

World trade rules impact farm income and the viability of agriculture-related businesses and industries. World trade also affects the diversification of our economies not only locally and provincially but also nationally.

I'd like to take a few minutes to give you a brief overview of Saskatchewan Wheat Pool as an organization. We have 74,000 class A members. Saskatchewan is Canada's largest publicly traded agrifood cooperative and western Canada's largest grain handling company. We employ more than 3,000 people across Canada. We are a made-in-Canada company, with operations in the United States, Mexico, Poland, and the United Kingdom.

While our core business is grain handling, Saskatchewan Wheat Pool has developed into a highly diversified, integrated company that exports a wide variety of products around the world. We add value to the crops grown by our producer members, including flour, which we mill. We process oats, most of which is exported to the United States. We're involved in oilseed crushing, ethanol production, and barley malt production.

Our livestock division exports livestock and fresh, frozen, and processed meat. CSP Foods is a division of Saskatchewan Wheat Pool that produces baking goods, including peanut butter products, sugars, and icings, which are in high demand south of the border. This is one of the important areas, because increasing access to the United States' market could allow our value-added and further processing on the prairies and in Ontario to expand.

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The diversity of our exportable product base and our direct contact with producer-members give Saskatchewan Wheat Pool a broad perspective on the importance of improving global trading rules. We have both the commercial perspective and our members' perspective to keep in mind.

The conclusion of the Uruguay Round was a watershed for the sector because for the first time it gave us a set of international rules for world agricultural trade. We must continue to build on that progress in the upcoming negotiations. The agriculture sector will be affected by both the agriculture agreement and the broader set of negotiations that will occur.

I want to touch briefly on those issues and their importance to agriculture and to Canada. Saskatchewan Wheat Pool firmly believes the agrifood industry has significant potential in both commodities and value-added exports. The benefits of realizing that potential will be felt not only in our local communities and provincial economies but also in the entire Canadian economy, which will benefit from more stable farming incomes, increased value-added, and further processing.

For the industry to realize its full potential we need a level playing field in the international marketplace through reductions in trade-distorting subsidies and increased market access so that farmers and agrifood processors have greater opportunities for selling the high-quality commodities and products we produce. We need a commitment from the Canadian government to provide a sustainable level of domestic support in order to maintain the industry's competitive advantage and enable producers to effectively manage risk.

International competitiveness is an area I would like to address. Export subsidies and lucrative domestic support programs being provided by other countries are distorting the world market for agricultural products. These subsidies are destabilizing and driving down world prices. In the years following the Uruguay Round Canada quickly went beyond its commitment to reduce subsidies. The loss of the Western Grain Transportation Act, WGTA, eliminated our export subsidy program entirely. Today prairie farmers pay the full cost of shipping their grain to export position, which is an extra cost of about $560 million annually. The federal government's funding for safety nets has fallen by 80% since 1992, placing Canada well below its commitment to reduce production-distorting domestic support. On top of that cost recovery fees for Canadian producers have increased by $150 million.

While we're not necessarily advocating a return of historical expenditures, it is important to realize that Canadian farmers cannot compete against the treasuries of other countries. Canada must continue to work for the elimination of export subsidies. Canada must also continue to work for restrictions on trade-distorting domestic support provided by other countries.

Canadian producers have made adjustments to their operations in order to remain competitive in the world market. They've diversified their operations, expanding production in new crops and decreasing wheat acreage. However, this transition has been hampered by the U.S. and the EU as they continue to provide high levels of support to their farmers, which is distorting market signals and leading to overproduction in those commodities. For example, while farmers in western Canada intend this year to decrease durum by 28% due to the forecast of lower prices, U.S. farmers are expected to increase acreage by 12% in response to a new crop revenue insurance program and lucrative program payments.

Compounding the problem is that countries faced with huge supplies often resort to using export subsidies that lead to a further distortion of world markets. This year the Europeans have an export subsidy that has paid up to $139 per tonne for barley malt. It's impossible for Canadian farmers to compete with a country that is willing to pay customers that much money to buy their commodity. Canadian farmers can't compete with that on an economic basis. It's no wonder that this year Canadian offshore sales for barley are virtually non-existent.

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While the Uruguay Round attempted to curb the use of export subsidies, both the United States and the Europeans argue that existing agreements permit them to apply unused subsidy allotments in later years. Although we would like to see the complete elimination of export subsidies, at the very least these loopholes must be closed.

With world stocks increasing, the potential exists for an unrestrained subsidy war that rivals those of the late 1980s and the early 1990s, and those cannot be weathered by Canadian producers. Primary producers are at a competitive disadvantage, and the long-term consequences of long-term lost competitiveness cannot be ignored.

The Canadian government must secure adequate funding domestically for infrastructure expenditures, research and safety nets. We must obtain assurances that programs such as NISA and crop insurance will not be subject to countervailing duties or reduction commitments.

Canadian farmers rely on world markets. Our relatively small population, coupled with a huge amount of arable land, means that we are net exporters of agricultural commodities. Fully 80% of our grains and oilseeds grown in the prairies are exported. Agriculture and agrifood producers need expanded and more secure access to international markets for the goods they produce. This includes raw commodities, consumer-ready goods and value-added products, such as canola oils and meat products. With more favourable trade rules, there's a huge capacity to increase value-added and further processing in Canada.

Canada needs to focus negotiating efforts on developing and accessing profitable markets. To this end, our goal going into the upcoming round should be to increase our access to world markets in three ways. First is by expanding minimum access commitments. While it's important to clean up existing access commitments, the industry also needs assurances that we will move beyond initial levels and see commitments grow over time.

Second, we need to negotiate lower tariff rates. In-quota duties should be eliminated, and we need to secure commitments to reduce the practice of tariff escalation, which is a tariff that discriminates against value-adding to products in the Canadian economy. Higher tariffs for value-added and processed commodities limit expansion of value-added processing industries here in Canada, as I said.

Lastly, we need to increase the transparency of the administration of tariff rate quotas to ensure that they do not diminish the size and value of market access commitments negotiated.

We need to move ahead on options such as zero-for-zero in sectors where support for this approach exists. Market access must be secure access. Last fall American producers attempted to block the free flow of agricultural products. They see Canadian products coming across the border, whether it's livestock, canola or grain, and demand that their government block Canadian access. They fail to see their own products coming into Canada. They also fail to see that our exports to the United States represent a very small portion of their overall market.

Canada and the United States recently announced a new process to prevent trade disruptions. This process includes federal, provincial and industry groups and will be a positive step to ensuring that threats to our markets, such as we experienced last fall, are diminished. However, we must also work to improve the WTO's dispute-settling process, to see issues resolved in a more timely fashion.

Finally, the new agreements we negotiate must be implemented in a timely manner in all countries, so producers can benefit immediately from the gains we make. Several other trade issues negotiated outside the agriculture agreement will impact the sector. As a strong proponent of the complete elimination of export subsidies, Canada will face pressure, especially from the United States, to allow restrictions on the operation of state trading enterprises, such as the Canadian Wheat Board. We must resist being drawn into making such concessions.

The Canadian Wheat Board is a key component of the Canadian marketplace, and six investigations into the board's operation by U.S. agencies, including the International Trade Commission, have proved that the Canadian Wheat Board does trade fairly. Canadian producers cannot afford to accept restrictions that would place them at a commercial disadvantage, nor can they afford to limit the board's ability to operate a price-pooling system.

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While food safety will gain prominence with consumers in the years to come, countries must not be allowed to use sanitary or phytosanitary barriers to block access to their domestic markets. Sound science and risk assessment, not emotion, should determine market access.

When formulating agreements through the WTO committee on trade and the environment and those relating to the biosafety protocol, Canadian negotiators must be ever mindful of the impact of agriculture. These agreements must be consistent with the internationally competitive agrifood industry.

Canada does have what it takes to compete internationally. We have a tremendous ability to produce food in a clean environment that is respected internationally. What we need to do now is adopt clear, universally applicable trade rules that will result in a more predictable and stable trading environment.

The Saskatchewan Wheat Pool and our members rely upon the economic opportunity generated by international trade and we will continue to work for positive change. We encourage the government to continue to work cooperatively with agricultural organizations throughout the negotiations, to ensure that the agriculture sector is competitive and dynamic.

Thank you for the opportunity to speak with you today. I look forward to any questions you will have.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

We'll start with Mr. Calder.

Mr. Murray Calder: Thank you very much, Madam Chair.

Good morning, Noreen, Marvin and Jonathon. One of the things we will have to deal with here, as Noreen brought up, is that Canada is a leader in subsidy reduction, so how do we get this level playing field the United States keeps talking about, for instance?

The Standing Committee on Agriculture and Agri-food was in Washington last month, and we met with Congress and the Senate. On the issue we brought forward to them at that time, I can run you some figures. You probably know them anyway, but just for the record, on wheat, which is very important here for Saskatchewan, the European Economic Community has the ability right now, through the carry-forward clause, to put up $1.4 billion to subsidize exports in the next two years. The U.S. still has the capability of putting in $444 million in, and Canada has zero. In oilseeds, the EU could put up as much as $25 million U.S., the U.S. could put up $22 million, but Canada has zero. As one more example, the EU has the ability to put up $1.5 billion U.S. on beef, the United States can put up $25 million, but Canada can put up zero.

Obviously we're a leader in the whole thing, so the question is very simply whether we can tread water while the rest of them catch up. Will they agree to that? What can we do, given the situation? We have gone by the rules, while the other ones have debated it.

Ms. Noreen Johns: Indeed, we did follow the rules. We are seen as a country that has followed those rules, but it's to the risk of us as farmers. It has to come out very strongly that if we want a strong agriculture industry in this country, we'd better be able to defend our treading water for awhile. I was asking for a mediation process as well that people could complain to if they were going to complain that we were treading water, that simply cannot be dominated by the Americans.

I also understand that if we want to trade into the United States, we have to live up to their expectations. But I just feel we've been very weak all along in standing up to them. There was the arrogance of Mr. Glickman, for instance, in Ottawa—and getting away with it. We would never go down there and do something like that in the first place, let alone get away with it. Where's the guts in what's going on, on behalf of Canadian agriculture? That's my concern. I don't know how we're going to make them listen, but to my mind, we've been too much of a pansy up to this stage.

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Mr. Murray Calder: As a farmer first and a politician second, when we were down in Washington I found that the Americans came out and talked tough right off the bat, which is exactly what Mr. Glickman did at the conference in Ottawa, but once you started challenging them, they very quickly got into a “yes, but” scenario.

For instance, when we appeared before the International Trade Commission, I asked a question about what was going to be on the table. The answer was, everything. What are we talking about here? A level playing field; we want zero tariffs. Okay, well, we don't have any tariffs on sugar or peanuts over in this country; are you going to take your tariffs down to zero right away to match what we've already done? Yes, but....

The other issue I would like you all to comment on is this. As we get into this situation of the global economic community, we're obviously going to have to look at the issue of international standards. Those standards are going to have to deal with subsidies, health, culture, environment, and labour, just to name a few. I'll deal with environment, for instance, because again we deal with this level playing field.

Say, for instance, you have a company in Central America that is producing brake parts, and the environmental standards of that company in that part of the Americas is a lot lower than the environmental standards of us up here, producing the same component. As far as I'm concerned, that would definitely be a subsidy because the overhead cost of that industry down there, because they don't have to meet the same environmental standards as we do up here, is obviously a benefit for them and a detriment to us. The question then is how do we establish that? How do we go into the negotiations and try to establish those international standards, or is that achievable?

Mr. Marvin Shauf: I'd like to comment a little bit on your last question first.

Canada went way beyond the commitments in terms of reducing subsidies. Canada has gone beyond the point of reducing subsidies to the zeros, which is really at this point leaving a lot of people to think we got a bad deal in the last round of negotiations. A large number of people are really disenchanted with what they think has happened and have a large fear of what they think will happen in the next round because of what they think they got from the last one.

It isn't as much that Canada didn't do a good job of negotiating as that Canada had some budget things it wanted to deal with and it dealt with those in the context of those negotiations. It really left an unclear picture with a large part of the population about what really happened in those last rounds of negotiations. So I think there will be some huge concern amongst producers, amongst processors, going into this next round as to what Canada will have and what we have left that we can negotiate with. I agree with that.

On the question you asked relative to harmonization, there will be harmonization issues with everything, from the tools people use to the overhead costs they have around issues like the environment, and so on. We're already running into some harmonization issues relative to chemicals—

A voice: Yes, the MRA.

Mr. Marvin Shauf: —within the production between Canada and the United States. Those kinds of things will have to harmonized. The standards will have to be set, and there will be issues in setting those standards in terms of what countries have the capability of measuring them. So it will go beyond just setting the standards, to ensuring that countries that set standards have the ability to apply them and to measure them. It's a large area, but it will be an important area for Canada to ensure that the standards are set, that people who agree to standards also have the ability to implement them.

Mr. Murray Calder: I'm going to keep my questions concise and right to the point. I've finished.

The Vice-Chair (Ms. Colleen Beaumier): Okay, thank you.

Mr. Penson.

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Mr. Charlie Penson: Thank you.

You've raised the issue of the domestic support that's really hurting our market access into other countries—the European Union comes to mind. You talked about the Uruguay Round being a watershed whereby agriculture was brought under trade rules. We all were committed to a certain phase-down period in amounts, and of course Canada is ahead of all other countries. But the year 2000 is approaching. We have another round coming forward.

The first question is, do you favour expanding the agricultural negotiations from just a sectoral negotiation into a general round?

Mr. Marvin Shauf: I think there's probably some merit in doing that. I haven't thought a great deal about that, but when you look at agriculture in and of itself, and when you look at the subsidies that Canada has already dismantled, it's difficult to understand what we may have left to negotiate with.

Mr. Charlie Penson: I'm not thinking of us so much as other countries. My concern is that if we go and ask the European Union, for example, to reduce their internal subsidies and export subsidies, it's a tough sell politically at home to come home from a sectoral negotiation and say, well, we lost, we lost, we lost. If there are more things on the table that they would be interested in, in a general round—further industrial reduction of tariff, international competition law, intellectual property rights, that type of thing is what I'm thinking of—it might give them a little greater flexibility.

Mr. Marvin Shauf: Yes. I think that's pretty much what I was saying too. If we just have agriculture alone, we have dismantled virtually everything we may have to put on the table to negotiate with.

So I think it probably does argue for it to be a broader round in terms of having to put some things on the table in order to be able to take some things home. At this point I don't think Canada has an awful lot left to put on the table relative to agriculture, and I'm not really comfortable in saying that and setting it up for agriculture needing to win at somebody else's expense, but I do think it needs to be a broader round in terms of what other countries may need from Canada. Canada does definitely need to be very protective and very selective in understanding the impacts on agriculture. If we don't look after our agriculture industry in Canada, we won't have one in the long term.

Mr. Charlie Penson: That leads me into my next question, and I guess you've probably addressed it. But if Canada comes home from these negotiations or if they really don't lead to any resolution of our concerns, which is basically to try to open up market access into other countries for our product, which is now presently competing against subsidized products, how long can our agriculture industry survive under the current situation we're under?

Mr. Marvin Shauf: I think that's difficult to put a timeframe on. It goes beyond that, though, in terms of how long it will survive. I think agriculture in some form will survive; it's a matter of whether or not that's the form Canada would like to see its agriculture take.

There are some important issues around agriculture being healthy financially. Agriculture needs to look after its resources. It needs to look after the environment. It needs to look after the people who are involved in it. Agriculture needs to be financially healthy in order for the economy that builds around agriculture to be financially healthy also.

Mr. Charlie Penson: Mr. Shauf, in a couple of other places we've heard other agricultural groups come before us and suggest that if we could continue to reduce tariffs, export subsidies, and domestic subsidies, there's a pretty big potential for Canadian farmers to have significant gains. I think some of the figures quoted were $2 billion to $3 billion and how our industry might stand to gain by getting market access into countries as a result of reduced international export subsidies and domestic subsidies. Has your organization done any work on that?

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Mr. Jonathan Greuel (Research Economist, Saskatchewan Wheat Pool): In terms of the export subsidies and reducing them, it would definitely benefit the sector. Going against the subsidies for barley malt, for example, that the Europeans are providing, we can't compete with this commercially. Right away, it would be almost $50 million on barley alone if those subsidies were eliminated. In terms of market access, there are more markets around the world that we could be moving our products into, which would also be a benefit.

Moving on into value-added, the gains go strictly beyond agriculture towards the whole Canadian economy as well.

Mr. Charlie Penson: I see the Canola Council are suggesting that on a zero-for-zero basis on tariffs there would maybe be a $2 billion gain for our Canadian canola industry.

Those are all my questions, Madam Chair.

The Vice-Chair (Ms. Colleen Beaumier): A brief answer, please.

Mr. Marvin Shauf: One point I wanted to add to this is that the export subsidies are the ones that really put European commodity on sale. By doing that they damage both Canada's volume and the price internationally. So export subsidies have to be at the top of the hit list for targets.

Ms. Noreen Johns: I wanted to make the comment that if we're looking at domestic support in Europe, I think what's happening is that it's also becoming an export subsidy that's cutting into our other markets. So if we want access into Europe, yes, we're looking at the domestic support side, but that domestic support is tumbling over into our export markets as well with their overproduction and what's happening there. There are two issues there, I think.

Mr. Charlie Penson: That's a very good point. Our family has a 2,000-acre grain and oilseed farm in Alberta, so we know all about it directly. I agree with you that the internal domestic subsidies lead to overproduction, which is in turn dumped onto the markets in third countries that we have to compete against. I think there are substantial gains to be made if we can make gains in this next round.

The Vice-Chair (Ms. Colleen Beaumier): Thank you. They are impressive reports. The suggestion has been made that perhaps civil society isn't well enough informed, but certainly this group from Saskatchewan is impressing me as to the fact that they are extremely well informed.

I would like to point out something to you. In scheduling this trip, we had one day set aside for Saskatchewan based on population. However, I think Chris can be very proud; the response from Saskatchewan has been a little overwhelming for our schedulers. We have to hear from over 30 witnesses today in Saskatoon, and unfortunately our time is limited.

I want to assure every one of you that any submissions you have brought will be included as part of the official record. For those of us who will be reviewing the report, they will be considered. If we have questions, we do have your addresses and we know how to get hold of you and we will be able to do that. In response to Mr. Peterson's question about the amount of time given for presentations today, our hearings are lasting for seven hours and we're not taking a break, and that isn't saying poor us. The academic panel was given an hour and forty minutes; the agriculture panel, fifty minutes; a labour panel with two organizations, fifty minutes; and the other four hours have been dedicated to hearing from as many individuals from civil society as we possibly can schedule in. I hope you will be understanding, and rest assured that your presentations are part of the record.

I thank you very much for your presentations.

Our next group is from the Canadian Union of Public Employees, with Malcolm Matheson representing them; and the Saskatchewan Federation of Labour, represented by Don Anderson, the executive assistant.

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Welcome. If you can encapsulate your presentation as much as possible—10 minutes, we hope—then it gives us more time to quiz you.

Who are we going to begin with? Mr. Anderson.

Mr. Don Anderson (Executive Assistant, Saskatchewan Federation of Labour): Thank you very much. It's nice of you to have us here.

I'm here on behalf of the Saskatchewan Federation of Labour. We represent some 80,000 workers in Saskatchewan, in all areas of the province. We're here today because the issues being discussed are very important to us, as they are to all Canadians.

Globalization, the flight of industry to low-wage regions, deregulation of long-established employment standards, and governments catering to the whims and priorities of international business, all directly affect working people more than anyone else in society. When international companies search for and identify the cheapest national or regional labour force and relocate their production facilities there, it's workers who are hurt, both here and in the Third World. Capital increasingly has no respect for national boundaries. It is a global economic predator.

When the free trade deal and NAFTA function as a starter's pistol in a race to see which jurisdiction can enact the most lax labour, environmental and occupational health and safety laws, and then enforce them least, it's working people and their families who suffer. Owners and managers typically don't work in dangerous conditions or live in squalor; workers often do. But it is more than not being able to refuse unsafe work, or avoid toxic compounds in the workplace, or form a union. Workers are also members of society, and increasingly we are being denied our democratic right to influence the affairs of our nation, province and municipality, let alone have any say in the affairs of the workplace.

We practise parliamentary mathematics in a dollar democracy, where money seems more important than people. As governments stop acting in the best interests of average citizens and devote themselves almost exclusively to delivering on the wish lists of multinational businesses, it's bad news for all of us who believe in an equitable, just and fair society.

A new mandate for the World Trade Organization and the proposed free trade area of the Americas are just the most recent instalments of measures that remove control and influence from the broad majority of the population and hand them over to the managerial class.

We'll give you a few examples. We all know about important legislation in our history: the Factory Act, banned child labour; the Workmen's Compensation Act in the late 1920s; the old age pension in the 1920s; unemployment insurance; prepaid hospitalization, which started here in Saskatchewan; medicare; the Canada Pension Plan; landmark occupational health and safety regulations and laws; human rights laws; pay equity laws in some jurisdictions.

As we can see from this partial list, there was a time when major pieces of legislation during the life of a government were milestones in our nation's social and economic security, and one may well ask, what was wrong with that system, the traditional political government arrangement that the British philosopher, Jeremy Bentham, described as legislating the greatest happiness for the greatest number? But this isn't the case lately.

We've had Brian Mulroney, Margaret Thatcher and Ronald Reagan, who were in charge of their nations, and what did we get out of it? We got GATT negotiations aimed primarily at eroding the ability of individual countries to protect the manufacturing sector of their economies and the jobs that go with it, and we got the Canada free trade deal, followed by NAFTA, and then we got the multilateral agreement on investment. And we're not convinced that the MAI is dead. It's stalled, but the boys, mostly boys in pinstriped suits, are going to bring it back. Capital will prevail if they have their way.

So because of our past experience with similar deals, we remain concerned about the adverse effects these schemes will have on our members, other workers and citizens.

The MAI and the FTAA appear to be intended to grant international investors and owners of capital further relief or immunity from the unbearable annoyance of having to comply with local, provincial, state, or national laws and regulations. If we get much further down the trade path deal, we will not have any real control over our economy. Capital will totally dominate. There will be no more public social programs such as medicare; no more crown corporations to address local problems; and no more use of government to enhance employment equality, equity, or preferential hiring programs. There will be no more right to develop our economy for ourselves—the market will and must prevail, and damn the needs of the people. Something is terribly wrong.

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Instead of progressive programs, politicians now bring us the FTA, NAFTA, AIT, MAI, FTAA, and WTO. We think the politicians responsible for this dramatic shift of direction should be asked if they honestly believe the citizens they represent are well served when their elected representatives cater mainly to the wishes of the 100 or so largest privately owned companies in the world.

The advocates of the MAI and FTAA, business lobbyists, corporate CEOs and their shills, and chamber of commerce apologists like to say there are protections in these trade deals for labour, the environment, and human rights. We don't believe that's true.

They talk about the three anchors in the agreement in the area of labour rights.

The first is the preambular reference. They say they'll make reference in the preamble of the document to some core employment standards that are not spelled out in that immediate context. Those of us who do union work on a regular basis know that it is often difficult and sometimes impossible to have an employer or arbitrator recognize the language of a preamble to a collective agreement, particularly when that language is vague and badly defined. We don't hold much hope that working people would be protected by that.

The second anchor is the annexation of the OECD guidelines for multinational enterprises. That is to say the OECD guidelines would be incorporated into the MAI. The problem with this approach is that the OECD guidelines for the multinational enterprises have been completely ineffective. The guidelines are exactly that, as I understand it—guidelines. They are voluntary. If an OECD country chooses to adhere to the guidelines, fine. If it doesn't, that's apparently fine too. It's all the same to the central administration of the OECD. Outside of a very few countries—Sweden, Finland, Belgium and Switzerland—the OECD guidelines for multinational enterprises have all but been completely ignored.

The third of these three anchors is a clause committing governments not to lower labour standards to attract investment. This proposal was strongly opposed during negotiations by governments in Mexico, New Zealand, and Australia. They reportedly blocked the adoption of this clause. There was another group of countries led by the U.S., Japan, and Germany—under the Kohl administration—who supported what's called a non-binding best-efforts clause to deal with employment standards. This is exactly what it sounds like—another voluntary non-binding set of aims which would have been ignored by corporations and countries alike.

It is our opinion that these so-called three anchors of protection for working people would not be of any practical value whatsoever to working people. Until some respected international body such as the United Nations can adopt a universal code of conduct for multinational enterprises and enforce it, the best protection of workers' rights is at the level of national and provincial legislatures, and that is where we will concentrate our efforts. We're not going to abandon our hopes of destroying many of these trade deals. The lessons of the free trade deal and NAFTA are still clear in our minds. We are opposed to any similar schemes. We believe they would be bad for working Canadians.

For those who say investment means jobs, we point out two facts.

First, an estimated 80% of global investment is purely for speculative purposes. Only one in five dollars of the capital movement in or out of countries is for maintaining, building, or expanding productive capacity. It is our view that these transactions must be regulated and taxed.

Second, we are interested in decent, full-time, long-term jobs with adequate wages and benefits. That is not the kind of employment the prime movers behind the various trade deals have in mind when they say their projects will create jobs.

The governments of the democratic industrialized countries used to pretty much stay out of the way of or didn't do the dirty work for multinational corporations, and they showed no interest in doing those sorts of things. But we believe that in recent years that's fallen away. We've become too caught up—our governments—in being front people for international capital. They are now the coat holders and drawers of warm baths for capitalism's worst bullies and goons.

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Our research person just finished reading a book about trade unions in the 1890s, and I think that's where he got those words from—they are now the coat holders and drawers of warm baths for capitalism's worst bullies and goons. It's a good line. We'll have to pay him more for that one.

Democracy is not what remains after the Lear jets have come to town, given the politicians their orders, and departed. It is not a set of laws drafted first in the inner councils of the OECD, OPEC, the Trilateral Commission, the manufacturers' association, or in the office towers overlooking Wall Street.

We in the SFL believe environmental laws are best designed with significant consultation and input from environmentalists, naturalists, and rank-and-file citizens, and not the exclusive preserve of polluters. Labour laws are better when there is advice and consent from workers in the organization and the exploiters of working people are excluded from the process.

I think I'll stop right there. Thank you very much.

The Vice-Chair (Ms. Colleen Beaumier): Thank you. I think you've delivered the message. Multinationals are not social workers. Is that what you're trying to tell us?

Mr. Don Anderson: That's very well said.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Mr. Matheson, please.

Mr. Malcolm Matheson (Spokesperson, Canadian Union of Public Employees): Thank you for the opportunity to appear here today.

The Canadian Union of Public Employees in Saskatchewan represents over 22,000 members who work in hospitals, nursing homes, mental health centres, group homes, school boards, universities, municipalities, libraries, daycare centres, legal aid clinics, and other public sector entities. CUPE is the largest union in this province.

I'd like to start out briefly just going through what some of the effects...or what Canada's experience of free trade has been.

Although overall exports to the United States have increased, several Canadian exports, from softwood lumber to hogs, continue to be harassed by U.S. countervail, despite the existence of the two free trade agreements.

Nearly 300,000 manufacturing jobs in Canada were lost between 1989 and 1996, and the number of manufacturing establishments in Canada has shrunk by 18.7% from 1988 to 1995. Labour productivity and manufacturing has also declined since 1989. While profits have boomed for several companies in the post-FTA era, workers have realized stagnant real wages and erosion of full-time permanent jobs in favour of part-time, temporary, and contract work.

The poverty rate has gone from 13.6% in 1989 to 17.6% in 1996. The effect on social programs has been to suffer cutbacks. The Canada Assistance Plan has been eliminated, and several provinces have slashed welfare rates and tightened eligibility requirements. Unemployment insurance has undergone repeated cuts that have seen the number of unemployed eligible for benefits fall from 87% in 1989 to 36% in 1998.

Funding to universities and colleges has plummeted, resulting in an 88% increase in tuition fees between 1990 and 1997. That was recently reflected at the University of Saskatchewan in Saskatoon with the announcement of a 12% tuition increase.

As federal and provincial governments cut back health spending, the per capita private spending on health care has increased from $606 in 1991 to $790 in 1997.

In regard to the threat to our social programs, the actual protection of Canada's health and social services system set out in NAFTA is very weak. Annex II-C-9 of the agreement offers protection for programs only to the extent that they are “social services” maintained or provided “for a public purpose”.

However, none of the key terms like “social service”, “public purpose”, or “health” are defined in NAFTA, leaving the scope of this reservation unclear and open to interpretation. While Canadian trade negotiators may interpret “public purpose” broadly, reservations to multilateral agreements are often interpreted narrowly by international courts and tribunals. More importantly, the United States trade representative believes this reservation should be interpreted in a very narrow fashion, suggesting the private delivery of health care, both for-profit and non-profit, may not be covered by this reservation. Since the vast majority of health services in Canada are not directly offered by governments but delivered privately, an interpretation that upholds the U.S. position could very well expose our public health care system to challenge by foreign companies.

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Mel Clark, a former senior trade negotiator for the Canadian government, argues that despite the above clause, NAFTA gives the United States the right to countervail any Canadian export on the grounds that its production is subsidized by our medicare system. This is often referred to in discussions of employment costs between Canada and the U.S. He said:

The evidence proving that NAFTA does indeed give the American health service industry the right to take over Canada's health care system is set out in the sections and articles of NAFTA that cover Canadian obligations and U.S. rights under this treaty [Articles 1201, 1102-1202, 102, 1902 and Chapters 19, 105, 103:2, 17, 11 and 15].

He goes on:

In effect, under NAFTA, the choice is between having our Medicare system Americanized voluntarily by the government itself, or having the big U.S. health service corporations do it by invoking their rights under NAFTA.

Clark argues that the only way to protect our health care system from American countervail is to withdraw from NAFTA and the FTA.

There is also a threat to our sovereignty, and that was referred to when Don Anderson spoke about the undemocratic nature of its settlement procedure. It is not just undemocratic, it is unaccountable. Under the agreement, an investor state dispute mechanism sets up a three-person panel with trade bureaucrats and deliberates in secrecy. Only national governments are able to intervene as third parties. Non-governmental organizations and interested individuals have no access to the proceedings, and decisions of the panel cannot be appealed.

Under this NAFTA clause, Ethyl Corp. launched a $350-million lawsuit against the Canadian government when it decided to ban the gasoline additive MMT for environmental and health reasons. Fearing it would lose the lawsuit, the federal government settled out of court by paying Ethyl Corp. $20 million for damages, repealing the ban on MMT and publicly stating that MMT does not represent an environmental or health threat. This capitulation by the federal government prompted another U.S. transnational corporation to launch a NAFTA lawsuit. S.D. Myers, a PCB waste disposal company, is suing the federal government for $15 million in lost profits for the year and a half in which the government had banned PCB exports.

One that's very close to home for CUPE members is the threat to our water. As public sector employees, we represent an awful lot of the people who handle the treatment of water and waste water in this country. NAFTA also threatens Canada's freshwater supplies. Canada currently holds 20% of the world's supply of freshwater, and many corporations are now lining up to export and sell bulk quantities of it abroad for huge profits. As soon as the water is exported, it becomes a commodity under the North American Free Trade Agreement and can be traded by North American companies without limit.

Even former U.S. trade representative Mickey Kantor said that “when water is traded as a good, all provisions of the agreements governing trade in goods apply”. The national treatment provision of NAFTA would require that U.S. and Mexican companies must be treated exactly the same as Canadian companies. In other words, the federal government could not limit the trading of water to domestic companies, nor could it place limits on how it is traded or on how much is traded. Under NAFTA's proportionality provision, Canada could never end bulk exports of water regardless of the needs of Canadians or the environmental impact.

Finally, the investor state mechanism allows foreign companies to sue our government for laws that interfere with their ability to make profits. If we were to permit bulk exports of water, Canadians would likely have to pay billions of dollars in compensation to foreign investors to prevent them from taking our water in the future. Already the California-based company Sun Belt is suing the Government of Canada for $220 million as a result of a B.C. decision that prevented the company from exporting freshwater from B.C. to California.

What are the implications of the trading of water? Wholesale destruction of wildlife habitat, the loss of forests and agricultural lands, and even climate change. Bulk exports of water would create few jobs and actually would drain resources from more beneficial economic projects. More importantly, though, we believe water is a public trust that belongs to all of us. No one should have the right to profit from it at someone else's expense.

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While there is growing interest by Canadian firms, such as Nova Group and the McCurdy Group of Companies in exploiting our water, at the same time many municipalities are into public-private partnerships with transnational water corporations. Some of these corporations provide water services in as many as 60 countries. The record of privatized water systems is not a good one. After Margaret Thatcher privatized the water system in England and Wales, utility rates more than doubled, the rate of dysentery increased by 600%, and unrepaired water mains lost up to 37% of the water they carried. On the other hand, the water companies' profits increased by 692% and executive salaries skyrocketed. Transnational water companies managing municipal water treatment operations could very well use these facilities as platforms to export water.

I have some comments on the multilateral agreement on investment. As Tony Clarke and Maude Barlow have observed, the prime objective of the MAI is to facilitate the movement of capital—both money and productive facilities—across international borders by setting rules to restrict countries from using legislation, policies, and programs to impede such movement. Thus, any country that signs on to the MAI would be forbidden to require any transnational corporation to meet certain economic, social, environmental, or cultural standards considered important for the well-being of its citizens.

The MAI would have done this by deepening and extending the investment provisions of NAFTA to all of the other countries of the OECD. The core principle of the MAI was the national treatment provision, which would have required the Canadian government to treat foreign-based companies no less favourably than domestic ones. Local procurement programs, subsidies, tax incentives, loan guarantees, or other forms of assistance that governments may use to stimulate economic development would have to be offered to foreign-based firms along with domestic firms.

The MAI would also have largely forbid the application of performance requirements of foreign companies that would obligate these firms to meet certain economic criteria in exchange for various forms of government assistance. In other words, federal, provincial, and municipal governments would be prohibited from placing performance requirements on foreign-based companies that would obligate the corporation to use domestic inputs, hire local residents, transfer technology, achieve certain research and development or employment targets, establish a joint venture, achieve a minimum level of local equity participation, or balance exports and imports. Like NAFTA, the MAI would also have given transnational corporations the right to sue government for any breaches of the agreement that cause, or are likely to cause, loss or damage to the investor.

The Vice-Chair (Ms. Colleen Beaumier): Sum it up fairly quickly, please.

Mr. Malcolm Matheson: I'll move to our recommendations.

We believe the Government of Canada should approach the upcoming millennium round of the WTO and future FTA talks as an opportunity to press for serious re-examination of the benefits of trade and investment liberalization. Past experience has shown few benefits arising from free trade agreements, but many costs.

In this context, CUPE Saskatchewan makes the following recommendations to the Standing Committee on Foreign Affairs and International Trade:

One, oppose a transfer of MAI provisions to the WTO and FTAA.

Two, promote a new framework. Instead of promoting narrow commercial interests that put profits ahead of working people, the Canadian government should embrace the principles of the United Nations Universal Declaration of Human Rights and other UN covenants as an approach to WTO and FTAA negotiations. This sets out many of the basic democratic rights and freedoms of citizens, including the right to shelter, clothing, and food; the right to employment, health care, and education; the right to a clean environment, quality public services and cultural integrity; the right to fair wages, collective bargaining and unions; and the democratic right to participate in decisions affecting these rights.

We feel it would be necessary to abrogate NAFTA, which has greatly contributed to the loss of manufacturing jobs, the stagnation of real wages, and the erosion of our social programs.

We would also like to promote the implementation of the Tobin tax. The proportion of foreign exchange transactions occurring for the purpose of conducting business in the real economy is only 2.5%; 97.5% of transactions are for speculation. This has wreaked havoc on the ability of nation-states to pursue independent monetary and fiscal policies and has contributed to the collapse of currencies in Southeast Asia, Brazil, and Russia. This tax would discourage short-term investments in search of the highest rate of return, while leaving long-term foreign investments and one-time purchases of foreign goods largely unaffected.

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The Vice-Chair (Ms. Colleen Beaumier): Mr. Matheson, are you aware of the fact that the House passed a—

Mr. Malcolm Matheson: In March.

The Vice-Chair (Ms. Colleen Beaumier): Oh, you are.

Mr. Malcolm Matheson: The House of Commons passed private member's motion M-239, which states that the government should enact a tax on financial transactions, in concert with the international community. That's what we're asking this group to do, to promote that.

To cancel third world debt, the Canadian government should put pressure on the governments of industrialized countries and their financial institutions to write off the unpayable debts of the world's poorest countries. In 1997 the less developed countries owed $2 trillion U.S. in debts, even though these countries paid nearly $3 trillion U.S. in interest and principal payments between 1981 and 1997. Cancellation of this debt will go a long way toward promoting equality worldwide.

Last is consultation with Canadian citizens. The federal government and provincial governments need to more widely consult with Canadian citizens regarding the costs and benefits of further trade and investment liberalization. As well, the Canadian government should strive for a transparent process in future negotiations that allows for the review of agreements by the public prior to ratification.

Thank you for your patience.

The Vice-Chair (Ms. Colleen Beaumier): Thank you. That last recommendation is one we've heard loud and clear right across the country.

I'm going to ask the question this time, because I'm only the acting chair. Sometimes it's more fun to ask questions to people you disagree with; you can get into a great feisty argument. However, this isn't the case this time. So I'm going to toss out a few statements, like multinationals are not social workers, and economic plans often fail because the human element is taken out. And if you're dealing in a country that does not respect human rights of its own individuals, how can we expect them to respect business rights of foreign investors? We'll take this not from a moral perspective, but let's just look at it purely economically.

There are other old sayings, like “if you play in the mud, you're going to get dirty”. We seem to have forgotten that. We're looking at deals with governments.... We are saying they should represent and forget civil society, but the corrupt governments.... I can only speak of two countries, because I have personal dealings with them. One is India and one is Mexico. We know that for Canadian investors, enormous amounts of money go under the table. How do we prevent that attitude from coming back into Canada?

I believe that lower environment and labour standards are a type of trade subsidy. I don't think you would disagree with me on any of those, and I have a whole list of them. But what I want to ask you is can we proceed with the World Trade Organization without the fear of these negative factors being dominant? If so, what can we use as an enforcement to make sure our standards don't have to be lowered and that in fact we will be bringing the other standards up? Is that possible, and how?

Mr. Don Anderson: I guess it starts off with why do we have economies, why do we structure economies? Apparently there's a reason. I'd like to believe it's for the betterment of all of us, for everyone, whether they live in Rockglen, a small town in Saskatchewan, or Regina, or great big Toronto, or even bigger New York; it's for the people who live there. Somehow we seem to have slipped away from that general notion and we're saying no, we have to protect money.

Billy Bragg, who's an English rocker, if you like, folk rocker—he's even younger than I am—has a song that goes “We're making the world safe for capitalism”. I, for one, have quit saying that we can destroy this beast. I still think it's immoral and puts people sort of on the wreckage pile of history. I don't like it as a system that works, but it's here. We'd better figure out how to bind it up and make sure it's not running loose in the streets every minute of the day. How do we do this?

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You can't trust those with money to look after the interests of the commons. They tell you that the business of business is to make profit. I accept that. But how much profit can they make?

Is Mr. Gates worth $42 billion or $44 billion today? They say he makes $125 per second, every second of the year, and if he saw a $500 bill on the ground, it wouldn't be worth his while to take the four seconds to bend over and pick it up. Now, think about that.

As I was coming up here today I tried to figure out how much money $40 billion or $35 billion is. First I stacked it up in loonies: two inches of loonies is $25, and that makes $1,500 a foot, and 5,280 feet.... Well, I was at the moon, and I hadn't even started to talk about the amount of money this man has accumulated. This is what's going on all over the world, and these are business folk that are doing it.

I'm sorry to be lengthy, but why are we developing economies? To put more money in play? There's lots of money in play.

When you fly into Toronto, the swimming pools start to sparkle from 25 miles out. Somebody owns those things. Go to North Vancouver and look at the luxury condos with the Mercedes and Jaguars in the driveway. Somebody owns that. This economy has done that for those people. What about the rest of us?

The Vice-Chair (Ms. Colleen Beaumier): I think you and I are coming from the same perspective. I want to know how we implement these safeguards. How do we go to the table? It would be naive to think that if I went back and told my government to stop, we're not going any further, just stop this.... That's fairly naive. So what can we fight for to enforce some safety nets for us?

Mr. Don Anderson: Well, I'm sorry, Malcolm, but on the Tobin tax, if one our big problems is this worldwide flow of money just hitting down wherever it wants to.... I think it was about ten years ago they hit Europe. They hit Italy, England, and Sweden, and they pulled about $12 billion out in sort of an eight-day period of time, just by running money speculation back and forth. So we have to get a handle on that.

I go back to asking why we are designing economies. Do we design them for people, or to make money safe? It seems to me that all of these deals we've got—and they're layer upon layer upon layer—handcuff us as individuals and as states or provinces to make our own decisions.

It's not just the money type of thing. We've got a deal now coming that deregulates our electrical system because somebody said that was a good idea.

The Vice-Chair (Ms. Colleen Beaumier): Okay, that's fine, but are you saying it's too late?

Mr. Don Anderson: No.

The Vice-Chair (Ms. Colleen Beaumier): Then how?

Mr. Don Anderson: Well, I guess we start by having meetings like this in Saskatchewan. I've attended five or six in the last year where there are a whole bunch of people concerned. When you talk about how many people you had in Saskatchewan, I think if more people had known you were coming, you would have had ten times as many people, because whatever side you are on the issue, we in Saskatchewan tend to like to get together and talk these things over or argue about them or yell. In fact I came in here thinking it was only 80% of the world's wealth chasing money. Malcolm says it's 97.7% or something. I'm even more alarmed now than I was ten minutes ago when I heard this. That's how people in Saskatchewan are.

It's not too late, but we've got to quit worshipping the almighty dollar and understand that economies have to be structured for people. Let's let them have a profit, but how much do you reasonably need?

We had a crown corporation in potash here, and I think we paid the CEO $150,000 a year. Mr. Devine privatized it. The guy now makes $15.3 million a year. And he's an American, so just so he's not hard hit, when he figures out his income tax they also figure out what it would have been if he lived in the States in a lower tax area, and they give him the difference. And he still makes $15 million a year.

You know, the minimum wage is $6 an hour in Saskatchewan. That's $12,000 a year. We expect people to live and prosper and be happy and say “hallelujah, I love my economy”? The economy should be driven by the needs of the people, and not for the needs of the dollar.

The Vice-Chair (Ms. Colleen Beaumier): Okay. Most developing countries, at least the majority of countries in the WTO, are strongly opposed to including labour standards. How would Canada overcome that restriction? How do we advance that cause? Do we just say if you're not going to put in labour codes, we get out? How are we going to do this?

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You're promoting international standards. Should this be included in the WTO? Should there be another body to represent these social concerns? One of the fears I have is if we do it in two different bodies, the one with the money, contributing the money, is going to have the most clout.

Mr. Don Anderson: I guess if I had an answer to this, I'd be trying to sit where you're sitting.

The Vice-Chair (Ms. Colleen Beaumier): Well, I'm sitting here to get answers from you.

Mr. Don Anderson: I understand that, but it's also frustrating for citizens. Malcolm talks about NAFTA, and if we start selling water, we can never stop selling water; in fact, if we don't give them as much as they had the year before, we can be sued for the difference. All of these things that handcuff us and don't allow us to make our own decisions are very difficult, but I think we can do something about them. I don't have any direct answers, but let's start examining where this money goes.

The Vice-Chair (Ms. Colleen Beaumier): What about you, Mr. Matheson?

Mr. Malcolm Matheson: I think one of the things we have to ensure is that the process is accessible and visible. There needs to be scrutiny applied. If the appeal system or the dispute resolution system is closed to groups like us, our values and our needs are never going to be heard. I think the thing has picked up enough momentum that it's not a matter of putting on the brakes or bringing to a complete halt, but I think we need to take it on.

On your comment about playing in the mud and just getting dirty, the way I've heard it is, never wrestle with a pig; you both get dirty and the pig likes it.

But sometimes you have to take that on, and that's where we see our role.

CUPE represents over 400,000 workers in Canada, and we're prepared to go on. Right now we're conducting something called the Water Watch Committee, and we're going from community to community expressing our concerns and trying to involve environmental groups. Our goal is to form coalitions, to mount efforts, to represent to hearings like this, and to continue to represent our views to government.

What we want the government to do is to take those views and those needs to the table and represent us. If that representation is done in a clearly visible way and if the consultation continues, then we think the public support will continue to grow, because people who live in Canada value those rights, those responsibilities, and the ability to set our own laws, our own regulations and, related to the civil society, our own social goals. As much as we fight about it and as imperfect as the process is, it's often said that democracy isn't ideal but it's a hell of a lot better than the alternative. We want to see the democracy kept and improved in this process.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Does anyone else have questions?

Mr. Chris Axworthy: Do we have some time?

Thanks very much for your presentations. I think we've heard great presentations the whole morning, and there's a fairly common theme in terms of the negative side of the internationalization of our economy. We've heard it from farm groups, from you, and from those experts at the universities who spend a lot of time in developing countries. I think it would be fair to say that even if we accept the benefits of this increased trade, the negatives are pretty self-evident.

So my question really follows on from Colleen's question. When you look at things like voter patterns and so on in Canada, apparently the vast majority of people are voting for parties who advocate more of this rather than less of it. So what can we do to move these agendas forward? When something is essentially self-evident, as I think it is and I think we mostly agree here, what do you do to move things forward?

You have some suggestions in your papers on some specific topics, and you've also talked about mobilizing public opinion in different ways. I think it would be fair to say that this isn't working very well.

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I don't think you should have any answers, but I wonder if you have any insights about what positive steps we can take to move these matters forward. I will particularly say that because, as you know, governments are motivated by what the population at large tells them, and if the population will still vote for them even if they contradict their best interests, they will continue to contradict their best interests.

You can be as long as you like.

Mr. Don Anderson: I guess Malcolm was onto it; we need citizen involvement, to start with, on these issues. Too few people know very much about it. When I make a list of NAFTA and the free trade agreement and the MAI and AIT and WTO and I start getting into this as someone who tries to stay on top of these things, it's bloody near impossible. If I can't do it, then some poor person who's not paying any attention at all is just overwhelmed by it. So we have to figure out some way of doing that.

The problem we have is that governments announce these things two or three years in advance, nothing happens, and all of a sudden it's on you. That's the case whether it's these kinds of deals or new laws that are coming in. By the time it gets there, people are overwhelmed.

I would like to see politicians who actually lead rather than take polls and follow. I'd love to have some who would stand up for the things I believe in, but I think even politicians who disagree with me philosophically don't necessarily stand up for the things they believe in. You always find in life that you can dislike somebody, but you can respect their point of view. I find that we don't have leaders whose point of view I can respect regardless of whether I agree with it or don't agree with it.

I think many Canadians have lost a measure of faith in democracy, not unlike what's going on in Kosovo. I sat there not picking a side, always having a side when it came to war as to who was good and who was bad. My kid said to me, “Well, who are the good guys?” This thing had started and got wound up before I paid any attention to it. The next thing I knew, I was dropping bombs on a country a long distance away, or we were doing it in my name, and I said, “Jesus, I'm ashamed that I wasn't paying attention, because I don't have a position other than that I've always been against war.”

I think that's what these trade deals do. I'm sorry to digress, but as Canadians we are overwhelmed by this stuff.

There are people pushing an agenda. My grandmother said watch out for the suits; beware of the suits. I think that's good advice. So citizens—

The Acting Chairman (Mr. Murray Calder): Quick, Malcolm, take your coat off.

Mr. Malcolm Matheson: He just said “Watch out”. He didn't say he was going to do anything.

The Acting Chairman (Mr. Murray Calder): Do you have anything to say, Malcolm?

Mr. Malcolm Matheson: I don't think I would add an awful lot to what Don has said. I think what we look for from our elected officials is some foresight in terms of what's coming down the road. I can't see that; my view is not at the same level as someone who's sitting in the House of Commons and who is dealing with this thing on a national level.

We need to have more information. We need to be able to track these things in their development. As Don said, the things are announced, and then they seem to follow some sort of subterranean course, and all of a sudden we're seeing them emerge someplace else.

We're very happy to have these kinds of hearings where we can come and state our views, and we want to see this process continue. Other than that, I guess our philosophy is that the labour movement is to organize, to organize to advance our agenda, and we'll continue to do that and try to enlist as much support as we can from our friends and from anyone we can take on as our allies.

The Acting Chairman (Mr. Murray Calder): Are there any more questions?

Jim?

Mr. Jim Pankiw: No.

The Acting Chairman (Mr. Murray Calder): I think maybe I'll do a little bit of clarification here.

For your perspective, Don, I'm still a farmer and I still look at things from an agricultural point of view primarily, and then I'm a politician. But in my six years of being a politician, there's one thing I have learned. They're very adamant in my little rural community in Ontario. Out on the street, in any of the coffee shops, it's either black or it's white; it's this way or it's that way. But within the political arena, and where most of the answers lie, it's somewhere in between. It's in the grey area. As members of the opposition, Jim and Chris are the conscience of the government per se, and as the government we are trying to do the best we possibly can for the country. That's what all of us are there for.

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I know that when we come up with a solution and walk out of the room, not everybody is happy with us. But it has probably been the right answer, because that means it's not that one side has won and the other has lost. Therein lies the balance.

We came into the last round of the WTO basically in the eleventh hour. When I was first elected in 1993, the response I found as a farmer, especially within supply management, was, “Oh my God, how are we going to fix this?” But we did. But this time around we have all kinds of lead-in time, and that's what we're working at. There are different sectors, for instance within the agricultural community, that have already got their negotiating position to our negotiators.

Other standing committees are out on the road right now doing the same thing, such as the Standing Committee on Agriculture and Agri-Food, of which I'm a vice-chair. We've already been to Washington. We've already travelled across the country once. A task force that's being put forward by the Prime Minister will be out during the riding week in May. They will also be listening to Canadians. So you're going to see this process repeated over and over again because we need as much input as we can get. We generally know what's going on. You people are the experts. You are the ones who specifically know what your problems are, and we go from there.

If you have nothing else to say as a follow-up, we'll go to the next presenters. We're a little bit ahead of time.

Mr. Don Anderson: I'd like to make just a couple of points. Thanks for coming out and talking to us. But, if I'm not mistaken, the MAI would be an act of history if citizens hadn't risen up and questioned it. It would have been done.

The other thing is that I saw a statistic in the CCPA Monitor a couple of months ago that said that in 1976 the ratio of income from the top 10% of Canadians to the bottom 10% was something like 27:1 and in 1996 that ratio was 314:1. So I say that this economy is working tremendously well for some people. I don't think we need big trade deals and stuff to make it work better for them. We need to figure out how we can make it work for the local people, the people who live here.

The Acting Chairman (Mr. Murray Calder): I would also agree with that.

Gentlemen, thank you very much for your presentations.

I would now like to call forward the Citizens Concerned about Free Trade, David Orchard, if he's here, or whoever is representing that group.

If that group is not here, in the interest of time, because we do have a tight schedule, I'm going to move to the next session, which is a 10-minute presentation. Is Tim Quigley from the Council of Canadians here? Carolyn Taylor can also come up with Tim.

Welcome. I think from the time you spent in the audience you know where we're coming from. Each of you will have 10 minutes. If you use your full 10 minutes to make your presentation, there will be no questions. If you keep your presentation under the 10 minutes, then there will be questions from the members sitting around the table here. Tim.

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Mr. Tim Quigley (Individual Presentation): Do you have a particular order you wish us to go in?

The Acting Chairman (Mr. Murray Calder): Your light is on, so go ahead.

Mr. Tim Quigley: Thank you. My name is Tim Quigley. I'm a member of the Saskatoon chapter of the Council of Canadians. I am pleased to be here to present this brief on behalf of all five Saskatchewan chapters of the council, that is, Saskatoon, Regina, Prince Albert, Moose Jaw, and Swift Current. As well, our brief has been endorsed by some 15 organizations representing trade unions, seniors, artists and writers, and anti-poverty workers.

In the great debates that occur around the issue of trade those on the so-called free trade side habitually think of those of us who are in opposition and who favour fair trade over free trade as Luddites. We are often told that globalization, of which free trade is a fundamental part, is inevitable and that there is no alternative to free trade. I am here to question those ideas and to say that those in favour of more rights for investors and corporations at the expense of citizens are the throwbacks to an earlier era of unbridled capitalism and colonialism.

It is only in this century that the nations of the world have begun to develop social programs that provide for the education, health, and greater economic and social well-being for all people and the environmental sustainability of the planet we live on. More than most nations, Canada has developed such programs and, until the last decade or so, made a conscious effort to achieve greater equality for its citizens.

However, the neo-liberal ideology that has overtaken much of the world has seen a serious attack on the gains that were made. Free trade, that is, fewer restrictions on capital and corporate behaviour, is very much a part of this ideology. Even worse, the move toward globalization has occurred in a backroom, extremely undemocratic way. Ordinary citizens around the world have seen their jobs disappear and their social programs severely reduced or abolished altogether. Inequality, both within countries and between rich and poor countries, has increased dramatically, and the environment has continued to be degraded in ways that bode poorly for future generations.

Third world debt has increased dramatically, and so have structural adjustment programs designed to manage that debt in the interests of lending institutions and at the expense of citizens. Measures such as the Canada-U.S. Free Trade Agreement, NAFTA, the proposed multilateral agreement on investment, and the proposed free trade area of the Americas are part and parcel of this trend. The central and very insidious features of these agreements include closed-door negotiations without the participation of citizens, democratic institutions, and non-governmental organizations; restrictions on the ability of governments at all levels to regulate and govern in the interests of their citizens; and correspondingly, a reduction in the protection afforded to the environment, labour rights, social programs, and measures designed to promote local economies, such as local employment or local content requirements.

A very serious impediment to democratic accountability and openness is the trend first begun under chapter 11 of NAFTA, and now proposed for an MAI and likely the FTAA, toward investor lawsuits before secret trade panels. In Canada we have already seen the threat those pose to our ability to govern by the capitulation of the federal government to Ethyl Corporation over the banning of the gasoline additive MMT. Another example is the action by the Loewen Group funeral homes against the legal system of Mississippi because of the verdict against it by a jury in that state.

We have reached the point in international trade law where expropriation of an investment is defined so broadly that it apparently can include almost any regulation by a governing authority, including such matters as zoning bylaws, environmental regulations, and now court judgments.

In contrast, under the existing and proposed international trade agreements, no obligations at all are placed on capital to respect international covenants concerning human rights, labour rights, or the environment. What can possibly be free about this type of free trade, unless it simply means trade that is absolutely free from restrictions and obligations for investors and corporations?

Canadians, and especially Saskatchewanians, are very aware of the importance of international trade. It is obvious that countries cannot produce every commodity themselves and that they should therefore trade surpluses in the commodities they do produce for those they cannot. Moreover, properly managed trade can facilitate international solidarity among peoples, promote social and economic equality, protect the environment, and help to achieve a better life for all of us on this earth.

To achieve these aims, however, we must repudiate the mistakes made in recent years and ensure that they are not repeated in agreements negotiated at the WTO or under the proposed FTAA. We must make an effort to establish a world of fair trade as an alternative to the current position in favour of few or no restrictions on capital but which reduces governments and citizens to mere pawns in a race to the bottom.

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To this end, it is our position that Canada's policy on international trade and investment should be animated by the following principles and actions:

One, there should be a thorough assessment of the effects of the FTA, NAFTA and WTO to determine whether or not these measures have operated in the best interests of all Canadians and other citizens of the world. If not, Canada should exercise its options to abrogate these agreements, and, in the case of the WTO, seek changes that eliminate such unacceptable practices as investor state dispute resolution panels.

Two, negotiations to amend existing agreements, or for new agreements such as the FTAA, should only be conducted in the United Nations fora. In such negotiations, international covenants and protocols on human and social rights, the environment, labour and indigenous rights should be paramount. In other words, trade and investment agreements should only be entered into when they advance the commitments made by signatories to those international covenants and protocols, and trade and investment rules should be subject to them. Canada should therefore support measures that achieve this fairer type of trade and support weaker nations that seek to protect themselves from the economic and social aggression inherent in the globalization agenda. We should also promote such international regulatory instruments as the Tobin tax in order to prevent speculative runs on currency that plague many developing nations and to impose some degree of responsibility on investors.

Third, specifically, investor states sitting before trade and investment panels should not be a part of any trade and investment agreements. Instead, the domestic laws of signatory nations should apply in the usual way and should of course be conducted in public in an accountable way. This means that the investment provisions of the MAI and chapter 11 of NAFTA should not be on the Canadian agenda for the WTO or the FTAA.

Fourth, prior to entering into international trade and investment agreements, Canada must consult widely and in a democratic fashion with its citizens about the effects of the proposed agreements. This means more than a short parliamentary debate. At a minimum, it must include comprehensive public hearings and the widespread dissemination of information about the proposed agreements. In addition, particular groups that may be affected by the agreement should be assured consultation and input. This would include indigenous people, environmental organizations, trade unions and working people, and organizations promoting human and social rights.

Fifth, the overall aim of Canada in negotiating international trade and investment agreements should be the fostering of social justice in the world community and within our own country. Therefore, we should not become a signatory to any agreement that does not have this aim as its dominant purpose. In conjunction with this aim, Canada should cease to align itself with those nations and interests that seek the removal of all barriers to trade and should instead become an ally of those like-minded nations and organizations that seek a world of social justice and fair trade.

Thank you.

The Acting Chairman (Mr. Murray Calder): Thank you very much, Tim.

We have time for one question—two minutes. Charlie, one minute for you, one minute for Jim.

Mr. Charlie Penson: I would point out to Mr. Quigley that we do have a trade agreement standing right now, the free trade agreement, and then subsequently NAFTA, that has an investment chapter in it. So we have been under the investors' chapter for roughly 10 years with the United States and five years with Mexico as it was rolled in.

My understanding is that among the Canadian public the support for the trade agreement has been growing every year. The polls are showing that it's 80%-plus these days, which means that it's going up. And given that over 65% of the inward investment we have—and it's roughly the same for Canadian investment outside of Canada into the United States—stays in place unless the three parties agree to change that, and given that basically I think there's pretty good public acceptance and I don't see too many problems that have arisen out of this trade agreement, how would you approach the idea we should not go further with it given the experience we've had?

Mr. Tim Quigley: I don't think the experience is as you describe. I think the fact that there's public support is likely due to the feeling that there literally is no alternative, which is, as I tried to show, not correct. We've had massive propaganda in one direction, but not serious, open-minded examination of all of the effects. For one thing, yes, it's true, our trade with the United States has increased, but I would question whether that's a healthy thing, to have increased our dependency on one single market.

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I also think that opposition to NAFTA will rise as the public becomes aware of things like the Ethyl Corporation's investor suit. I think we're just starting to see the tip of the iceberg here, and once we see corporations starting to challenge various government measures under the aegis of chapter 11, then I predict we're going to see an outcry from the public about the emasculation of our government.

Mr. Charlie Penson: What's your understanding of the Ethyl suit in terms of...? I've been hearing a lot of people over the last couple of months cite that case as an example of why Canada should not be involved in these kinds of investment agreements. But my understanding is the Canadian government introduced legislation not based on science and saying that it was harmful to the health of Canadians, and not based on showing it was harmful to our environment. That was not the way this legislation was introduced in the House and passed; and so subsequently the rationale was that they had to do it on the basis of restricting imports and also restricting interprovincial flow of products across the country. And it was challenged by the provinces and therefore the legislation was rescinded as a result of that action, and Ethyl Corporation never did get to the stage where there was a dispute panel that addressed the issue.

Mr. Tim Quigley: Because they didn't have to. They had such leverage with the federal government that we rolled over, played dead and gave them $50 million. What it really shows very clearly is the threat to sovereignty of any nation under these agreements, because almost any public policy measure is subject then to challenge, not in a court where there is an alleged violation of domestic law but in a secret panel where we can't—

Mr. Charlie Penson: My understanding of it is—

The Acting Chairman (Mr. Murray Calder): Last question, Charlie.

Mr. Charlie Penson: Okay.

My understanding of the investment chapter of NAFTA is that if for any reason there's a health problem, if a product is shown to be a health problem or if for any reason it's shown to be harmful to our environment, the Canadian government—in fact all three governments—have the ability to exempt based on those criteria. It's already there. We have the right to do that.

Mr. Tim Quigley: But I think the risk of chapter 11 is that we won't even put this to the full test, because the risk of losing to governments in that kind of setting, where the only question is whether the requirements of NAFTA have been met, means you don't deal with the finance at that kind of setting. And it's in front of international trade experts, not domestic courts that are open to the public with the opportunity for interveners to participate and so forth. It's a very skewed process, and so we have a great threat hanging over us with these things.

The Acting Chairman (Mr. Murray Calder): Thank you very much, Tim.

Carolyn, could you lead on, please.

Ms. Carolyn Taylor (Member, Saskatchewan Environmental Society): This brief I'm presenting was prepared by Roger Peters for the Saskatchewan Environmental Society.

This brief from the Saskatchewan Environmental Society proposes new global principles governing trade and investment that would provide permanent safeguards for Canada's vital interests and those of other countries. The brief also proposes how Canada should use this new approach in the upcoming negotiations under the WTO and the formation of the FTAA.

First, why is there a need for a new approach? Recent trade negotiations have focused on the removal of barriers to trade and investment with only voluntary guidelines to temper the negative impact that this might have on society and the environment. One of the main problems is that countries are not allowed to differentiate between goods and services based on how they are produced. This is undermining economic and social development and preventing environmental and resource sustainability. For example, countries cannot favour lumber and paper products that meet the requirements of the Forest Stewardship Council, or carpets that meet the requirements of the International Labour Organization's child labour codes.

A new approach to trade and investment is needed that would regulate trade and investment for the world's overall benefit, while at the same time providing a common set of rules and protections for traders and investors.

Having established the need for a new approach, rules governing trade and investment should be based on the following universal values:

- democratic decision-making and government accountability to its citizens;

- social citizenship and the collective responsibility for our fellow human beings;

- the need to preserve and protect our environment and resources for future generations;

- the subordination of private corporation and property rights to the common good;

- the ability to reasonably benefit from our labour and investments;

- protection of human rights;

- universal access to public education, health care and social services;

- a living wage and a safe and equitable workplace;

- protection and community ownership of land and natural resources;

- the rights of aboriginal peoples.

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Next, let's look at the seven basic objectives for trade and investment agreements:

- they should provide a clear set of rules that will serve to stimulate rather than to stifle economic initiatives;

- they should provide consumers with full information to help them make safe and wise purchase decisions;

- they should encourage productive forms of investments that will benefit local and national economies;

- they should enable governments to implement economic, social, environmental and cultural policies appropriate to each country;

- they should ensure that corporations fulfil their social obligations by meeting economic, social and environmental standards and priorities;

- they should allow for development strategies that involve public ownership in strategic sectors;

- they should curb volatile, short-term, speculative forms of investment that lead to rapid capital outflows and cause economic collapse.

Under this new approach, the principles governing trade and investment would be as follows:

1. Communities and citizens shall have the democratic right to be consulted on the rules governing international trade and investment, and approve participation of their governments and international agreements through a legally binding national process.

2. All investments, goods and services shall be covered by a common set of rules that may include minimum performance requirements based on social and environmental impact and on method of production. All goods and services shall be labelled as to the method of production.

3. Communities, through their government, shall be able to set legal performance requirements for domestic and international investments, business practices and development in the form of regulations to meet the above standards.

4. Communities and countries, through their governments, shall be able to make policies that encourage local development and protect natural resources.

5. Countries shall be able to favour goods and services that exceed minimum performance standards.

6. Countries shall be able to levy international taxes on trade or financial transactions, or take other multilateral action to regulate trade or financial transactions.

7. Any disputes between communities, governments and investors shall be referred to a fully independent dispute tribunal that would hear and resolve the dispute in the community or country affected through an open and democratic process.

How does this apply to what Canada should be doing at the 1999 WTO negotiations? First, Canada should introduce the following general concepts for consideration by the WTO:

- minimum performance standards based on impact and method of production;

- international labelling standards based on method of protection developed through the International Standards Organization;

- discrimination, without penalty, against goods and services that do not meet minimum standards or cause a negative impact on social or economic development, or on environmental or resource sustainability;

- favouring, without penalty, goods and services that exceed minimum standards, or provide a beneficial impact on social or economic development, or on environmental or resource sustainability.

Second, the WTO is an ideal forum in which to consider international fiscal measures such as the Tobin tax. Canada should propose that this tax be instituted as soon as possible and that an international task force, led by Canada and two other trading nations from outside the OECD, be struck to work out an implementation strategy.

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Third, Canada should use the above concepts to base its negotiating positions on specific agenda items such as agriculture, services, intellectual property, government procurement. For example, in agriculture:

- the WTO should develop a series of minimum performance standards for trade and investment in all agricultural and fisheries products;

- all agricultural and fisheries products traded internationally should be differentiated with respect to origin and method of production through appropriate labelling and other information;

- any country can restrict trade and investment in agriculture and fisheries products based on method of production if it has been recognized as detrimental to cultural, social or environmental standards;

- any country can favour trade or investment in agriculture or fisheries products based on method of production if it has been recognized through international stewardship or labour organizations as being beneficial to cultural, social or environmental standards;

- any country may restrict the manufacture, use, sale, export or import of any existing or new agricultural chemical that is proven or suspected of being toxic or unsafe, without compensation for loss of profits;

- any country shall be able to restrict and regulate the import of seeds and agricultural chemicals without compensation, if they are deemed detrimental to the sustainability and future growth of that country's agricultural production and processing.

The formation of the FTAA will also provide a unique opportunity for Canada, as chair, and its trading partners all over the hemisphere to take a new direction in the administration of multilateral trades and investment, one that recognizes the global rights of citizens as well as the global economy.

Canada should introduce the same general concepts for consideration by the FTAA:

- minimum performance standards;

- international labelling standards;

- discrimination against goods and services where there is a negative impact;

- favouring of goods and services that exceed minimum standards, or provide a beneficial impact;

- a democratic dispute settlement mechanism;

- key roles for public policy and public ownership, especially in services;

- key roles for government procurement.

We would like to thank the standing committee for this opportunity to present our ideas on this very important and topical subject. I hope they are useful and that you will take them into account in your report.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

We have a couple of minutes left here. Mr. Axworthy, did you have a question?

Mr. Chris Axworthy: Not really, because I agree with what you've been saying. It was mentioned earlier that it's more fun to ask questions when you don't agree.

I wonder if I could just ask a general question. You've set out a very clear agenda of what should be done. What would you regard to be the most significant obstacle to achieving these goals?

Ms. Carolyn Taylor: I suppose that if everybody bought into this, there probably wouldn't be too big a problem. The problem is that everybody doesn't buy into it. So it's a matter of educating and putting the power in the hands of people who feel this way.

Mr. Chris Axworthy: I asked the question because we've heard almost every witness talk about the negative implications of everything that's taken place, and I think most of us would accept that these are indeed in place, yet not only is it that we are dragged as a country into these things, but we actually kind of lead the charge when it comes to—

Ms. Carolyn Taylor: I know, I know. It's embarrassing.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

We welcome John and Betsy Bury from Veterans Against Nuclear Arms. Before you begin, may I ask if you've read the standing committee's report on nuclear disarmament?

Mr. John Bury (Veterans Against Nuclear Arms): Yes. I've got it right here.

The Vice-Chair (Ms. Colleen Beaumier): Thank you. Could you begin?

Mr. John Bury: The national executive of Veterans Against Nuclear Arms has already presented to this committee, as I'm sure you know, when it was considering Canada's nuclear weapons policy. So I need only say we're an association of veterans and their immediate families of all countries who live in Canada and whose objective is to ensure the elimination of nuclear weapons. So why are we here, as one of your assistants asked one of my colleagues the other day?

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The Saskatoon branch appears today to raise the question of the effect of the changes proposed to the World Trade Organization and the FTAA on the sovereignty of Canada—what everyone else has obviously been talking about. But our particular slant on that, and an example that really drew it to my attention, was the ruling of the WTO on the banana dispute between the European Community and the United States.

That should give us pause because that ruling gave preferential powers to corporations over the powers of poor, powerless farmers in the Caribbean. So the decision went to the really major corporations, to the detriment of much smaller and less powerful people. We believe that other issues, apart from corporate profit, must be considered in changes to the present agreements and before we enter into new ones.

Our interest as veterans in this issue is that economic disparity is a major cause of conflict, and conflicts lead to wars. As long as nuclear weapons exist, the world remains hostage to the risk of deliberate or accidental war—of course, you've just heard about that from General Lee Butler, Robert McNamara and the two Grahams who appeared before your committee a month ago—and debates on free trade will be irrelevant. It's our responsibility as citizens to reduce rather than increase economic disparities. Of course, veterans have always been told that's what they were fighting for.

The other aspect of the issue that has been highlighted by the war in Yugoslavia is the close relationship we have with the United States through our membership in the North Atlantic Treaty Organization. We plunged into this war without adequate national debate or consideration, driven by a policy vigorously proposed by the United States, which remains NATO's principal spokesman and leader. It's a country that in 1984 published a document describing how they would in fact disassemble Yugoslavia. It was published again in 1993, and I can get you the references for that if you'd like.

The outcome is as yet unseen, but so far it appears to be a humanitarian disaster and a military fiasco. It may be that when the last missile has been launched and the last Kosovar dispossessed, Canadians will rethink their involvement in NATO. Today there's great discussion on that issue, even among retired officers of the Canadian Armed Forces.

In your report Canada and Nuclear Challenge: Reducing the Political Value of Nuclear Weapons for the Twenty-First Century, it is quite clear you believe that Canada should promote the Non-Proliferation Treaty. The report strongly hints that Canada should push for the removal of nuclear weapons from the strategic plan of NATO. This is strongly opposed by the United States.

Furthermore, Canada, led by Mr. Axworthy's action of leading 11 other NATO nations in abstaining from the vote on a new agenda coalition resolution of the United Nations General Assembly in December of last year, was certainly serving notice that it wanted a new initiative in progress toward nuclear disarmament.

We're now asking this committee to consider the use that may be made of trading agreements to limit and damage the ability of Canada to take its own decisions in matters of defence policy. Although this matter been pushed off the front page by the Kosovar war, Mr. Axworthy has been successful, to some extent, on NATO's 50th anniversary, in at least getting injected into their strategic concept that they should consider removing nuclear weapons from their armaments.

But the threat of economic sanctions recently over military agreements, suggested by the recent loss of most favoured nation status, does give us pause at how the United States responds to anything we do that they don't agree with.

It appears that the free trade agreements have had some significant limiting effect on our ability. We've discussed the Ethyl case, so we won't go over that, but there seems to be another one brewing over exports of drinking water in British Columbia. We're concerned that present and future trade agreements must have greater flexibility, to enable them to take account of poverty and economic factors, so disparities between the powerful and the poorer, less powerful nations can be addressed. Unless they are, the world is headed for increased conflict, tribal and ethnic massacres, and, in the long run, wars.

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The past history of the General Agreement on Tariffs and Trade over 46 years of unilateral and indiscriminate liberalization of trade in Africa only brought worse conditions. Just recently, 13 French-speaking African nations have been challenged that they have to change their regulations to allow genetically modified seed into their country, or else. The banana war suggests that the same sort of sanctions are being carried on.

We believe that any changes to the World Trade Organization, or the terms of the free trade agreement of the Americas, must concern the ability of Canada to act in its own best interest, and that interest should not be further eroded.

Our concern remains peace. We do not believe that arrangements based only on free trade and the market contribute to that end. Canada until recently had a respected reputation as a peacemaker. Let us not allow our blind faith in market forces to spoil it.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Mr. Calder, do you have a question?

Mr. Murray Calder: That was a very interesting presentation, John. I am a legion member and an avid historian of the first and second world wars. What we see going on in Kosovo and Yugoslavia at the present time is just the flip of what happened approximately 55 years ago, when the Wehrmacht was in occupation and the Albanians, Macedonians and Kosovars were backing them. There was ethnic cleansing going on from the other side.

I think you have to remember that Canada is one of 19 members of NATO. The decisions that were made by the other 18, which we agreed with, were basically to stop the ethnic cleansing that is going on there at the present time. History will tell us whether we've been right or wrong in the decisions we've made. That's the other thing.

There is one thing I would like to know about, though. With the negotiations as we go along right now, one of my concerns has been that the developing countries, which don't have the same amount of money as countries like the United States, won't be able to put the same number of negotiators into the trade negotiations, as they start with the WTO. Is there anything we can put in place to help those countries? The United States will obviously have negotiators with expertise in agriculture, industry, health and so on, whereas a developing nation might have one individual that handles all of those area. I see that as a disadvantage for those nations. How would you foresee us addressing that problem?

Mr. John Bury: I don't honestly know. I'm not an expert on international trade. We just see that the trade agreements up to now have tended to lead to great disparities for those undeveloped and developing nations, compared to the powerful western block, of which United States is certainly the strongest. It seems to me, as my colleague from the environment society said a little earlier, we have to put standards into those agreements about how they affect the local population—their ecology, their labour standards and their general way of life.

I'm terrified of the genetic modification thing that's travelling across the world, because I think that will put a lot of poor farmers out of business. They won't be able to replant the seeds and they won't be able to afford to buy the patented seed. That sort of power has to be reduced. I think we've been rushed into....

This city is of course all gung ho for two things—uranium and genetic modification. Biotechnology is what we think we have to do. I don't think either of them is totally healthy to be involved in. We need to put those sorts of standards, as I suggested earlier, into the agreements.

Mr. Murray Calder: Thank you, Madam Chair.

The Vice-Chair (Ms. Colleen Beaumier): Ms. Bury.

Ms. Betsy Bury (Veterans Against Nuclear Arms): I think we ought to add that the question of the effect of Monsanto on farmers in Saskatchewan is a little closer to our hearts than the one of the banana republic. I believe you should be looking at government control of international companies coming in and taking over that freedom of the farmer to do his growing of products that we've known as an agricultural province.

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But I'd also like to take exception to Mr. Calder's comment about the bombing. I too am a veteran of the Second World War and know exactly what happened during the onslaught between 1939 and 1945. I believe we would have questioned, if it had happened in 1949, the value of trying to solve any kind of problem from 33,000 feet rather than negotiating settlements. We realized the war that we had. We felt we were doing something worth while. I don't believe many military people today believe the method that's being used in NATO is very effective. Therefore, I think the face of Canada as a peacemaker is being marred. I rather regret that as a Canadian veteran, and I think most of our veterans also feel the same way.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Neil Sinclair, please.

Mr. Neil Sinclair (Leader, New Green Alliance): My presentation will be short, you'll be happy to hear.

Sovereignty, democracy and the environment: With every new international trade agreement that the Government of Canada enters into, we, the people, lose more of our sovereignty, our democracy becomes weaker, and our ability to protect the environment here in Canada and elsewhere in the world is reduced or eliminated. Our recent experiences with the free trade agreement and then with the North American Free Trade Agreement and also with the multilateral agreement on investment, which was defeated, taught us much—mainly that Canadians do not support these trade deals, but actively oppose them.

Our sovereignty is under attack by multinational corporations that seek ever-greater profit and influence over governments. NAFTA set a dangerous precedent in that it put corporations on an equal level to governments in their ability to sue directly for lost profits. It was a very sad day indeed when little Ethyl Corporation successfully intimidated the Canadian government to retreat on legislation to ban the MMT gas additive. Our health and environment are now being put at risk because our Parliament is too weak to pass legislation. Why should we, as Canadian citizens, have to pay Ethyl Corporation compensation for lost profits to protect our health and environment? This is outrageous. Parliament is no longer supreme.

What kind of democracy do we have when foreign corporations sue our Canadian government secretly? The whole process is secret from beginning to end. Canadian citizens are left totally uninformed about what is going on. This affects government legislation. This weakens our democracy. Our members of Parliament represent us and our views. How can they make decisions based on our opinions when we do not even know what is being decided upon? The whole aspect of the secret dispute resolution mechanism in NAFTA and the proposed MAI was, and is, reprehensible. We wonder how any politician who truly believes in democracy could support this.

Finally, we must look at the world's environment. What effects are happening as a result of trade liberalization? The problem with the World Trade Organization is that it does not take into consideration environmental concerns when passing its judgments. As a result, we have seen the WTO consistently rule against a country's environmental legislation when it comes into conflict with trade.

An example is the United States Environmental Protection Act, which requires that domestic and foreign shrimp fishers use nets with turtle excluder devices to protect endangered sea turtles. The WTO ruled that this legislation was illegal. Will the endangered sea turtles become extinct because of the WTO?

Based on past experiences with the FTA, NAFTA and the MAI, the New Green Alliance recommends that Canada not enter into a free trade area of the Americas, and that Canada work towards weakening the WTO. Countries with elected governments must be better able to act on the wishes of their citizens and, in so doing, better protect the well-being of their people.

All international agreements that affect the citizens of Canada should be put to a national referendum. Let the people decide whether or not we want NAFTA, the MAI, or other similar agreements.

Thank you.

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The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Mr. Axworthy, do you have any questions?

Mr. Chris Axworthy: No, I don't really, because everybody is saying things I agree with. So I just actually listened to what everyone else said...to get people to repeat what they said.

The Vice-Chair (Ms. Colleen Beaumier): Mr. Calder.

Mr. Murray Calder: Just for clarification, Neil, on the issue of the MMT, where we got into trouble with this is the fact that we were told that the science was available to show that MMT was environmentally hazardous. So we proceeded. When the challenge came and we were basically challenged by interprovincial barriers, when we had to produce the science, we went back to the automotive manufacturers for the science, and the science was not there. So we backed off so that we wouldn't get sued in court on a case that we couldn't win.

First, it didn't cost the taxpayers a suit, but it was embarrassing for us, because when we had to produce the science—and we had been told the science was there—it hadn't been developed yet. So that was the problem.

Mr. Neil Sinclair: Was Ethyl Corporation not compensated $20 million? All the news reports reported this information.

Mr. Murray Calder: Was it? Okay.

Mr. Neil Sinclair: The whole problem is that the whole process is secret from beginning to end.

The Vice-Chair (Ms. Colleen Beaumier): Excuse me, I beg to differ on that one. I know that the Globe and Mail carried pages and pages and pages on this, step by step, and it is there. If in fact this isn't getting to the public, is it the government, or is it that perhaps the newspapers think it doesn't sell papers? I don't know, but I do know that it was covered.

Do you have clarification?

Mr. Gerry Schmitz (Committee Researcher): I'm not going to debate the case, but there was a ruling under the Agreement on Internal Trade where several provinces, including Alberta and I think several others, brought a challenge to the interprovincial import ban of MMT. There was a ruling in June 1998, as you are probably aware, in which the federal government lost the case. Now, that was somewhat separate from the Ethyl Corporation challenge under the NAFTA, but I think it certainly did probably weaken the federal government's case. Then subsequently, of course, there was that settlement prior to NAFTA deciding the issue.

I think the significant issue that a lot of you are bringing up is the issue of the definition of expropriation, which would be subject to review by the investor state mechanism, and the way in which Ethyl Corporation, which is the sole North American producer of MMT, claimed that the federal ban had the effect of expropriating future profits. It's that issue, I think, about which there is a great deal of concern in terms of how the investor state arbitration procedure of chapter 11 of the NAFTA might cause problems in terms of compensation to foreign corporations.

The other issue of course is that only a foreign corporation has access to this procedure under the NAFTA. A Canadian company would not be able to use this kind of arbitration procedure. There is a whole series of issues that come under that, but it's quite a complicated story.

The Vice-Chair (Ms. Colleen Beaumier): Very complicated.

Mr. Chris Axworthy: To be fair, the more significant point that's being raised is that Canada passes legislation and gets told by somebody else that they no longer have the power to pass this kind of legislation. The impact that has on democracy is being presented as a significant negative of all these deals here, and I don't think anybody can go against that.

The Vice-Chair (Ms. Colleen Beaumier): I didn't mean to appear as though I was arguing or even necessarily disagreeing with your point. However, you know we've heard this a number of times during these hearings. Our parliamentary secretary was here, and I was feeling very bad and very convinced of the arguments being put forth without a complete explanation. I just wanted to give you the benefit of the explanation that I requested several times over these hearings, over and over again, from our parliamentary secretary.

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Mr. Neil Sinclair: Okay.

There's one other piece of information I'd like to add. Ethyl Corporation is also the company that introduced a lead additive to gasoline. The first evidence that it was dangerous to public health came in the 1920s. Ethyl Corporation argued against this, and it was not until the 1970s that lead was banned.

We're in the first few years of the manganese additive, and I hope it doesn't take half a century again to get rid of this, if it is dangerous. I think we should side on the side of caution when it comes to our health. And I think the Parliament of Canada should have the power to protect the Canadian citizens.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you. Your point is well taken. Hopefully technology will bring this to light a lot faster than the 40 or 50 years it took for lead.

Now, please, Mr. Garth Nelson from Nature Saskatchewan.

Mr. Garth C. Nelson (Nature Saskatchewan): Thank you for the opportunity to speak to the committee.

The first thing Nature Saskatchewan would like to stress is the fundamental importance of the diversity that characterizes life on earth. When viruses or bacteria invade the human body and cause disease, we have a built-in core of healers called the immune system, a complex and powerful force towards recovery.

Like the human body, our planet also has a complex and powerful immune system. It is called biodiversity, a great and varied assortment of interconnected genes, species, and ecosystems. It is this immense diversity of life forms and the ability to create greater diversity that gives us the stability and power to recover from wounds and diseases, even those as serious as mass extinctions of species.

There have been five great extinction episodes in the history of our planet, the last one being when the dinosaurs disappeared. In each of these cataclysmic episodes, many of earth's species were lost, yet the diversity and health of life on the planet eventually returned after millions of years.

Edward O. Wilson of Harvard University, one of the world's most respected scientists, believes that we are now in the midst of the sixth great spasm of extinction, one caused not by natural factors but by the impact of the human species.

Our economic system has been built on the premise that all that matters is the making of money and that other species have no value except as resources for exploitation. It has an economic system that is either unaware of the crucial role of biodiversity as the immune system of the earth or that chooses to deliberately disregard it in the interests of short-term gain.

My second point is that there is a hefty price to pay for such lack of awareness or conscious disregard for what heals and sustains life on earth. We are all familiar with AIDS, the disease that does havoc to the immune system of the human body. Earth itself is suffering from something akin to AIDS. The loss of species through extinction and the consequent depletion of gene pools and destruction of ecosystems have been accelerating at an alarming rate.

By using the power of sophisticated technology to harvest enormous numbers of wildlife, by destroying the habitats on which other species depend for life, by introducing alien species to native ecosystems, and by deluging the atmosphere with greenhouse gases, human beings have increased the rate of extinction from 1,000 to 10,000 times what it has normally been in the interim between the great extinction episodes. These are figures of Wilson's. He adds that the most conservative estimate of species lost that can be reasonably based on our current knowledge of the extinction process is that 2,700 species are lost forever each year, or 74 per day.

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This sixth great extinction spasm is destroying the resiliency of earth's biosphere, undermining its immune system, and thus attacking the very foundation on which all our trade and commerce, and our very lives, are based.

Complicating efforts to counteract this trend and to protect ecosystems is the fact that little is known about most of earth's species and their needs. Wilson estimates that 90% of them are little known and have never been given even scientific names. While the disease of biodiversity loss is rampant, we dally and make comparatively little effort to study the nature of the disease and to achieve the kind of knowledge needed to competently deal with the epidemic.

Also impeding efforts to arrest the extinction epidemic is the fact that more than half the species of plants and animals on earth are concentrated in the tropical rain forests of developing countries whose economies are being crippled by oppressive debts and rampant currency speculation. They slash and burn forests and wipe out precious biodiversity in a frantic effort to service their debts and to cope with the effects of currency devaluation caused by speculation.

This brings me to the third point I wish to stress. Globalization is promiscuous behaviour. Its emphasis on the liberalization of trade and investment and of speculation of currency is causing the spread of the AIDS-like disease that is afflicting the planet. The U.S. Council for International Business, a powerful component of globalization, asserted to senior U.S. officials in 1997 that it would “oppose any and all measures to create or even imply binding obligations for governments or business related to environment”. The provisions of NAFTA and the agenda of the Organization for Economic Co-operation and Development, with its multilateral agreement on investment initiative, appear to underline such resistance to environmental responsibility.

It was with the utmost humiliation that we witnessed the Canadian government last year, as was mentioned before, under the requirements of NAFTA, get down on its knees and apologize to the Ethyl Corporation for passing legislation to ban the use of the manganese-based gasoline additive MMT, lift the ban, and then compensate the company to the tune of $19 million or $20 million.

It was with alarm that we saw the OECD promote the MAI, an agreement that would have undermined much of the conservation work of organizations like Nature Saskatchewan. Under its national treatment provision, protection of ecosystems would have been reduced to the lowest common denominator. Under the standstill and roll-back clauses, the passing and preservation of effective laws to protect the environment would have been made more difficult, if not impossible.

Under the dispute section, the kind of intimidation of national governments that we saw in the Ethyl Corporation suit would have been made easier, with the settlement of the dispute possibly taking place in a foreign country without any public scrutiny.

Now it appears that the MAI agenda is being promoted in the World Trade Organization, that a broader version of NAFTA is being planned in the form of a free trade area of the Americas, and that Canada is supporting both.

We keep being assured that Canada will safeguard its vital interests in the area of environment, but our skepticism mushrooms. Such assurances were profusely given before NAFTA was signed and when Canada was promoting the MAI. Yet we continue to see lawsuits taking place against environmental laws. We continue to see transnational corporations, the major brokers of globalization, pull up stakes and move their operations to countries where it is easier to pollute and destroy ecosystems in the interests of profitability. We continue to see the World Trade Organization, as in the tuna-dolphin and shrimp-turtle rulings, favouring trade rules above environmental protection.

It is our view that to continue along the road of globalization in the way that is being currently promoted is to promiscuously spread the disease that is wrecking the immune system of the earth and endangering the survival of many species, including our own. There is no cure yet for the AIDS disease that ravages the human body. There is, however, medication for the ailment that afflicts the biosphere.

This is my final point. The recommendations that follow are in our view essential ingredients of that medication.

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We recommend, one, that Canada suspend its negotiations with the World Trade Organization and other economic forums to liberalize trade and investment rules. Let us concentrate instead on a thorough analysis of the impact of globalization on earth's real capital, the biodiversity that sustains life on earth.

Secondly, we recommend that Canada suspend its negotiations to establish a free trade area of the Americas. Instead, concentrate on renegotiating the North American Free Trade Agreement with a determination to ensure that the Canadian government is free to pass whatever legislation it deems necessary to protect the nation's species and ecosystems, and to never again be subjected to the kind of humiliating assault on our national sovereignty and democratic governance that resulted from the Ethyl Corporation suit.

Thirdly, we recommend that Canada act quickly to implement the recently passed Bill M-239, the Tobin tax bill, which commits the government to show leadership and enact a tax on financial transactions. Also, we recommend that Canada vigorously encourage other nations to take similar action in order to discourage rampant currencies speculation and short-term flow of capital.

Fourthly, we recommend that Canada, through its own example and by using its other powers of influence in the world community, vigorously promote, first, the effective protection of the world's endangered species and their habitats and, secondly, research of the 90% of the world species that remain unnamed and unknown.

There may still be time to turn things around by transforming our economic paradigms, but there is not much time. We are well into the planet's sixth major extinction episode. As Harvard's E.O. Wilson emphasizes, our environment “will destabilize and turn lethal if the organisms are disturbed too much”.

I leave you with one final word from him:

To disregard the diversity of life is to risk catapulting ourselves into an alien environment. We will have become like the pilot whales that inexplicably beach themselves on New England shores...it is reckless to suppose that biodiversity can be diminished indefinitely without threatening humanity itself.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Do you have any questions? Does anyone? Given the fact that a couple of people haven't shown up, we can take a couple of minutes.

Mr. Murray Calder: Okay, perfect.

The Vice-Chair (Ms. Colleen Beaumier): We may even be able to take a break.

Mr. Murray Calder: That sounds like a good idea.

I enjoyed your presentation, Garth. I'll tell you, as a farmer, I have been a steward of the land since I started farming in 1973, not only because it makes my operation viable but because I love nature. That's the other aspect of it.

Out of your four recommendations, I agree with your third one and I'm interested in your fourth one, but I'll go back to one and two. Of all the people who we've heard right now, I question whether suspending negotiations either with the WTO or the FTAA is achievable. What we have to do, though, and it's what we're doing right now, is go back in and develop and establish a strong negotiating position for this round.

When the World Trade Organization negotiations were finished in 1993 and the agreement signed in 1994, we basically set the ground rules for the game where there had been no ground rules before, and in this round, what we're doing now, however long it's going to be and whatever they're going to call it.... I question whether it can even be done in three years. I think it's going to be a lot longer than that. But what we're doing now is fine-tuning those rules. We know the mistakes that were made in 1993 in a whole bunch of different things, and I think that's the process we're going to be working at now. I'd like your comments on that.

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Mr. Garth Nelson: I'm not in a position to know the extent to which Canada has power to suspend negotiations. I'm assuming that a sovereign nation can enter into an international agreement or decide not to.

Mr. Murray Calder: Just as clarification for that, we can exit. I'll give you the demographics of this right now. When the negotiations were started back in 1993, there were 117 nations involved in it. There are currently 134. There are another 30 right now that want in. If you've watched the news, the People's Republic of China, for instance, toured the United States, and they're very interested in getting in.

At the beginning of this month I was in the Republic of China, Taiwan, and we were also working with putting forward our trade position with them because they also want into the WTO. When I say I don't think the first two are achievable, it's because what you're asking is for us to walk away from the WTO and stand alone, and I don't think we can, as a trading nation, considering that 40% of our economy right now is international trade.

The Vice-Chair (Ms. Colleen Beaumier): Thank you. We thank you for your presentation. As I said earlier, all presentations will be part of the record.

Now we'll hear from Mr. McConnell, please.

Mr. John J. McConnell (Individual Presentation): Madam Chairman, if you wish to have a break now, that's fine with me; I can wait until after the break.

The Vice-Chair (Ms. Colleen Beaumier): I think we'll have a break right after you for five or six minutes.

Mr. John McConnell: Thank you very much, Madam Chairman, and members of the committee.

I come here as a volunteer, I suppose. I have worked for 40 years, more or less, as a public servant, and I consider this little message a little more in the interest of public service. I feel I'm here to say something on behalf of a lot of the little people who would like to be here, but can't, for a variety of reasons.

I'm mainly concerned, if I were to put it in a nutshell, about the character of Canada, how it's changing, and I'm concerned about how we're losing financial control. I think John Foster Dulles, Secretary of State of the United States, of all countries, said many years ago that there are two ways to take over a country. One way is by the force of arms. The other way is simply by getting the financial control of that country. I'm concerned about that. As I've said, I've spent 40 years in the public service, both provincially and federally, including a number of years in Ottawa, and most of it's been as an economist, believe it or not.

Today, my interests are much more concerned with the grandchildren and the environmental issues, and I'm delighted to hear the kinds of eloquent remarks I've heard this morning.

I won't say anything more about the Tobin tax, because I'd say the same as you've heard. But I'll go on to mention a few things.

Minister Marchi certainly sums things up for me when he says we enter into trade agreements to better the lives of our citizens. He said “It is vitally important that we consult closely with all Canadians” and that these agreements be “more open and transparent”. Of course, that interests me a great deal, because an awful lot of my work has been in public communication, television and press, and editing and publishing.

Looking at the question of bettering the lives of our citizens, recent press reports on Statistics Canada studies, based on research by economists who study family issues, state that the majority of Canadians are working more and earning less.

I have some concern to focus so much on the welfare of Canadians when I think of the world. I worked for a number of years in the Canadian International Development Agency, more as, again, a person relating to communications. I found out a lot of what that very impressive organization has done in the past. Unfortunately, today they're not being financed to do very much, relative to what they did before. What's going on?

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They say the average Canadian family is no better off than they were 20 years ago, even though today some 70% of both parents are working outside the home. Many are in low-paying jobs and in part-time jobs, as we all know so well. In real terms, the standard of living of most Canadians has fallen, yet our economy is far more productive than it was 20 years ago. How productive? It's absolutely amazing. We're exporting over $1 billion—not a million, but $1 billion—a day. Our exports today are $368.9 billion, a big increase over 1992, for example; it's nearly double today compared to 1992.

Fantastic wealth is being produced. I'm a volunteer on a committee here looking at the forests in northern Saskatchewan, another example of a great deal of wealth that's being produced. But that's another story, because we've heard a lot about what's happening in the forests.

Most farm families, and many others who supply these very vital necessities to Canadian society, are not receiving a reasonable return from the exports of this wealth. Meanwhile, large corporations doing business in Canada explain that they must stay globally competitive; they must downsize as necessary. That means if Canadian taxes are raised and wages go up for their workers, they may have to move to another country where they can reduce their costs. They also see the value of Canada's social programs, though, whenever they're in a more sober mood, and they realize how much those social programs mean to them in terms of the quality of our outstanding workforce.

We hear from time to time from certain corporate executives that Canada must become much more competitive to stay in global competition. This very month in CanadExport, that major publication for exporters, KPMG, that international management organization, has a detailed study comparing business costs in all G-7 countries. Would you believe Canada is ranked as the lowest-cost country in which to do business? Canada's average cost of doing business across nine industries, compared to the average U.S.A. cost, is, would you believe, 7.8% lower? We don't hear that very often, do we, about the opportunities and the quality of the operations in Canada when it comes to efficiency and cost?

Moving on, Canada's negotiators—and they're mainly lawyers and economists, but I hope they're still taking direction from parliamentarians—have a very tough job. But our observation, if I may be so bold, is to suggest that they are not standing up enough for Canada. They are not using enough of an interdisciplinary approach. Economics is a fairly narrow field, and there's a lot more to life than economics. I'll get into that a little later. But I do stress the importance of the interdisciplinary approach and the need to upgrade oneself every few years.

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In order that the negotiated rules for these issues can be fully endorsed and enforced if there are legal battles in the coming years—and there certainly will be—I think they should be established as trade rules. Why? Because when they are established as environmental rules, for example, lawyers and economists say that's another committee and we'll deal with that later. It never gets the same treatment, in my opinion, as the hard economic and legal aspects, because they're built right into the trade arrangement.

In this regard, there is a real need for not one but several trade working groups on civil society. Incidentally, thanks to my MP, who sent me a good deal of literature on what's happening, I read that there are over 14 groups or committees in business, 14 smaller groups that keep advising and are plugged in and so on. That's fair enough, but what about the number that should be relating to the civil society groups?

Some economic scholars who have studied Adam Smith's ideas and books—and it was a couple of hundred years ago when he wrote those—are saying that his teachings included prudence—and as economists we're very good at practising prudence today—but that perhaps we've forgotten some of the other virtues he mentioned, such as compassion, fair trade, justice, and so on. So I'm suggesting that in the economists' and lawyers' deliberations, they not only be interdisciplinary, but also take a look back at what Adam Smith's The Wealth of Nations and his other writings had to say.

Moving on, many church leaders are saying similar things. I have one minute, so I'll just run along quickly here and say that the moderator of the United Church of Canada, for example, the Right Reverend Bill Phipps, says there can be movement toward moral economics in civil societies. He says that comes about where there is a more even distribution of wealth and greater dispersion of power. The goal of such economic policies, he explains, would be to encourage the creation of caring communities, more economic security, more social investment, and more environmental well-being.

I'd like to say just a word about making trade frameworks more open and transparent. Frankly, there has been too much secrecy, and it's only thanks to groups of Canadians that there was as much airing of it as there has been. There is a great need for more public understanding and awareness, but also, as Madam Chair mentioned, the media has an important responsibility. They need not only to know what's going on and be better informed but also to record it and inform their citizens. Perhaps their citizens are ahead of them in terms of being a little brighter than some of the media think they are.

I have a bit more on water. This has been covered well, so I'm going to skip it and just say ditto. I'll say the same for the Tobin tax. I won't bother quoting what George Soros thinks, and I won't mention what Lamberto Dini, a former executive of the International Monetary Fund, had to say. But the essence of it was that you need to have a global control as well as a sovereignty control of a country.

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Thank you very much. I appreciate you coming here to Saskatchewan, and I know you get a good audience when you do come here.

The Vice-Chair (Ms. Colleen Beaumier): Thank you, Mr. McConnell. I think you made a fine point about the civil society and the public being a little bit ahead of the press. We're just beginning to recognize that the solutions are out there with the public.

I want to remind everyone that we do have a website, and it is a participatory website. I confess I haven't looked at it.

Gerry, could you comment?

Mr. Gerry Schmitz: You announced this morning that a series of discussion notes and questions have been added to the committee's Internet website. For those who do have access one way or another, the transcripts of all of our round tables and these meetings will eventually appear on the committee's website. Usually, there's a delay of a couple of weeks for final translation. So a full record of these consultations will be available for people to review. This is an ongoing process, obviously, so it will allow people to provide input in the coming months. But the members of the public across Canada, or anybody for that matter, who have access to an Internet site can go in there and see the full record of the consultations of the committee.

The Vice-Chair (Ms. Colleen Beaumier): I would like to suspend the hearings for 10 minutes. If everyone would please just bear with us, we will be ready to reconvene in 10 minutes.

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The Vice-Chair (Ms. Colleen Beaumier): Order. We'll begin our hearings now. Mr. Calder should be joining us in a few moments.

From the Multi Faith Social Justice Network, we have Merv Harrison. We have the Reverend Jeanette Liberty-Duns from the Saskatchewan Presbytery of the United Church; Roger Petry from the Saskatoon Synod of Evangelical Lutheran Church; and Tony Haynes of the Roman Catholic Diocese of Saskatoon.

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Shall we begin as I have them listed? Mr. Harrison, please. We'll do the same thing we did last time with a ten-minute presentation. If you take less time, we can maybe spend another minute or two on questions.

Mr. Merv Harrison (Multi Faith Social Justice Network): Thank you. My name is Merv Harrison, presenting on behalf of the Multi Faith Social Justice Network. Our brief is not brief. Our brief is quite long, but I'll try to lift out the highlights, if I can. However, we would urge that it be read. We feel quite strongly that it provides the basic principles and the fundamental philosophy that should govern Canada's role in world trade.

In our presentation here we're representing a number of faith communities, and their names are in the brief. We're doing it under the theme of building a moral economy, an economy based on certain moral principles and values. We've started with the same question that the Hebrew prophet asked: What does our God require of us? In our view, our God requires moral, ethical choices by individuals, by communities, by nations, and by world leaders.

We believe that all government policies, including international trade and investment, must give priority to a set of human values, values that such agreements must honour and not erode and trample. We've identified those seven values. We won't speak to each of them individually but we'll name them: human dignity, mutual responsibility, social equity, gender equity, economic equity, fiscal fairness, and ecological sustainability.

Economic choices are ethical choices. We use these values as moral benchmarks to create an economy that would serve all of our people. We must always remember that the economy exists for people, not people for the economy.

Last fall, our group expressed its strong opposition to the proposed multilateral agreement on investment. In our view, that agreement would violate most, if not all, of the values and principles we have identified. We use the analysis of the MAI as a template for these discussions on international trade and investment for two reasons: first, because we greatly fear that this very same MAI agreement will be resurrected in the WTO negotiations; and secondly, we fear that all future trade negotiations will, in the World Trade Organization, have the same principles and objectives that were embodied in the proposed MAI.

In the 1980s and again in the 1990s, our member churches were involved in the struggle to stop the free trade agreement, or at least to change it, and also with NAFTA. We now witness the fallout from these agreements, and we've listed them here. We won't reiterate them verbally.

In our view, we must never allow the terms and conditions of FTA, NAFTA, and the MAI to be embodied in any future world trade or investment agreements. Certainly they should not be included in the new proposed FTAA agreement.

Other presenters here today will talk about the specifics of various kinds of trade and investment. Our purpose is to examine international trade and investment from a moral and ethical perspective, and we've identified six areas we want to talk about. The first one is economic globalization.

The MAI was only the most recent in a series of policies negotiated in ten years among the most powerful nations in the world to consolidate this globalization process. We are told that a globalized free market economy is inevitable, that Canada must deregulate, privatize, be competitive, and pursue world markets, or we will be left behind. But in reality, neither unregulated economic globalization or its disastrous effects on the majority who are poor are inevitable. Globalization is rooted in politics, in values, and in ideology, not in some natural forces of nature. And the overpowering influence of international finance and commerce flows directly from those policies. The policies aren't inevitable nor irreversible. International commerce can be regulated. Transnational companies can be held accountable.

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The kinds of agreements we've seen, such as the MAI, would also violate and prevent countries from honouring many of the contracts and agreements they've signed through the United Nations.

The second point is caring for the most vulnerable. In Canada we have a long history of attempting to protect the most vulnerable through social programs. A number of these programs have been systematically dismantled in recent years in the name of deficit reduction, as Canada has joined the race to the bottom to provide a level playing field in the FTA and NAFTA.

Continuation of more liberalized trade and investment policies would erode things even further, and we describe in the paragraph the kinds of things we fear.

Canada, and especially developing countries, must have the freedom to implement creative solutions to address their deprivation, inequality, and poverty; maintain labour standards; and respond to the aspirations of aboriginal people. As citizens of Canada and the world, we are morally obligated to make this our very first priority.

Promoting the common good is number three in our presentation. We are greatly concerned about the kinds of things we are seeing in the MAI that will erode and destroy the public ownership of corporations Canada has used for social benefit and the common good. These kinds of criteria are directly in conflict with the values we have identified if those entities are no longer able to function. They will destroy our ability to be mutually responsible and create social equity. With unregulated foreign investment, job creation will not be required of foreign investors.

This orientation directly contradicts the ethical principle that labour, not capital, must be given priority in the development of an economy based on justice.

Fourth is preserving the environment and natural resources. Garth Nelson has discussed this one at length, and we need only refer to it and reiterate our support for those concerns. But tragically, to a very large extent Canada has already lost this battle. Clauses in the free trade agreement compel Canada to continue to export natural resources in general, and non-renewable petroleum resources in particular, to the U.S., even in periods of national shortage. John McMurtry, a professor at the University of Guelph, described the ultimate catastrophe had the MAI come.

Our faith calls us to live in harmony with creation and nurture and preserve it for all creatures and future generations. To so severely curtail government's ability to be good ecological stewards is morally indefensible.

Number five is citizen participation. We find it appalling that the MAI was negotiated in secret for over two years. This tells us how little respect there is for human dignity and the worth of the individual.

We are now equally concerned about a financial services agreement that we understand was signed by Canada through the WTO in December 1997. When do we get to see this document? Some of us have been asking to see it since 1997, without success.

On previous similar occasions, our churches have expressed, in those three statements we've set out for you, their great concern about the lack of public consultation. At a minimum, forums must be created in which citizens can discuss, debate, and formulate positions on any and all trade and investment agreements.

Our sixth and final section is on the foreign investment code for just and sustainable development. In recent months, we've seen a global market out of control, ravaged by the destructive gambling of money speculators and hedge funds. Economic turmoil in Asia, Russia, and now Brazil has caused world leaders to finally acknowledge that there must be some regulation of global financial markets.

Fundamental reform may finally be on the agenda, and we suggest that Canada should seize this opportunity to take leadership to institute this kind of reform worldwide. We've spelled out six different kinds of reform and tried to explain their effects. They include capital controls, especially for less developed countries; a small tax on international currency transactions—the Tobin tax; regulating hedge funds and derivatives trading; establishing an international insolvency tribunal; moving immediately to cancel the debt of at least 50 of the poorest countries of the world; and replacing or restructuring our outdated financial institutions in the world, especially the International Monetary Fund.

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To do these kinds of things, the first thing required is a major shift in values. The goal of serving the basic needs of all the people of our society must take precedence over the maximization of profits and growth. We've therefore set out a set of principles and guiding principles that the Ecumenical Coalition for Economic Justice has proposed. I'll leave those with you in print.

Their document goes on to identify even more specific objectives and performance requirements, and we've appended a draft of that outline to our brief.

In conclusion, Canada should not rush into the next round of negotiations, eager to create more liberal trade and investment agreements. It should call for a moratorium on that process and find some lasting solutions to the agricultural commodity crisis that continues to devastate life here in Saskatchewan.

We should urge the WTO to launch a review of the devastation and human hardship that already flows from existing agreements and press for the fundamental reform of the international financial system we've described.

We began by asking “What does our God require of us?” God requires us to create international investment and trade agreements that give priority to the values that support and enhance the human condition; create instruments and agreements that will foster global economic stability and effect real social change, with the expressed purpose of addressing the poverty, hunger, and depravation that prevail in all countries of the world.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Just as a point of interest, the financial services agreement came into force as of March this year. It's a completely public agreement, and the summary of the obligations is on the Department of Foreign Affairs and International Trade website.

Mr. Merv Harrison: Since when?

The Vice-Chair (Ms. Colleen Beaumier): Since it was signed in 1997.

I believe we have a fire bell going off.

Mr. Murray Calder: The exit is right behind you, Madam Chair.

The Vice-Chair (Ms. Colleen Beaumier): Being a foreigner in Saskatchewan, I'm going to take my lead from the natives.

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The Vice-Chair (Ms. Colleen Beaumier): We'll reconvene and hear from Reverend Jeanette Liberty-Duns.

Reverend Jeanette Liberty-Duns (Saskatoon Presbytery of the United Church of Canada): Thank you.

The Saskatoon Presbytery consists of 42 churches with approximately 8,100 members. My remarks are based on some specific concerns expressed by the Saskatoon Presbytery on the policies and positions developed by both the provincial and national bodies of the United Church concerning economic justice in our country.

Our church comes to these discussions with a long history of working for social and economic justice and pressing for public policy that supports the common good. We come with certain theological, ethical and moral values that give priority to basic human need, sustainable use, and care of all creation. As Christians called by the gospel of love and justice, we have a special concern for those that are most oppressed and vulnerable, both in Canada and throughout the world.

We must insist on national and international policies and agreements that will alleviate the growing gap between the rich and poor countries of our world, and that includes the gap between individuals here in Canada and in other countries.

In the 1980s, our church nationally spoke out to try to obtain something much better than the present free trade agreement with the United States. In 1984, the general council of the United Church of Canada supported “policies that are environmentally sound and...that enable governments to control the rate of non-renewable natural resources”.

In 1986, the general council expressed concern that the FTA would result in dependence on decisions of transnational corporations for the export of raw materials, such as fresh water, minerals, timber, grain, livestock and fish. We were concerned that the FTA would cause manufacturing plant closures, the loss of thousands of jobs, the loss of control of the use and export of our natural resources, and the erosion of labour standards and social programs, all in the name of being competitive and creating a level playing field. But the FTA proceeded, and article 409 compels Canada to continue exporting natural resources in general, and non-renewable petroleum resources in particular, to the United States even in periods of national shortages.

In 1994 we urged that some of these concerns be alleviated in the North American Free Trade Agreement, but to no avail. This agreement has only made matters worse.

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Last year over 500 delegates at the annual meeting of the Saskatchewan conference of the United Church of Canada endorsed a document opposing the proposed multilateral agreement on investment. There now seems to be general agreement that the proposed agreement was seriously flawed. Therefore, given the track record of our federal government in all of the above matters—the FTA, NAFTA, and the MAI—we are extremely nervous about Canada's role in future World Trade Organization negotiations.

Three of our main concerns are: first, that an investment agreement such as the MAI, with all the flaws and goals, will be implemented through the WTO; second, that the basic principles, concepts, and goals that were embodied in the MAI will be used in future WTO negotiations to achieve the further liberalization of trade, which will benefit corporations but will forget about the cost to the people of the world; and third, that some or all of the negotiations will take place without adequate information to or consultation with the citizens of Canada.

It is our view that the same concerns we identified in our documents about the MAI, as well as the values and principles we called for in the previous hearings, apply equally well to any further world trade negotiations. The principles and values that must have priority in any trade and investment agreements are: one, principles of democratic decision-making and government accountability to the nation's citizens, which means consultation with and participation by the the people; two, collective care and responsibility for all people, both nationally and internationally; three, the right of every sovereign nation to determine its own future; four, international agreements that protect human rights, labour standards, and the environment; and five, effective regulation of international trade and investment, for example by the implementation of the Tobin tax.

I've listed here the things we want to be assured Canada will not participate in, but I will not read them all to you.

The presbytery is also concerned about the ramifications of an international agreement on all aspects of agriculture in our province and in our country. We are especially concerned about food security for Canadians as well as for those in developing countries. We are concerned that although agricultural exports are 5.5 times higher than they were in 1975, net farm income is 25% lower, and in fact we are in the midst of a farm crisis here.

There has been a substantial increase in trade, but it has only benefited the major corporations, not farmers who make their living on a family farm. We are concerned that fewer people, namely large corporations, control the production of food, and more people are displaced from their land, not just in Canada but also in developing countries. This has resulted in rural depopulation and all of the social problems related to people being displaced.

We are concerned about the increase in genetic engineering, how that will affect farming in the future, and how it will be controlled worldwide. In order for small farmers to continue to have viable farm operations, they must be assured of having marketing boards that control the price of their products, as they cannot continue to farm if they do not have stable returns they can count on.

We ask that all of these concerns be addressed in any World Trade Organization negotiations.

Finally, in summation, the United Church asks that Canada make people and the environment the priority in any negotiations, rather than the expansion of major corporations. Our country was built on small businesses and small farms, and Canada must continue to recognize the necessity and the importance of them. Bigger is not necessarily better.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Do you have enough time for questions?

Mr. Murray Calder: I'd be more than happy.

The Vice-Chair (Ms. Colleen Beaumier): Okay, good.

Mr. Murray Calder: As to your last point on small farms, I am a farmer in my other life. I'm also the vice-chair of the Standing Committee on Agriculture and Agri-Food. Our operation is a poultry operation, so we're part of supply management.

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I also co-chair what we refer to as the SM-5 caucus, which is all the five supply-managed groups together. We have put together a trade negotiating position, which has been submitted to and accepted by the Federation of Agriculture. It's entitled First Things First. I feel very confident and comfortable with the position we have put forward. We are working to make sure TRQs, tariff rate quotas, are protected, and yet we still agree that we should get out-tariffs down to 0%.

The dairy industry is the only one right now that is receiving a subsidy, of about $130 million, and that is diminishing. The industry is compensating for that as we speak. The other sectors of supply management are not. That's a very strong position for us to go into the WTO with, and I'm quite confident. In fact I'm building another poultry barn this year just to show that confidence in where we're going within the WTO.

On the other points you've made here, yes, I have heard them before. In fact that's one of the things that got me into politics, away from my farm. I still say I'm a farmer first and a politician second.

Mr. Merv Harrison: May I ask if that initiative you're referring to will address the continual slide in commodity prices? It seems Canada honours the non-subsidy while other countries provide huge subsidies.

Mr. Murray Calder: The slide in the commodity prices—and I can even quote from a government document....

One of the rules we were trying to look at was that low prices would stop low prices. What I mean by that is you cannot produce a commodity at a loss for an extended period of time without the bank owning you. We know that is not true, and I can give you an instance, which I gave this morning. The European Economic Community has a clause that the negotiators call a carry-forward clause, and of course the United States, through their FAIR Act, have put money into their farmers. It's to the point that the EU has a subsidy of $1.4 billion that they can subsidize their wheat exports with, the U.S. has $444 million, and Canada has zero.

We've played by the rules—

A voice: I know.

Mr. Murray Calder: —and they have basically debated the rules. That's one of the negotiating positions I used on them last month, when we were down in Washington.

I found, especially when we appeared in front of the International Trade Commission, once we started talking about tariffs and wanting a zero tariff, a level playing field, very quickly they were into a “yes, but” scenario.

Mr. Merv Harrison: That's key, isn't it?

Mr. Murray Calder: Yes, it is, very much so.

The Vice-Chair (Ms. Colleen Beaumier): We don't have time. I'm sorry.

Mr. Penson has a question.

Mr. Charlie Penson: It's in regard to much the same issue.

Mr. Harrison, you suggested that we take a time-out from negotiating further, and I think you used the example of the problems adversely affecting Saskatchewan farmers.

Mr. Harrison, I think you should know that in the Uruguay Round of the GATT negotiations, agriculture was brought under trade rules for the first time, but only a modest start could be made in phasing down subsidies and tariffs worldwide under that agreement. Roughly, it's about 15% in the first six years.

In recognition that they couldn't move more quickly, they built in a second round for agriculture, which is going to start in the year 2000. The desire from most grain, oilseed, and beef producers we've talked to is that they want us to go to those talks and try to negotiate further subsidy and tariff reductions in order to improve their situation.

Essentially it goes like this. They see these big subsidies you were just talking about, especially in Europe and the United States, hurting our prices. The European Union subsidized their farmers $70 billion last year. That tends to mean we can't have access to their market at the moment. But even worse than that, they overproduced as a result of these subsidies, which was dumped onto third-country markets at a very low price. That tends to depress prices to our Canadian farmers.

So we have Canadian farmers coming to us and asking us to go further, and even to not be restricted to the agriculture realm. Many of them are saying they want us to expand the round further and have a millennium round so that more things are on the table to help them successfully achieve some of the concessions they would like to see.

The Vice-Chair (Ms. Colleen Beaumier): Do you have a question, Mr. Penson?

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Mr. Charlie Penson: No. I was—

The Vice-Chair (Ms. Colleen Beaumier): Can I just remind my colleagues that we're here to listen. It would be nice if we had lots of time for a debate, but we are here to listen.

Mr. Charlie Penson: It's a point of order. I think it's important to have an engaged discussion, which will also help people understand where there might be inaccuracies. And if that can be part of the discussion—

The Vice-Chair (Ms. Colleen Beaumier): Yes. However, we do—

Mr. Charlie Penson: It's important that we engage people as well.

The Vice-Chair (Ms. Colleen Beaumier): We have a very tight timeframe here, and we do have to hear everyone, please.

Mr. Petry.

Mr. Roger Petry (Saskatchewan Synod, Evangelical Lutheran Church in Canada): Thank you very much. I'm here representing the Saskatchewan synod of the Evangelical Lutheran Church in Canada.

In April 1998, the Saskatchewan synod passed two motions: first, that the Saskatchewan synod of the ELCIC strongly opposes the multilateral agreement on investment that was proposed; second, that the Saskatchewan synod of the ELCIC, in convention, encourage concerned citizens to lobby the federal government for public consultation before the final signing of the multilateral agreement on investment.

In light of that second resolution, I would like to commend you today for allowing this public input, and I think, as has been mentioned, there is a tremendous need for transparency and openness in any type of international agreement that's going to be widely accepted. What I think we learned with the multilateral agreement on investment goes back to Luke 12:2: “There is nothing covered up that will not be revealed, and hidden that will not be known”, according to Jesus. I think that's true for what happened with the MAI.

In terms of that first resolution against the multilateral agreement on investment, I think I can speak on behalf of the church in saying that to the extent they were strongly opposed to the MAI, they certainly would not want the issues that they opposed in the MAI coming up under another guise in the World Trade Organization; nor would they want the parameters set up for negotiations of the World Trade Organization effectively leading to a multilateral agreement on investment. I think there would be a strong consensus amongst the churches that this is probably the wrong venue even for discussing these matters, that the United Nations is a more democratic, open, and representative global body. And the question of who is putting this before the World Trade Organization is a question.

What I would like to focus on today, however, is one concern that your body raised in terms of looking at the overall scope, content, and process of new negotiations for the World Trade Organization. From the perspective of the church, I think a key issue is the whole issue of stewardship and the ability of human beings to be responsible in their decision-making, specifically their economic decision-making, as well as be accountable. Furthermore—and the Lutheran Church has put forward this position paper on this—we are also looking at sustainable communities that don't jeopardize God's creation or the needs of future generations.

When we look at the World Trade Organization, oftentimes in these negotiations they talk about wanting a clean economic agreement. We want to be discussing economic things only on the table, and they create a fire wall that prevents legitimate issues from being discussed and included, specifically relating to social and environmental concerns. In the long run, these mechanisms often work against the legitimate stewardship role of sovereign states.

If those initiatives of sovereign states to put forward stewardship issues are being overridden by the World Trade Organization, then ultimately the World Trade Organization will have to include those social and environmental concerns in their own decision-making. Otherwise, ultimately what the World Trade Organization is doing is aiding and abetting illegal activity by nation-states. This is illegal activity in terms of violating national and international covenants to which they've agreed to, illegal activity often in terms of international law, and illegal activity often violating the very constitutions of these nation-states that do not allow various rights and privileges of their citizens to be signed away into these international bodies. So I think that's a very critical point.

A further concern is that oftentimes when nation-states are putting forward agendas that show wise stewardship, these things are being claimed to be protectionist. I would argue that the World Trade Organization would have an obligation, first of all, to demonstrate that such policy was protectionist; second, that it was the actual intention of the government when they brought forward such a policy; and further, to allow a good Samaritan clause that would allow nation-states to experiment in terms of legislation that puts forward wise stewardship of resources, so that ultimately they aren't penalized if in fact something inadvertently turns out to be protectionist.

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If we are going to argue that this is purely an economic agreement, I think as Christians we have to look at the traditional prophetic tradition that focused on economic concerns of the poor and marginalized. We cannot tolerate the coercive use of economic power in the marketplace by powerful interests.

What is an interesting question is why there are so many economic issues that are not on the table in these World Trade Organizations.

First of all, there is the traditional attack on monopolistic practices in the private marketplace. We would argue the that global practices of transnational corporations have to be monitored, and that there has to be a global enforcement of antitrust legislation against monopolistic practices.

A second concern is that if we are saying these are economic matters, then we have to facilitate the ability of individuals as consumers, and nations as consumers, to exercise wise stewardship in the products and services that they consume. Ultimately if these consumers and governments are to show wise stewardship, they need to have information on these corporations—where they're operating, what conditions they're operating under. They should have the right to demand what those conditions are before a world trade body, and ultimately be able to make wise decisions on the full price of the economic costs of the services and goods that they are consuming.

Furthermore, the World Trade Organization should also help support consumer bodies that try to legislate and set product labels that ensure various standards in the global community, and not allow corporations to undermine those standards.

A third concern is that where shareholders and pension funds are starting to exercise sovereignty and stewardship of the resources of their companies, the World Trade Organization ought to be advocating and supporting their rights.

A fourth concern—and this has been raised by a number of the others here—is the whole issue of speculation in currency markets, commodity markets, and stock markets. Ultimately this is the concern of insider trading. Insider trading is an illegal activity where individuals are using the volumes of goods that they're buying and selling to influence prices. They are using privileged information, and that is an illegal activity that should be enforced by the World Trade Organization.

Fifth, consumers have a right to be able to organize alternative forms of economic activity. We do not encourage a global monoculture, which we currently have in terms of the way industries operate. Ultimately, for the viability of this planet, in the same way as we need biodiversity, we also need a diversity of economic forums in the form of cooperatives and community economic development initiatives, and these should not be prohibited by the World Trade Organization.

A sixth concern is that the World Trade Organization should monitor corporate activity to ensure that there is compliance with national tax laws and penalties for tax evasion. Ultimately corporations are using electronic means to evade taxation, and it would seem that a world trade organization should be forming global legislation on that policy.

The World Trade Organization should not guarantee investor rights. Ultimately it's up to a nation-state to determine the relative value of property rights with respect to other social, economic, and environmental rights. To the extent that the MAI was trying to guarantee the profits of corporations and allowing companies to sue governments for lost profits, that creates perverse incentives. The private marketplace does not guarantee anybody profits, and ultimately we would be encouraging bad decision-making and bad calculations on the part of corporations by legislating something like that.

Finally, the last concern I would like to raise is the whole issue of democratic accountability to nation-states and international bodies. The World Trade Organization, if it is going to take on these parameters of debate, ultimately needs to be monitored by the United Nations and its agencies in order to ensure compliance with international agreements, including international law and international covenants.

Furthermore, all discussions by the World Trade Organization and its members would have to be recorded and made freely available to any citizen. Ultimately, these venues should not be open to private corporations and private lobbyists, because they are the very individuals that the World Trade Organization presumably should be monitoring, and the World Trade Organization, at the end of the day, has a responsibility to citizens, not corporations.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Are there any questions?

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Mr. Murray Calder: I asked this one this morning, Roger, and you've hit on it again, so I'm going to ask it again. We're talking about international standards and laws that will deal with subsidies, health, culture, environment, labour and a whole bunch of things. But how do we put that together?

We have big countries, small countries, and developing countries, and they will all be going through these negotiations right now. As I said before, we set up the preliminary rules in the 1993 negotiations, and now we're going to start fine-tuning what we established in 1993. How do you see the process we would go through? What you're talking about here is international law that doesn't exist right now, so how do we go about establishing that?

Mr. Roger Petry: You first have to gather together the international agreements that have already been signed. There are plenty of United Nations covenants that have been agreed to that should be setting the parameters for this debate. We can't simply look at 1993 as the starting point. We have to look back to after World War II to set the parameters for these debates. So we need a formal mechanism that ensures the United Nations and international agencies that monitor these sorts of things are included in the process, and any discussion about the way international trade should be conducted is conducted within those parameters.

Furthermore, we have to recognize that nation-states have responsibilities with respect to stewardship. If they are exercising those responsibilities of stewardship and can be shown to be doing so, even if that turns out to be protectionist, I would argue the international trade laws would have to be on a lower level than those other responsibilities of national governments.

So when we are looking at international trading laws, we have to evaluate the status of that law with respect to other laws and whether they create perverse incentives, with respect to national governments that aren't doing their jobs in terms of trying to enforce and regulate in a proper way, as well as legislate on behalf of their citizens.

We have to look at the status of that law in the same way as we have to look at the status of property rights, which was the big question in the MAI. The MAI and that international body were assuming that property rights were on some type of pedestal. In western political history for the last three centuries, property rights were somewhere down here, and all of the other rights often involved redistribution of property. That will be a critical issue in the next 50 years.

Nation-states may very well have to impose fairly high tax levels. They may have to expropriate to solve poverty problems. That could very well be an issue. The question will be whether international law will allow a government that's acting in good faith to do that. I think that's the real debate.

Mr. Murray Calder: May I ask a short one?

The Vice-Chair (Ms. Colleen Beaumier): Very short, we're running behind.

Mr. Murray Calder: In that essence then, if we are able to establish this international law and its basis for health is lower than the standards we have in this country—and our standards I feel are quite high—will we have to be advised by the international law if we're going to be part of the WTO, or should that law not have such an intrusive effect on our own legal system here? These are all the things we will have to work our way through when we establish this.

How would you perceive that?

Mr. Roger Petry: If the Canadian government is going to enter into these agreements, first of all I don't think it can negotiate away its citizens' rights and privileges that are guaranteed in our Constitution. Given that, if the Canadian government ends up agreeing to these parameters—we also have to assume these are democratic nation-states—they may decide to opt out of these standards, but they will have to do it formally and openly.

I don't think it's a bad idea that global standards are being set up in the areas of trade, or any of these other areas, as long as they're looking after the best interests of people in a global way and not the interests of the wealthy elite. That has been the driving force, unfortunately, behind a lot of these negotiations.

My brief points out all of the other economic concerns that aren't on the table, precisely because they are working on behalf of ordinary people against monopolistic practices of global corporations. Why aren't those issues, which are traditional economic issues against insider trading, monopolistic practices and tax evasion, being built into a global economic agreement? That's the question I'd be asking.

The Vice-Chair (Ms. Colleen Beaumier): Thank you very much, Roger.

Mr. Haynes, please.

Mr. Tony Haynes (Social Justice Office, Roman Catholic Diocese of Saskatoon): My bishop, the Most Reverend James Weisgerber of the Roman Catholic Diocese of Saskatoon, which stretches beyond the city limits in size, would like to have been here this afternoon to make a presentation, as he did at the MAI inquiry last November. But because he had rather short notice of your coming, he sincerely regrets he's unable to attend. For that matter, I regret I am only able to speak as his spokesperson rather than, as he did, on behalf of the social affairs commission of the Canadian Conference of Catholic Bishops.

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Nevertheless, as the director of social outreach for the diocese, I'm here to make a presentation to you this afternoon, not as an expert in international economics or trade law but to reflect on how, from the point of view of Catholic social teaching, Catholic leaders view the important issues. The issues we will discuss today are too important to be left to the domain of experts, since they affect all of us in so many varied and profound ways. We're all experts in the discussion of the kind of economic future we care to construct for the next millennium.

In a very real sense, the question of international trade and investment treaties is a debate concerning values, particularly the current idolatry of free market values of competition and unlimited economic growth, accompanied by ecological irresponsibility and the growing exclusion of the impoverished. Is it not time instead to focus on those basic human, community and even spiritual values that our overdeveloped societies have unfortunately discouraged?

Perhaps it needs to be explained why we are calling for a pause and reconsideration of the implications of stateless corporate metapower, expressed in the operation of the World Trade Organization as well as the free trade area of the Americas. It is because of certain principles that supersede all economic factors. Let me identify them, embellish them and reawaken you to the very practical effects or disasters that have surfaced in the very short regime of the World Trade Organization. These principles are the common good, public participation, preferential options for the poor, rights of workers, and subsidiarity.

What does the church know about economics? We may not know very much about the very many economic theories, but we know more than enough about the economic reality of the world today and the incredible suffering placed upon so many in the world.

We lay the blame upon the willingness of some governments to allow multinationals to write their own rules at the level of world trade. It is our belief that having failed to do this at the level of the OECD, there is now an attempt to do the very same thing at the WTO. Thus I am drawing upon the brief my bishop presented the MAI inquiry held here last November. But in addition, I will be referring to the very real experience the European Union has just undergone with the United States over bananas grown in the Caribbean.

First, on the common good, Catholic social teaching suggests many principles for action that can help guide the formation of conscience and the development of appropriate social action. One of the most important principles is that of the common good. Perhaps this principle was best explained for our present context in a document of our episcopal commission, which stated that the basic purpose of economic systems and structures must not be the multiplication of products, profit or domination, but to serve the needs of people for a more fully human life.

The resources and goods of the earth, therefore, are to be developed to serve the common good. This is the basic principle that should govern all economic and political systems. All other rights, whatever they are, including property rights and free commerce, must be subordinated to this principle.

Similarly, the Canadian bishops have raised their voices, both in public statements in our country and in international synods of bishops in Rome, to question the growing economic dominance of the transnational corporations. If the WTO were to incorporate the now exposed agenda of the MAI, referred to by some as a charter of rights and freedoms for transnational corporations and by others as a charter of rights for absentee landlords, it would grant yet further powers to the economic behemoths of their era.

Citizens may not enjoy the opportunity to bring complaints against corporations. But on the other hand, the WTO has already forced governments to pay permanent compensation to the injured party. What else might it do—bar countries from restricting hot money, investments, or profits flowing in and out of their economies?

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Who is to benefit from changes in the WTO and the extension the FTAA? The answer seems to be that huge multinational corporations headquartered in the north, which have no allegiance to any state and have lobbied hard for unfettered markets, would be favoured.

From listening to the people that the Catholic Church ministers to, and according to the principles of the common good, this is not what human beings, or indeed the environment, most need. It has certainly not been proven through independent audits of social, environmental, and gender issues that the WTO has been of benefit to disadvantaged groups in Canadian society and the world.

Secondly, on public participation, a parliamentary subcommittee travelling the country will be, I pray, the first step of many to see that the secrecy that was associated with the proposed introduction of the MAI will be replaced by transparency.

Catholic social teaching has called for more capacity for civil society and governments throughout the world to counter the economic power of massive corporations. These titans, who are often in league with docile governments, already control the rapidity and might of financial flows, and now that the MAI has been rejected by the OECD, seek to further enhance their corporate power via the WTO.

Thirdly, on a preferential option for the poor, many Canadians have felt that they have had little opportunity to grapple with the implications of the world trade order and the proposed FTAA. But consider how the countries of the south are faring. Many of these countries cannot afford to have one lawyer representative at the WTO. It is simply unacceptable that some leaders still believe they can, and even should, negotiate a deal and then offer it to, and indeed impose it on, developing nations. If some countries are less powerful to begin with, then there is, in all justice, no reason why asymmetrical agreements should not be signed, giving smaller and weaker economies a better chance to develop as they see fit.

Next, on the rights of workers, Pope Leo XIII's 1891 encyclical letter Rerum Novarum was translated into English as On the Condition of the Working Class. This document not only launched and guided the Catholic social apostolate in the first 70 years, but remains a major theme today.

When Pope John Paul II visited Canada in 1984, for example, he repeated a famous statement of the Canadian bishops that remains relevant today:

The needs of the poor have priority over the wants of the rich; the rights of workers are more important than the maximization of profits; the participation of marginalized groups has precedence over the system that excludes them.

If we agree that “the ethical principle that labour, not capital, must be given priority in the development of an economy based on justice,” we would guarantee that the value of human labour would be protected. Specifically, this would mean that core labour standards would be respected and universally applied. Nothing in the WTO mandate must negate the fundamental international human rights covenants and International Labour Organization conventions.

Last, on subsidiarity, the principle of subsidiarity is relevant today and also at the heart of Catholic social teaching. It essentially holds that decisions should be made at the level closest to those persons who would be affected by that decision. Concerning the MAI, the social affairs commission of Canadian Catholic bishops pointed out in March of last year:

When individuals are being told that they must take greater responsibility for themselves and at the same time fiscal responsibilities are being decentralized to lower levels of government, is it not paradoxical that Canada is to be part of an agreement that gives more freedom to big business and undermines political power?

How can governments then purport to represent their citizens? Removing democratic decision-making from elected officials to managers, and a step further removed, the shareholders, is not an enhancement of democracy, nor is it, clearly speaking, subsidiarity.

Let me conclude by referring to the recent WTO decision on bananas grown in the Caribbean. This recent ruling by the World Trade Organization is the result of a ten-year hassle, before the birth of the WTO. On the one side is the United States protecting the economic interests of its multinationals in Latin America, although it used the usual ploy of having other countries in its hip pocket—Guatemala—make the complaint. On the other side was the European Union, with some of its members weighing up their responsibilities to former colonies in the Caribbean, and then when the United States threatened sanctions against certain European exports, other members of the European Union felt the need to protect their innocent producers.

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Note that contrary to the intent of the WTO, it was willing to allow the States to apply protective tariffs of $200 million on European goods, and also WTO levied a fine close to $170 million upon the EU. How the WTO decided this was in secret, although the statements have now been published.

You may say that is not the concern of Canada. I submit that the very title, the World Trade Organization, makes it so. The banana exporters of Latin America are multinationals of North America, whose interests are financial. The World Bank and IMF are supported under their structural adjustment policy, which many people realize does little to relieve the poverty of the workers and their families in the Latin American countries. More significantly, it is to deny what is to happen to the people of the Caribbean islands, whose staple export is bananas. What alternative crops do they have?

It is the same alternative as many small coffee growers had in Latin America when the price of their product was manipulated and depressed by commodity markets and multinationals in the north. The alternative is stark; the crop is cocaine, which is an integral part of the drug culture and hidden economy of the United States. So in permitting profits to a few in a free market economy, governments are now paying out in combating the curse that is afflicting not just the poor, not just the single person, not just the household, but the whole community in the United States and beyond.

Before I make some recommendations, I will quote from a recent editorial in a British newspaper.

The Vice-Chair (Ms. Colleen Beaumier): I'm sorry, you'll have to make your recommendations now, please, because you're over the time.

Mr. Tony Haynes: Sorry.

I would make two specific recommendations: First, begin to listen to and act on those who say that human rights and human well-being will be better protected by restraining the power of the WTO, not expanding it, and that would include the high-power business interests, the transnationals whose search for profit, ostensibly to satisfy shareholders, is at the cost of unemployment and impoverishment worldwide. Second, reassert the power of governments to be witnesses to and empowerers of the rights of the workers and their families, and this can only be done by transparency.

The Vice-Chair (Ms. Colleen Beaumier): Thank you very much, all of you, for your...I'm sorry, we don't really.... Now I feel guilty. Whichever one of you raised me up, you did a good job on the guilt.

Yes, go ahead, Mr. Axworthy.

Mr. Chris Axworthy: It's interesting.... Well, I guess I wouldn't be asking if I didn't think it was interesting, but it seems to me that most world leaders, including our own, are members of one of the faiths you represent here, and sometimes others.

The Prime Minister is plainly a Catholic. Why is it that he, President Clinton, prime ministers and presidents around the world, who are members of the faiths you represent, simply do not adhere—

The Vice-Chair (Ms. Colleen Beaumier): Good point.

Mr. Chris Axworthy: —to the points you are making? They have been made over a long period of time. That does present a huge challenge to us, doesn't it? If they don't respond, how can we expect ordinary people to respond?

Mr. Merv Harrison: My own view of that is that they too, along with most of the public, have bought into the false philosophy that the free market economy is god, not the God we used to worship.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

If anyone says it's only Catholics that have guilt, they did a good job in the United Church, too.

Mr. Murray Calder: Oh, come on now; you should try a Presbyterian.

The Vice-Chair (Ms. Colleen Beaumier): Our next witnesses are William Adamson, Don Irvine, Jan Norris, David Greenfield, Sasha Kvakic, and Michelle Beveridge.

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Please keep your presentation to 10 minutes. I remind you that if you have to cut it a little short, it will appear as a full part of the record. I'll try to give you two minutes' notice so that I don't have to interrupt you. Just look up occasionally when you've run out of breath.

We will start with Mr. Adamson.

Mr. William R. Adamson (Individual Presentation): Good afternoon, members of the panel.

It would be advantageous for Canada to cooperatively develop a framework and a set of procedures and guidelines for mutually fair and just trade with other nations. However, these guidelines will need to be of a special type and quality.

First of all, we need to declare our basic values as the touchstone for negotiations: democratic decision-making and government accountability to a nation's citizens, which you've heard several times today, I believe; social citizenship and the collective responsibility for our fellow human beings; 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.

Negotiated agreements need to be in harmony with the United Nations Universal Declaration of Human Rights, plus the International Covenant on Economic, Social, and Cultural Rights and the International Covenant on Civil and Political Rights.

It's helpful to remind ourselves of the nature of capital. Industrial capital is the product of present and previous generations of labour. It also has an ecological dimension, since national resources extracted from the earth for energy and production are part of our common heritage on this planet. Hence is derived the stored social value of capital. Such stored social value carries obligation and responsibility with it.

Certain ideologies and myths are floating around in our culture that are misleading and illusory and that need to be challenged and rejected.

It's inappropriate to classify persons as simply consumers or investors. This detracts from their capacity as citizens to engage in democratic relationships and to care for their neighbours and communities.

Another myth is that the influence and development of the marketplace will guide our community relationships. The market is chiefly concerned with profits and does not give a damn about persons. As humans, we need a broader sense of citizenship, responsibility, and accountability.

A third myth is that culture and human services are simply commodities that can be bought and sold as though they were material objects. This is degrading to the human community.

A fourth myth is that economic globalization is a natural force sweeping the world, which we can do nothing about, but simply adjust to, as our Prime Minister said. We have had a global village since 1860, with the laying of the transatlantic cable. Our modern computers are fast communicators, but we can control the messages being forwarded and the politics and the values being espoused. We can also track financial transactions and transfers in a new way, and therefore have a way to control them.

As for financial stability, during the Asian meltdown, the Canadian dollar was vulnerable to speculative investors who besieged it and brought it down to an historic low. The federal government was helpless and immobile before the onslaught. Speculative investment has supplanted productive investment as a dynamic of the global economy. During this crisis in the first half of 1998, some 81 takeovers of Canadian companies took place, 69 of them by American buyers alone.

Our federal government needs to work quickly, in concert with other nations, to implement the Tobin tax on financial transactions, especially across national borders. It also needs to require foreign investors to deposit a portion of their investment in the Bank of Canada or in regional banks to secure their accountability in the community where they operate and thus slow down the fly-by-night speculators.

The NAFTA is frequently taken as a reference point for negotiating trade deals. However, there are problems with that practice. Its predecessor, the FTA, in article 809, compels Canada to continue exporting natural resources in general, and article 904 requires that petroleum resources in particular are to be exported, and in periods of national shortages, the U.S.A. is to receive 60% and Canada 40% of the Canadian oil. This is intolerable.

• 1520

In NAFTA, chapter 3 establishes the obligation of Canada to export water as a tradable good under the regulations of NAFTA.

The provision on national treatment for foreign investors is intolerable. Under NAFTA, chapter 11 allows foreign investors to sue the Canadian government for the loss of profit or the loss of possible future profits. Such compensation is not open to Canadian investors.

Several recent and embarrassing cases reveal the travesty of these regulations: the MMT gasoline additive, which has been mentioned several times; S.D. Myers and PCB waste disposal; Lockheed and Pearson airport; U.S. tobacco companies and proposed legislation; the split magazine controversy; and the Sun Belt Water Corporation. These things are intolerable.

The federal government has already given away too much of our sovereignty. It gives too much power and advantage to foreign investors and has abdicated its care and oversight of the welfare of its citizens. It has left itself impotent and helpless before the onslaughts of transnational corporations.

The federal government needs to have the backbone and the guts to renegotiate these offensive regulations of NAFTA. If negotiation does not work, then it needs to give the six months' notice and abrogate the agreement. It had better remedy these embarrassing and vulnerable problems before it begins negotiating an FTAA agreement.

Any FTAA agreement will need to highlight the fundamental rights of citizens and their local governments and enterprises, and not just the rights of corporations or investors. It will need to include a flexibility that takes into account the size, situation, resources, and power of the various nations. National governments will need flexibility in their use of policy tools. It must not be a giant gridlock clamped irrespectively on all the nations, regardless of their circumstances. It must take into account the bully in the midst, because of size and wealth and power, which wants every time to get its own way and secure the greatest gain, e.g. softwood lumber, durum wheat, dairy products, culture, bovine growth hormones, bananas, and water export.

The WTO urgently needs revision. At the moment it is an autocratic behemoth. It is constructed chiefly to guard the investments of transnational investors, without care for the common good of the people and governments of such nation-states. The fact that it arranges three- to five-person tribunals of trade specialists to adjudicate disputes between nations is offensive. These arbitration panels are held in secret, there's no public input by concerned citizens or groups, the members are not elected or accountable representatives, the decision of the panel is final, there's no means of appeal, and there's no reference or relationship to national government policies. This arbitrary and dictatorial procedure is thoroughly contrary to our democratic, judicial, and parliamentary heritage in the western world. It must be brought into harmony with democratic procedures and social values.

Apparently the WTO reduces everything to commodities or goods. It has no understanding of factors such as culture, services, intellectual properties, health, education, and such key items of civilized society. It has always negated environmental concerns for the sake of enhanced trading.

As for the MAI, political leaders are now calling for a dialogue with civil society. It remains to be seen whether this will be a genuine search for new approaches and citizen-oriented regulations, or whether it will be a cosmetic, co-opting, and propaganda exercise. Whenever the offensive elements of the proposed MAI are raised, whether in fresh guises or different venues, they are to be detected and rejected.

The citizens of Canada are now alerted to the issues with trade negotiations and are now better informed and better organized. If our government leaders fail to grapple with distinctive new approaches and new premises, and simply regurgitate the vested interests and the conning manoeuvres of the transnationals, there'll be hell to pay.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Mr. Irvine.

• 1525

Mr. Don Irvine (Individual Presentation): Madam Chairman and members of the standing committee, and those at this table and those behind me, let me first congratulate the Government of Canada in its worthy initiative to bring the views of the general public to bear on international trade and investment policy liberalization, both within the Americas and throughout the world.

Ever since I was old enough to be aware of such things, I've had a rather global outlook for some reason, and abhorred unwarranted impediments to international movement of goods or persons. So Canada's leadership role in the early phases of GATT and of the OECD have been a matter of pride and satisfaction for me. I'd like to think that this latest initiative, the civil society consultation process that brings us together here today, will also be something that not only I myself but all the people of Canada can long hold dear.

By way of vocation I happen to be a toxicologist, and I lecture primarily on risk-benefit analysis and tools for critical analysis of problems. This morning there were some references to risk-benefit ratios and that sort of thing, and I hope to get back to that in just a moment.

Another keen interest I have is in history, and I say something about that in my written brief, but to shorten it I would just say that the GATT of course is the General Agreement on Tariffs and Trade—general agreement—and the OECD is the Organization for Economic Co-operation and Development. General agreement and cooperation are very laudable ideas. However, I think maybe we've switched tracks a bit or the track went around a severe bend, because now we're into global competition at the expense of cooperation it would appear, and such things as the MAI don't seem to be particularly cooperative, and they don't seem to be particularly in the interests of the person in the street.

Therefore I have some concerns I would like to share with you. I would like to—not surprisingly, I guess—look at these new proposals in terms of risk-benefit analysis. This is on page 3, for those who have copies.

We all informally balance risks against benefits when making personal decisions. In environmental studies and many aspects of toxicology, examining this balance becomes formalized and procedures have been developed to make risk-benefit analysis systematic, scientific, orderly, open, and accessible to the ordinary citizen. Much of this process can be formulated as specific questions that should be asked and then answered. And although these have been developed in the area of environmental analysis and that sort of thing, I think they apply just about equally well to proposals of the type we're discussing today.

For any new endeavour, how do the risks stack up against the benefits? What exactly are the benefits? What exactly are the risks? Who gets the benefits? Who takes the risks? Where geographically and socio-economically are those who benefit? Where geographically and socio-economically are those who take the risks? When are the benefits taken? And when do the risks show up? Why should we do this? Why should we run the risks? So those are pairs of questions based upon the five Ws.

Now I come to another set of questions that are usually asked in risk-benefit analysis in general: What will be the secondary side effects? Is it environmentally sound? Is it in keeping with sustainable development? How does it preserve or enhance the public good? Have the benefits and the risks been evaluated comprehensively from all viewpoints? Have effective and neutrally facilitated means been used to obtain and incorporate the views of all potentially affected persons? Is the decision-making process open, accessible and democratically conducted? Is there extensive ongoing, two-way communication between the planners and negotiators with the general public and non-profit, non-governmental agencies? Is the total risk level acceptable to the public? And is the balance of benefits over risks compelling? Does the net benefit in the long term make it worth doing this? These are all generic risk-benefit questions that apply to the WTO and the proposals for the FTAA.

But perhaps it should be noted that the general public is known to be more accepting of risks if these have the following characteristics: that the risk be of a familiar nature; thoroughly understood by them; of their own choosing; of clear benefit to themselves and others around them; agreed upon, not imposed; communicated in jargon-free simple terms but not simplistically, talking down or downloading; and with sensitivity or respect for their perceived concerns.

• 1530

Moving beyond these generalities of risk-benefit analysis to some point specific to international agreements, the following additional questions would seem pertinent:

First, is this proposal consistent with our existing agreements on such non-monetary dimensions as carbon dioxide reduction, environmental protection and sustainable development?

Will Canada or other nations still be able to impose trade and financial sanctions as we have against apartheid in South Africa or against other intolerable state behaviours, for example, in Libya, Iraq or Serbia? Does the proposal fit with our national character?

Finally, I would like to apply the methods of critical analysis to the seeming watchword in liberalization of trade and investment policy and economic globalization in general: be more globally competitive. What do we see if this idea is, so to speak, put under the microscope?

The first is vagueness and ambiguity. Who or what is to compete with whom or what on what dimensions? Is it just money or more? The second is an urging toward a new philosophy, a steady shift away from cooperation to competition. The third is a parallel urging to be more productive, to do more work per unit time for less pay. The fourth is an emphasis upon a single bottom line—money and profit. The fifth is measuring competitiveness with a worldwide yardstick.

Making products at home with child labour in lands with extremely low living standards, no effective protection of the environment, and no enforced standards for work hours, workplace safety or health hazards may all push down costs dramatically and raise profits dramatically. Countries with such conditions, which are allowing total robotization of production, will be very globally competitive. With a globally liberalized trade and investment policy, Canada would have to follow their example. There would be no means of protection from their exports and no way to protect our own industries from such competition. This is the race to the bottom. Does Canada want to run this race? Does the average Canadian want to join in this race?

The sixth is engendering feelings of insecurity in workers through such cost-cutting measures that are said to ensure global competitiveness. These include massive layoffs, downsizing, work-from-home programs, cubicles, “hotelling” of office space, automation of work even to the point of complete displacement of staff by robot tellers, and electronic surveillance of work efficiency.

The seventh in this list is extolling competitiveness in terms of financial success and investment profit, even though competition produces by definition many more losers than winners. By contrast, cooperation produces primarily or even exclusively winners.

In recent efforts to establish the rules for hemispheric or global liberalization policy for trade and investment, certain lamentable features stand out:

The first is a regress from a richly textured set of considerations in relation between nations to merely those of profit-making.

The second is a regress from democratic interaction between sovereign states to quasi-judicial decisions driven by the financial interests of small minorities.

The third is shifts that are not mandated by the person in the street or freely debated by their parliament, but which are inimical to their interests and repulsive to them.

The fourth is serious discrepancies between Canada's philosophical and strategic stance on proposals for international liberalization of trade and investment polices vis-à-vis the character of Canada's many international agreements in other areas already signed and ratified, for example on sustainable development.

These well-accepted agreements to protect the global environment and further global peace and public well-being run contrary to the thrust of all our recent agreements and proposals on trade and investment. How are we to deal with this dilemma? Surely, Canada and all nations should present to the rest of the world a self-consistent, coherent and integrated set of policies that reflect the several facets of the nation, not merely making money.

I have set of 10 recommendations. The first is consultations—

The Vice-Chair (Ms. Colleen Beaumier): You're going to have to do them in 30 seconds, because you're over.

Mr. Don Irvine: Consultations like the one today should be continued and expanded. The Canadian public from non-profit organizations should be included in the actual planning and negotiating process. The experts who are involved in these decision-making and planning processes should be from not just finance, but sociology and environmental science, occupational health and interdisciplinary studies. International investment policies should not be liberalized.

• 1535

I would stop at this point to allow for possible questions.

The Vice-Chair (Ms. Colleen Beaumier): Thank you. We'll do the questions after everyone has made a presentation, if we have time.

Jan Norris, please.

Ms. Jan Norris (Individual Presentation): Thank you for this opportunity.

I've been here for three hours, and I haven't yet heard anyone who's really gung-ho on the World Trade Organization. I'm wondering if this is the response you're getting across the country. If it is, I wonder if it represents the majority of Canadians. If it does, I wonder if it's at all going to influence government policy.

As a member of the board of directors of the Saskatchewan Environmental Society and the Sierra Club of Canada and as a member of the steering committee of the New Green Alliance here in Saskatchewan, I'm going to speak mostly about the free trade movement and its effect on the environment. But I would also like to emphasize that environmental concerns are intimately interconnected with social and labour concerns and that these need to be dealt with and looked at very carefully in all of these agreements.

If there's one message I would like to convey to this committee about the GATT, the WTO, the FTA, NAFTA, the FTAA, APEC, all these trade liberalization measures, it is that they have been nothing but bad news for the environment. It's not surprising when we look at who's negotiating them and why they're being negotiated.

Free trade agreements operate by getting countries to give up their powers to legislate trade and commerce within and across their borders. They have a very strong enforcement mechanism in these trade dispute panels, which a number of people have talked about. There was a little bit of a debate earlier today, I remember, about whether or not these panels operate openly. While it's true that the Globe and Mail would cover the results of the panel after the decision has come down, it is not an open process. Unlike in a court, the media are not there, the documents are not available to the public, and there's no provision for intervenor status for other concerned people. These decisions are made by a few trade experts who are very narrowly focused, and they make arbitrary decisions that are not necessarily based on precedent. They are, as Mr. Adamson said, not open to any form of appeal.

The unquestioned assumption behind the global free trade movement is that trade is good and more trade is better and that trade law should take precedence over any other kind of legislation, and so it does. It is therefore not surprising that, without exception, when a law to protect the environment has come up against an international trade law, the environment has lost.

The very first dispute that was taken to the World Trade Organization was an attack by Brazil and Venezuela against the American Clean Air Act. The secret, three-person trade tribunal ruled in favour of Brazil and Venezuela, and that debilitated legislation in the United States, which was expensive and had taken a long time to be developed, that would have improved the air quality across the country. Other rulings have resulted in destroying the Marine Mammal Protection Act in the United States, which protected dolphins and sea turtles from fishing practices for shrimp and tuna.

Canada has used, and is continuing to use, free trade agreements to make sure that other countries cannot ban the import of our asbestos, which is a dangerous carcinogen. Also thanks to free trade agreements, Canada can no longer insist that fish that are caught in our waters be landed. We used to be able to insist that they not only be landed but also be processed and canned in Canada. That was shot down by the GATT, and now we also cannot insist that they be landed. We cannot properly monitor the stocks to see how much is being taken and how large they are, and we therefore cannot properly manage that resource. As every Canadian knows and as has been mentioned here several times, our government has no power to stop the import of a gasoline additive that impairs our cars' pollution abatement mechanisms and very possibly harms our children's health.

• 1540

How did this situation develop and what can we do to ensure that environmental protection is considered at least as important as trade law?

I have four recommendations. The first is to give back to governments all the means necessary to regulate trade and investment in the best interests of people and the planet. This includes being able to limit imports and exports. Of course, the developed nations were able to build their economies by doing that. For hundreds of years we were able to limit our imports and exports, and now we want to deny that right to developing nations through these trade agreements.

A country should be able to legislate any necessary environmental, labour, social, or cultural standards even if they negatively affect the profits of corporations. The superiority of multilateral agreements on the environment must be made explicit in World Trade Organization agreements, the FTAA, and any other trade agreements. I'm talking here about such things as the Montreal Protocol on Substances That Deplete the Ozone Layer, the Basel Convention on hazardous waste transport, and the convention on the trade of endangered species. As has been mentioned, these are in opposition to trade agreements. They specifically limit trade. You cannot trade in endangered species. There's a direct opposition there. At some point one of these is going to be challenged at one of these tribunals, and it will be interesting to see what happens. If it follows the current pattern, the environment will not win. As I mentioned, it has lost unanimously.

The second thing I would recommend is that we begin to price energy accurately. This is not specifically a World Trade Organization prerogative. It affects the whole global economy so momentously that I can't help but mention it. The global marketplace is powered by artificially cheap fossil fuels. It is only because governments continue to subsidize the oil and gas sector and because the full cost of using these fuels is not considered that the system can survive. By that I mean the health costs we as taxpayers pay for respiratory diseases, cancers, and car accidents; the infrastructure costs at airports, harbours, and highways that are paid for by taxpayers; the costs we pay for oil spills, which happen far more frequently than we read about in the media; and crop devastation, which is now being recognized as occurring from low-level ozone—that is, smog.

All these things we're paying for help to keep the price of energy down, which aids corporations and fuels the global economy. Without that, the whole thing would pretty soon grind to a halt—well, not to a halt. It would be slowed down. So all fossil fuel subsidies should be removed and full cost accounting, including damage to the environment, should be applied.

Third, we should support bioregionalism. There's a growing movement called bioregionalism, which means living within one's own ecosphere. This is in direct opposition, of course, to the global free trade movement. It means that rather than having vast monocultural plots of agricultural land—such as growing bananas or pineapples in the tropics and then we get them very cheaply up here at the expense of the local farmers down there—we will be growing our own food or buying it from local farmers. We would be producing our own goods from our own local resources, and we would be connecting with the land on which we live. Ultimately, this is what large numbers of people must do if we are to preserve the life support systems of this planet. The current paradigm of the ever-expanding global economy is simply not sustainable. More and more people are realizing this, and that's why this movement is growing.

Any trade agreement that would impinge on a community's ability to live within its own bioregion, for example, by restricting the formation of local cooperatives or by disallowing local procurement practices, should be disallowed.

• 1545

Fourth and finally, the precautionary principle must prevail. Current trade agreements take no account of the precautionary principle. This states that if we think a measure might be harmful to the environment or to people's health, we may act. We cannot use uncertainty as a reason for not acting.

Right now the World Trade Organization is forcing the European Union to accept hormone-treated beef. There have been studies that suggest that this beef may be harmful, but there's no scientific proof. So according to World Trade Organization rules, Europeans must accept this beef in spite of their opposition. This is an example of not following a precautionary principle.

We're facing the same situation with biotechnology. The effects of unleashing gene-manipulated organisms into the environment is not known. We don't have a clue. But corporations are urging the WTO to prevent governments from being able to stop it. Governments' right to invoke the precautionary principle and therefore prohibit trade in questionable products must be upheld.

I would just like to mention something. We were talking a little earlier about improving market access in the European Union for our farmers. The Europeans are really not big on biotech. It's a big issue over there. They do not want it, and we are really risking a huge amount of our market share by allowing biotech companies to come and spread their crops all over our fields, thereby possibly polluting our non-genetically engineered crops as well. We may run the risk of losing our market in Europe because of that.

In closing, I'd like to return to the big picture.

The Vice-Chair (Ms. Colleen Beaumier): You have 30 seconds.

Ms. Jan Norris: The goal of the World Trade Organization, the free trade agreement, the free trade area of the Americas, and all other trade liberalization measures is to increase trade. Increased trade means increasing production, packaging, shipping, and disposal of goods, many of them pointless and unnecessary. Increasing trade means increasing greenhouse gas emissions and climate chaos. It means increasing pollution and depletion of the earth's resources. It is antithetical to basic environmental principles. We should be doing what we can to increase people's self-reliance and connection to the earth, not negotiating further trade agreements that undermine the ecosphere and exploit the poorer people on the planet.

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you.

Mr. Greenfield, please.

Mr. David Greenfield (Individual Presentation): Good afternoon. I am both a citizen activist and a citizen artist, particularly in the area of being a poet, singer, and song writer. So I submit it to you two poems: a sonnet entitled Marcuse's No, and a free-verse poem entitled Iron Heel. I'm not going to read either of those, but if there's time I intend to sing a short song. The topic of my presentation is generally in the range of the same subject matter as the poetry that I've submitted.

I've come here today to say no: to say no to the so-called principles that were embodied in the former MAI; to say no to the entrenchment of the principles of the MAI in the WTO; to say no to the current uses and activities of the WTO; to say no to the free trade area of the Americas; to say no to the North American Free Trade Agreement; to say no to the Canada-U.S. Free Trade Agreement; and indeed, to say no, a fundamental no, to the entire direction in which capitalism has been moving in the last 10 to 20 years.

One of the words we're bombarded with quite a bit in this discussion is the word “globalization”, which is an interesting word because it implies first of all that this process is somehow a natural and inevitable process. It's about growing up in the global village. It's about being part of the globe, part of the world, etc. Secondly, it implies that those people opposed to this process are somehow narrow-minded, provincial, nationalistic, even reactionary.

• 1550

I don't use the term “globalization”. The term I prefer, which I think is a much more accurate word, is the term “corporatization”, because what this entire process that we've seen unfolding in the last 10 to 15 years is about is the small number of people, about 250,000 people worldwide—that's about 0.004% of the world's population—who actually own and control most of the world's wealth. It is about this relatively small group of people, and the concentric circles from them who benefit to some degree, essentially increasing their control, concentrating their wealth and power in ever greater concentrations. It is about the enclosure of common space to the private space of the corporate elite, and indeed, as Maude Barlow and Heather-Jane Robertson put it quite aptly in the title of a book they co-authored a few years ago, it is class warfare. It is about the war of the few privileged elite in the world against the rest of the world's population and against the biosphere. It is not about nation versus world, or local versus global. It is about a fundamental war of the ruler elite versus the rest of us and the rest of the biosphere.

Another term I use to describe the system into which we are being asked to move, or forced to move, is the term “totalitarian capitalism”. I use the term “totalitarian”, and that is a very strong word. It conjures up images of Hitler's Germany or Stalin's Russia. But I use the word “totalitarian” in the following sense. In the context in which it was used earlier in this century, it implied that the authoritarian state, or military state—which already existed in czarist Russia or in the kaiser's Prussia—had been made total, and that the functions of authority, state policing and so forth, had been made total. The co-existence of other options had been crushed and destroyed, and society as a whole was being engineered or being reshaped in a very forceful way.

In “totalitarian capitalism”, what I mean is that the power of capital, which has existed for 100 or 150 years or so, is being made total, and the existence of alternative models, the ability of institutions and ideas that conflict with the interests of the ruling class, is being destroyed or extremely marginalized, and indeed societies all over the world are being reshaped and engineered from the top down through this process. So I think the term “totalitarian capitalism” is quite appropriate, and my further comment on that is that the use of the word “totalitarian” also indicates that this is a very negative thing and is something that we're obligated to fundamentally oppose.

I want to say that I am not against the globe or against the world. In fact, it is because I love the world, because I love the planet and every human being, every creature, and every species on the planet, because I believe in the planet and believe in a kind of global vision or global village, that I am opposed to most of these processes that have been happening in the last 10 to 15 years.

And if we're really going to talk about being in a global village and thinking globally and all this, let me throw out a few alternative options for a progressive globalism:

One, let us have a global elected Parliament—elected by the people of the world directly—that has the power to tax the multinational corporations all over the world, with no tax havens, no escapes; second, let's have the power to demand the trillions of dollars of back taxes that the multinational corporations worldwide must owe the people of the world; and thirdly, a global democratically elected parliament would also have the power to institute a global minimum wage, global-scale environmental standards, and so on, and the power to enforce them.

• 1555

Now let's see how long the multinational corporations will be chirping about being on a globe when being global and thinking globally comes to mean the globalization of democracy and the globalization of the power of people.

To make myself clear, although I present that as a possibility, I do not propose that we put all our eggs in one basket. At the same time, we have to strengthen our local communities, local alternative institutions such as cooperatives, local currencies, and encourage greater local and regional self-sufficiency and self-reliance.

At the intermediate level, the national level, in a few succinct words, the nationally elected people must stop listening to the corporations, fundamentally, and ask the question, who indeed do you represent; do you represent the people of Canada, or do you represent the 0.004% who own and control most of the wealth? My job is to work at the community level; your job is to lose sleep over that question.

Finally, I want to quote the alternative economist, Robert Theobald, who in 1965—and this is a slight paraphrase—essentially said that if we don't start to move now to make changes in the direction we are going, we are very soon going to find ourselves in a society reminiscent of Kafka's The Castle, Aldous Huxley's Brave New World, or George Orwell's Nineteen Eighty-four. That was Robert Theobald in 1965. Here we are, 34 years later. I would say that Kafka's The Castle or Huxley's Brave New World, and I would add, Jack London's Iron Heel are not all that far away.

Now I'd like to sing a song.

The Vice-Chair (Ms. Colleen Beaumier): A two-minute song.

Mr. David Greenfield: This song is called Out With the Powers:

Out with the powers that keep us down
Out with the powers
You'd like to keep our heads
Going round and round
Out with the powers


This a global village
Not a company town
Out with the powers
Out with the powers that keep us down
Out with the powers


You've got your corporate power elite
Travelling around the globe
Calling us all to get with it
Or we'll be left behind
Don't you know


Don't you know, I don't think so
And I don't feel any pain
Last time I looked
It looked to me
Like a northern fortress power gain


Out with the powers that keep us down
Out with the powers
You'd like to keep our heads
Going round and round
Out with the powers


Your global village
Is a company town
Out with the powers
Out with the powers that keep us down
Out with the powers


When corporations rule the world
The fortresses have no end,
Freedom is a stranger
And dreams are your only friend.
It's a race to the bottom
And a dance of death
To the rhythm of the bottom line.
We saw the yellow canary fall
How many years ago?
How many million times?


Out with the powers that keep us down
Out with the powers
You'd like to keep our heads
Going round and round
Out with the powers


We want a village common,
Not a company town
Out with the powers
Out with the powers that keep us down
Out with the powers


Working people of the world unite
Has never been truer than it is today
If we could get together
We could show them
There would be nothing more to say


But we'd to take the tyrants
Of the ruling class
And we put them in their place
Till capitalism and imperialism
Had vanished without a trace


Out with the powers to keep us down
Out with the powers
You'd like to keep our heads
Going round and round
Out with the powers


We say no
To your company town
Out with the powers
Out with the powers that keep us down
Out with the powers


Out with the powers that keep us down
Out with the powers
Out with the powers that keep us down
Out with the powers.


• 1600

The Vice-Chair (Ms. Colleen Beaumier): Thank you, David. We probably could have used that at about 1 o'clock today, too.

Next is Michelle Beveridge, from OXFAM.

Ms. Michelle Beveridge (Provincial Coordinator, OXFAM Canada): Thank you. Good afternoon to everyone. I feel slightly panicked that perhaps I should have turned my presentation into a rhyming couplet to make the message more creative.

I'm the provincial coordinator for OXFAM Canada. OXFAM is an international development organization with projects in over 20 countries in Central America, the Caribbean, the Horn of Africa, and southern Africa. We are committed to the equitable distribution of wealth and power through fundamental social change, and we work in relationships of solidarity in partnership with people who are already working at the grassroots levels in these countries.

One of the three major areas of our work overseas and in Canada is food security, every person's right to food. In Canada's action plan for food security, which was Canada's response to the World Food Summit, food security is defined as existing when all people at all times have physical and economic access to sufficient, safe, and nutritious food to meet their dietary needs and food preferences for an active and healthy life.

Of major concern to us and the people we work with is the decreasing access to food and land and the increasing commodification of food and land that people around the world are experiencing as a direct result of heightened trade liberalization.

In the past five years, we've seen the WTO contribute to increasing poverty and inequality for the majority of the world's population, unsustainable patterns of production and consumption, and growing disparity between rich and poor, both between nations and within nations.

Liberalized trade as a tool for increasing food security is based on the notion that if developing countries improve their productivity and efficiency within their food sector and other parts of their economy, they will be better able to compete with and trade in the world markets.

In Canada's action plan for food security, it is added that this would be an important contribution to the country's long-term food security, since it helps them overcome agricultural protectionism and food self-sufficiency concerns in favour of food self-reliance. But this assumes that a competitive global market has an abundance of food accessible to everyone, whereas adequate food production at the global level is irrelevant. What happens in an international market that is preoccupied with free trade is that hunger can and does increase, because locally grown food bypasses the hungry in search of market.

The theory of supply and demand means that food flows past those with real demand, the hungry, to those who have effective demand, people with the money to buy the food. It is especially poignant when producers themselves are not in the category of people with access to or the means to buy food.

• 1605

Despite record and rising exports, Canadian farmers are facing the lowest income levels since the 1930s. If a Canadian farm family cannot make a living growing 1,000 acres of grains and oilseeds using the latest technology, how will Thai and Peruvian farmers survive? Where we see starvation and famine, homelessness and landlessness, economic instability and revolution around the world, we should ask ourselves if there is any connection between these calamities and the effects that our exports are having on indigenous farmers and communities.

If Canadian farmers were winning this game and those in other countries were losing, then we might ask if the benefits were worth the cost, but with Canadian farmers losing as well, the answer is very clear. It is a reality now that countries export food while their own people are starving—800 million people in the world are starving. Trade liberalization has brought us to a stage of critical imbalance with famine-creating shortages and high prices, in essence a manufactured food insecurity. Real food security addresses the issues of who has land, who produces, who makes the decisions, who will eat and whether or not the food produced is culturally appropriate. Ultimately, real food security can only come about through food self-sufficiency locally, nationally or regionally.

The fair trade movement is an alternative global trading system that is gathering steam across Europe, the United States and Canada, as more consumers are becoming educated about where and how the products they buy are being made. A company or organization can call its products fairly traded if it follows a certain set of principles:

- the company must trade directly with democratically run cooperatives;

- co-ops pool the resources for the good of their communities, building schools and health care centres with their increased revenues;

- the company must pay a fair price for the products, which is based on the real price of production and need and not the lowest price possible;

- a company must also offer affordable credit, which is a huge problem for small farmers, since often the only credit they receive is from mid-level traders who charge exploitative levels of interest; and

- the company must develop long-term relationships so that the cooperative can count on the company, or that alternative trade organization, to buy their products for the long term and they can then make longer-term operating plans.

The vision of a socially just food system and trading system includes environmental protection and respect for human rights, and it is not just idealism, it is a matter of international law and agreements. The WTO alone has the power of enforcement, able to prevail over other agreements and to strike down national laws protecting the environment and social rights. This power raises profound issues for international and national governments and reduces the capacity of governments. It promotes trade for trade's sake, and not for the good of humanity.

Thanks.

The Vice-Chair (Ms. Colleen Beaumier): Thank you, Michelle.

We have one more witness, Linda Murphy.

Ms. Linda Murphy (Ploughshares, and InterChurch Uranium Committee Educational Cooperative (ICUCEC)): I'm here to speak for Ploughshares Saskatoon and ICUCEC, the InterChurch Uranium Committee Educational Cooperative. And since you guys have to be in your taxis, I'm going to have to cut this shorter.

First of all, I'd like to protest that we have such a short time, with no allowance for questions, etc. I must admit I haven't been here all day, but I don't think we've had a lot of chance for that. I had to register that complaint.

I'm speaking as an individual when I say that the first thing we have to do is get out of NAFTA and the free trade agreement. Canada has to do that. I've heard a lot of discussion here about the Tobin tax, and I don't think that's going to work unless we get out of those trade agreements.

So what I was going to do is give you a recycled version of a brief that Joanna Miller, from Ploughshares Saskatoon, gave to the MAI inquiry in Saskatoon here in November 1998. And of course since then things have changed; the MAI has been defeated. And I do say this facetiously because we know that it hasn't been defeated, that it's just gone underground and will resurface with another name in another forum. So in Joanna's brief I will substitute “MAI-type agreement”, which I've dubbed MAITA, for MAI. So when she said “MAI”, I will say “MAITA”.

In her brief, she talked about the costs of militarization, etc., over the last 50 years; and most of us know the costs have been tremendous, so I won't bore you with that. It's in my written brief. The one figure that came from the Brookings Institution of the U.S.A. says that almost $10 trillion has been spent for or committed to the nuclear weapons systems, $5.8 trillion of that being by the U.S. alone.

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I just want to give you this one quotation from Senator Douglas Roche, who says that the western powers, which include Canada, continue this struggle “for the protection of the Western way of life against the rising clamour of the disenfranchised of the world...”, and we were talking about the NATO-Warsaw conflict over the years.

It's weight of this knowledge of the cost of the weapons and fighting that convinces us the MAITA must be defeated. We are convinced the MAITA would promote the further militarization of nations, thereby increasing the poverty and suffering of the people of the world and the destruction of our environment. Most ominous is the way in which it would limit the power of governments to constrain militarism.

End the Arms Race, Vancouver, chose an apt title for its study on militarism and the MAITA by naming it Protecting War. This study makes many of the following points and we would like to express our appreciation for the important research done. If Canada becomes a signatory to the MAITA, it will be denied much of its power to intervene in the economy for the benefit of Canadian citizens. Should Canada choose to intervene, it will be open to challenges by foreign states and investors and to lawsuits demanding massive compensation, like Ethyl.

Although there is an exception to the rules and challenges of the MAITA, it brings no comfort. While the MAITA threatens nearly every public sector of the Canadian economy such as health care, education and culture, actions or programs implemented in the interests of national security are explicitly excluded from the demands of the MAITA.

These actions or programs include government spending for the military, weapons development and protection, and direct support for weapons corporations. On this issue the negotiators for the OECD countries are in complete agreement that “the military must continue to enjoy government support without interference.”

What will be the result? Under the MAITA, the power and the influence of the military corporate complex will be enhanced. They will have access to an even larger share of public spending, to the detriment of the economic and social needs of the Canadian people. Under the MAITA, government programs to promote social goals, such as community development, will tend to favour military projects over domestic projects. For example, given the choice between building ferries to serve people in local communities and building military destroyers, the latter would be more attractive, thus more and more of our economy may focus on military production rather than meeting the needs of Canadians.

Under the MAITA, governments will be prevented from regulating arms exports, even to countries at war or countries that violate human rights—the Pinochets of this world. This raises the question of the impact of the MAITA on the export of landmines. It would be a tragic irony if signatories to the MAITA had to choose between allowing the export of landmines and compensating the producers for lost contracts.

Canada already exports more than $1 billion in arms each year and is the eighth largest exporter of arms to the developing world. Under the MAITA, arms exports would be encouraged. By promoting arms exports, the MAITA will also encourage other nations to direct more of their resources away from domestic needs in the developing countries. The result will be increased poverty, environmental degradation, and abuse of human rights, all of which contribute to civil unrest and conflict, and too often to war.

Under the MAITA, there is seemingly no limit to the demands for protection of the corporations. The MAITA defines provisions for ensuring that in times of war, foreign corporations should receive the same level of compensation that domestic corporations receive from the government. Thus, countries at war would be required to divert large sums to protect foreign investment in their countries, at the expense of their own people. It is not hard to imagine this future scenario: corporations that have contributed to fomenting and fuelling wars in nations where they have investments could then demand protection and compensation for those investments that are damaged.

Under the MAITA, federally funded research and development will increasingly be directed to military programs, decreasing R and D funding for other sectors, such as health or the environment. This diversion of resources has already happened. The MAITA will accelerate the trend.

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Under the MAITA it is probable that governments could be prevented from enforcing arms embargoes or imposing sanctions on companies doing business with human rights abusers. Sanctions were effective in helping to end apartheid in South Africa. Under the MAITA they might no longer be allowed. Sanctions imposed on Canadian companies doing business with countries such as Indonesia could open our government to legal challenges.

Thus we, the citizens of what we believe to be a democracy, will be robbed of our right to governments that can carry out our wishes and meet our needs. That right will, to a large degree, be usurped by corporations, many of them transnationals whose profits flow elsewhere.

For all these reasons, we believe the MAITA poses a threat not only to Canada, deemed one of the best countries in the world in which to live, but to the global community. The challenges we face together are already almost overwhelming. International agreements that undermine our efforts to meet these challenges threaten all our futures.

That's the end of Joanna's brief, but since I'm combining this with ICUC I have a few questions to ask. If a government of Canada were astute enough to vote to support the SCFAIT's report on nuclear weapons, could the government be sued for loss of profit if a corporation were not allowed to manufacture parts for these weapon systems? Could the abolition of nuclear weapons be in jeopardy because transnationals had more power than governments?

If a government of Canada were astute enough to vote to have no nuclear waste from other countries, could that decision be overturned as a result of a MAITA?

If a government of Canada were astute enough to vote against bringing in and burning MOX fuel, could that decision be overturned as a result of a MAITA?

If a government of Canada were astute enough to vote against being part of NATO, could that decision be overturned as a result of a MAITA?

If a government of Canada were astute enough to outlaw the use of depleted uranium, which is really a nuclear weapon because of its long-term radioactivity, could that decision be overturned as a result of a MAITA?

Saskatchewan's hands are bloody because of our having supplied uranium for the depleted uranium weapons used in Iraq and Yugoslavia. The report of the joint federal-provincial panel on uranium mining developments in northern Saskatchewan, February 1997 states that:

no process exists to separate Canadian uranium from uranium acquired from other sources. The policy of fungibility, therefore, fails to provide assurance to the public that Canadian uranium will not be used for weaponry”.

If a government of Canada or a province were astute enough to stop uranium mining, could that decision result in penalties for either? In other words, could our sovereignty be eradicated by a MAITA?

Thank you.

The Vice-Chair (Ms. Colleen Beaumier): Thank you very much.

I noticed that you registered a complaint that you couldn't have two different presentations. Today we've heard 30 presentations and over the last week we've heard 150 presentations, so the time has been scarce. I'm sorry we couldn't have allowed you the two presentations, but there are many others who probably would have liked to do two presentations as well on two different aspects.

My apologies, because we didn't have more time.

Ms. Linda Murphy: I assume it's because you're trying to save us money—right? Couldn't we have had two days of this? I'm just asking.

The Vice-Chair (Ms. Colleen Beaumier): Well, this is our fifth day of this, and there are another five days. I think we'll have had twenty days in total by the end of this. We probably could have done one week here and a couple of weeks in B.C., because there were a number of people wanting to contribute.

There is a website and there is your local member of Parliament too. We're talking about democracy here, and I assume he was democratically elected, whether you approve or not. However, there are other avenues in which to have input. There are only so many hours in a day, and we apologize for your not feeling you've been totally heard.

This ends our hearings in the far west, as I guess we've referred to it in our division of Canada.

The presentations have all been extremely interesting. We really were here to listen, and we have listened. The message of transparency, I believe, has been loud and clear. We will consider all of your briefs in our deliberations.

I thank you very much for attending.

The meeting is adjourned.