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]

Tuesday, April 27, 1999

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[English]

The Chairman (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Order, please.

Normally I do an introduction as to what the purpose of these hearings is, but you all know exactly what we're doing in terms of travelling across Canada to get the opinion of Canadians on what the negotiation strategy of Canada should be in the WTO round, which we all assume will begin in Seattle in November.

We're very grateful to you for taking this time to be with us today. We very much look forward to hearing what you have to say. I'm sorry there's only an hour because you're obviously a panel with great expertise, but we'll get in as much as we can.

If we could start with Professor Clarkson, then we'll go to Dr. Ostry and Professor Kirton.

If you can keep your remarks to ten minutes, that will give us a half an hour for questions at the end.

Professor Stephen Clarkson (Department of Political Science, University of Toronto): Thank you very much.

Mr. Chairman, Madame Debien, it is a great pleasure to be here, even though it just cost me $105 for going through a stop sign on my bicycle. In any case, I'm sure the committee pays travel expenses.

I think it's very appropriate that you're having these hearings, and not just because we've had five years of the WTO and there's a whole new set of negotiations on the horizon. It's a moment when the ideology behind trade liberalization is under real challenge. The so-called Washington consensus that freeing markets and economies of government control will lead to prosperity for all is under severe challenge globally.

It's clear from the Asian crisis of the last couple of years, which has now extended to Brazil, that completely unfettered markets are not a solution. It's also clear locally that neo-liberalism has not delivered more and better jobs, a higher standard of living, and greater social cohesion—on the contrary.

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The point of trade liberalization is it's really the link between the global and the national, the global and the local. This is because trade liberalization is much more than trade liberalization. It's a fundamental change in the political-economic relations of nation-states with their international environment.

Clearly, in theory, it's a very attractive package of changes, because we're meant to free up business to do what business does best. The problem, even in the theory, is this is about consumers consuming cheaper goods, but it's not about those who work. We know that work quality has deteriorated. Relatively fewer full-time jobs are properly protected, and many more part-time jobs are not well protected. Generally we have increasing insecurity, about which there's not time to go into.

But the link row is not just consumers who are also workers, but workers and consumers who are also citizens. In my view, with these trade agreements that have been negotiated, from the FTAA in 1989, to the NAFTA in 1994, to the World Trade Organization in 1995, if you cumulate the provisions of these agreements and realize how they've been entrenched in national law, it makes sense to think of them as each country's—in this case Canada's—external constitution. They're constitutional in the sense that they define limits on what governments can do, and they're constitutional in the sense that they define rights.

The problem is that all constitutions are not necessarily democratic. I've just come back from Chile, where I was last week. Clearly their constitution enshrines Mr. Pinochet as a senator for life, along with his colleagues. They have a stranglehold on constitutional change because the majority in the country is not able to change the constitution.

We have to be skeptical about constitutions and look at them carefully. In this case, we see that the rights—we'll talk about the limits on government in a second—that are defined are rights for corporations rather than citizens. The corporations that have the most rights are foreign corporations, not national corporations. As you probably know just as well as I, chapter 11 of NAFTA gives Mexican and American corporations more rights in Canada against our government than Canadian corporations have.

So there's the very real problem that these agreements may be delivering less than what we expected, and in fact not at all what we, the citizenry, expected. You will have heard probably numerous times already the formula that Canada, as a smallish or smaller country, is better off in a rules-based system than in a power-based system. In my view, Canada did better before NAFTA in conflicts with the United States. I think that can be proven in terms of the number of conflicts that were won or lost.

But the other problem is that when you talk about a rules-based system, it's very important to know who made the rules. In the negotiations that take place leading up to trade agreements, generally the most powerful countries dominate the rules-making process. Three examples from our recent experience that you are all very familiar with make the point.

First of all, there's the TRIPS, the trade-related intellectual property rights that were in NAFTA and are now in the WTO. These have clearly not produced free trade in ideas. TRIPS is designed to give monopoly power to major knowledge-based corporations. The Canadian system has experienced this in the granting of greater rights to the drug transnational corporations, making it much more difficult for generic drug companies to produce lower-cost drugs for the Canadian health system, which is put into further jeopardy by these increasing costs.

We've had the cultural exemption, which we thought we had in the FTA in article 2005, paragraph 1. But we all know very well that the United States has been able to use the WTO rules to wipe out the obstacle to split-run magazines.

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So again the rules, as written by the dominant powers, have really affected us badly as a smaller power. Any thought that these rules provide greater transparency on the one hand and greater predictability on the other is contradicted by the famous chapter 11. In giving foreign corporations this right to challenge expropriation, chapter 11 in effect imports American property rights into the Canadian Constitution. These property rights now give an American corporation more right than a Canadian company to sue the Canadian government, federal or provincial, for some regulation it may have taken that affects the bottom line of the American company. I take these changes to the Canadian Constitution very seriously, and I presume you will also.

I'll just bring my brief analytical section to a close by making a point that was made to me in Buenos Aires just last Friday. I was talking to a trade official there, and she said it used to be the case that lawyers, such as our chairman, in the government served the policy-makers and showed the policy-makers how to do what they wanted to do. What has changed is that the lawyers are now telling the policy-makers what they have to do, because the international law says X or Y. We have to adapt to the trade-related intellectual property rights or whatever the provision is at the global level. She feels—and I think it's a very astute perception—governments are now much more driven by this international trade law than they are driving it.

The Chairman: I wish, Professor Clarkson, all the members of our committee were here so they could hear this and start listening to me, instead of constantly carping whenever I say anything. Maybe now they'll treat me with more respect.

No chance. Mr. Blaikie is looking sourer and sourer at the prospect.

Prof. Stephen Clarkson: In my ten minutes, I don't have time to talk about what Canada should try to achieve in changing the rules. I think particularly culture and investment rules are obvious things to go after. I thought it would be much appropriate to end up with a couple of words about process rather than policy, because this new situation has created what the Europeans call a democratic deficit.

Enormous amounts of power have shifted both to the continental and more importantly to the global level. I'm not saying the baby should be thrown out with the bathwater, but we hope there is a learning process in this. If mistakes have been made, they should be corrected before we go on to deepen and broaden the system.

The democratic deficit needs to be tackled on two levels. One is what some of my political theorist colleagues call cosmopolitan democracy. That's at the global level. We know the European Union has done a lot to try to reduce that deficit by providing for regional representation in Brussels and by providing for workers' and farmers' organizations to be represented with their own body in Brussels. Canada has taken a very big lead in making institutional proposals, as Dr. Ostry knows better than I. But the dispute settlement system of the WTO is very much a result of a Canadian initiative. I would suggest this committee consider the similar kind of institutional reform to make citizens' voices available in Geneva. I think that's the most promising level.

The FTAA is not going to be a very appropriate place to push for civil society involvement, largely because the Latin American countries are very much against this. They're lower down on the learning curve of trade negotiations than we are. But it doesn't stop us from involving the citizenry.

That's the other level; the national level. Even if there are quite severe limits to how much democracy can be created globally, it doesn't stop us from having much better citizen access to the process of trade rule negotiations. You are obviously doing this already, so I can't preach to this committee. This is the kind of thing that is necessary for greater public input.

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But we need to go on. The government ought to make information available to the public, on a comprehensive basis, on the nature of this external constitution, because even the most expert have not understood it. Our trade negotiators were either lying or didn't understand what they were negotiating—I prefer to think the latter—when they negotiated chapter 11. Even they didn't understand what we were getting into.

We now need to have available, in non-legal terminology, comprehensive information about our external constitution, so government can even advise citizens' groups that are concerned, whether it's farmers, citizens, or environmentalists, what to do.

I'll end with this one note. I have heard in public meetings—particularly abroad—Canadian trade negotiators say how much they wanted to reduce the power of their own government in negotiating these rules. I think it's time for that to be pointed out and changed. The nation-state is not a threatened endangered species; it is the best intermediary between citizenry and the global system. Our trade negotiators—and you should push them—should realize that the nation-state needs to be defended in its powers, as it cooperates with other countries in the world.

Thanks very much.

The Chairman: Thank you very much, Professor Clarkson.

Dr. Ostry.

Ms. Sylvia Ostry (Distinguished Research Fellow, Centre for International Studies, University of Toronto): Thank you very much.

As a former trade negotiator, I'm curious about how you reduce the power of the government. It never entered into our discussions, but maybe we can discuss it afterwards.

I want to give the contextual background to what may be—and I now have to underline “may”—a new round, for the time being called the millennial round, to be launched in Vancouver...that was a Freudian error; to be launched in Seattle at the end of November. In Seattle at the end of November there will be a ministerial meeting of the World Trade Organization. The negotiations to get it into the United States took a great deal of pressure. Finally, at the 50th anniversary meeting, which took place last year in Geneva, Clinton yielded to the pressure and announced he would welcome the meeting.

I want to talk a bit about the contextual background and then I'll get to the Canadian issue. The United States, as I'm sure you all know, created the GATT and launched all the post-war rounds. Without the United States' creation we would not have an international trading system, for a very simple reason: it was after the war and there was no great power. For a period of time, which we now realize was quite brief, the United States wanted to build a stable international system. Its usual isolationist policies, which had dominated it for the twentieth century, were ended when the Japanese dropped the bomb. So for a brief period there was the United States' internationalism, idealism, and so on.

The last round of the Uruguay Round was unique in that it is unlikely that the United States would have maintained its commitment to the multilateral system without the support, and the active support, of the American business community. The reason for that is many in the United States believed it was easier, since they were a superpower, to get things unilaterally or bilaterally. If you're powerful you can use aggressive unilateralism or bilateralism, so why do you need this cumbersome international rule-based system in Geneva?

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The administration was worried about that, and rightly so, since in the mid-1980s there was an enormous protectionist surge in Congress stemming from Reaganomics, from the growing deficit and the overvalued dollar. Indeed, I would argue that this is why we had the FTA. It was an insurance policy, because we would have been killed if any of those 114 bills had come through.

What happened was that there was an amazing rallying of the business community, both in the intellectual property and in the service area, which said to the administration, if you can deliver these new issues, as they were called—services, intellectual property, and investment—we'll deliver the multilateral support, which they did. They organized coalitions, dragging the Japanese Keidanren in, the European business round table, and so on. Their deal was, we want the new issues and we'll support the multilateral system. That's in fact what happened.

In effect, there was a north-south deal. The developing countries who were opposed to the new issues, for a variety of reasons, were led by Brazil and India. The deal, which took place after the round started—actually, at the Montreal ministerial you could see the beginnings of the deal—was to the Europeans and Americans, that we want agricultural protectionism and that strange baroque edifice, the common agricultural policy reform; we want access for our agricultural and our industrial products, which were largely labour-intensive or medium technology. That was the deal. We'll accept this radical transformation of the world trading system, which is now no longer focused on border barriers but on domestic regulatory policy. The incursion into “domestic sovereignty” is profound. The system has profoundly changed. We'll buy that for the trade-off for your market for agriculture.

The reason I say that is that today the situation is really strange in Washington. I repeat, without the United States and given the state of the European Union, there won't be a round. What has happened in Washington is what I call the dog that didn't bark—two dogs, actually.

The Chairman: There are millions of dogs that bark.

Ms. Sylvia Ostry: Right.

The Chairman: That's the problem.

Ms. Sylvia Ostry: But some of them bark loud, and these are the two that didn't.

One is that there's an enormous trade deficit. It's going to be bigger than anything we've seen. Yet where's all the protectionism? I remember the 112 bills. It's true that you have the steel lobby, but the steel lobby is addicted to anti-dumping, so that's nothing new. They'll try to get quotas. You have textiles and you have some farmers, but I don't know where the protectionist upsurge is. It ain't there.

Secondly, the other dog that didn't bark is the business community. They are indifferent to a new round. There is no support that can be rallied. It's very interesting. I attribute that to the Clinton government's trade policy, which is based on clients. It's not a policy. There are clients. Boeing wants China; that's a client. Motorola wants something else; that's a client. So there's a kind of absence of trade policy, and there's no push for a new round.

What that will mean is not clear to me, but here is another dog, if you'll forgive the expression, considering my colleagues, that is barking very loud. That is the non-governmental organizations pushing that environment and labour standards should be included in the World Trade Organization. In Europe they call it a red-green coalition. Four European governments now have red-green coalitions. Germany is one we hear most about, but there are three others.

In the United States, being the United States, it has not gone the political route, because again, it's better to have clients. You pay off and you get the returns. There's the environmental organizations and the AFL-CIO. When I go to meetings, the AFL-CIO is there, but they are really relying on the environmental organizations, and that is a very unsettling situation for the business community. That may be another reason, because they don't know what's going to happen.

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But it's also very divisive, because the Clinton government, let alone Al Gore, is going to have to deliver something on the environment—I don't know what it's going to be—so they're also making noises. I've been at meetings where the administration says the objective of the WTO is sustainable development, which sends shivers, since it's undefined, throughout the developing country world.

The other issues that would preclude an easy north-south trade-off are the two technology revolutions. One is the information technology revolution in which the push by the corporations in the United States is for a new round to include rules on electronic commerce. Again, that's not defined; we don't know what it's going to mean, but it's sending a good deal of nervousness, particularly in the EU. The other, which in my view is more profound, is the biogenetic revolution. Here you have now the United States, which dominates the pharmaceutical industry—I think 90 out of 100 top pharmaceutical prescriptions are American—and you're seeing a convergence of the pharmaceutical industry, the food industry, and the agricultural industry. You're going to have a bioengineering conglomerate arrangement by country, and that again, I need hardly say, is very divisive.

First of all, the developing countries are carrying on a campaign that is interesting, because I've seen estimates that 90% of the world's genetic resources, which would be the raw material for all this R and D, is in the developing countries. So they have a bargaining tool. But you also get the transatlantic division about the attitude of consumers, the Frankenstein food, and the United States companies are terrified that they might be blocked out of major markets. I could go on, but I won't.

The EU, which is the other large trading partner that has played a counterveillance to the United States dominance, is now.... It's not clear to me what they're going to be able to do. They're stuck with agriculture again.

I was at a meeting in Washington, and listening to them I thought déjà vu all over again. They cannot domestically move far to reform. The banana dispute was nothing compared to what the hormone beef is going to be, and then all the other ones that are going to come up. In my view, these are different value systems, or one example of it, and I think that tension is going to be very profound.

Also, in order to offset the attack on agriculture, the EU talks about a “comprehensive round”, which means you have enough issues out there so you can have trade-offs. They're pushing competition policy and investment, which will reawaken the chapter 11 thing, which is going to be explosive since the MAI was killed.

The third issue is that the LDCs are no longer united the way they were in the Uruguay Round. Partly because of the NAFTA, the Latin Americans are willing to go along with the majority re the United States. Brazil is playing games a little bit, because they still want to be a regional power. They have said openly that the FTAA is dead; forget about it. But India, who is the other blocker, is now beginning to organize the LDCs to prevent a new round, and the argument is a very straightforward one: the Uruguay Round was radical; we haven't been able to digest it; we have to have the resources to implement it; it's very complex; we don't have the capabilities; we don't have the legal systems; we don't have the technical assets; we will be increasingly marginalized. You can see the marginalization of the least developed; therefore, let's pause a little bit. We have the built-in agenda. Do we really need a new round?

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I'll finish in a second.

That coalition is beginning. I don't know what will happen. If you want the bottom line, will there be a millennial round? I can't answer it. I don't have a crystal ball. My own view, for what it's worth, is beginning to say, maybe there is some rationality in that we have the built-in agenda. It is extraordinarily difficult to implement the Uruguay Round. We should be focusing also on trying to prevent the marginalization of the least developed countries. We should be trying to upgrade their capabilities. Maybe we don't need a massive new round, but there is one issue—and I'll finish with this—which is the strengthening of the institution, on which I feel very strongly.

The Canadians pushed in the Uruguay Round and we formed coalitions to form a group called the functioning of the GATT system, FOGS, which turned out to be a wonderful acronym. We had very minor ambitions, but we knew that the GATT couldn't survive if it wasn't strengthened. It was the Canadians who put forward the proposal for the WTO. We had been blocked. The Americans can do without more international institutions—Congress would have killed them—and the Europeans have never been in favour of a strengthened dispute settlement system. What allowed the Canadians to get the WTO through was American unilateralism. The Europeans finally got nervous about 301. So it was very good. It helped get this institution.

But in regard to the institution, my favourite figure is that the total budget of the WTO is equal to the travel budget of the IMF. It doesn't have analytic resources. It doesn't have technical resources. It has a dispute settlement mechanism that has set up a constitutional system, an international constitution. It's going to be overburdened when China comes in, so there must be a strengthening.

Let me finish with what Stephen said. We didn't understand when we set up the system that we were setting up a supranational constitution. The implicit agreement in the GATT, and in the Bretton Woods institutions, was that there would be policy space for domestic policy. There would be international rules and there would be buffers that allowed policy space. This system has raised the question, what is the domestic policy space? It's not only culture; it's environmental—it's a whole series of things. There is a push for transparency and democratization that is terrifying, which is to bring in more lawyers.

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I've said the Americans have moved from laissez faire to laissez régler on the environmental side to laissez litiger, and that's the cry. Some of my best friends are lawyers. But if you can imagine the developing countries and everybody but the United States appearing before a system in which it's a battle a little like the O.J. Simpson trial.... I think the issue of strengthening the GATT system, looking at the dividing line between domestic space and international rules.... Anyway, my paper goes into great detail on that. Thank you.

The Chairman: Thank you very much, Dr. Ostry.

It's a hard morning for lawyers, and I notice that our last panellist is a lawyer, so, Julie, you're going to have to defend yourself and the profession. I understand you and Professor Kirton are going to split your time, so if you'll be about five minutes each, that would be great. Then we can get to questions.

Mr. Kirton.

Professor John Kirton (Political Science, University of Toronto): Thank you very much.

Let me begin by joining my colleagues and applauding the committee for taking up this important topic. In the recent past, I had the opportunity to serve as a member of our government's International Trade Advisory Committee. We were very concerned that with the coming of these important trade negotiations there was a pressing need to involve Canadians from all walks of life in the discussion of our trade policy, both to inform our government but to also broaden the base of understanding of the benefits that trade liberalization could bring. And the committee's work is I think an important contribution to that needed process.

Julie Soloway and I are going to focus our remarks on the issue of trade and environment linkages. It is of course only one issue amongst many, but it is I think a central issue as we look ahead. Trade and environment issues are at the forefront of the existing disputes we have, certainly in the WTO context, but even here at home in North America.

They are a make or break issue certainly for the prospective millennium round, and of course those of us looking forward to a successful launch and completion of that round would not want it to go the same way as the MAI, where issues of environment were consequential in the defeat to date of the MAI.

It is also I think an issue where Canada is very well positioned to lead in the regional process of the FTAA, in the multilateral process of the WTO. We can do that because of capacity, raw power. We are in the first rank globally of traders and of those with ecological capacity. It's also a matter of vital national interest. We're all very familiar with the vulnerabilities our country has both to trade and the need to preserve its openness, and ecologically, as a thought back to the east coast recently suggests.

Less well known, I think it's a matter of distinctive national values. If one looks in depth at the public opinion polling data on the aspirations of Canadians in their foreign policy, overwhelmingly, consistently, Canadians everywhere, regardless of language, region, income level, stated their number one foreign policy priority was global environmental protection. That is an imperative that ranks ahead of trade liberalization.

So if we were to take as a vocation a projet de société, the leadership role in creating regional and multilaterally an environmentally enhancing trade liberalization regime, we would be responding to the basic values of all Canadians. I think what we have to try to do as we look ahead regionally and multilaterally is to take the leadership in producing an improved, ultimately global, version of the North American NAFTA-based trade environment regime, which despite its imperfections has, after five years, a proven performance in accomplishing the basic interest and values of both trade liberalizers and those who put in first place ecological enhancement.

To develop that point we would like to make four basic arguments. The first is that the NAFTA regime does indeed work in accomplishing the sustainable development win-win of trade liberalization, combating protectionism in our major markets abroad, and also providing ecological protection and enhancement. Julie Soloway and I have just, by way of one example, looked at 84 major issues or cases of trade and environment relationships in North America from 1980. We find that as we move into the NAFTA period, as these issues are dealt with through the NAFTA institutions—through NAFTA's environmental institutions rather than their trade institutions—Canada wins more of the disputes. More of those disputes end up with cooperative solutions, where all three countries in the region benefit, and the values of both trade liberalizers and, above all, the environmental community are realized to an enhanced degree. The NAFTA trade and environment regime works.

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Secondly, as we know from the recent five-year review of NAFTA, there are imperfections—imperfections that many of us signalled when we launched the NAFTA architecture. One, of course, is the absence of an ecological enhancement fund. Trade liberalization does not easily and automatically deliver ecological benefits. It takes active institutional design, as we realized in NAFTA and succeeded largely in doing. It also takes capacity, as Dr. Ostry mentioned in the case of the WTO.

It also takes an active effort at all levels to integrate the concerns and values of the trade and the environmental communities. And here our NAFTA architecture is still lacking. The ministers on both sides have each called for joint meetings, for example, to discuss that shared agenda, but not a single meeting at the ministerial level, jointly between the two, has taken place. After five years of such calls, the explanation of scheduling difficulties is wearing rather thin.

Thirdly, when we turn to look at the WTO, we see that it is vastly behind the North American architecture as a basic model for trade-environment integration and equality, and that the existing track record of the WTO, through Marrakesh, through Singapore, is not going to get us nearly where we'd lead. The charitable way of saying it is that the trade environment regime of the WTO still largely reflects our understanding of ecological vulnerabilities and opportunities, our understanding of trade and environment linkages, of the late 1940s, certainly not of the 21st century.

So what is to be done? We think that taking into account Canada's interests and values, but also negotiating feasibility, there are 11 objectives with which Canada should move into the FTAA and the millennium round processes.

First, we need to focus on preambular principles, the basic normative aspirations of the regime itself. And here, if I might just take a minute, it is worth noting that the core NAFTA trade text—our NAFTA, the NAFTA of the trade policy community—affirms at the beginning that the overall goal, amongst some others, of the NAFTA trade liberalization is the promotion of sustainable development and the strengthening of environmental laws and protection. Trade liberalization is a means to this higher end, so says the core NAFTA text.

Secondly, the core NAFTA text also affirms the primacy of multilateral environmental agreements, some with trade-restricting provisions, over the trade liberalization brought by NAFTA itself. And here, I think, we have to carry that principle forward and look more sharply into the multilateral realm. We simply cannot have a trade system that does not recognize, and in important areas accord precedence to, multilateral environmental agreements.

Thirdly, environmental enforcement is a complex topic. Canada did succeed in the NAFTA architecture in saying we would not allow broad-based trade restrictions to be used to enforce the environmental objectives of the agreement. Mexico and the United States were unable to escape that threat to the basic thrust of the trade liberalization regime.

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It is our component of that balance that we have to carry forward, but at the same time look at ways of enhancing our capacity for environmental enforcement through transparency, through openness, and through engaging a broader array of civil society actors in the process of initiating investigations about alleged derogation of environmental practices.

In regard to capacity building, simply stated, we cannot simply rely on the World Bank to take care of the environmental damages or opportunity of a new millennium round. We do, I think, at a minimum have to enhance a great deal the global environmental facility and give the WTO a major role in its governance, as well as we do here in North America, ensuring that the WTO has a mandate to monitor on an ongoing basis the environmental effects of millennial round trade liberalization.

I think we also have to look creatively at ways in which we can use trade liberalization for purposes of environmental enhancement. As we recognized through Canadian leadership at the APEC process a few years ago, we have to liberalize fully and first those sectors that are environmentally enhancing, beginning with the vastly burgeoning environmental products and industry sector, but moving beyond to look at all sectors that are environmentally facilitative and give them advantages in the trade system.

I think of some of the new issues, electronic commerce, for example, which is overwhelmingly environmentally friendly relative to the sectors it will displace.

On some of these other issues, I will turn to my colleague, Julie Soloway.

The Chairman: Julie, I'll just give you a bit of a warning. We're really running short of time. I've got to give the members time to ask some questions. You were going to split your time with Mr. Kirton, and he's taken the whole 10 minutes, so I'll have to give you only a couple of minutes at the most, and then we're going to turn it over to questions.

Ms. Julie Soloway (Research Fellow, Centre for International Studies, University of Toronto): I'll just run through a couple of the other points that we think are important.

The Chairman: I'm sorry to rush you.

Ms. Julie Soloway: That's fine.

I think the WTO SPS agreement went far in defining science and risk assessment and making improvements in that area. I think, given the importance of that text in disputes that Canada has been involved in—beef hormones, Australian salmon—there is more room for improvement here. What is sound science? What is an arbitrary measure? What is an adequate risk assessment? These are important issues in terms of addressing the problem of the democratic deficit in terms of the WTO.

The same goes for harmonization and mutual recognition. How can we increase coordination between the WTO and groups like Codex Alimentarius and the International Standardization Organization? These groups are making the standards that prevent trade agreements, and perhaps we should look at how to include non-state actors directly in these processes, instead of going through their governments.

In terms of foreign direct investment, this has been mentioned before, but the NAFTA dispute-settlement mechanism, chapter 11, has raised a number of problems. I think those stem from the application of commercial arbitration rules on issues of public policy, which is probably not the best way to arbitrate issues of public policy.

This isn't necessarily an indictment of direct access on the part of non-state actors to dispute settlement, but rather the suggestion that a closer look be taken at process issues such as transparency.

Also provided through trade and environment linkages is an opportunity to link trade to other social dimensions, such as labour and human rights. The linkage between environment and trade can provide a path to include other social dimensions. That should be examined as well.

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Lastly is the issue of civil society engagement. We should be looking at how to engage not just in negotiations but beyond that to some permanent structural measures within trading systems to include directly the voices of non-state actors rather than through their governments. Thank you.

The Chairman: Thank you very much. You did a great job of getting through that very quickly.

I'm going to hold everybody to five minutes, because we'll be trespassing on the next group as it is. Mr. Obhrai.

Mr. Deepak Obhrai (Calgary East, Ref.): Thank you, Mr. Chairman.

Thank you for the analysis.

Coming from the third world country of Tanzania and from India, I am quite aware of what a protectionist state policy can do. I have witnessed the civil society or the living standards of the poor going down.

I do understand, and thank you for bringing a lot of the red flags in reference to environmental issues, human rights, and the rights of the workers, because these agreements do tend to be at times, as you said, a constitutional infringement.

I believe free trade is still going to help, and I've seen its positive effect. I do not agree with India's position of protectionism because I've seen the disastrous consequences of that.

What bothers me in this thing is that from what I'm getting, the WTO is the one that has some teeth in it with regard to enforcement. But, as you said, the budget is so small, and what is happening is that we are putting so much emphasis on the WTO that it is going to become a useless entity unable to enforce.

We have the United Nations and international labour organizations and other organizations, and everybody that is coming into this thing is toothless. So why are we not concentrating at this given time, recognizing that the WTO may have a narrow-minded free trade over there, which is...but at the same time getting the United Nations to get their teeth in there and not make this a weaker organization, and then what will we have? Will we have what we have with NAFTA, individual agreements, or are we going to have a global agreement? What would you say? Wouldn't WTO be overburdened? We have other institutions, the ILO and all these things. Why are we not going after that?

Ms. Sylvia Ostry: Who are you directing your question to?

Mr. Deepak Obhrai: Anybody who wishes to answer.

Prof. Stephen Clarkson: I'd just like to make a response to your opening sentence about the unquestioned benefits of free trade. I think in theory and even sometimes in practice you can see benefits, but I think it's very important to realize that it has not ended the use of power. In particular, you see in the United States that they love it when it works for them, but as soon as it doesn't, they put tractors on the border or they take the softwood lumber industry back to court and get Congress to fiddle around with the rules. So we have to be cautious in saying that it's an unquestioned good.

The Chairman: This is a question this committee is constantly being faced with. Everybody says put this in the WTO. Other people say—and we'll hear from the labour people right after this—strengthen the ILO and don't burden the WTO with this. This is a structural issue we're trying to get our minds around. Perhaps you can help us with that.

Ms. Sylvia Ostry: I'd like to respond to that. Unlike Stephen, I don't believe that regional agreements in the western hemisphere would give Canada more power Au contraire, I think there's one dominant hegemony. The reason the United States has a regional policy is that it can customize it, decide what it wants, and then take it to the WTO. They've done that with APEC, and they tried to do that with NAFTA. So with all its faults, the WTO has constrained American unilateralism. There's just no question about that. How long it will continue to do so I have no idea. That's why there's the question of a new round.

• 1000

Now, why the WTO and why should it be overburdened? I think that's a very important question. The reason the WTO was chosen for intellectual properties when there's the World Intellectual Property Organization down the street is very straightforward. All those UN agencies have no dispute settlement mechanism. You can have the rules, but you can't bind them. You'd have to go to the International Court of Justice and look at the record of that. So they chose the WTO because they wanted to be able to find a binding mechanism. That's what the dispute settlement is. The ILO has no dispute settlement mechanism.

Now the real question is, can you work out means? I think UNAC, the United Nations thing, is too weak. I think you need a global environmental organization. You have to work out what we call in trade parlance coherence, that is, specific, detailed, coordinating mechanisms. Again, if you don't strengthen the WTO, which has no executive committee and no ministerial capability to meet with finance ministers, environmental ministers, and those in favour of development, you will have a system that is crumbling. Whether you like it or not you've established it, and it's the only rule-based system and the Americans are no longer joyful about it, but the key by accident is that the first post-Cold War institution is the WTO. That is the only way in which you could get the coherence going. But you have to put much more into it than you have now.

The Chairman: I'm going to have to move on because we've gone over, but thank you.

Ms. Sylvia Ostry: You want to say something about the—

The Chairman: Unfortunately, we'll have to move on to the next question because of time. But I think we'll probably have a chance to work it in in another answer.

Madame Debien.

[Translation]

Mrs. Maud Debien (Laval East, BQ): Good morning to the witnesses. I had some very pointed and concrete questions to ask you, but since Mr. Clarkson and Ms. Ostry have brought the debate to a more philosophical level, I will continue along the same lines.

Ms. Soloway said, at the beginning of her intervention, that we had to evaluate the risks in the scientific field. I imagine that, by extension, she was talking about trade.

Mr. Clarkson, you raised a certain number of very important concerns when you spoke about the public's anxiety due to the lack of information about the WTO. You said that at the WTO, at this time, the major international agreements had been set in place to protect societies and not citizens and you drew a very clear distinction, that I quite liked, between workers and citizens. You spoke about democratic deficit and institutional reform and you pointed out the present danger at the WTO, where numerous systems with different values go head to head, and Ms. Ostry expressed the same thoughts.

Finally, Ms. Ostry—and I will not go into detail because you raised some very important issues—closed by wondering whether there would be a millennium round. She said that she wasn't sure. She believes that we must first rationalize what has already been done and that we don't need a massive round.

In the upcoming round that will begin in any case, I would like to know what Canada should be most interested in. What subject should Canada delve into? I have in mind the whole matter of cultural exemption because, in Quebec, we might be greatly affected by this aspect. If there is no massive systematic round, but only a rationalization of what has been done so far, what should Canada's priorities be?

• 1005

Mr. Stephen Clarkson: Would you like her to answer first?

Mrs. Maud Debien: Both of you, if you can.

Mr. Stephen Clarkson: In my opinion, the two priorities are the famous chapter 11 of NAFTA, that gives foreign businesses more weight than our governments and our own businesses have, as well as the so-called cultural exemption which gives less leeway to our elected governments, who are more knowledgeable than some lawyers in Geneva about what our country needs. We must seek some type of balance between this increase in international rights and the reduction of provincial and federal rights, because provincial governments are affected. An independent Quebec would have the same problems.

• 1010

Ms. Ostry said that we weren't in agreement, but that is not the case. I believe that NAFTA is worse than the WTO because it increases the asymmetry of power between Canada and the United States. The sovereignty of Congress is hardly affected, whereas that of the federal and provincial governments truly is.

[English]

Ms. Sylvia Ostry: Let me just say I didn't say there shouldn't be a new round. I said I am beginning to raise questions about whether it is necessary, given—I'm sorry to use terminology—that there are already commitments called the built-in agenda, which are very extensive, that were embedded in the commitment to the Uruguay Round. So there will be negotiations.

The question is, would you want to add to those? There's a long list. I don't know about that. I think Canada would have to decide whether it's worth pushing to get industrial tariffs. My own view would be it would be very important to try to see—although I doubt it can happen—something about anti-dumping, the weapon of choice, etc.

But I did say the one key issue for Canada, and in my view the stability of the trading system, is to strengthen the institution. In my longer paper I go into some detail. I am very fearful of this call for democratization until I see what it means. If it means more participation of a variety of non-governmental organizations, multinational corporations, etc., I am not clear what that means.

It is an intergovernmental institution. We've got to be very careful, and I would argue that if you want to alienate a good portion of the developing countries, then pushing the idea without explaining in detail—and I've never heard the detail that you would have NGOs from the northern countries in there and you would have trade unions and labour rules in there, which may all be very meritorious, but you will....

When I go to Latin America, they say, what is an environmentalist? They say a watermelon. When you ask what they mean, they say, green on the outside and red on the inside. I'm sure you've heard that, but there is growing concern. I think Canada has a very strong interest. It's true we can mediate and so on, but we'd better have a very clear idea of what we mean by democratization.

In my view, the best democratization is a ministerial committee that meets with other ministers from other mandates—that's democracy—and debates the policy, debates the dividing line between what is domestic sovereignty and what are international rules.

The Chairman: Thank you.

We're well over the time. We'll move to Mr. Blaikie now.

You're not as far apart as you sound.

Mr. Bill Blaikie (Winnipeg—Transcona, NDP): I have just a brief comment and then a question for Mr. Kirton, who, because he isn't as aggressive, always gets left off. So I'll direct the question to him.

The Chairman: Don't worry, Professor Kirton can be appropriately aggressive when he has to be.

Mr. Bill Blaikie: It just seems to me, related to something Dr. Ostry said, that it's kind of ironic to hear the WTO defended as a protection against American unilateralism—and I understand the argument—while at the same time those of us who are critics of the WTO see it also as a way in which American values or American views of what's appropriate economic activity and what isn't are being imposed on the rest of the world.

• 1015

So you have this not very nice choice. You either get American unilateralism or you get American ideology shoved down your throat. And this is sort of the global choice that everybody else faces. I don't know whether that's putting it too starkly, but that's what it seems to amount to one way or the other.

My question for Mr. Kirton is, you said you thought the environmental side agreement on NAFTA was working well according to the study you had done—I'm not sure what you mean by “working well”. Can you give me an example of some issue or dispute or case where the environment was protected? I don't mean things got sorted out between the governments; I mean the environment actually turned out better because of the way in which NAFTA works. An example would be helpful.

Mr. John Kirton: Two of our 84 cases, one at each end of the spectrum, just so you can see.... I think the exemplar of a win situation is the move, through the NAFTA institutions—and these are trade institutions—to develop a North American code for the transportation of dangerous goods, for example. So as we transport hazardous material throughout the region, we now have a common regime based on those more broadly multilateral in the United Nations system, a code of protection for the transportation of dangerous goods. It starts with small packages, which are easier, but it's moving upwards into tanker cars, into more deadly chemicals—halogenated organic chlorides, for example.

This has been an upward movement. I'm sure if Mexico didn't have that regime.... But if you look at cognate chemicals, in another example of the trilateral working group on pesticides, you can see all of our free countries where we didn't have regulations before prospectively looking ahead, at mercury emissions, for example, moving together upward to a harmonized system.

At the other end of the spectrum, one can think of the automotive industry and of course the MMT case, and here to come back to a previous point—wouldn't it be useful if, in the NAFTA dispute settlement mechanism, and in the prospective WTO, because I don't see how we can get the United States and others to build a new international institution like the GEO, if we had embedded in that a capacity for genuinely sound science?

So on the beef hormone issue, and other environmentally related ones we face more broadly, but also on MMT, we would have an authoritative judgment of just what the scientific environmental risks were.

The Chairman: Thank you very much.

Mr. Pickard.

Mr. Jerry Pickard (Chatham—Kent Essex, Lib.): Thank you very much, Mr. Chairman.

I was very interested in the side that was presented, I believe, by Dr. Clarkson and Dr. Ostry. We're losing our regional control. It's becoming more and more control from outside—U.S. domination, more or less. At the same time, the rules of WTO have become very technical and so we're getting into a litigation society. The average business, smaller interests in Canada, labour, agricultural concerns are then losing out on independence, as well as the Canadian government and people in general. How do we reverse those kinds of trends?

Prof. Stephen Clarkson: Maybe it's a way for me to respond to Dr. Ostry's last comment. My response would be—again there's a question of balance—to rebalance the system so there is more democratic reality to it. I don't define democracy as trade officials meeting behind doors unless those trade officials' positions are known to the public and there's some input of the democratic representatives in defining what the positions are.

I think of Denmark's relationship with the European Union. Danish officials in Brussels report to and take their orders from a parliamentary committee. I don't see why that extension of our democratic practice couldn't and shouldn't be made. Now that power has been moved up to another level, surely you, who are legitimately elected, should play that role of intermediary and carry the democratic energy into those meetings. There should be transparency and accountability of these trade negotiators because they are dealing in our power.

• 1020

The Chairman: You will have to try big time, Madame Debien, not to take this message back to your colleague, Daniel Turp, because he's been onto this issue for a long time. We'll have to work on that.

Ms. Sylvia Ostry: I don't know what you mean that the farmers have lost. We live in a world where after the war we liberalized trade, then in the seventies we liberalized financial flows, and in the eighties we had a great spurt of foreign direct investment. All that has pulled tighter linkages among countries—what I call deeper integration.

There are two options. One is to try to have rule space and the other is to de-link. The de-linkage is very clear if you look at the African countries. They are de-linked. They didn't do it voluntarily, but they're de-linked. The question is, how can you best deal with a fact, which is the invasion of sovereignty and the existence of rules, that because of the dominance of the United States, with the legalization of the system, is entrenched in the world trading system? That's a fact.

So you have an option. You try to mitigate that through finding coalition, as we did in the Uruguay Round. We worked with Latin American countries and Asian countries. When it suited us, we sided with the U.S. When it didn't suit us, we got the EU to attack the U.S. We did what middle powers do: we leveraged our power. You can do that or you can opt out. The people who are saying opt out are not really saying opt out. But again, the question is, what is the room to manoeuvre, given the fact of life?

This question of democracy is a very key one because it's undefined. The question is whether you would want the EU negotiators, through Leon Brittan, to report every day to the European Parliament, which would seem to be very democratic until you looked at the European Parliament, and whether you could actually have any negotiations under those circumstances—that would be interesting to explore—or the U.S. negotiator should report every week to the U.S. Congress—that would be terrific. But maybe that's the way in which we will never have any other negotiations.

The Chairman: Maybe I can follow up, but that's the end of the time. That's a very good point, but I want to ask each one of the panellists about something we hear about the democratic deficit from everybody.

When we were in Geneva—I don't think anybody else here was there, but there were representatives from all the parties—at the last WTO hearing, the 50-year anniversary or whatever it was, an NGO there was pushing for a WTO parliament modelled after the European Parliament notion, not with NGOs, because they represent special interests, and not with the multilateral corporations, but with elected representatives of the people coming together in the WTO framework. It wouldn't be a ministerial conference like yours because the Europeans found it didn't have any democratic credentials either.

We went to the meeting. There was only one country there with Canada. There were American congressmen there and others, but nobody showed any interest. But if we put in our report that at least the WTO should be exploring the idea of a form of an assembly that will be chosen from its constituent members, would this be a crazy idea? I just want a yes or a no idea from each one of you quickly because our time is over. What about you, Dr. Ostry? Would this be something we should look at?

Ms. Sylvia Ostry: I would be very careful.

The Chairman: Okay.

Dr. Clarkson.

Prof. Stephen Clarkson: The American revolution was based on the principle of no taxation without representation. There is a definition of democracy. The meaning is people power. It's a very simple word. We can have other kinds of power—court power, business power, parliamentary power. So I would say, yes, it needs to be explored.

The Chairman: Dr. Kirton.

• 1025

Prof. John Kirton: Yes, it should be the WTO interparliamentary group with a mandatory obligation by the WTO ministers to consult with it.

The Chairman: Ms. Soloway.

Ms. Julie Soloway: Yes, I think that would help increase democratic legitimacy, which is crucial for the system.

The Chairman: That's very helpful, all of you. Thank you very much. We will have to move on because we have Professor Bob White waiting in the background and Andrew as well. Sorry to keep you waiting.

Next we have the Canadian Labour Congress; the Ontario Liquor Boards Employees' Union; the National Union of Public and General Employees; and the United Steelworkers of America. Thank you very much for coming. If all four of you were to restrict your introductory comments to ten minutes, that would take 40 minutes. Then we'll extend a little over the time, the way we did last time, with some extra time for questions. So if you can possibly fit it within ten minutes, we'd appreciate it.

Professor White, can we start with you?

Mr. Robert White (President, Canadian Labour Congress): Thank you very much, neighbour. We live in the same building.

The Chairman: In Ottawa.

Mr. Robert White: So they have good and bad people in that building—progressives and others, right?

I appreciate the opportunity to appear before the committee this morning. I just want to summarize the brief we have already sent to you. My summary won't take any more than ten minutes.

In our view, the liberalization of trade and investment has in many ways had a very negative impact on a lot of Canadians. Despite all the promises about free trade producing jobs and better wealth, etc., for working people, it hasn't been the case. Dick Martin, our secretary-treasurer, appeared before the committee a couple of weeks ago in Ottawa and focused primarily on NAFTA. Of course, his experience working within that region was important.

Let me start by saying we are not narrow protectionists. We think trade can be a tool for social progress. If you look at the history of the Canadian Labour Congress, you'll find we have generally supported liberalized trade through GATT. But our concern is the new type of arrangements under WTO rules and NAFTA go far beyond what was under GATT and what we anticipate, in terms of trading agreements.

In many ways they strengthen the power of corporations. In fact, in many ways the rules are designed by international corporations. They strengthen the power of investments. They give them the tools to challenge democratic governments, undermining governments that are acting in the public interest. They have done nothing to ensure that trade liberalization benefits ordinary citizens.

We're concerned that the next round of the WTO, which takes place in the United States later this year, will exaggerate that trend. We say at some point we don't need to expand the scope of liberalization; we need to change the focus. We can't continue to allow economic integration as a competitive race to the bottom, in terms of wages, working conditions, workers' rights, environment, and public health.

• 1030

Mr. Wolfensohn, the president of the World Bank, whom I had an opportunity to meet with a delegation a few weeks ago, reported last week that the world's poor are in fact getting poorer, while the economy is recovering from the effects of the Asia collapse. I keep wondering, as I pick up the paper, and somebody says the crisis is now behind us.... If you talk to a lot of people in those countries, it's not behind us, and now people are saying this morning that the euro is in trouble. It always moves somewhere else. So this comfort level some people have this morning I'm not sure is real. There's a bit of it that's behind us, but the fact is there are more and more people in developing countries who are earning less than a dollar a day.

We don't believe our country should support any new liberalization until we put in place a strong social and environmental framework for sustainable humane trade and economic development at the international level. We recognize that the WTO can play a powerful role in establishing a new global economic order, but we think the WTO itself has to change. I will use the word “transparency”. I'm going to explain what I mean so that people like Sylvia can really understand. I'm serious about this, because I do think it's important to understand our position. It has to be a more open democratic and accountable organization.

In our brief, we call for WTO rules so that UN agencies like the International Labour Organization and the UN Conference on Trade and Development can be full participants in the WTO. We propose changes that would allow trade unions and non-governmental organizations to participate in WTO committees' dispute settlement panels. I've heard these arguments before, that somehow this is a conspiracy of the north, trade union movement, environmental social action groups, to do something without any consultation with those in the south.

I'm the chair of a trade union human rights committee at the International Confederation of Free Trade Unions, with 124 million members—north, south, east, and west. At the table, when we discuss these issues, there are representatives from all of those countries. So when we're talking about the labour movement, we have an international labour movement that represents people from the north, south, east, and west, in which we have talked about these issues and formulated these policies.

NGOs—when the United Nations had a social summit in Copenhagen, it wasn't the north only that attended the social summit. There are NGO organizations all over the world. They don't always agree on things, but they are representatives. So the idea that somehow we can't find groups that can really speak for the voices of the south and not just the voice of the north is not correct.

Environmental organizations—there are environmental organizations in the south, in the east, the north, and the west. So there are opportunities to do that.

So we have structures in place, and we propose to broaden the WTO trade policies so that the reviews examine the environmental and social impacts of trade, including the impact of trade on women workers. And we've put these recommendations, at the international level, through the ICFTU. So I've mentioned the fact that we're concerned about what's going to happen in the next round.

We draw your attention to the section of our brief, pages 5 and 6, where we discuss the WTO and investment. We are opposed to investment being included in the next round of WTO talks.

Now, I know some people who are very troubled about what happened at the MAI. We were quite encouraged by that—and one of my other positions is president of the Trade Union Advisory Committee to the OECD. Here was a situation that for months and months was conducted in Paris by negotiators for governments, with no input from the civil society, no real input from environmental or other groups. As a result of a lot of campaigns in several countries around the world and a lot of countries in the south, who were concerned about the implications of MAI, in terms of their future investment policies and development of their economies, people finally agreed at the OECD that this wasn't going to work. And it was very clear there was opposition developed from all over the world.

I think the latest global crisis—and I see, again, in fairness, our finance minister this morning is helping to carry the argument there. We have to get around to the question of hot money, and if we had had an MAI agreement in the WTO, we would never have been able to get there. These ministers could not have met and taken decisions in terms of what the implications are for a lot of poorer countries when people bet against the currency, put the hot money in, and pay it out in 48 hours. Those countries have to spend billions of dollars of their currency to stop it. The hot money thing would never have happened. So you start to put MAI and investment in the WTO. We're very concerned about that.

• 1035

We want to just congratulate all the members for endorsing a Tobin tax. Again, that's a long way to go, but who would have thought five years ago, three years ago, that our arguments about hot money, about financial market speculation would get the credibility they're getting today in some parts of the world? So the same thing has to be on the Tobin tax, and I'll be going to Germany to a meeting with the chancellor there with some other labour leaders shortly after our convention. We'll be raising that there again.

We think those are the kinds of measures we need to explore, not the kind of deregulation of investment that is contained in MAI. We think it should be discussed in a forum like UNCTAD, where they have the expertise and human development needs and don't just focus on trade numbers.

Let me get to the other thing, which is what I really want to focus on this morning, that if we're building a social framework for trade, a workers' rights clause is an important part of this. We have argued for this in NAFTA, in the MAI and FTA. Again, this is not protectionism. It's not some new idea of the north. We're saying it means respecting the right to form trade unions that are free from government interference. It means the right of workers in all countries, if they choose to form unions, to participate in free collective bargaining and equality of employment. It means prohibiting forced labour. It means prohibiting exploitive child labour. These are not rich countries' standards. They're not western standards.

They're international human rights, which are clearly being defined in long-standing conventions at the International Labour Organization. They have been reaffirmed in the fundamental principles and rights that were adopted at the International Labour Organization in June of last year, at which the countries of the world were present. They're rights that were set out in the Universal Declaration of Human Rights, of which we celebrated the 50th anniversary last year. So members of the United Nations, including the developing countries, have in fact endorsed these principles. So there's nothing to do with protectionism.

We're not saying the country has to have a trade union movement like Canada or the United States. Quite frankly, we differ from the United States in terms of our structure. We're saying it's up to the workers in those countries, but the governments of those nations have to have the legislative framework to allow workers to participate in basic formation of trade unions, basic workers' rights, basic human rights.

The other thing is, apart from any moral argument, it makes economic sense. The international community shouldn't allow countries to use repression to gain an artificial trade advantage. Countries that can't agree to that shouldn't have access to the WTO unless they agree to those fundamental international human rights. We're not talking about a system where we find a violation of workers' rights in country X and we wake up the next morning and say we're going to declare a trade war, we're going to declare sanctions against them. We're talking about...sanctions will be applied if there was a flagrant violation of rights. Before you ever got there, you would use the ILO as they do now. If there's a complaint at the ILO they send out a mission. They look at what's happening. They give technical assistance if it's a poor country to try to resolve the problem that's taking place. Only after you do all of that, and there are continuing flagrant violations of workers' rights or human rights, you then say we have to do something.

By the way, don't tell me the WTO doesn't do that. If somebody violates intellectual property rights, which is about CDs as an example, and somebody continues to violate them, there's no debate around the table about taking some action. There's no debate around the table about what the WTO rules are in terms of what they say on aerospace, for example, although there may be some differences of countries. So if you can do this for intellectual property rights, which are part of an agreement, surely it's so fundamental that we can do it for workers' rights and democratic rights.

Now when you look at economic growth, I think there's a case to be made that those countries where there is democracy, where there is a free and democratic labour movement, a human rights structure, you'll find the wealth is better shared—not greatly shared, but better shared with more of its citizens. And you'll find that wages in relation to productivity will grow. That's an important issue in the country.

• 1040

The problem with the country today, I think, and I'm not an economist, is that we have too many goods chasing too little money, except at the top, and we're looking at the possibility of deflation. So the reality is we should be trying to do something economically that's going to improve the purchasing power of people in several countries around the world.

Finally, in our report we discuss the need to change the rules so they don't interfere with government's ability to protect the environment, to regulate foods, drugs, consumer products, and to protect public health. You can see that in our presentation, 10 through 16. We talk about how food and drug safety in Canada has been affected by changes at the international level.

Then we talk about the question of individual countries or groups having their hands tied when they want to restrict the import of genetically modified seeds, plants, and food.

Then I think the question gets to democracy itself. I think as parliamentarians you're all concerned about this. If we continue to take major decisions affecting the lives of people farther and farther away from some place where people can have impact on them, we are going to have a lot of problems in our countries. It is difficult enough now for people in a country like Canada to see a federal government relating to them if they live in the outports of Newfoundland or the northern part of British Columbia.

• 1045

The WTO people—and I mean no disrespect to Mr. Weekes, who I think is the current chair and who I know well—are nameless, faceless bureaucrats to the people around the world. The panel of trade experts meet in isolation without any public input whatsoever.

So where is the opening? In the cultural debate that's going on in Canada, where is the opening for cultural workers except to go to see the Minister of Canadian Heritage? Where is the opportunity for them to go to a hearing on this at the WTO and to say this is our position on this impact in terms of culture and jobs? Where does it happen in the aerospace industry, which is a very important industry in Canada, where aerospace workers may have a different view from some of the aerospace sector? Where is the opportunity for environmental groups and civil society?

It doesn't have to be that complicated. It doesn't have to be a loose...one person comes in and you bargain all this stuff in public, but there surely has to be some place where people will have an opportunity to make their case. So we think there has to be much more opening of that and a recognition of the reality that democratic governments represent you, but people have opinions and they just can't do them through their governments. They want to see who these people are and they want to provide input to them.

We support international rules and regulations for trade and economic development, but it can't be just about imports and exports. They have to be about human needs, environmental realities, and human realities, so we're looking for changes in the WTO itself at the next round. We're looking for changes that preserve the ability of governments to make decisions on behalf of their own people. We want to see the focus placing trade solely in the framework of democracy and the human needs environment, which up till now has been completely ignored. Thank you.

The Chairman: Thank you very much, Mr. White. That is very helpful, and thank you for the helpful brief

[Translation]

in both of Canada's official languages. That's good.

[English]

Next we'll go to the Ontario Liquor Boards Employees' Union.

Mr. Heino Nielsen (Business Agent, Ontario Liquor Boards Employees' Union): Mr. Chair, committee members—

The Chairman: You might be interested to know that in Quebec we actually heard from the Quebec liquor control board as well. We actually heard from the liquor control board management, though. I think it wasn't the—-

Mr. Heino Nielsen: And also the union.

[Translation]

The Chairman: We have heard from representatives of the board but not from representatives of the employees, is that correct?

[English]

Mr. Heino Neilsen: Again, Mr. Chair and members of the committee, we want to thank you for allowing us the ability to make a presentation today. I especially bring greetings to Jean Augustine, my own MP—

The Chairman: Oh, I thought you were going to say she was your best customer.

Voices: Oh, oh!

Mr. Heino Neilsen: —on the sunny shores of Lake Ontario, not far from here.

At any rate, with me today is Gord Gerrard. He's our union vice-president, although I'll be making the presentation.

The Ontario Liquor Boards Employees' Union is pleased to have this opportunity. Again, our day-to-day work is not at panels like this dealing with issues of international trade. It is far more down to earth, I suppose, in some ways. But the members of the OLBE understand that trade agreements have a huge impact on the lives of every Canadian.

• 1050

This submission will detail our belief that to protect Canadians in matters of health, social services, criminal justice, and industry and commerce, the ability of provincial governments to maintain state trading enterprises for the sale and distribution of alcohol must not be restricted by international trade agreements.

The OLBEU supports in principle the ideal of free trade. Free trade is an ideal that's seen by many to be a rather lofty goal. It's easy to describe, but as we all know, it's difficult to attain without huge shifts in employment, income, and prosperity for both individuals and societies. The members of this standing committee cannot forget these potential outcomes. Freer trade must not take from governments their ability to regulate and control specific enterprises. It is for this reason that governments must have the right, if they so choose, to maintain state trading enterprises, especially for the sale and distribution of alcohol.

I'm just going to give you a little bit of background about the OLBEU and our members' employer, the LCBO. The OLBEU represents about 4,600 workers employed primarily at the Liquor Control Board of Ontario. The OLBEU started as an employee association more than 40 years ago. Until 1987 it was based exclusively at the LCBO, but then we began to organize workers outside in the private sector. Our members work in a wide variety of jobs, including retail store customer service, the management of small retail outlets, warehousing, clerical support, computer operations, programming, etc.

The LCBO regulates the production, importation, distribution, and sale of alcoholic beverages across Ontario. It's the largest single retailer of beverage alcohol in the world. It buys products from more than 60 countries. To provide this service the LCBO operates five regional warehouses, which supply 596 stores across the province. In the interests of consumer protection, the LCBO conducts approximately 200,000 tests on 11,000 different alcoholic beverages each year, and this quality assurance testing ensures that all products sold by the LCBO, Ontario winery stores, and Brewers Retail comply with the federal Food and Drugs Act as well as the LCBO's high standards for quality.

The regulatory and operational functions of the LCBO are complex. They touch all aspects of public life. Alcohol policies affect public life, rates of crime, social services, education, and economic productivity. The social fabric of Ontario is unique, and each individual in our society has a personal responsibility to govern his or her alcohol consumption. But, historically, government has had a role in this personal decision-making by establishing a framework for those choices through legislation. In Ontario, liquor legislation and regulations have evolved from this premise. The Liquor Control Act, the Liquor Licence Act, and related provisions within the Criminal Code and municipal bylaws have formed that basis, and the key structure for all of these has been and continues to be the LCBO.

The foundation of the LCBO is its dual mandate. This mandate requires the provision of a quality, customer-focused service in a socially responsible manner. Maintenance of this dual role has benefited the people of Ontario, and this system acknowledges the true nature of alcohol. Alcohol is not just another normal consumer product. Any trade agreement entered into by Canada must preserve the ability of provinces, if they so choose, to maintain this dual mandate and the type of system that is best housed within a state trading enterprise such as the LCBO.

We have summarized a number of statistics in our full report, which I'll leave you to look through later.

I want to just outline five areas in which there has been a huge benefit to the people of Ontario by the existence of a state trading enterprise such as the LCBO.

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The first is an issue around public health and the ability of a state trading enterprise to moderate the adverse effects of drinking. Again, we have included a large report from researchers from the Addiction Research Foundation of Ontario, and you can look through that. That report also includes a very exhaustive bibliography of additional sources of research that support this premise.

STEs can be an effective control mechanism by which governments can determine the levels of availability of alcohol products. Without the existence of such structures, alcohol products would be turned over totally to private business and the open market. Regulation of sales would be difficult as such special regulations would be seen as intrusions into that marketplace. The same rules that would apply to the sale of pencils, batteries, or candy would inevitably then apply to alcohol sales. Again, these would lead to pressures for expanded product use.

The upward shift of alcohol sales has been mapped in various jurisdictions that have reduced or eliminated their state trading enterprise for alcohol. These are primarily American jurisdictions. Evidence of the benefits of state monopolies for alcohol control can also be found when comparing rates of crime between control states and open states in the United States. These are all contained in the appendix; I won't go into any great detail.

Another benefit of state trading enterprises is that they can provide fair treatment for domestic producers and the agricultural sector. State trading enterprises provide that equitable treatment at the retail level. This is particularly important in Ontario, with its unique domestic wine industry. This industry, while important in the Niagara peninsula and Windsor areas, is tiny when compared to the large multinational companies that dominate this industry. This domestic industry is a significant employer in these regions, both at the wineries themselves but also at the supporting vineyards and fruit farms.

The relative size of the LCBO allows domestic producers easier access to the market. A scattered open marketplace with large numbers of small retail stores would significantly increase the cost of merchandising. Over time, large-category leading products would edge out small producers. In the case of Ontario, this would signal the end of the domestic wine industry. Again, the LCBO, in our case, provides a safety net for these small producers, many of which are domestic, but it does not at the same time discriminate against larger companies.

That can be best illustrated by looking at the sales of foreign and domestic products and comparing them. These sales are set out in the appendix to our brief. What they will show is that both categories have increased, and you'll see that the import product sales are a very huge part of the market when you compare them to domestic products. For example, the dollar value of wine sold in Ontario from foreign sources is almost triple that sold by domestic producers.

Further, the market share taken up by foreign products has steadily increased. Clearly this statistic alone would indicate that the presence of a state trading enterprise has not adversely affected foreign product sales. In dollar terms, foreign products accounted for 75% of the total value of domestic sales in 1994. By 1998 the level of import sales had increased to over 90% of the value of domestic sales.

There is also a retail price breakdown in our study, and you can see where there aren't any hidden levies, any hidden points at which import products are up-priced relative to domestic products. Those are contained in appendix 6.

State trading enterprises can also decrease the growth in illegal alcohol sales. State trading agencies or enterprises reduce the complexity of the marketplace, making illegal alcohol sales easier to identify and to investigate. In jurisdictions without STEs, the huge numbers of privately owned stores taking up that position from government really do present an opportunity to smugglers and illegal alcohol producers.

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Even under the current system, alcohol smuggling and illegal winemaking now account for almost 10% of Ontario's beverage market, and that's about equal to $584 million annually. These numbers are decreasing through joint policing efforts between the RCMP, Canada Customs, local police, and the Alcohol, Tobacco and Firearms people from the States.

State trading enterprises can provide efficient collection of public revenues without sacrificing social responsibility. STEs—

The Chairman: I'm sorry to interrupt you, but we're drifting a little bit over the time.

Mr. Heino Nielsen: Okay. I'll wrap it up.

The Chairman: You have a very good brief, so we're going to be able to pick up the information.

Mr. Heino Nielsen: There are large amounts of money that go to government, and the final point I'd like to make is that suppliers and producers are not disadvantaged by an STE. This comes from its scale. Large size means that by shipping products to a single warehouse, the product supplier can get that product right across the Ontario market.

The LCBO, for example, has added a lot of innovative programs that are totally comparable to those offered in the private sector.

In conclusion, the OLBEU members realize that Canada is in a difficult position during international trade negotiations. Many larger countries can exert considerable pressure to negotiate agreements that can benefit their national corporations. Nevertheless, OLBEU believes state trading enterprises can and do serve a useful purpose when it comes to alcohol sales. The Government of Canada must ensure that provinces maintain the right to use STEs as one proactive measure in regulating alcohol should they so choose; STEs that are open, that are transparent, that treat all products fairly and equitably; STEs like the LCBO.

We thank you again for this opportunity.

The Chairman: Thank you very much, Mr. Nielsen. That was very interesting.

We will now hear from the National Union of Public and General Employees. Is it Mr. Dale or Mr. Brown?

Mr. Larry Brown (National Secretary-Treasurer, National Union of Public and General Employees): Mr. Brown. Mr. Dale is with me as well, but I'll be opening the presentation.

Like other speakers this morning, thank you for the time. It will surprise this panel, I'm sure, to realize that there are occasional similarities in the presentations you're hearing with this group. I'm not sure how that happened. We somehow struck on the same sorts of themes.

But I do want to pick up on what Mr. White said. The premise we're starting from is not anti-trade. That idea that somehow the labour movement comes into these matters with an anti-trade agenda is one that gets annoying after a while.

What we're talking about is what is currently described as trade agreements. They're probably reasonably well named in one degree, which is that all they deal with is the right of companies to trade. We've described it as a one-way street, where all of the trade agreements push back the ability of governments to govern and increase the ability of companies to trade, and we think there is something wrong with that one-way street picture. Instead of anything in any of those agreements enhancing the ability of individual countries working collectively to control the activities of international corporations, basically it's a one-way street in which their ability to control is always going down and the ability of international corporations to manoeuvre is always going up.

So when we talk about trade agreements being that kind of an agreement where you don't like them very much and think there is another approach, we don't even think the philosophical basis, the sort of theory behind those trade agreements, makes any sense. If you look at the economic textbooks, as my colleague, Mr. Dale, has done fairly recently, what it says in the textbooks about what these agreements are about and the real world are two very different things. We're not talking about the model that you find in the textbooks that seems to be somehow applied with equal trading partners and all of the equality that's assumed. In a world that has an economy the size of the American economy right next door to ours, to apply textbook theories to international trade strikes us as a bit doomed to defeat from the beginning.

But in terms of my ten minutes this morning, more important than the analysis of what goes into the existing trade agreements is what we would propose instead. We have several pages of analysis and argumentation about what's wrong with the current system. I want to leap ahead to what we would propose in the alternative.

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I want to pick up on a comment that was already made with respect to international labour standards. Like many of my colleagues at this end of the table, I'm sure I've spent many hours dealing intensively at the International Labour Organization over some new international labour standard or other. Those things don't come easily. They're hard fought. There are intense negotiations.

The first time I ever went to one of those I was looking at a calendar that said I was supposed to be there for two weeks to deal with an item that I thought was going to take us about two days. I actually booked my plane home thinking that nobody could possibly take that much time to deal with the issue, and we just barely got it done at the end of the two weeks. Governments fight those things intensely, as do—it's a tripartite arrangement—the corporate representatives who are there.

After all of the work that goes into setting international labour standards, and all of the commitments that governments make in Geneva when they're sitting there, if you go away and look at the IMF, the World Bank, NAFTA, and the WTO, you'll find it's impossible to find any recognition of those hard-come-by international labour agreements.

It's as if we're operating in two different worlds. There's the Geneva world for labour folks, where we're patted on the head and we hear “That was a nice job; we've got some really good standards now and we can all feel good.” And then all of the corporations and the governments that were involved in setting those standards go off to other international forums and ignore what they did in that one.

We're saying that just has to come to an end. When governments go to Geneva, unless it's an institutionalized hypocrisy that shouldn't be tolerated anymore, if they say in Geneva on a labour standard that they are prepared to make their commitment, then that commitment should follow through into other fora.

There's no excuse anymore for the IMF, the World Bank, the WTO, or the NAFTA agreement all ignoring those basic labour rights. Freedom of association, the right to organize, prohibition of forced labour, minimum age standards, and non-discrimination of employment are ones that this government here, with most governments in the world, have signed on to.

So our first point is to underline and emphasize that to sign that international commitment and then ignore it when it comes to the real work of international trade agreements is no longer acceptable, if it ever was.

Secondly, we would argue that instead of the one-way street approach to trade agreements, which basically always weakens governments and strengthens the international corporate sector, we should be looking to an approach that says that international trade agreements collectively strengthen the right of governments to regulate their corporate citizens. Instead of saying to the corporate sector, here's what you can't do, we say instead, here's collectively what you can do.

We would crank that up one more step and argue that in order to participate in trade agreements, there should be a price attached to government behaviour. If a government does not sufficiently live up to its international commitments on labour standards, if a government does not sufficiently live up to its positive commitments, then we don't see any reason they should be able to avail themselves of the protections of the trade agreement.

The third point we would make, which is something that in all of the trade agreement reading I've ever done has never even come up, is that the corporate sector, internationally, seems to have an absolutely free hand to do whatever they choose, wherever they choose, whenever they choose, and there's no obligation on them to live up to some standard before they can avail themselves of these trade agreements.

The can have the Canadian government challenged by the most rotten anti-person corporation you could ever imagine, and the fact that they violate every standard known to humankind doesn't prevent them from turning around and challenging our government for having a standard they don't like. We don't see any reason...we've never heard of another system like that, quite frankly, where somebody has no obligations on them, but can hold a government of an independent sovereign nation to account.

So our argument is quite simple. If a corporate individual will not act according to the standards of international society, then they should be exempted from it. They shouldn't have the right to challenge a government under the WTO, NAFTA, or any other international agreement.

We should be talking about providing workers with decent standards of living appropriate to that country. We should be talking about that fact that a corporation that uses forced or prison labour inappropriately shouldn't have the right to complain under these trade agreements, or that a corporation that doesn't provide decent health care and living conditions shouldn't have the right to go back to a trade agreement and make complaints.

Finally, we would argue that in the same way the Government of Canada shouldn't go to the ILO and make agreements on labour standards and then ignore them in other forums, neither should the work on trade agreements be isolated from other international work, such as reform of the IMF and the World Bank, and we have some details.

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I'm trying as best I can to live within the ten minutes.

These issues include the tax on financial transactions, the debt cancellation issue that's increasingly important, and even a new theory that's being talked about is one that we find very intriguing. In Canada we have an official policy saying there should be a minimum income for everybody in the country. There is a proposal being bandied about that would provide that on a world basis, in order to participate in international trade agreements, you have to live up to an international minimum standard of $2 a day. A very marginal rate of taxation on international transactions would make that quite possible and quite feasible.

Finally, the international issue of labour arbitrage where individual companies will try to make countries underbid each other—how low can you go in wages, how low can you go in labour standards, how low can you go in environmental protection—should be dealt with.

In conclusion, all of the agreements we've looked at have been a one-way street, saying the rights of companies have been improved and the rights of countries to regulate those companies have been weakened time after time after time. We don't see any reason that the definition of “trade agreement” should be that unilateral. We think trade agreements could in fact be a two-way street, increasing the ability of countries to act collectively with other countries to improve their ability to regulate, not always to weaken it.

Thanks for your time.

The Chairman: Mr. Dale, you're remarkable. You're actually five seconds under. You get the prize.

Mr. Brown.

Mr. Larry Brown: Mr. Dale would have been a little longer.

The Chairman: I'm sorry, Mr. Brown was remarkable and Mr. Dale wouldn't have been. Okay, we'll put that in the record.

We're now going to go to the United Steelworkers of America. Mr. McBrearty.

Mr. Lawrence McBrearty (National Director, United Steelworkers of America): Thank you. I'm accompanied by Hugh MacKenzie, who is our research director.

[Translation]

I would first of all like to thank the committee for giving us the opportunity to meet with you today to discuss such important issues. I will make part of my presentation in French and I will answer your questions in that language.

[English]

A forum for public discussion of Canada's approach to international negotiations, as you'll understand, is long overdue, as Bob and others have mentioned. We remember that the Mulroney government negotiated the free trade agreement with only token and secret consultations with the lead groups. The Chrétien government hasn't even done that. It treated NAFTA negotiations with Chile as if it were a private party, but at least we knew they were going on.

With the MAI it didn't even get that much. We didn't even know that the negotiations were going on until the non-governmental organizations made the draft agreement public and blew the whistle on the OECD's quiet little conspiracy.

The MAI controversy was important. It set a potential precedent. For the first time, non-governmental organizations around the world worked together on an international trade issue and, to our point of view, succeeded. The MAI controversy drew public attention to the sweeping nature of the investors' rights sought by international business, rights that were in large part already contained in the FTAA and the NAFTA agreement. Also, with the MAI the shift of power from the public to...private owners of capital arrived at the party naked. People noticed and they were not impressed. More importantly, it exposed the twisted and inappropriate priorities being followed by government in international trade negotiations. What offended people about the MAI is that when all the real problems were in the trading system...and its effect on people...our government chose to devote their time and political energy to negotiating a declaration of independence for owners of capital.

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Thus, what I want to talk about today are priorities. We're not going to sit here and suggest that trade isn't important to Canada or that we don't need agreements to govern our trading arrangements. But I think the MAI, and the public reaction to it, signal the need to stop and ask the following fundamental questions: Is this really the kind of world we want to create? Do we really want to create a world in which owners of capital based in foreign countries enjoy greater rights than those of our own citizens? Do we really want to create a world in which democratic regulation of economic activity is replaced by an international regulation regime driven by the needs of business interests and accountable to no one? Do we really want a world in which the most important decisions about the economy are taken out of the hands of the elected governments?

I think the public reaction to the MAI speaks loudly that Canadians don't want that kind of world. There are warning signals everywhere that the FTA and NAFTA have taken us somewhere where we don't want to go. When we can't change a regulation on the contents of gasoline without paying compensation to a foreign company, compensation to which no Canadian company would ever have been entitled, we know we're having problems.

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We're like the coal miners in years past when there was a dying canary in the cage, except that instead of going to the surface for a breath of fresh air, we're going deeper and deeper into the mine.

We need to get our priorities straightened.

Maybe someone thinks it is important to make sure software pirates in China don't cheat Bill Gates out of a couple of million more, but that is not the priority for the real people. Maybe someone thinks it is important to make sure that banks get bailed out when their high-return speculative investments go bad. Maybe someone thinks it is important to protect U.S.-based agriculture corporations against unfair competition from countries that can't afford the subsidies, even if it destroys the economic base of poor countries. Maybe someone thinks it's just fine to have a regime for trade in goods and services that does nothing to prevent the kind of blackmail on cultural policy that the U.S. is attempting with the linkage to steel trade.

But are these things more important than fostering economic development in the poorest countries in the world, ensuring that might can't override right every time some business in the United States is unhappy, making sure that labour rights and environmental standards are protected, protecting the ability of governments to tax capital to pay for services their citizens want? We don't think so. That's why we think there should be a whole new set of priorities for international economic negotiations. Let's take the topic of international investor privilege off the front burner. Let's not even put it on the front burner. Let's put it back in the cupboard. The last thing we need right now is more privileges and less responsibilities for owners of capital.

Let's look carefully at the impact of the current model of trade liberalization on working conditions, on environmental quality, on human rights, on economic development, on social stability, on democratic accountability, and on the ability of governments to deliver the services their citizens need and deserve. Then let's go to work on the international agenda that addresses those issues from the perspective of the world's people.

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As Bob has mentioned, the CLC is affiliated with the world's largest labour movements. Bob has mentioned one—the ICFTU. We also have affiliations and associations with democratic labour movements, for example, in Mexico, Brazil, and other countries, and pretty well all the countries of the Americas where discussions are going on. When we say the free trade agreement and NAFTA brought us somewhere we didn't want to go, we're talking for ourselves here in Canada.

We also know—and we've seen and lived for some part of the time with some working communities in Mexico and elsewhere—they didn't think NAFTA would bring them to where they are. They thought NAFTA would bring them better living conditions. Those workers' living conditions and working conditions probably got worse in certain industries.

This is our brief introduction to the document we already presented to you. Thank you very much.

The Chairman: Thank you very much.

Mr. Lawrence McBrearty: I guess I didn't take ten minutes for that.

The Chairman: No.

Mr. Lawrence McBrearty: Not bad.

Mr. Robert White: If I could get him to be as brief as that at the CLC meetings, it would be great.

The Chairman: Don't tell Mr. Dale. He'll try to jump in and take up his extra time.

Now we'll go to questions. Again, it would be better if we could keep it to five or seven minutes.

Mr. Obhrai.

Mr. Deepak Obhrai: Thank you very much for coming and giving your point of view. You took the time to come and explain your position to us. It's an interesting position.

I think I'll go back to exactly what you said. You said the labour movement is not anti-free trade but is looking for rights. Nobody would argue with you that we need to ensure that human rights and labour rights are respected and there's a fair distribution of wealth.

I'll give you an example of where I have a problem. I grew up in a country that took a socialist path. It had a very strong economic base. I visited that country twenty years later, this past February. You've heard about President Nyerera, who said very clearly that his economic policies of socialism had brought the state to the weakest time in its history, where today it is selling itself to foreign investment because there is nothing left in the country.

I agree with Bob White when he said the World Bank chief has said the poor have become poorer. I've seen that happen. I have difficulty with the fact that the standard you demand, the level you demand, is a major curtailing problem if it's not done in the right manner. Your trade organizations and everything have a responsibility, through the ILO, to ensure that is done in a balanced approach. You're all asking for a balanced approach in the WTO, as well as in the labour movement.

What concerns me—and I see your recommendation here regarding the WTO and the ILO—is free trade will bring, if handled right, the prosperity that is needed. State enterprise, as the gentleman here said—and I've seen it in fact and I'm sorry to say that.... I come from Alberta and I've seen free trade over there.

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To me, state trading corporations are a major cause of economic disaster. I've seen it. I'm speaking from personal experience. I'll give my point of view; you've given yours. What bothers me about this is that I'm trying to see the ILO...I don't want to see the WTO to be so burdened that it becomes a useless organization. In your recommendation, you spoke about the ILO and the working part of...and about the ILO being a one-way street. The question is, is the ILO really an ineffective body?

If I understood you, you have stated that you make recommendations to the ILO and nobody listens to the ILO. Has the ILO really then become a useless body? Is this United Nations body becoming useless, toothless, so that it's now time to jump into different fora to get the teeth? It was said there was no dispute resolution in other organizations, hence not subject to putting pressure on the government.

But in a democratic country you people have the trade rights to be a trade union. You have the right to put your point of view. You have the right to pressure the government and the ILO.

My question to you is, if the ILO and United Nations bodies are not really a factor, is it not time to think how you're going to make it a factor, then try to get on to something that has a potential to bring—I'll use your word—prosperity to the poorest of the poor?

The Chairman: I'm sorry, you took five minutes with your question. The question is, basically, can we strengthen the ILO?

Mr. Robert White: I don't want to get into the socialist debate and free trade. Let me just make the statement that free trade does not bring prosperity automatically.

Mexico today, if you look at the latest numbers, has a surplus of trade with Canada. GDP numbers are up, export numbers are up, and poverty numbers are up. Mexican workers' wages have fallen; they haven't improved. So this idea that somehow free trade.... By the way, you're not talking free trade; you're talking corporate rules for trade.

We had a trade agreement in Canada that I lived under, called the Canada-United States Automotive Products Trade Agreement. It wasn't free trade. It had specific rules requiring investment and so on.

With regard to the ILO, the ILO is an institution that talks generally about workers' rights and conditions, child labour, and so on, and sets some parameters. But the power of the world has shifted to a concentration that trade and investment and capital markets are what really make the difference now. So the capital markets and trade organizations are dictating to governments as to what the rules are going to be. If this is where the power is, this is where you have to bring in also the work rights condition, because if you don't, then you have people saying, well, if you do this as a government over here, we'll withdraw our money from that country, and so on.

So I'm not suggesting dismantling the ILO. In fact, you should improve it. I'm not suggesting that the UN is not an effective organization. I think we ought to quit bypassing it. I think it is an important international institution. But we are saying at the table, at the WTO, where these decisions are made that have an impact on workers, that have an impact on the environment, that have an impact on human rights, that there has to be a decision taken that included in all of those is workers' rights, the right to form trade unions, the right to have environment, the right to have human rights, or they should not have membership in the WTO—and everybody wants to be there.

By the way, if you talk about the developing world, the developing world wants to be able to have some rules on investment. They want to be able to use investment...as we did in Canada. If we had a WTO today, we wouldn't have developed the east-west transportation system, a broadcast system, a health care system. We wouldn't have been able to do it. We would have left it for somebody to make those decisions. We intervened directly in the economy.

So I think the question is not, is the ILO impotent. No, the ILO is an important vehicle of tripartism, where we get together with governments, business, and labour. But again, you can't say that and then somehow the WTO takes care of everything else when everything else impacts on labour, on environment, on human rights.

The Chairman: Very quickly, Mr. Nielsen.

Mr. Heino Nielsen: I want to make the comment that our position is that state trading enterprises are an extremely useful tool in our sector, and that's the alcohol sector. That's well proven by lots of research. I can't make comments about other sectors.

While we don't always agree with the decisions of the Canadian Parliament, we believe they have the right to make those decisions, as is true for Mike Harris and the current government here in Ontario. Again, while not agreeing, they have certain authority as the government, and we want them to make that decision, as opposed to Ernest and Julio Gallo from California.

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The Chairman: Thank you.

[Translation]

Mrs. Debien.

Mrs. Maud Debien: Mr. White, you said that the Canadian Labour Congress was against having the MAI negotiations within the WTO. Where should this debate take place, then? You alluded to the Tobin tax and stated that it was a good example of investment management. I don't believe, however, that such a measure would be sufficient.

You also said that the NGOs and civil society in general should participate to a greater extent at the WTO, including with respect to any matter relating to the dispute settlement mechanism. You agreed that even if the NGOs don't always agree amongst themselves—you gave the example of the World Summit for Social Development—they can still arrive at a consensus.

Is there not a danger of falling into a trap if the NGOs take part in a dispute resolution mechanism but run up against a very united front composed of businesses and corporations? If they are already divided among themselves on certain subjects, would this not be a danger?

Mr. Nielsen, a few weeks ago, we met with representatives of the union for Quebec's Société des alcools, the liquor board, who expressed practically the same arguments and concerns as you. They gave an additional reason for the Canadian government to protect government-operated liquor boards, saying that these boards could not cause any trade imbalance since they are neither producers nor exporters. Would you agree with them? Would something similar apply here in Ontario, even though you are producers, unlike the situation in Quebec? Are you also exporters, what do you make of this argument?

[English]

The Chairman: Mr. White.

Mr. Robert White: I'll deal as briefly as I can with your question.

I think Mr. McBrearty put it in proper perspective. The last thing the world needs now is major meetings about the right to protect investors.

There are a lot of other problems in the world; one is not problems of investment. This discussion has to take place in parliaments around the world. It has to take place in UNCTAD; it has to take place in other fora. There's no reason for this. There are a lot of other problems. We don't need more rules to protect investors around the world, so we don't need to move this to the front burner, as Lawrence McBrearty said.

I think the Tobin tax passed in the Canadian Parliament.... We've had discussions with the IMF and the World Bank. We'll be there at the other international fora. The WTO should leave this alone for now; this is not a priority. Why not fix some of the problems we have there now before we start including more?

In terms of the NGO civil society, you can find a way. I thought this morning about the aerospace decision of the WTO. It would have been nice to have had the aerospace workers in Canada, who are members of several unions, be able to have the input into the committee that made that decision, and the aerospace workers in Brazil be able to have input into that committee, the same as the environmental groups.

If there are decisions coming down that impact on the environment of a country, the environmental groups should have a right to be there to make their presentations. This cannot be decided by rules that are set by people we never see and without people having input to that, and really a democratic.... It is authoritarian of the worst kind.

The Chairman: Mr. Nielsen.

Mr. Heino Nielsen: The first comment is that as a union we have had a good relationship for years with our sister union in Quebec. In many ways the Quebec union for liquor board workers is really a leader in the way it approaches public issues, and we in Ontario have actually learned a great deal from them. In fact, part of the reason we're here making a submission is that they took the lead and said this is an important issue and you should be at least putting something to this committee. It's an issue for the future, and they've often been ones to look to the future, while many of us have been fighting the day-to-day issues. So really, we need to give them some credit.

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But to answer your question, Ontario wine producers do export, as do distillers. The way we see the state trading enterprise, the LCBO, is slightly different, I think. We believe that governments, should they so choose—and, again, this is a decision that should rest with provincial governments—should have the right to have state trading enterprises. Once you grant that right, there are a number of variations to that type of structure, going from the Ontario example to a far more privatized system like the Alberta example.

Our view is that the existence and the ability to have state trading enterprises is a protection for a number of social rights, no matter how you come down on that continuum. The issue of whether products are dealt with fairly is an issue of pricing—what kinds of levies, duties, and taxes are attached to each of those products? It's our belief that an equivalent product, for example, a bottle of wine, coming from California, France, or the Niagara region, should be dealt with, in terms of pricing, in the same way. But the structure through which that product is sold, should a provincial government decide so, could and should be, we think, a state trading enterprise. The two issues, I think, are separate. One is the platform upon which the sale takes place; the other is the actual structure of the price. And both have certain characteristics that we think are beneficial.

The Chairman: Merci. Thank you very much.

Mr. Blaikie.

Mr. Bill Blaikie: Thank you, Mr. Chairman.

I haven't heard anything that I'd like to quarrel with, but I think it would be a mistake—I'm just referring to something my Reform Party colleague said—to see the arguments that are being made before this committee in the context of the experience of some other country. What we're arguing for here, it seems to me, is for the recovery of a relationship between government and the economy, of a certain discretion, a freedom on the part of government to intervene in the economy in the public interest. It's a Canadian model. That's something that existed prior to the free trade agreement, NAFTA, and now the WTO. It's not a question of something that happened in some other country. We're talking about something that was the product of a consensus in this country, across all party lines, for 30 or 40 years—a sort of post-war consensus—which has now been successfully challenged and almost totally dismantled as a result of these agreements. The MAI was the next step—successfully stopped for the moment—but if investment goes into the WTO round, we'll see another attempt to further erode what's left of that understanding.

I guess my question is this. Lawrence talked about going deeper and deeper into the mine. It seems to me that the challenge, for those of us who are critics of this, who are opponents of it, is at what point.... We keep going deeper into the mine hoping to get a social or environmental clause, or to get the right framework, but all the while we're participating in negotiations that we hope will give us this achievement, that on the other hand are always making things worse in terms of further limiting the power of governments, further increasing the privilege of capital, etc. I think one of the things that needs to be decided, at least for critics and opponents, is at what point do we say, sorry, this is an irredeemable exercise, and adopt some other stance? That's the problem I wrestle with.

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Mr. Robert White: I think most trade unionists—others can speak for themselves—have always taken the position that we want to be at any table. We want to be involved in discussions. If we were drafting an international arrangement on trade around the world, we would draft it much differently from how it is being done today. We're trying to convince governments that before they go any farther, they ought to start restructuring this in a much more progressive way. It just slays me, because you get this...you can't intervene.

I want to say the Asian example has shown that all of these arguments about public debt have all gone out the window. They have transferred more private debt to public debt—more corporations and banks were corrupt. They've taken on public debt. They've directed the right to intervene in the economy. And some of the countries that are not in agreement with workers' rights are the dictators of the world. Indonesia is opposed to workers' rights. China is opposed to workers' rights. That ought to say something about the importance of this.

So, Bill, I guess the question is, what's the alternative to being there and making the argument? If somebody said let's get a blank sheet of paper out and have a discussion, what we would structure would be much different. So what we have to do at this point in time...because I think if we don't start doing this, it is going to blow up. It is going to blow up, like the financial thing that's blowing up in our faces. As Lawrence McBrearty said, can you imagine...is there no criticism today that the cultural issue can't be discussed as an important issue without a threat from the United States on the question of steel? It doesn't make any sense. People run around and say don't talk about culture because we're worried about steel. It's insane to do that.

So I think this idea that somehow we've fixed this with these new rules...we haven't fixed it at all. The powerful are still going to throw their power around. We've got to get in and say this is not the way we build an international democratic society in which people are going to share in this. There is some respect for human rights and workers' rights, and this is about benefiting the broad society, not just benefiting a few. You're not going to do that unless we open this process up, unless there's development of trade unions and social groups, and unless environmental groups are going to be involved. We're not going to do it, just as we couldn't do it in our country.

Mr. Bob Dale (Chief Economist, National Union of Public and General Employees): I'd like to add something, if you wouldn't mind. One of the things we're attempting to say in our brief is that we have to question the so-called conventional wisdom about free trade agreements, the fact that free trade agreements, as they've been structured today, are good things, that they're based on economic theory, and that they're consistent with the realties of the global marketplace. Our perspective is that they are not. There's nothing wrong with trade. Trade benefits people. But trade, the way we've been conditioned to look at it today, is a bad thing.

To answer your question, Bill, I think there comes a point where you do have to step back and look into the types of agreements we're doing and say maybe we've got to start to build a better model. I think that's what we and the others here are trying to get at.

The Chairman: Mr. McBrearty.

Mr. Lawrence McBrearty: I'd like to add to what Bob mentioned and to the question. We've tried, and we have utilized the NAFTA side agreement, and we found out—

The Chairman: Sorry, the labour side agreement.

Mr. Lawrence McBrearty: Yes, if you want to call it the labour side agreement. We have found that it is not effective. The last case we had here in Canada, which was the first case ever in Canada, was presented last year. We finalized our presentation, and we got our counterparts from Mexico to come in, the employers were in, the ministers of labour were in from the countries, etc. There were meetings prior that we didn't know about. There were meetings that happened during the hearings that we didn't know about, and there were meetings that happened after the hearings that we didn't know about and weren't part of.

But finally, we were sort of happy about the results, on paper. We were able to establish that the workers' rights in Mexico in the certain establishments of a company that came from Canada and the United States were threatened, that women were threatened, kids were threatened, and the environment was threatened. There were two aspects and two elements of our presentation. We can say that we won both of them. But what in hell did we win? We didn't win anything. We passed days, we spent a lot of money and energy just to establish that at the end of the day, the two ministers of labour should meet to discuss the results of those hearings. Now what in hell did we win?

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I went to Mexico again, two weeks ago, on the Texan border. It's worse than it ever was. The company that moved from Ontario, with 1,200 workers from Waterloo Custom Trim.... I went in—not invited, but I went in to the plant in Mexico last week. Do you know what the name of the street is where that plant is? Definitely there's a street and there's a cross street. The name of the cross street is Canada and the name of the street where the Canadian plant is, is Ontario. That really pisses me off.

I've got nothing against Mexican workers. I pity them, and we try to help them and we do help them because they are exploited, and the women are, and the children are. That plant, the production...I'm not talking about jobs. I think we use the wrong words when we say jobs have left. It's the production that the corporations and the companies are taking away. They're bringing it either to Mexico, or when they find it too expensive to operate in Mexico, they go to Brazil, just as Philips Electronics did from Montreal in late 1998. They found they could operate in Brazil rather than Mexico at $2 cheaper a day.

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But what's happening is that production has left this country, and in this case the province of Ontario, and has gone to two or three different places in the maquiladoras in Mexico. The jobs here weren't overpaid; they were about $13 to $14 an hour, and that's not overpaid in Canada. In Mexico, the company still believes they're overpaid at 60¢ an hour. The highest paid is $74.39, I believe, a week. And I don't want to mention where they're living.

I'd rather you go and see where they're living and then we can talk about it, because people don't believe it. Even our own communities and our own members sometimes don't believe it when we tell them where those workers are living. They do have some bad conditions. But on the other hand, they have some beautiful plants. But around the plant, toxin is in the rivers. Kids are drinking it.

I think I'd better stop.

The Chairman: Thank you. That's very helpful.

Madam Augustine.

Ms. Jean Augustine (Etobicoke—Lakeshore, Lib.): Thank you, Mr. Chairman.

I'm always very pleased to see constituents, and even more pleased when constituents bring samples to the meeting, Mr. Nielsen.

I'm also very pleased, on a serious note, to see the input into this most important issue.

But I want to ask a question with a “let's suppose”. Let's suppose this committee recommends exactly and precisely the involvement, that we need a whole set of priorities for economic negotiations as per Mr. McBrearty's presentation. Since Canada is one player in this arena, I'd like to ask—since you're involved with affiliations and associations on an international basis—where else is there pressure being put on other countries and other spheres to ensure that, as Canadians, whatever stance we take, we would find the necessary support?

We heard a few minutes ago about how we did not win and we see whatever is happening. We also talk about the living and the working conditions and the labour conditions in many other countries and many other places. How then can we create this momentum to get the recommendations you're putting before us as part of the agenda and moving that forward?

Mr. Robert White: Again, I think there are several fora. When you will see the WTO meeting in the United States, you'll probably see 40,000 or 50,000 people in an alternative summit there who will be pressuring their governments. We work with labour movements around the world. If you look at the United States, at tradesperson Barshefsky, she has argued for the inclusion of workers' rights. Everybody says, well, that's the U.S. position. That's not the U.S. corporate position; that's not the congress position; that's a few people around the White House where the FLCO has a major impact.

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The same thing is happening in the U.K. The same thing is happening in Europe. When I go to Germany, it will be an issue we'll raise with the German government as part of the G-7, G-8 issues; we raise these all the time. So there is work going on by labour movements around the world to maximize the pressure on governments, etc.

As I said, I was at a meeting of the IMF and another one of the World Bank. It was the first time ever they met with the labour movement. The first time ever—imagine that. So these are the kinds of issues that people are knocking at the door....

Again, I want to say this. Some governments have to take positions. Canada has an important reputation around the world. I quarrel with some of the things that are happening today, but it has an important reputation around the world. Canada has an obligation to go to these meetings and put those issues on the table and build a consensus around it, and not let other countries who don't practise democracy within their own confines destroy that. It's important for government after government to do that. All we can do at this point as Canadians is pressure our government, but I can tell you the labour movement around the world in all fora is pressuring the various governments to do the same thing.

I think, as Lawrence said, the MAI was a good example to people that something is happening out there. There's unrest in several countries about what's going on here, and it will move to protectionism at its finest for those protectionists if we don't move to some different kind of arrangement, as Bob Dale said—fundamentally different from what we're doing today.

The Chairman: Mr. Brown, you wanted to add something to that.

Mr. Larry Brown: Yes, a couple of different points, I think. First of all, one of the difficulties we run into is this set of initials TINA: there is no alternative. You know, in every forum we go into the answer is there's no alternative, you've got to do it that way. Well, at some point I would ask the question, how do we know there's no alternative? When was the last time we actually put our shoulders to the wheel and tried to force another alternative onto the international agenda? If we don't go in and ask, then the answer is pretty clear, there won't be. If Canada does take a very different position, how do we know how unsuccessful it will be going in? The trade union movement once in a while negotiates from the proposition that we don't expect to get every single thing at the end of the day that we table in the first instance. Sometimes we have to put our muscle into it, but we still know what the process of negotiation is about.

The second aspect of the answer, though, is that I just came from an ILO meeting in December where the ILO itself is committed to the idea that ILO standards and the ILO mechanism should be moved out into other international bodies. So the ILO is—I'm not sure the governing body has adopted it, but a working group, with the Canadian government representative chairing the employer side.... By the way, this is not something obscure to this group. And the very strong conclusion coming out of the labour folks and the government folks and the one or two private sector people that were there was that the ILO had to insert itself into other processes. So as the Canadian government is moving forward demanding that, you're going to see the ILO coming in from the other side demanding the same thing.

Bill raised the question of how far down into the pit we go; I think he borrowed Lawrence's phrase. Where you're dealing with a group of labour folks here, and not surprisingly, as I said, the perspective is a bit the same, to go back and read the discussions that were going on in Davos, Switzerland, at the last two or three meetings, what you're going to find is a remarkable consensus. Half of the conclusions of the people, the power brokers, that are going into that meeting would not sound terribly foreign to what we said this morning, which is that we're heading for one big problem here, folks. Unless we really draw in and take a second look at this...you had heavyweight after heavyweight, not exactly labour folks, going into that meeting for three or four years in a row saying you can't keep on going in this direction blindly because it's going to break.

The Chairman: Maybe I could close the session by just asking the question I asked at the last. Mr. White, you talked about the need for input. I want to ask about this idea of maybe some form of parliamentary association. One of the problems we have that you mentioned is that when we look at the way the negotiations take place...you mentioned the the fact, for example, that you have close links with labour movements in many countries in what we would call generically the south. But one of the problems it seems to me our government has to deal with is that those voices are not necessarily represented around the table of the 134 nations when we go to the WTO negotiations. Take Malaysia. You could have a series of representative countries, where in fact they raise anti-labour arguments, anti-environment arguments, because they see them as trade barriers, but their own voices are not coming through. There are other voices that you referred to. They don't get through.

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If we had some sort of a parliamentary association.... My only experience is...take Latin America. At least the Congress people who come to meetings represent diverse views apart from those of just the government. They don't see labour and the environment as the enemy the same way that some of those governments do. Would that be some way at least of struggling towards some sort of representative input that you're looking for?

Mr. Robert White: I won't say absolutely no, but again my problem would be I think a lot of them would be elected from the same constituents who elect the governments and would mirror the voice of the governments. That's one of the problems. So you have somebody who comes from China, or whatever—let's take Indonesia or some other country, or Malaysia. The policy of the Malaysia government is this; does that person who's elected reflect the government policy? Around a WTO meeting in the United States next year will be trade ministers.

So I don't know. It's worthwhile exploring. But it's not in place of; it's in addition to the things we're talking about, which were about real input from people, from organizations like labour, environment, social society, civil society, NGOs, etc.

The Chairman: But your input model is largely at the dispute resolution level, because actually where the bite takes place, if I understand your—

Mr. Robert White: But also we want to have input with our own governments in terms of taking leadership positions. What we're saying is in addition to that, if there is a dispute, we want to be able to have some input into the impact that dispute has on our members, on our workers.

The Chairman: I understand your interest at our government level, but at the WTO institutional level it's largely at the dispute resolution phase.

Mr. Robert White: Yes. Again, to be fair you have to change a lot of the other stuff that's going on in addition to that. But under the current structure there has to be some opportunity. If there is a discussion around a complaint from a government about something that's happening in our country, we're going to defend it. We want to be able to go there, hear what the arguments are, and make our presentation.

The Chairman: Right. Thank you very much. That's very helpful. And I'm sorry we don't have more time with your panel.

Mr. Blaikie, because we're keeping the other people—

Mr. Bill Blaikie: On a point of order, Mr. Chairman.

The Chairman: Yes, sir.

Mr. Bill Blaikie: I think the record should show that although this is probably not the last time Mr. White will present to a parliamentary committee, it's probably the last time he'll present as the president of the Canadian Labour Congress, and I personally know, as many others here know, that he's given a lot of advice to parliamentary committees over the years as president of the CLC and before that as president of the CAW. It's advice that I wish had been taken more often, but nevertheless I think the record should show this. And I would like to express my own thanks to him for all the advice he's given to committees I've been on over the years, and I'm sure he'll show up in some other incarnation before a parliamentary committee in the future. Good luck.

Mr. Robert White: Thank you very much.

The Chairman: I think maybe I should make that unanimous on behalf of the committee.

[Editor's Note: Applause]

The Chairman: We certainly all wish Mr. White very well. I know there will be a future career there. There's too much energy left for it to end now.

Mr. Robert White: Thank you.

The Chairman: Thank you very much for coming, gentlemen. We appreciate it.

We're going to start right away, Mr. Rosenblum. Other members will be coming back shortly. I'm going to try to keep us on a bit of a tight leash here and see if we can get out by 12.10 p.m. So if you could make a 10-minute presentation, we'll have 15 minutes for questions. Thank you for coming.

• 1210

Mr. Simon Rosenblum (Director, World Federalists of Canada): If nothing else, Mr. Chairman, it seems I can clear a room.

The Chairman: It's like a movable feast; it comes and goes.

Mr. Simon Rosenblum: On behalf of the World Federalists of Canada, I am most appreciative of this opportunity to present to you some of our views on globalization and trade. Neither the World Federalists of Canada nor myself consider ourselves expert on the details of trade negotiations, but we have thought long and hard on the matter of global governance as it pertains to a host of issues, including trade.

Globalization to some is guilty of high crimes in the areas of economic and environmental justice. To others it is a panacea for all that ails us. We subscribe to neither viewpoint, but rather support the ongoing trend toward liberal and open trading relationships, mindful at the same time that globalization has changed the relationship of the national state to society in many ways, which creates a democratic deficit at home and calls for increased attention to global governance in a number of important policy areas. I use the term “democratic deficit” here to point to the gap between the limited powers transferred to the bodies of global governance and those lost or reduced in the nation-state.

It is not uncommon to hear that globalization has caused, or will cause, a race to the bottom, where footloose global corporations rush off to wherever they can pay the least wages and taxes and thereby create both a downward levelling effect on wages and an impoverishment of the nation-state. Paul Krugman and Dani Rodrik, economists at MIT and Harvard respectively, have convincingly argued that low wages are not the driving force behind today's global commerce. Corporations must factor in differences in labour productivity, and most often low productivity simply cancels out low wages for the corporate bottom line.

At the same time—and here I highly recommend to you Professor Rodrik's book Has Globalization Gone Too Far?—unchecked economic globalization is not without some serious negative consequences that deserve the attention of policy-makers. Since it is more difficult now to tax mobile capital, globalization reduces the ability of governments to fund the welfare state. The need to regulate or slow down capital flows has of course been argued by many, including the financier, George Soros.

Then—and most relevant to the mandate of this committee—there is the issue of unfair trade practices. Here we are not talking of low wages per se, but those unfair practices, whether they be constraints on free trade unions, unregulated child labour, etc., which may artificially force down the price of labour and not allow wages to rise with productivity. This gives rise to the argument that the international trading system should restrict or penalize the export of goods produced under unfair labour practices.

The position is strongly put by many that the WTO should import the International Labour Organization's core labour standards into its work. Others, including the developing countries, argue just as strongly that to do this would be to legitimize protectionism, albeit of the back door variety. We would submit to you that this need not be an all or nothing situation. For the WTO to adopt ILO standards holus-bolus might very well be disguised protectionism. However, a more modest proposal might be quite appropriate in an effort to begin making human rights and labour rights provisions an integral part of international trade agreements. The use of slave and prison labour for exports has of course long been recognized as exemptions from GATT and WTO protection.

We would recommend to you that the WTO insert provisions that protect the workers' elementary rights to freely organize, as codified in the Universal Declaration of Human Rights in 1948. It is of some note that recent scholarly studies have shown that this very right is indeed the most significant bellwether for overall democratic rights in the developing world.

I am under no illusion that it will be easy to insert such social clauses into the WTO and other regional trading agreements. Even if the political will existed, there would be plenty of difficulties in setting definitions and penalties. The devil, as they say, is always in the details. But surely global trading arrangements must provide a level playing field not only for business but for labour as well, not to mention the implications for the pursuit of human rights.

We are of course mindful that many people also wish the WTO to adopt provisions against child labour. This I believe is a much more complicated issue, one that requires standards as much as or more than prohibitions. In any case, there will hopefully be a learning curve as regards the adoption of social and labour rights provisions by the WTO, and a greater emphasis on the right to organize would not be a bad beginning. Ongoing collaboration between the WTO and ILO would be most helpful to those and other pursuits.

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Just as certain restrictive labour practices may provide a trade-distorting subsidy—in other words, social dumping—so too can the undervaluing of environmental resources. This is, regrettably, an area where I do not possess much knowledge. Fortunately, however, my World Federalists of Canada colleague, Urs Thomas, possesses considerable expertise on this issue and recently participated on our behalf at the WTO high level symposium on trade environment.

Once again we will stake out something of a middle-ground position. It is of course essential to integrate trade and environmental policy formulations. In the preamble to the 1994 agreement establishing the WTO, member countries agreed to protect and preserve the environment and to enhance the means for doing so. Again the argument is put that to incorporate environmental standards into WTO rules is to engage in green protectionism. Indeed, that is a legitimate concern, and all interventions in this area must respect the needs and conditions of economies at different levels of development.

Mindful of time restrictions and my own deficiencies in these matters, we will draw attention to two environment-related trade matters only. The first concerns process and production methods, PPMs, which we believe need to be included in WTO deliberations as a “new issue”. PPMs are presently not taken into consideration by the WTO. In other words, an importing country cannot discriminate on goods that are manufactured in an environmentally destructive fashion. With its almost exclusive focus on the physical characteristics of a good, the WTO is, we believe, at odds with efforts to create rules of international commerce that encourage sustainable production and consumption. The current WTO interpretation on PPMs seems very much to protect producers rather than the public at large. We believe the process and production methods used to produce a good to be a key environmental concern that should in certain carefully defined circumstances be valid grounds for restricting imports. Success in addressing and resolving the PPM issue will very much depend on the willingness and ability to address the legitimate fears of many that this would amount to green protectionism.

A related environmental concern, which we wish to mention, is that of interagency coordination and cohesion. There are clear conflicts between the WTO and multinational environmental agreements, which are called MEAs, on climate change, hazardous waste, biodiversity, etc. While we don't expect the WTO to become the address for the environment, at the same time these conflicts need to be mediated in some fashion. For starters, a stronger relationship between the WTO and the United Nations environment program might be quite helpful. In the same regard, we would very much like to see a sustainability impact assessment of the next round of trade liberalization negotiations in the WTO.

Finally, I turn from policy to process. Please allow me to express my appreciation for the assistance of the World Federalists of Canada executive director, Fergus Watt, in the formulation of this last section on the rights of the governed.

It is now widely recognized that trade liberalization and economic globalization more generally contribute to what may be called a global governance agenda. However, citizens feel left out of the process. Public discourse on global governance issues is perceived to be dominated by transnational corporations, officials of national governments, and faceless international agencies. Accompanying this growing governance agenda there exists also a global democratic deficit.

We referred earlier to the growing perception that trade liberalization as one of the driving forces of economic globalization necessarily affects the capacity of governments to regulate in the public interest, for example, by maintaining social and environmental standards. Furthermore, the widespread view that the WTO is inaccessible and unresponsive to civil society has generated hostility toward not only the organization but also the multinational trading system more generally. Improving the understanding of the WTO is important to securing the necessary support for future trade negotiations from key civil society representatives.

The recent postponement of the MAI negotiations and in the United States the defeat of fast-track negotiating authority demonstrate the need for the broader engagement of stakeholders and a wider and more sustained process of consultation and accountability.

We urge this committee to support a strong commitment to public participation, accountability, and transparency at the WTO. Specifically, we suggest two directions for an improved WTO process: one, expanding the role of NGOs; and, two, support for a WTO parliamentary assembly. The first is an objective that could be pursued immediately. The second is a longer-term goal.

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Improving the institutional arrangements with NGOs at the WTO should include broader and faster access to working documents, opening dispute settlement and appellate body proceedings to public observation, mandatory consideration of amicus curiae briefs, the participation by NGOs in WTO meetings, and the development of a better consultative process among the WTO, NGOs, member governments, and businesses. Improving NGO access broadens the public's involvement and understanding of trade and related issues and also ensures a measure of public accountability.

However, NGOs by definition almost always represent specialized interests, my own organization excepted, of course. Parliamentarians on the other hand, having been democratically elected, are more legitimate voices for the common interest, at least theoretically.

The trade and governance debate in so many respects boils down to—

The Chairman: I approved of the first qualifier, but I had trouble with the last.

Mr. Simon Rosenblum: —a need for a compromise, a need to reconcile competing public policy objectives. In any mature, democratic political community, the single most appropriate and important institution for enabling citizens to be represented is a parliament.

Whereas the WTO is presently made up of representatives of governments who ultimately represent institutional interests within a nation-state system, a parliamentary assembly would bring a new and different voice to international discourse on trade and governance issues. The European Parliament and the parliamentary assembly of the OSCE provide important examples of how supranational political organs can begin and evolve.

We believe this committee should endorse the goal of the creation of a parliamentary assembly for the WTO. Although such an assembly would be a consultative organ with few legislative powers, if any, it would, nevertheless, play an important role. It would be a vital link to national parliaments and to the world's people. It would be an ally of citizens' groups as well as an essential source of guidance to and leverage on national governments.

The idea of a WTO parliamentary assembly may at first seem unrealistic. It is relevant, therefore, to note a couple of developments that lead us to recommend such a body to this committee at this time. One, recently parliamentarians from throughout the Americas participated in a parliamentary conference of the Americas, a forum that parallels the emerging free trade areas of the Americas. The next meeting for the conference is expected to be held in the spring of 2000.

Two, in 1993 this committee—at that time it was the Standing Committee on External Affairs and International Trade—endorsed the creation of a parliamentary assembly for the United Nations. The committee was then chaired by the Honourable John Bosley. Furthermore, Mr. Bosley's successor, Jean-Robert Gauthier, also supported the UNPA proposal.

In conclusion, I would once again like to thank the committee for the opportunity to discuss these important matters with you. Our specific proposals today may be considered minimalist by some, but we very much hope they will facilitate a renewed enthusiasm for appreciating the role global governance can play in meeting the challenges of globalization, including trade liberalization. Thank you.

The Chairman: Thank you very much, Mr. Rosenblum. I must say that I think all parliamentarians should be grateful to the World Federalists of Canada for the great deal of work your association has done over many, many years to try to bring some notion of the problems of global governance and democratic participation in it. Thank you very much.

Mr. Obhrai.

Mr. Deepak Obhrai: Thank you.

Thank you for coming. In hearing all this, I can see a lot of ideas and a lot of points coming across. It's becoming natural that everybody's trying to put their points in there. I know that the chairman has been talking about the parliamentary assembly for the WTO, and you're also recommending that in your brief here.

Mr. Simon Rosenblum: But independently of the chair.

Mr. Deepak Obhrai: You said here that it would be a consultative organ with few legislative powers. Perhaps you could elaborate on this association you are recommending. We have enough groups coming in and putting forward their point of view, which is good. To me it would be another forum where the same groups would be coming in. How do you see its effectiveness? I can understand your trying to talk to parliamentarians.

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Perhaps you can elaborate on that point.

Mr. Simon Rosenblum: I'll try, sir.

Where this is different, I think, is that you have a situation today whereby the degree to which there is input by civil society into WTO deliberations—and I think, as I've already indicated, that in itself needs considerable improvement, but it does exist at certain levels—is at a technical level, in many respects.

What we're looking for here is a chance to, pardon the phrase, “politicize” it a little bit in the sense that the elected parliament—and I would hope they would choose to send a delegation representing the diversity of that Parliament, such as the members of this committee would represent—would have a chance to interact, in a very hands-on way, with the vital issues—and they are, more and more, the vital issues—that have to be decided at a global level, and to be able to both share amongst themselves and to bring back to their respective parliaments some more developed sense of really what the issues are and what the possible options for resolution may be.

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Today, outside of a very small handful of parliamentarians and civil servants, it tends to be “an expert debate”. That's not to say that parliamentarians aren't experts, but their expertise is a broader one. I think it would be most helpful at a time when it is felt that what goes on internationally is sort of out of control and not at all representative of the world's people. To some extent, that's a matter of alienation in general; it's also a matter that the profit itself lends itself to those accusations and feelings.

[Translation]

The Chairman: Mrs. Debien.

Mrs. Maud Debien: Good day, Mr. Rosenblum.

I often address this question to organizations appearing before us because we each have our own priorities. If you were Minister Marchi or the Minister of Foreign Affairs and you were going to the WTO, what would be your priority among the numerous possible subjects for debate? What would be the main point which you would bring up? There will be so many subjects for discussion and so much give-and-take that the Canadian government will have to choose one or two topics in particular. What are these two subjects which the Canadian government must support?

[English]

Mr. Simon Rosenblum: In many respects, our brief was dedicated to that exact proposition. We didn't cover the waterfront. What we tried to do was single out what we considered to be the most vital issues on both the rights agenda, which is both a labour and human rights agenda, and also the environmental. So, clearly, on the labour/human rights side, we have talked about the priority on the right to organize, which is so much more than a labour issue narrowly defined. On the environmental side, we have talked very much about the PPM issue.

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I think the purpose of our intervention today was not to get down into every single item, which we are unable to do. That's not what we're all about, quite frankly. We want to present to you what we consider to be the imperatives of global governance at a particular juncture, and then try to indicate what the issues are that can begin to make substantial headway. I also think we didn't choose issues that are beyond the pale. We didn't put before you issues on which there are irreconcilable claims out there that no progress can be made on them. I think we have given you some proposals that are well within reach, within the realm of the possible. And I indicated the necessary learning curve. I think we have to be able to bite the bullet at the WTO level on a few of these and begin to see where it takes us. But clearly we see the imperative in the few that we have laid out for you.

[Translation]

Mrs. Maud Debien: Mr. Rosenblum, most witnesses have brought up the two cases you have spoken about, but there is one you have not touched upon which has been referred to or discussed by everyone else up to now; it is the entire question of the cultural exemption. Many interveners seem to feel that this is a very important question. I would like to hear your comments on it.

[English]

The Chairman: Did you fully understand the question?

Mr. Simon Rosenblum: Yes, I think I did.

The Chairman: We'll see from your answer.

Mr. Simon Rosenblum: I would say that in the most general terms we would express, coming from a World Federalists sort of background, we believe there has to be the appropriate control at the appropriate levels of government—and there are so many tiers of governance on an international basis. So those things that are best done at a lower tier should not be usurped at a higher tier. That would lead us, in the most general terms, to be very sympathetic to the protection of cultural sovereignties. But I don't want to get into details that I am quite frankly not capable of addressing.

The Chairman: Good answer.

Mr. Blaikie, did you have any questions?

Mr. Bill Blaikie: Yes, I have two comments on the brief, first of all. I have to say, in the context of an otherwise helpful presentation, I find it disturbing to have the World Federalists say that they're convinced low wages are not a driving force behind today's global commerce. For anybody who believes that, I have some swampland in Florida to sell them.

Secondly, the comment on the MAI, that the recent postponement of the MAI negotiations, and in the U.S., the defeat of fast-track negotiations, demonstrate the need for a broader.... There's no hint here that it was actually, in part, the substance of the MAI that was the problem, not just the process surrounding the MAI. So I'm not sure whether, having regard to the first error in the presentation, I could take it from this that the World Federalists somehow support the MAI and just regret that it wasn't handled properly.

Thirdly, with respect to the whole idea of a Parliament, I think this is a promising thing, and I'm glad to see somebody actually formally mention it in a presentation. Again, just listening to what Simon had to say, my idea of this, if it were to come about, would be more along the lines of the European Parliament, where people are directly elected. They're not sent as a delegation from the Canadian Parliament. I've had all kinds of those experiences in 20 years as a member of Parliament. What happens is that it's the government position that is put forward at these meetings. It's not really a parliamentary gathering in the purest sense of the word. There's a lot of pressure on opposition members to take the view of the country at those particular things. Whereas at the European Parliament, you have the chance of people not just representing different positions, but also having different political configurations. So you might have a different party dominating the Canadian delegation at a WTO parliament than might be the case in the Canadian Parliament itself.

• 1240

I wasn't sure what you were advocating there, because I took it in my own way, of course. Then you said something about a parliamentary delegation from the Canadian Parliament, and that made me think that might be the way you were looking at it. So perhaps you could give me some clarity on that.

The Chairman: Maybe you might just add, however, Mr. Blaikie, that at the Council of Europe—I don't know if you've gone there—they're delegated from their national parliaments, but they fit within the political framework from which they come. So socialists sit as a group, and liberals, etc. You get a different makeup, and so you avoid that.

Mr. Bill Blaikie: That would be different again, yes.

Mr. Simon Rosenblum: Okay, I'll deal with three in the reverse order. The chair has pre-empted me on the latter issue. I'd be very hesitant to recommend to you that there be a licence in this country to determine which parliamentarians are WTO representatives. I think it would be a little bit of a political overload. But there's so much room between that—

Mr. Bill Blaikie: Perhaps in a regional parliament. You could have a North American parliament....

Mr. Simon Rosenblum: I think it would have to be on a much broader level than simply the WTO if you're going to get into the notion of parliamentary assemblies, which may have.... If you're going to go that route, then don't limit it to the WTO. I think you may have a broader one with a diversity of mandates. That may be much more realistic. But there is so much room in between this notion that you have “elected” officials going with a pure WTO mandate, so there are WTO parliamentarians, and on the other hand, the experience you've had, the “tag-along” experience, where there's a Canadian delegation, and yes, some backbenchers are asked to go along, but it's not exactly what you might think....

Mr. Bill Blaikie: I'm talking about parliamentary assemblies. I'm not talking about government-to-government meetings to which members of Parliament are invited. I'm talking about things such as the NATO parliamentary association, the Canada-U.S., Canada-Europe, Canada-France....

Mr. Simon Rosenblum: Yes, right. But clearly, it all depends on the process. You can have a richer process that allows the appropriate diversity of that parliament to be represented internationally, and once you get to that event, that forum, the way it's structured—the way in which parliamentarians give input. So I'll leave it at that.

Now to go to the question of the MAI. I don't want to mislead in the sense that I can see the possibility of misreading our intentions. The last thing we wanted to imply here was that it was simply a matter of bad process and misunderstanding. We do believe there were substantive problems. But a better process may well have allowed better proposals in the first place, more balanced proposals, not simply an investors' constitution, if you will.

I will come back to the first point. I think that's where there is a significant departure in terms of how you understand globalization and how I do perhaps. I think the economic literature...and that's why I pointed to a few particular economists who I think are very liberal. We're not talking about neo-conservative economists. I'll just try to embellish, if I may.

It is very important to look, not at examples—there's a saying in my culture, in Yiddish, that an example isn't an argument—but at the preponderance of evidence and the larger flows. You will find, at least on the basis of my reading of that literature, that there is still a fairly close relationship between low wages and low productivity, and that is why there hasn't been the enormous shift, let's say, that the Council of Canadians and others would have led us to believe would happen, that the world was going to fall apart, or at least our part of the world was going to fall apart. The economics of the matter are a lot more subtle.

• 1245

The Chairman: We'll have to leave it at that. I just want to remind members that we're going to come back here at 1 o'clock. It's now 12.15 p.m. We have 45 minutes for lunch, so I think we'll break now.

I want to thank Mr. Rosenblum very much for the very experienced organization and for bringing us the advantage of your expertise. Thank you.

We'll adjourn until 1 o'clock, then.

• 1246

• 1348

The Chairman: I'd like to call this meeting of the committee to order and welcome our guests. This session is going to be focusing largely on free trade of the Americas. Up until now we've been dealing with the WTO. Of course the issues overlap. We appreciate that.

I imagine you also know that we've split our committee in half. That is why we're not as numerous as we'd like to be to hear you. Half of us are out west and half of us are doing Ontario and Manitoba. The other problem is that because of votes and various debates in the House, the whips keep pulling various members back and forth. We're doing the best we can, and we'll keep as many members here as we can. We appreciate very much your taking the time to come and be with us today.

I'm going to remind you to keep your introductory remarks to about ten minutes each. There are five of you on this panel. We have an hour and a half, so if we take fifty minutes for introductions, that'll leave a good half hour for questions.

So perhaps we could start. I'll just take you in the order you appear on the agenda. First is Common Frontiers, Patricia Barrera and Mr. Dillon.

• 1350

Ms. Patricia Barrera (Coordinator, Common Frontiers): We welcome the opportunity to present today before the Standing Committee on Foreign Affairs and International Trade in relation to its study of Canada's priority interests in the FTAA process.

We were glad to hear Minister Marchi state in his remarks before the committee in early February that the negotiations cannot be left to only a few people in back rooms, but need to engage the whole of society and governments at all levels.

We're aware that to date you have heard many testimonies on the FTAA, certainly a lot of detail about what governments should and should not do in these negotiations. You've heard from the ministers, many experts, academics, and various departmental staff. You've gone across the country, or are going to go.

But what we're here to say is that Canada needs to and can take a leadership position in these negotiations. It needs to engage the social agenda more formally, and we regard this as part of the trade agenda. This process we're embarking on needs to be democratic, taking into consideration a broad set of interests. It needs to be transparent, with civil society participation in the negotiations. We need a balanced economic relationship. At the moment we feel this balance has been destroyed. We've prioritized trade over everything else. The end result should be that the majority of the people in the hemisphere and in the world benefit. We hope that our remarks will be informative, give you substance, and help orient your final report and recommendations.

Common Frontiers is a multisectoral working group. It provides national organizations with a forum to discuss, coordinate, and work together to develop an alternative to the economic model in the Americas. We do this through a combination of research analysis and action in cooperation with labour, human rights, environmental, church, development, anti-poverty, and social justice organizations.

On page 2 of our report you'll see that we walk you through who the organizations are that are most active on our steering committee. Just to name a few: the Canadian Labour Congress; the Ecumenical Coalition for Economic Justice; the Inter-Church Committee on Human Rights in Latin America; Inter Pares; Oxfam Canada; and the Steelworkers Humanity Fund. In any case, you see the whole list there on page 2.

Our hemispheric partners include the Mexican Action Network on Free Trade, the Alliance for Responsible Trade in the U.S., the Alliance Chile for Just and Sustainable Trade, the Brasilian Network for a People's Integration, and many other organizations that are working toward building the Hemispheric Social Alliance. The alliance is an initiative we're very much involved in. It's a space for activists and organizations from across the Americas to come together to share information and work together. If you look at page 2 of our presentation, you'll see a full description of the alliance and some of its history, where it came from.

Due to the time available and knowing that our colleagues have presented or will be presenting to you, we'll be focusing on a whole bunch of different issues. We will concentrate on the issue of civil society engagement. I'll skip over the issue of fast-track, but we do address that in our brief. We also touch on a few dynamics in the Americas, which I will also skip over in the oral presentation and leave to you. It's also in our brief. My colleague here, John Dillon, will address the issue of the alternatives for the Americas, a process we have been engaged in for a very long time.

In our opinion, the government committee on civil society that was set up in the FTAA is completely unacceptable. Not only was it struck without goals and objectives, but also the way it has conducted itself has demonstrated how inadequate it is. When civil society organizations requested a voice or to participate, they did not mean a committee of government representatives discussing civil society. They wanted to voice their concerns and preoccupations, put forward policy advice, and have a tangible impact on the outcome of trade negotiations themselves.

• 1355

Furthermore, had the committee that was struck been on social and labour issues with equal status as the working groups or the negotiating groups, as the labour movement has been asking for, for a very long time, it would have been of value. Instead, we have a committee without purpose, without a chair, without a schedule, and without the participation of civil society.

By default, as chair of the full process, Canada will now chair the committee until the Toronto trade ministerial, where the ministers will be asked to make this decision on what to do next. Furthermore, since the committee acts on a consensus basis, it will never advance, as Mexico, Peru, Costa Rica, and others continue to block it, and always will, because they do not support the principle. For the moment, unless something changes dramatically, it will remain an ineffective use of time.

The one action of this committee, as you know, was to call for briefs to be submitted to a mailbox, with a due date of March 31, 1999. We understand that the decision to open this process took much debate, disagreement, and lobbying by the Canadian and American governments. A total of 72 submissions were received from all over the Americas. The question that begs is, why not more? We believe that more than the fact that the consultation process was not advertised properly, people and organizations that represent civil society felt that the negotiators had not taken the committee seriously. Also, there was no reason to believe the submissions would be dealt with seriously or with respect. Therefore, there was no incentive to submit them and believe this process would lead to results. Furthermore, it's difficult to constructively engage when you do not have access to the official discussion nor its documentation.

What about the April 30 Canadian mailbox? Does the Canadian government believe there will be a good turnout when it has only been advertised in the Gazette and on the DFAIT website? Does the government believe the masses read either of those? Having information on a website is not proper or effective advertisement, nor is printing it in a paper that few read.

It is incumbent upon the negotiators of the FTAA to seriously and effectively engage civil society representatives in the negotiating process. Our government has the responsibility to make sure this happens.

The Chairman: Thank you very much.

Mr. John Dillon (Steering Committee Member, Common Frontiers; Research Coordinator, Ecumenical Coalition for Economic Justice): Mr. Chairman, we've tabled with the committee today the complete text of our Alternatives for the Americas document. It has been worked out with our colleagues throughout the Americas. In today's presentation there's not time to go through a document of this length.

I want to draw to your attention, though, that the document begins with the chapters on human rights, environment, labour, and immigration in order to make a fundamental point. We believe these issues should take priority over commercial interests, and that's why we begin our document with a discussion of them.

The Chairman: I think I should tell you, though, Mr. Dillon, that in a way you're all right because you're getting two bites at the chair. You probably already know that your colleagues in Montreal approached this as well. So we've already received the document in Montreal. It's the second time we're hearing from your group, so you're getting the voice through. It may be only half each time, but it will add up to the whole.

Mr. John Dillon: Thank you, Mr. Graham. We're pleased to hear that you took their presentation seriously.

The Chairman: They were very good.

Mr. John Dillon: Yes, they are, and we're very pleased to have them as our partners.

In the limited time today I want to discuss briefly some of the points we make in the investment and finance chapters of our document, because they're central to what the free trade area of the Americas would be all about.

As you know, the model for this is the NAFTA agreement, and I want to draw particular attention to how our document is fundamentally different from the NAFTA approach. The essence of the NAFTA investment chapters is that certain performance requirements would be prohibited in an investment regime. We take the contrary position. We believe it's very important that national governments have the ability to impose investment requirements on foreign investors in such areas as local procurement; the employment of nationals of each country; and, in particular, in terms of sovereignty over finance.

As this committee is well aware, we are just coming out of a prolonged financial crisis. This week in Washington the IMF and the World Bank are debating and somewhat optimistically saying that the financial crisis is over. I submit that's somewhat of a naive interpretation.

• 1400

With regard to some of the essential causes of this crisis, the ability of finance capital—in popular terms we call it hot money—to enter and leave countries at will has not be curbed. In fact, if you analyse what happened in Mexico, you will find that the very terms of NAFTA were an impediment to Mexico's ability to deal with its financial crisis in 1994 and 1995. The particular articles of NAFTA on foreign investment prohibited Mexico from using some of the tools that traditionally have been used to contain flows of hot money.

It's significant that in our hemisphere the one country that was able to come out of the financial crisis in good shape was Chile, and that was because Chile had its own type of financial control, known in Chile as the encaje. This enabled Chile to avoid the tequila effect that destabilized other countries of Latin America.

Mr. Chairman, indeed, it's ironic that the NAFTA provisions, which are the model for the FTAA, would prohibit these controls when this very week our own Minister of Finance, Mr. Martin, is in Washington arguing before the IMF, the World Bank, and his colleagues in the Group of Seven industrialized countries that sovereign states should be able to take other measures to control hot money. Not only has Mr. Martin endorsed controls of the type Chile has used but also he's talking about an emergency standstill clause that could be invoked by governments in financial difficulty to stem the outflow of hot money. If NAFTA were extended to the Americas through the FTAA as presently constituted, it would not be possible to use an emergency standstill clause. I think it's important that this committee be in touch with other arms of the Canadian government, particularly the Department of Finance, and that some coherence be brought to Canadian policy with regard to the urgency of controlling hot money.

Also, the members of this committee who were present in the House of Commons to vote on the recent motion put together by Mr. Nystrom on a tax on international financial transactions are to be commended for that vote.

In our alternatives for the Americas, we commend the model of transaction taxes as another form of control over hot money, and we would challenge this committee to consider how the investment and finance provisions of a free trade agreement of the Americas might make room for measures such as transaction taxes, which would begin to bring back some control over finance capital.

Ms. Patricia Barrera: Just to wrap up, I should point out to the committee that in addition to the recommendations on our alternatives presentation that you can find in our brief, we would also like to highlight our recommendations on pages 8 and 9 of our brief. Most of the recommendations you'll find on pages 8 and 9 do deal with the issue of how civil society could be included and consulted.

I do want to highlight point number two. As Canada will host the next series of events, meetings, ministerials, and summits, this committee should recommend that the Canadian government provide equal levels of material support to all civil society sectors in order to ensure that their voices are heard in the process. The government must also ensure that the outcomes, proposals, and recommendations of parallel events are received by the officials and included in the official agenda. That's a particularly key one for us.

To conclude, we'd like to emphasize that we're not against the government's right to negotiate and sign trade agreements. We're all very aware that 40% of our GDP is based on exports. If we add imports, that means that 77% of our economy is trade oriented.

What we are against is the integration of the elites and the disintegration of our societies. We are against having a model that was developed to work amongst like countries being applied to unlike countries.

Furthermore, we are clear that the FTAA investment negotiations are based on similar principles, as my colleague has said, already established in the NAFTA and that were proposed in the failed MAI negotiations. In our opinion, these principles expand the rights of transnational corporations and limit the capacity of governments and their citizens to establish national policies for economic and social development and protection of the environment.

• 1405

A significant sector of civil society has already rejected this pass forward. These negotiations should not go forward at the expense of the different nations and their ability to legislate for the public good, or without previous involvement in civil society, or without the explicit political mandate of the negotiating governments, and without a social, labour, and environmental impact study.

Thank you.

The Chairman: Thank you very much.

About the international financial institutions, you might be interested in knowing that this committee did a report on the international financial institutions prior to the G-7 summit about three or four years ago. There is a section in that on the Tobin tax. You might want to have a look at it. And we will be having a chapter in this report that will directly relate to the structural relationship to trade and to international financial institutions. That's clearly something all the members are becoming very conscious of as we keep examining the interface between those two things. So thank you very much.

Next is the Horizons of Friendship. Mr. Arnold.

Mr. Jim Orr (Deputy Reeve for Hastings County; Horizons of Friendship): I'll be speaking first, and Rick will take over later.

I'm referring to a document called Response to the Free Trade Area of the Americas: Reflecting the Values and Interests of Canadians in Northumberland County, Ontario, a copy of which we submitted earlier.

We welcome this opportunity to address the Standing Committee on Foreign Affairs and International Trade to put forward the findings of a two-day forum held in early February 1999 in Northumberland County.

Northumberland County is one and a half hours drive east of Toronto. It's primarily rural, on the shores of Lake Ontario, roughly between Port Hope on the west, Brighton on the east, and Campbellford on the north. It had a population of 81,729 in 1996. Most residents earn their livings through manufacturing, retail trade, government and service industries, agriculture, and construction. The largest urban centre in the county is Cobourg, with a population of approximately 15,000 citizens.

The potential free trade agreement, like those before, has direct impact on local citizens of Northumberland. Therefore we believe it is incumbent upon those representing Canadians in these negotiations to incorporate the expressed views of its citizens, such as the residents of Northumberland County.

As I mentioned, we had a forum in early February. Approximately 40 individuals from Northumberland County and beyond gathered to explore the implications of free trade, and specifically the FTAA, on smaller rural communities—namely, Northumberland County.

The forum was organized by a committee of interested residents of Northumberland County and representatives of Horizons of Friendship, an international development organization supporting projects in Mexico and Central America; the Cobourg Family YMCA International Committee; the Northumberland Community Coalition; the Northumberland Labour Council; and Aber Ecological Consulting Limited. Participants came from a variety of backgrounds, including agricultural, social services, small business, labour, youth, environment, law, and international development and cooperation.

On the second day we had four areas of discussions: agriculture and rural livelihoods; environment; health, education, and social services; and job security. Rick will now lead you through some of the main parts of the four discussion areas.

Mr. Rick Arnold (Executive Director, Horizons of Friendship): Thank you, Jim.

As Jim has outlined, the two of us were sort of nominated by the other members of the overall group that helped, first of all, to pull the “Free Trade of the Americas and You” conference together in February, and then more recently prepared the document that we have sent to the standing committee.

The Chairman: We're presently having copies made.

Mr. Rick Arnold: Excellent.

In preparing for this brief, we did not propose to go over our document, so hopefully if you haven't read it by now, you will take it for interesting reading later on.

Rather than go through the four areas that, as Jim has outlined, were the main discussion points, we opted to select out from each of these areas one example that was discussed in small groups during that day and a half.

• 1410

Overall, we're trying to look at the question of food security when it relates to agriculture and rural livelihoods, job security, environmental protection, and health, education, and welfare—that is, human sustainability. The stance we're taking in Northumberland is not that we want to have things just as they were and let's not disturb anything; we understand that there are major changes afoot, and we understand that trade done in a careful and cautious way, and hopefully a way that supports the most vulnerable people in society in the Americas, could be a good tool for our hemisphere. So it's within this spirit that we bring these four examples forward.

Under the heading of food security, in one of the discussions we had a person from Central America with us, and they brought their experience from Central America. One of the areas that was mentioned was what has happened to the small corn farmers in Central America, and I understand that it's also happening in Mexico.

• 1415

The specific example that was discussed at some length, which has a lot of relevance for Canada, is the Costa Rican example. By 1980 Costa Rica was producing sufficient corn to meet the needs of its own population. Much of this corn for local markets came from a fertile region on the Atlantic side of the country. Here hundreds of small farmers harvested their corn and took the produce surplus to their family needs to grain stations, part of a government-sponsored marketing board. The corn farmers got a reasonable price for their efforts, which guaranteed that they would face down weather and crop infestations to produce another corn crop in the future.

By 1985 Costa Rica had become one of the first Central American countries to begin to implement stringent structural adjustment programs as a condition of having debt repayments rescheduled. Costa Rica also had to agree to lowering tariffs on imports and phasing out what the multilateral lending agencies called subsidies, like the corn marketing board. Costa Rica complied. By 1990, cut flowers, macadamia nuts, and other non-traditional exports were taking over lands formerly in the hands of small family farmers. Costa Rica ceased being self-sufficient in basic grains and its markets were flooded by cheap corn imports produced on huge agribusiness farms in the U.S.A.

This is a prime example of policies leading to food insecurity. Costa Rica is dependent on the United States for corn while their own corn farmers have gone out of business. Many of the small farmers had to migrate to San José to look for work. Several countries have experienced a similar fate to Costa Rica's in Central America with regard to the destruction of the domestic corn-producing capability. Latin America, historically a net food exporter, is now a net importer.

Canada is now headed down the road of eliminating marketing boards and phasing out protective tariffs. A measure of security and stability had been achieved for the remaining 3% of the Canadian population still involved in farming. The record shows who wins and who loses if you leave the vulnerable small farmers at the mercy of the vagaries of the marketplace.

Under job security, there were a number of people there from the labour sector in particular and a number who had worked in good-paying jobs and jobs in which the owners had treated the workers well over time. But they found that with the free trade agreement, the first one with the United States, to give you one example, Cooper Tool, which had been a long-time resident of Port Hope, pulled out, arguing that they could no longer afford the cost of unionized labour in Port Hope. And they moved to Alabama and set up shop there, where of course labour unions are discouraged and the price of labour is significantly lower.

• 1420

This characterizes a little bit what has been happening in our area. A fair number of plants have moved, have shifted. We have received other employment coming in, but it's a different type of employment. By and large, there is a growing service sector in our area, and part-time and service sector jobs are what are replacing the longer-term, better-paying industrial jobs that used to be the mainstay of Cobourg and Port Hope areas.

Under the area of environmental protection, we did discuss in the February meeting the whole exploding issue of the banana wars. We found it ironic that—and this I guess goes under the WTO heading as much as the FTAA heading—neither of the contending areas of the world that were litigants against each other actually grew their own bananas. So that's interesting in terms of an extraterritorial struggle. The other component is that a significant number of the banana producers for Europe are to be included under the FTAA, as well as the Central American banana producers for the Chiquita brand and others.

Why we listed this under the environment and not necessarily under food security is that what Central Americans have been telling us is that they are not happy with the vast banana plantations that are to be found in a number of the coastal areas of their countries. Costa Rica comes to mind immediately, as well as Honduras, in the sense that in Costa Rica's banana plantations there is a lawsuit against the banana companies there for the sterilization of hundreds of workers by overspraying while the workers were working in the plantations. And some of the chemicals that are used on the plantations have been seeping into the waters where some of the tourists like to do the whitewater rafting. So the country itself is getting concerned about that situation.

It's a model that Central Americans would not wish on the people from the Caribbean. The people from the Caribbean have more of a small farmer production mode for the bananas, but it would appear that with this latest FTO decision the Caribbean nations are going to have to move toward the Central American model, and this will potentially have a vast impact on the environment.

The last area to mention is the health, education, and welfare, or the human sustainability. In Cobourg and Port Hope in particular we were told about nine months or a year ago that we had two hospitals, and, sorry, we could only have one. I won't go into the rancour that has taken over the two towns about which town should get the hospital; let it be said that Cobourg has it at the moment. But there is a great degree of insecurity over this trend of trying to cut down on social costs to be able to put money into other areas. We understand that the deficit needs to be brought under control, but we need to look at the human cost of doing this.

Likewise, insecurity is the watchword in the health sector in Central America. If any of you have had an opportunity recently to travel to some of the countries in Central America, and Nicaragua springs to mind, you probably have heard the stories of people who get sick in Nicaragua. If you're sick in Nicaragua, take your own sheets. Ask the doctor what it is they'll be using on you if they have to operate, and then make sure you go out and buy it, wherever you can get it, and your family comes and prepares the food for you. This is where the Nicaraguan health system has gotten to: in their attempt to pay off the debt they have had to cut from areas such as health, again breeding insecurity.

The Chairman: Excuse me, Mr. Arnold, but we're trying to keep these to ten minutes.

Mr. Rick Arnold: Ten minutes, sorry.

The Chairman: You're at fifteen now. I don't like to interrupt our witnesses, but the thing is—

Mr. Rick Arnold: Absolutely.

The Chairman: —sometimes the question and answer period is one of the most rewarding parts of the committee's experience.

Mr. Rick Arnold: Sorry. I will now immediately turn over to my colleague Jim, to relate the final recommendations that came out of the conference.

• 1425

The Chairman: Really the final, because you're cutting into other people's time.

Mr. Jim Orr: Okay.

One of the ones we want to highlight, and these are on page 3 of our submission, is that international principles and standards be established in all aspects of the proposed agreement, including agriculture, environment, labour, health, welfare, and education. We would like to see, wherever possible, these principles and standards be incorporated into the body of the agreement, rather than in sidebar agreements. We want the FTAA to clearly be supportive of an equitable distribution of wealth. And we also want comprehensive studies to be conducted on the impacts of existing free trade agreements, with these studies to include input from all sectors and ages of society. Finally, acceptable and effective appeal structures and dispute resolution mechanisms must be put in place and made available to all effective bodies.

Thank you.

The Chairman: Thank you very much.

In Horizons of Friendship you have a television program as well. Is that the same?

Mr. Rick Arnold: No.

The Chairman: No, okay. I'm confusing it with another station. Sorry.

From the Maquila Solidarity Network, Mr. Jeffcot.

Mr. Bob Jeffcott (Spokesperson, Maquila Solidarity Network): I think you received a questionnaire. You should have received copies of the brief we're presenting. I apologize if it's late.

The Chairman: No, we got it.

Mr. Bob Jeffcott: I'll not read the entire brief, in the interests of saving some time. I'll focus on the situation in Mexico.

First, thank you for the opportunity to appear before the committee this afternoon to discuss important labour and human rights issues and their relationship to the proposed free trade area of the Americas.

The Maquila Solidarity Network is a small non-governmental organization with a membership of about 400 groups and individuals across Canada. We work in collaboration with counterpart organizations in Latin America and Asia to promote improved labour and environmental standards and greater respect for the rights of workers in free trade zones and maquiladora assembly-for-export factories. Since the vast majority of these workers are young women, we give particular attention to issues specific to women workers, their families, and their communities.

The MSN is also one of the founding members of the Labour Behind the Label Coalition, which focuses on the growing problem of sweatshop abuses in the garment industry, both in Canada and internationally. One of the major efforts of the coalition has been lobbying for a federal task force on sweatshop abuses in the garment and footwear industries. Such a task force could help achieve civil society and private sector consensus on minimum labour standards and could therefore strengthen the Canadian government's position in the negotiation of those standards in trade agreements.

Although the focus of our work has not been on international trade issues, we are very conscious of the profound impact trade agreements and trade liberalization policies have had on the lives of workers and communities. Because of our ongoing commitment to women in Latin America and Asia who labour behind the labels, we are certainly not opposed to international trade or to overseas or foreign investment. However, we do oppose trade and investment policies and agreements that pit workers and communities and countries against each other in competition over who will accept the lowest standards in exchange for investment and jobs.

I would like to focus this afternoon on the impact of NAFTA and the trade liberalization policies of the Mexican government on workers in the maquiladora factories in that country. I should also mention that there is another section in the brief that talks a little bit about the impact on the garment industry in Canada. I refer you to a publication recently released by Status of Women Canada, which we authored, that is about that issue. There is a copy available, or additional copies could be available, from Status of Women Canada. Although I will not be focusing on environmental issues, the negative impact of under-regulated maquila production is well documented and is of grave concern to ourselves and to maquila workers and their families.

As you are probably aware, the Mexican maquiladora program predated NAFTA by almost 30 years. The program allows for the duty-free importation of component parts to be assembled in foreign-owned factories and then re-exported for sale outside the country. Although the program was originally limited to the border regions, it has since been extended to other regions of Mexico. As well, in 1983 changes were made in the program to allow 20% of goods produced in maquilas to be sold in Mexico. The maquilas are therefore seen by many as a free trade pilot project for NAFTA.

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As of January 2, 2001, under the terms of the North American Free Trade Agreement, foreign-owned assembly plants will be on equal footing with domestic manufacturers and will no longer be able to import machinery component parts and materials duty-free from non-NAFTA countries. However, like Mexican firms, they will be able to do so from NAFTA member countries. As well, U.S. or Canadian-owned maquila assembly factories will, for the first time, have unlimited access to the Mexican market. While some might view this as an end of the maquiladora program in Mexico, other Mexican commentators have observed that after 2001 all of Mexico may well become one giant maquila.

So what can we learn from a more than 30-year-old pilot project in free trade? First of all, there is no question that the maquiladora program has encouraged foreign investment and created jobs in Mexico. As of 1997 there were a total of 3,500 maquila factories in Mexico, employing 900,000 workers. While the majority were still concentrated in the border region, a number of assembly factories, particularly in the garment sector, were located in the interior or southern regions of the country.

Although the level of Canadian investment in Mexico's maquilas is not in the same ballpark as that of the U.S. companies, the fact that many U.S.-based multinationals have production facilities and/or a source from suppliers in both Canada and Mexican maquilas means that the three countries are tied together in a regional production network. Any shift in production or sourcing practices will therefore have serious consequences for Canadian workers.

Since the North American Free Trade Agreement came into force on January 1, 1994, Canadian investment in the maquilas has increased from only nine Canadian-owned maquilas in 1993 to 29 in 1997. While auto parts is still the leading sector, there are also significant Canadian investments in apparel assembly. Apparel manufacturers are attracted to Mexico's maquilas by the stable, low-cost labour force, the absence of quotas, and duty-free access to the U.S. market.

While NAFTA and the Mexican government's trade liberalization policies have encouraged investments and created new jobs, those jobs are notoriously low-waged, high-stress, and dangerous to the health of workers and their families. Free trade and increased investments have not, however, resulted in higher wages. In fact, as a result of the peso crisis, maquila production workers in the garment sector saw their average real wages, including bonuses and other indirect wages, decrease from $1.65 U.S. per hour in 1993 to $1.05 in 1994. While real wages regained some ground in 1998, reaching $1.51 per hour by 1998, they are still lower than what workers were paid before NAFTA came into effect.

Nor has NAFTA and trade liberalization resulted in greater respect for workers' rights. In fact, after 30 years of the maquila free trade pilot project, there are, with one or two possible exceptions, no independent democratic unions in Mexico's 3,500 maquiladora factories. This is not to suggest that maquila workers haven't attempted to exercise their right to freedom of association. Numerous attempts by maquila workers to organize independent unions or to democratize government-controlled unions have been met with mass firings, plant closures, violence and threats of violence, legal delays, and questionable decisions by conciliation and arbitration boards.

One recent example is the case of 28 employees of the formerly Canadian-owned Custom Trim auto parts plant in Valle Hermoso, who were fired in 1997 for leading a strike for better wages and improved health and safety practices. After one of the fired workers visited Waterloo, Ontario, to seek support from Canadian Custom Trim workers, members of his family received death threats from unidentified men. Despite threats and legal delays, the fired workers continued to pursue legal channels to win their reinstatement. Yet despite an unprecedented ruling by the local conciliation arbitration board in December 1998 declaring that the workers were fired illegally and ordering their reinstatement with full back pay, the workers have not yet been allowed to return to their jobs.

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I could go into detail about that if you have any questions. There was quite a farcical situation where the workers were to be reinstated in a vacant building, and therefore eventually could not be reinstated.

The Chairman: I would appreciate it if you could, Mr. Jeffcott, because I believe a couple of those workers actually came to my office in Toronto.

Mr. Bob Jeffcott: That's right.

The Chairman: If that's the case, I would like to be able to follow that up with some of our members and colleagues.

Mr. Bob Jeffcott: We'll send you some of that information.

The Chairman: I would be more than happy to write a letter about that.

Mr. Bob Jeffcott: Great.

The Chairman: I remember those people when they came and spoke to us.

Mr. Bob Jeffcott: While the NAFTA labour side agreement has offered Mexican workers whose legal rights have been violated an opportunity to bring their cases to the attention of the U.S. and Canadian governments and media, the agreement has not proved to be an effective vehicle for defending workers' rights. Although there have been a number of cases brought before the U.S. national administrative office, to our knowledge not one of those interventions has resulted in concrete actions by the Mexican government to remedy violations of workers' rights.

In addition to violations of Mexican maquila workers' rights to freedom of association, women maquila workers continue to experience gender-based discrimination. According to Carmen Valadez of the Tijuana women's centre Casa de la Mujer, a woman's rights are violated from the moment she goes looking for a job in a maquila plant. Valadez's charges are confirmed by two extensive studies carried out by the respected U.S. human rights group, Human Rights Watch. The first study, carried out in 1996, documents the routine use of compulsory pregnancy testing as a condition of employment, and mistreatment and forced resignations for women who become pregnant while employed by maquilas. These practices are clearly a violation of Mexican law and of ILO Convention 111 on discrimination in respect of employment and occupation.

In December 1998 Human Rights Watch released a second report, entitled A Job or Your Rights: Continued Sex Discrimination in Mexico's Maquiladora Sector. The report confirms that more than two years since their first report, the Mexican government has yet to take any meaningful action to condemn, investigate, or punish this blatant sex discrimination. As a result, as this second report documents, pregnancy-based sex discrimination persists both in places they had previously visited as well as in places they had not visited before. The report also confirms charges that some companies are requiring women to show their soiled sanitary pads to company clinic personnel to prove they aren't pregnant.

Despite these clear violations of workers' rights and the Mexican government's failure to enforce international labour standards or its own laws, some would argue that Mexican workers on the whole benefit from free trade and increased foreign investment, since bad jobs are better than no jobs. We would acknowledge that Mexican workers need and want employment. However, we would echo the slogan of the Mexican Maquila Women Workers Network: “Employment, yes, but employment with dignity”.

The Chairman: We're well over the time.

Mr. Bob Jeffcott: I just wanted to add that there is a recent UNIFEM study that talks about the fact that although there has been a tremendous increase in employment in the maquilas, there has at the very same time been an elimination of many jobs in the domestic sector, in the garment industry, and in other industries. So when we talk about job gains, actually the losses in the domestic industries oftentimes counter those that have been gained in the maquila industry.

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Lastly, I should just say that in terms of our recommendations, they are specifically focused on labour rights questions. We would say that we also endorse the proposals that are in the Alternative for the Americas document that you've received, and that our proposals on labour rights mirror some of the proposals in this document.

I should also mention, though, that two issues that are included in ours that are not in this document are questions about the rights of homeworkers, women who sew products in their homes—in Canada, Mexico, and other countries—and the rights of part-time workers, which we think should also be addressed.

Thank you.

The Chairman: Thank you very much, Mr. Jeffcott. That was very helpful.

We're going to go next to the Inter-Church Committee for Human Rights in Latin America, and that's Suzanne Rumsey and Reverend Chris Ferguson.

The Reverend Chris Ferguson (Area Secretary, Latin American-Caribbean Division of World Outreach, United Church of Canada): Thank you very much. I will try to be brief and see if we can recuperate some of the time. I'll consider myself to be auditioning for the Horizons television program.

The Chairman: It's good.

Rev. Chris Ferguson: We appreciate very much this opportunity to speak to the committee today. The Inter-Church Committee for Human Rights in Latin America is made up of 20 denominations and religious congregations and orders here in Canada. We speak from a perspective of 25 years of experience of bearing witness to the violation of political, civil, social, economic, and cultural rights in the Americas.

Out of that perspective we want to clearly and unabashedly focus on the question of human rights in the context of FTAA processes, and hold up what is apparently against the orthodoxy, that not only does trade have everything to do with human rights, but in fact human rights have to be the fundamental criteria for judging the adequacy of any trade agreement. Trade agreements that do not in fact promote, defend, and enrich the basic human needs of all the peoples of the region are bad agreements.

There is a clear ability to lift up, as a plumb line, as a fundamental criterion, the adequacy of all these processes in their largest framework, in their details, and in this style of negotiation, based on the degree to which they do two things. One positive is to promote and assure human rights, which are understood now amply to include social, economic, and cultural rights, which aren't always included when we buzz about human rights. We're very clear that at the core of human rights declarations like the universal declaration of the UN, the core values include the obligation of governments to defend the social and economic rights of their people.

These are inseparable from the other rights and have to be understood as an obligation that isn't an also-ran, that can't be kept in some other category. Of course, we're speaking against delinking, where somehow trade happens over here and human rights happen over there, that both the rhetoric and the action of government can be separate, because somehow trade activities will bring all sorts of benefits and they don't have to actually be tested to see whether they're promoting these other values. We're suggesting this must be absolutely turned around.

You've heard a lot about Mexico already. You'll hear more when my colleague speaks, as we have concrete examples in the situation of NAFTA where we believe there is a free trade agreement that violates fundamental human rights, and also gives us a window in to how the Canadian government has acted in relationship to human rights when there's a trade agenda. And we think that has to be held up and looked at.

Rather than the formal language of delinking, what we instead see is that they're very much linked, because as our trade interests grow, our silence and our lack of witness to human rights increases in the case of Mexico. We could give other cases in the Americas. Recent actions of the Canadian government in other parts of the world might be helpful exceptions. In the Americas, there's been an unfortunate relationship of silence around human rights.

Outside of trade circles, if you talk about Mexico in church and international relations circles, Mexico will be known as a systematic violator of human rights that has militarized vast portions of its country in order to impose and defend an economic model that is not in the best interests of the majority of its people. They have resorted to torture, extra-judicial assassination, and disappearances to keep that model in place. That's how you would characterize Mexico. That's not the image of Mexico that emerges when you're sitting around talking about NAFTA in a trade context. We have simply distorted and confused our ability to see our trade partners as they are.

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At the end of Suzanne's recommendations I will speak to the specific recommendations in our report. I believe you have it before you. But the chief issue we'll bring before you is this. I've seen how in every way we have to be sure that the trade agreements do not do damage to human rights in specific ways, including undermining democratic participation, that they speak directly to issues of justice, and that they in no way supersede, displace, or, as I say, work against the other commitments to human rights that are found in other international obligations.

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We must try to bring the same language used when the Canadian government speaks about human rights in the Human Rights Commission of the UN, and social and economic rights have to be absolutely married to critical civil rights. We want that same concern to be present and active in all details in trade negotiations.

The second point, besides the example we'll give about NAFTA, has to do with modelling the way the civil society's voice, participation and concerns are active in these negotiations, as a way of modelling whether or not democracy is being taken seriously. The folks who spoke before have already made that point and we won't dwell on it, except to say we are concerned that it is not evident to us, in other statements made by department officials of DFAIT and in the style of civil society consultation here in Canada, Canada is sufficiently modelling the seriousness with which citizens have to be part of the shaping of trade negotiations.

Not just Gallup polls are done to get our opinions; they were actually co-participants in the forming. If we don't model that model of democracy then we are wasting Canadian dollars when overseas official development assistance is used to try to promote civil society participation in the rest of the Americas. We're not going to take it seriously in the things that count unless we really show there is an ability to have a new model for negotiating these agreements.

Suzanne, could you tell us a bit about Mexico and NAFTA?

Ms. Suzanne Rumsey (Mexico and Central America Coordinator, Inter-Church Committee for Human Rights in Latin America): Thanks, Chris.

Thank you for the invitation to be here.

ICCHRLA has been around, as Chris mentioned, for 25 years. Our work in Mexico goes back to 1990, although church members have had a much longer history of involvement in the country. We mark 1994 as a watershed, not just because it is the date when NAFTA was implemented, but because the very same day it was implemented, the Zapatista uprising took place in the southern state of Chiapas.

Since that time we have seen the Mexican government carry out a policy of militarization of major parts of the country; emerging low-intensity war, particularly in southern Mexico; and the elaboration of a doctrine of national security where the military, through legislation, is becoming increasingly responsible for internal security matters. Our history of work in the region shows that when you give internal security responsibilities to the military, you can bet your bottom dollar you will have human rights problems.

We see most recently, in the cases of El Salvador and Guatemala where peace accords were signed, that one of the key aspects of those accords had to do with delinking policing, that is internal security responsibilities, from the military. We're concerned that Mexico is going in the very opposite direction.

Legislation was passed in 1995 that defines public security very vaguely and raises great concerns for partners of ours in Mexico about legitimate social opposition becoming delegitimized and being made illegal. This is happening in a context in which partners in the human rights communities, social and indigenous leaders and independent trade union members are under increasing attack.

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While violations of economic, social, and cultural rights and civil and political rights predate NAFTA, we have concerns about both the framework of NAFTA and the environment of NAFTA. These concerns have led us and our Mexican partners to conclude that the imposition of a neo-liberal economic model and its institutionalization through NAFTA has required, and is requiring in the face of legitimate social opposition, state repression.

Just to give you two quick examples of what I mean by framework and environment, as a precondition for signing NAFTA, constitutional changes had to take place in Mexico. Some of the most famous were changes to article 27, which ended the historic form of communal landholding known as the ejido system. This guaranteed a land base to rural communities in perpetuity.

The Mexican government promoted the ending of this guarantee as a way of making land collateral for rural peasants and rural communities, but it is really causing the disintegration of rural communities, and particularly indigenous communities, where a land base is central to their cultures and way of life. This is leading to emigration to the cities, border regions, the maquilas and the United States.

That is happening because at the same time, basic grain subsidies have been lifted extremely rapidly. Mexico was to reduce its subsidies on corn over a 20-year period. It's done it in five years. So small producers can no longer afford to grow the corn and beans needed to sustain themselves and their families, much less compete with the cheaper imports on the Mexican market.

As a consequence of that, for example, in November 1996 we saw a corn farmers' blockade in Chiapas attacked by the police and military, which left three dead and numerous people arrested.

As Chris mentioned, we are also concerned that in this framework and environment the Canadian response has been one of virtual silence. Just a couple of months ago, we again participated in the annual DFAIT human rights consultations in preparation for the UN Human Rights Commission.

A special round table was held on Mexico, and for the sixth year ICCHRLA, together with many NGO colleagues, called for Canada to speak out about the deteriorating human rights situation in Mexico at the UNHRC. I was present in Geneva, and Canada again failed to do that.

Why is there silence? We're told it may close doors to Mexico. However, we don't take the same position around Cuba or China, where we both trade and engage rather vigorously in human rights. Is it because we are willing to talk tough to one-party states, but go soft on electoral democracies?

Mexico may be an exemplary trade partner for Canada, but it is a systematic human rights violator. That has been confirmed, not only by ourselves and our Mexican partners, but by the UN subcommission on the prevention of discrimination and protection of minorities, the Inter-American Commission on Human Rights, and numerous other international bodies. So it's extremely concerning to us that Canada is virtually silent on this issue.

Is this what we can expect in the future with the hemispheric free trade agreement, we ask ourselves? We would assert that comprehensive trading relationships demand comprehensive and public human rights responses.

I'll turn it back to Chris for our final recommendations.

The Chairman: We're well over the time and we're cutting seriously into our questioning time at this point.

Rev. Chris Ferguson: I apologize for that.

I'd like to just stress that on page 5 of the report you have before you, the nub of our recommendations is that at a very minimum Canada should use every means at its disposal to ensure the guiding principles and specific objectives, with respect to human rights, as set forward in the document, Alternatives for the Americas: Building a Peoples' Hemispheric Agreement, which has been referred to by many of the speakers today, become the fundamental principles for any agreement that emerges from the FTAA process.

In addition, Canada should immediately sign the American Convention on Human Rights, the Inter-American Convention to Prevent and Punish Torture, and the additional protocol to the American Convention on Human Rights in the area of economic, social, and cultural rights, often called the San Salvador protocol, and encourage the United States to do likewise. In addition, Canada should put—

The Chairman: That's drawing a much longer bow, if I may say so.

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Rev. Chris Ferguson: Yes, I think you'll see where we're going with this, which is that by encouraging them to do otherwise we're saying we shouldn't trade with people who aren't prepared to stand up and defend human rights as fundamental. So adherence to fundamental human rights instruments—-not only questions of ensuring that a trade agreement has mechanisms within it but assurance that these other mechanisms are signed by the parties—is the principle we're trying to get here. There is another set of commitments that people have to bring to the table.

Thank you, Mr. Chair, for showing how arduous that may be—to dialogue, for instance, with the United States on this—but it's an important goal, we would say.

The Chairman: Well, I'll tell you that we raise this regularly with our American colleagues, and their congressional colleagues' answer is that they will not dilute the level of human rights in their country by signing on with these international commissions. That's their position. You and I can argue with them as to whether they're right or wrong, but anyway, that's their position.

Rev. Chris Ferguson: Yes. Even if they signed with reservations, or even if they said they were willing to be part of the international conversation about this, this would be an improvement.

The Chairman: I agree. I don't disagree with your position; I'm just telling you the problems we've had with Congress when we've tried it.

Rev. Chris Ferguson: Thank you for that reflection.

The second point under this point is to ensure that all trade, economic, and financial agreements include a democracy clause guaranteeing complete democracy within the institutions of the state, with unlimited protection of broadly defined human rights. All treaties must effectively ensure real participation of civil society in the development, adoption, and implementation of trade, economic, and financial agreements, clearly setting out transparent participation and accountability mechanisms for the various parties.

The last point is to ensure the enforcement of international human rights instruments by affirming the operative section of the agreement that state parties have adhered to in these instruments, and indicating clearly that no part of the trade agreement will take precedence over, or will be in violation of, these agreements—something, just to end, that we believe was true in NAFTA, where clear parts of the NAFTA agreement led to violations of economic and social rights.

The Chairman: Thank you.

I have just one last point. Would you send us a list of the churches that belong to the interfaith group? I'm not sure if it's in the document.

Rev. Chris Ferguson: Absolutely.

Ms. Suzanne Rumsey: We can leave the document with you.

The Chairman: I appreciate that. Thank you very much on behalf of members of the committee.

Now we'd like to turn to our last witness in this group, and that is Mr. Holt, from the Canadian Council for the Americas.

Mr. Bill Holt (Director and Treasurer, Canadian Council for the Americas): Thank you, Mr. Chairman.

I'm going to present a slightly different view of free trade, and that's from the business perspective. I'm not sure whether there's a hidden meaning in the order of the table here, but we seem to be on the right side of the agenda.

The Chairman: You can move anywhere you want. You're on my left.

Mr. Bill Holt: With me today is Mr. Richard Baker, who is also on the Canadian Council for the Americas, our legal counsel.

Thank you for giving us an opportunity to present our views and the views of private business to your committee.

My name is Bill Holt. I'm the treasurer and director of the Canadian Council for the Americas. I'm also the vice-chairman of Canada's largest textile company, which is headquartered in Montreal and has been there for over 50 years. Through that, I have been on the SAGIT in Ottawa and recently I was the chair of the textile SAGIT in Ottawa. Internationally, I've been a textile governor at the World Economic Forum meetings that we have every year in Davos, Switzerland, so I get a perspective on that side. Finally, and probably as importantly, I spend a lot of time in the international environmental movement. I'm the treasurer of the Earth Council, which is the NGO developed by Maurice Strong immediately after the Rio summit. We have a secretariat in San José, Costa Rica, and its mandate is to influence the world agenda on sustainability.

So I wear a number of different hats, and I see the problems from a fair number of sides.

The CCA represents Canada's primary business organizations to foster business relationships with Latin America. It has been in business for over 10 years. We are very active. We have over 600 members across Canada. We have provincial chapters in Halifax, Montreal, Ottawa, Calgary, and Vancouver, with a head office in Toronto.

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The council's work is closely allied with the department's work in terms of trade facilitation. On Team Canada's trips abroad, the CCA has been instrumental and part of creating more of a private sector input into those Team Canada missions, and we have been with them now for a great number of years.

On the side of Canada, when visiting dignitaries come, we as a council put on workshops, and we have lunches to introduce the political side to the corporate business side of Canadian society. We've done that recently with President Fujimori, and we've done that with President Frei and President Cardoso. This is an ongoing association that we have with DFAIT.

I won't get into the background of the FTAA. I'm sure the committee have heard the background through the witnesses, from Mr. Marchi to Kathy McCallion and all the people in Ottawa. So what I'll try to do is focus on the private sector part of the process, which is the ABF. That's the American Business Forum.

The first ministerial was in Denver, Colorado, organized by the late Secretary Brown. His view was that the private sector should be part of a trade negotiating process. It can't be done in isolation, because when trade ministers meet they have to know what trade issues are involved from a country point of view and from an international point of view. From that point, every trade ministerial—and there have been four of them—has had a parallel American Business Forum part to it. To the layman they look like one affair, but in reality it's a government ministerial discussion and a private sector discussion. But they blend into one another.

So for the fifth ABF, which will be held in Toronto, we're proposing a two-and-a-half-day ABF that will dovetail into the beginning of the ministerial meetings in Toronto. On the last day there will be concurrent sessions, where the ministers will come to the business forum to hear recommendations, to create dialogue, and this is an ongoing thing. Of course, this is the first time this ABF has been held in Canada—probably the last time.

Now, the government has asked the CCA to become the secretary of the ABF process because of our extensive knowledge of Latin America. To create the proper organization to accomplish that, we have associated ourselves with the Canadian Chamber of Commerce, the Business Council on National Issues, the Alliance of Manufacturers & Exporters, the Province of Ontario, the City of Toronto, and DFAIT to create the committee and to fulfil the function of the ABF. In addition to that, we're dealing with an organization in Miami called the Business Network for Hemispheric Integration, which represents a lot of the other Latin countries' business associations.

The reason I'm making this presentation is that, as we speak, there's a ministerial meeting in Miami—Kathy McCallion is down there—but there's also a Business Network for Hemispheric Integration meeting there. Kent Jespersen, who has been appointed by Sergio Marchi to coordinate the ABF—Kent is a senior business executive from Calgary—and David Winfield, the national chairman of the CCA, are in Miami as we speak. David Winfield, as the committee probably knows, was our ambassador to Mexico City for two terms, almost eight years. He was there while the NAFTA was being negotiated.

The ABF itself will be held over a two-day period. We'll have plenary sessions, and then we'll have workshops that will focus and parallel the negotiating sessions themselves in the different areas. Hopefully, the negotiators will give a play-by-play of where they are to the private sector and the private sector will give their views to the negotiating sessions. That's an integral part of the ABF itself.

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In addition, we're proposing to have a civil society part of the ABF. That's a new initiative, because up to now business has tried to steer clear of “civil society”. It's an undefined area. But it has been agreed that although social problems, in my view, shouldn't be the primary responsibility of trade and business relations, they cannot be moved completely outside of it. So we have to work with the civil society issues as they emerge, but in addition, there have to be other avenues to deal with the major issues that some NGOs are bringing up. So I'm sympathetic to a civil society part, but it has to be realized that the private sector cannot do everything.

The reason for free trade, I think, has been amply illustrated in many, many studies. In my presentation I talk about why, on a macro basis, the proposed free trade agreement makes some sense, and I'll just give you two numbers.

The hemisphere has a population of 800 million people, with a GDP of $9 trillion. The NAFTA part of that is 386 million, with a GDP of $7 trillion. So what we're talking about is to try to develop relationships with a population base of over 400 million people that has a GDP of over $2 trillion.

Canada's relative access to that market is nominal. We are dependent on U.S. trade to what I consider an extent that's becoming dangerous. Eighty-three percent of our trade goes to the United States, and if there's an economic turndown in the United States, I think Canada will be hit first because we're marginal suppliers to the American economic machine. That's what's going to happen. So as a country we have to diversify. I don't say stop trading with the United States, but focus on other countries that we can develop trading relationships with.

Let me give you an example from a personal point of view. Consoltex is Canada's largest textile company. In 1986 it was strictly a Quebec-based, Canadian-based company. Its U.S. sales in 1986 were marginal, to say the least. FTA was developed in 1986, and our policy was to restructure the company to take advantage of the U.S. market that was opening up. I can now say that over a ten-year period, because of free trade and because of the NAFTA, out of Quebec production—this is not production that we've bought or we've moved—out of Cowansville, out of Sherbrooke, we have created a business of over $100 million that's new.

There's an example of how the free trade agreement has affected my company and those communities in the Eastern Townships that depend on it for employment. Our wage rates are very high. We have unionized full support. If you go down to the Eastern Townships and talk about free trade, you'll have a very positive answer. Our plants and our employees go back, if not two generations...I bet we have three generations of employees. These are ways of living in these communities. I say that to show an illustration of a company that has prospered because of the free trade agreement.

We're in Mexico now. We went down paralleling NAFTA. We bought some plants in Mexico. We're not displacing anything we do in Canada, but we're creating new businesses in Mexico to be sold back into the United States, all under Canadian control. Our strategy is that once FTA is developed, we as a company will follow the FTAA into Latin America.

• 1515

We sell now to agents, but I can see selling through permanent relationships, maybe having some production, but manufacturing a lot of the products in Quebec. The reason it works is that these are high-paid, highly technical jobs. We're not talking about garment workers around sewing machines. These are textiles. They're a textile company, not an apparel company.

We can manufacture high-quality textiles in Quebec and ship them almost anywhere in the world, if you want to talk about it, but we ship them now to Texas to be made into garments. We ship them to Mexico to be made into garments. We can ship them to Argentina to be made into garments. You're not going to ship sophisticated machines to Mexico or to Argentina. You ship the product itself. It's a peculiarity of our industry.

I would like to conclude by saying that the FTAA has a tremendous potential for the direct benefit of Canada. I think NAFTA has proved it. I think the Chilean bilateral step forward is a positive move. I think by doing it this way, we're going to rebalance our relative interest in the United States market, which I think is too high. Canada as a middle power can maximize its leverage at the agenda-setting stage of a negotiating process, and I think we're trying to do that properly. I think there's a policy vacuum today. That fast track is not there and it won't be there until the next presidential election, but I do believe they'll get fast-tracked. And Brazil is going through its own problems right now. So Canada has a unique position to play. I think we have some very competent people doing that and I would encourage Parliament and our members to push that forward.

Thank you.

The Chairman: Thank you very much, Mr. Holt. I appreciate those comments.

We now have time for questions, members, if we could keep them to say 15 or 20 minutes, because as always we're running behind. I apologize for that.

[Translation]

Mrs. Debien, you have five minutes.

Mrs. Maud Debien: Thank you, Mr. Chairman.

The Chairman: I know that Mr. Holt has given you an opening.

Mrs. Maud Debien: No, not at all. My question will have to do with the WTO.

Our first interveners indicated that the trade liberalization agreements, the FTA, NAFTA and GATT, did not give the hoped for results, creating an even greater gulf between rich countries and poor countries. As well, it was not possible to ensure the protection of human rights.

You have said a great deal about NAFTA and the Free Trade Agreement with the United States, but not very much about the WTO. You seem to be afraid that the WTO negotiations will have repercussions similar to those of the FTA and NAFTA. There is no going back, however: the WTO negotiations will very definitely take place. You have had no difficulty convincing me that the environment, human rights and social clauses should be part of the WTO negotiations. I share your opinions in that respect.

On the other hand, you have said a great deal about the presence of civil society, the absence of democracy and a democratic deficit as far as participation by civil society in these various negotiations. Unfortunately, I have not read your brief, but I would like to know how you see participation by civil society in the WTO negotiations.

My second question is more technical. Should investments be part of the WTO negotiations? Some witnesses have told us they have very grave reservations in this regard, whereas others were entirely in agreement. If you feel that discussions on investment should not take place at the WTO, what would be the appropriate forum? We have also heard about the Tobin tax. I agree that it is one tool, but do you think there would be others?

• 1520

As for the environment, it's been said the WTO is becoming the most powerful organization on the planet and that all matters should thus be submitted to it. I wonder if, where workers' rights are concerned, the International Labour Organization might not become the executive arm of the WTO, if I may put it that way.

Mr. Holt, I welcome you to Ottawa in the name of Montreal, Cowansville and Sherbrooke. Do you think that the textile sector that you represent more specifically, will give rise to specific problems during the next WTO negotiations?

• 1525

[English]

The Chairman: I would like to remind the panel members of something. This session ends in five minutes and I'm trying to keep the question and answer sessions to five minutes, so we're going to have to make our answers quite short. Madame Debien has kind of launched us into the World Trade Organization rather than the FTAA, so I don't know whether you want to kind of link.... I'm sure there are linkages you can make that would be helpful, but perhaps you could give quick answers, please.

Mr. John Dillon: Yes. Thank you, Madame Debien.

Very briefly, yes, our concerns about the issues we raised on civil society involvement extend to the WTO. I was recently at a conference in Asia where we took our Alternatives for the Americas document as a document developed by civil society in the Americas, north and south, and shared it with Asian colleagues. What we learned from our Asian colleagues is an intense interest in what has happened in the Americas, particularly the examples we heard from Suzanne Rumsey and Rick Arnold about the impact of NAFTA on agriculture—campesino and peasant agriculture in Mexico, or banana workers in Costa Rica. People in Asia are very concerned that in upcoming WTO negotiations on agriculture the same thing may happen.

On investment, universally in the Americas and in Asia there is a strong movement to keep the multilateral agreement on investment, which is modelled on NAFTA chapter 11, out of the WTO so that those bad precedents are not extended internationally through the WTO. There is a feeling that there are other better fora where these issues could be dealt with. You asked about the International Labour Organisation. The Canadian Labour Congress brief to this committee is very clear that the International Labour Organisation should have a role in monitoring labour standards and whether the core labour standards are adhered to. There are many other fora where these issues should be taken up, and we are very skeptical of having too much power invested in organizations that are nominally to deal with trade issues when in fact they're not competent to judge whether or not human rights standards are being dealt with.

The Chairman: That's a very interesting answer.

Mr. Holt, did you have a quick observation?

Mr. Bill Holt: There are ongoing issues affecting the textiles industry. A lot of those issues are addressed at the textiles SAGIT. That's an ongoing thing, and they tend to reoccur. Once the agreement on the WTO.... Prior to the WTO, textiles were never part of the GATT. It was always a separate agreement, a multifibre agreement. So they brought it into the GATT, and there were tariff hurdles that people would have to overcome on declining tariff quotas over a 10-year period, I think it was.

Some of the issues we're facing is that some countries say, rather than waiting ten years, why don't you do it right away? So we had to re-talk about those issues. The apparel industry in Canada, which is not the textiles industry, always come to us and say “Well, I can't buy the material I need because you don't produce it. Therefore, I have to go somewhere else to buy it.” And we say “No, we can produce it; you buy it from us.” So we're always fighting with the apparel industry. Those are ongoing things.

• 1530

But you talk about the textile industry, and people confuse it with the apparel industry. You think it's going to disappear to Asia, that it's all going to disappear somewhere else, but there is a vibrant high-technological textile industry in Canada. We use the fastest, most sophisticated machines. We do a niche business in terms of fast turnaround into the fashion industry. We supply many suppliers within the New York and New Jersey area with product; it's cheaper for them to get it from us than from the Carolinas, and it has become a very good market for us—again, a very high-tech aspect of the product itself.

But we do have ongoing problems. A lot of them get up to the SAGIT. Some of them are resolved at the SAGIT and some of them aren't.

The Chairman: Thank you very much. Thank you, Mr. Holt.

Mr. Blaikie, do you have anything—

[Translation]

Mrs. Maud Debien: I'd like Mr. Holt to specify what agreement he was alluding to. Is it the sectoral agreement, the one that's called the multi-fibre agreement?

The Chairman: No, he wasn't talking about the multi-fibre agreement, that's something totally different but rather about the foreign trade sectoral consultation group, SAGIT.

[English]

You weren't getting into the multifibre agreement at that point?

Mr. Bill Holt: It's gone.

The Chairman: Yes, it's gone. It has been folded into the WTO.

[Translation]

Mrs. Maud Debien: You're talking about SAGIT.

[English]

The Chairman: Yes.

Did you have anything, Mr. Blaikie?

Mr. Bill Blaikie: Just a quick question.

Mr. Holt, you said you've built some factories in Mexico in order to sell into the United States. I think that is what you said. You were talking about your company.

Mr. Bill Holt: To be precise, we purchased an existing business in Mexico that was supplying domestic markets.

Mr. Bill Blaikie: In Mexico?

Mr. Bill Holt: In Mexico.

Mr. Bill Blaikie: To sell...?

Mr. Bill Holt: Just internally. But our strategy was to take some of that production and sell it into the United States.

Mr. Bill Blaikie: You mentioned that you pay decent wages in the Eastern Townships. What would the difference be between, say, the average wage in the Eastern Townships and the average wage in Mexico?

Mr. Bill Holt: It would be quite a bit different, there's no question about it, and it would be different in the United States too. The further south you go, the lower the wage rates become. We pay more than they pay in the United States.

Mr. Bill Blaikie: And even lower in Mexico.

Mr. Bill Holt: Yes. But when I say “lower”, I mean that they're good wages in relation to the society we're dealing in, but they're not Canadian wages. I'm not here to tell you they are.

Mr. Bill Blaikie: I am just trying to get some figures.

The Chairman: Okay. Thank you very much.

Ms. Augustine.

Ms. Jean Augustine: I'll be very brief, Mr. Chairman.

Thank you for the very interesting information and for giving us the whole picture of labour standards and otherwise in the Americas, because I think it's important.

But I want to ask about this. The 40 people at the Northumberland forum concluded that there is no evidence that existing free trade agreements have been of value to our country and its citizens or to other countries and their citizens. It seems to me that what was concluded here is that free trade agreements have no value whatsoever to us or to others. At the end, the final statement said that we need a proper fair trade agreement, and I wondered if they defined what a proper fair trade agreement would be in light of the fact that there is no evidence at present to show that there are any benefits to us. I wonder if someone can address that.

Mr. Rick Arnold: I think the feeling out of the four workshops that I described was that in the Northumberland area people could not detect positive impact from the free trade arrangement that Canada has already been a signatory to. With the guest from Central America, we explored what was going on preliminarily in the rest of the Americas. Of the 40, there are a number of people who travel extensively to Latin American, and we could not put our finger on a country in which you could say the gap between the poor and the rich has closed markedly because of that country's engagement in a free trade arrangement.

• 1535

On that basis, the general feeling was that from the way things are going at the moment we don't see a very positive result from the free trade area of the Americas unless there be some very specific new negotiating positions taken by Canada.

I'm trying to keep this very concrete. I think other people around the table have given a broader perspective on it, an excellent broader perspective, but there are in place the germs of some alternative trading arrangements now. I will refer to some of the trading companies based in Canada that work directly with producer groups in different countries of the Americas. The idea there is not how do you drive the prices down to the producers, but how do you give them the best break possible and still get their products to market in Canada. It's that different type of approach that we're hoping will be taken into account by those who are negotiating on behalf of Canada.

The Chairman: Does anyone else want to add to that, but very quickly, because we're cutting into the next panel time? No? That was an answer.

As members of the panel, one of our problems might be.... As you said, the people in that room didn't find it, but we have to look at it on a global basis. You could take a group that would say no, another group would say yes—Mr. Holt, obviously, is going to say yes—and we're trying to get a good balance. One of our witnesses this morning said there is a good Yiddish expression: one example does not make an argument. So we have to try to look at the overall. However, I think the panel's been very helpful.

Perhaps I might ask very quickly.... I wanted to ask the Common Frontiers about civil society in Latin America. We've heard a great deal about the difficulty of trying to get the civil society agenda going. We had trouble, obviously, with the Mexican delegates, several delegates. Several governments in Latin America consider this as a threat to them. Some of them see labour and environment groups almost as political opposition within their system, rather than as partners in society, etc. Have you any suggestions as to how we can work, or suggestions to our government as to how they could move the civil society agenda? From talking to Mrs. McCallion and others, I gather there's a sincere desire to do this, but the problem is they're being blocked themselves. Do you have any recommendation to make to this committee as to any recommendations it might make to the government as to how it might be more effective in that?

Ms. Patricia Barrera: Yes. We've been meeting with Kathryn McCallion on a regular basis, getting briefings and what not, and we've presented her with a giant list of how. The biggest one that comes to mind at the moment is the MERCOSUR pact. They have actually instituted into MERCOSUR a table where civil society is defined broadly, not only business as part of civil society, but business and labour groups. NGOs and various coalitions sit at the table with government to discuss the content or the substance of the trade agreement—not civil society issues, whatever those are—the actual agreements that are being negotiated.

The Chairman: A quick question, and I'm going to ask for maybe a yes or no in answer to this. We are working at trying to set up an OAS parliamentary assembly. Do you think this would be helpful in terms of getting a civil society dialogue going on the free trade area of the Americas?

Ms. Patricia Barrera: On the FTAA?

The Chairman: Yes.

Ms. Patricia Barrera: I'm not sure, considering that our Ambassador Boehm in the OAS has tried to disassociate the FTAA from the Summit of the Americas process. We are told they've set two parallel tracks.

The Chairman: I'm talking about a parliamentary assembly. Parliamentary assemblies have a way of establishing their own agenda, apart from—

Ms. Patricia Barrera: Certainly it would be a step forward—

The Chairman: Okay.

Ms. Patricia Barrera: I think others could be, as well.

The Chairman: Would other members agree with that?

Rev. Chris Ferguson: One of the issues about the OAS is the need, for instance, to have recognized non-governmental participation as observers in the OAS. There are structural problems, so yes and no isn't quite so simple. But if it could lead to a full civil society voice through the usual kinds of non-governmental organization observer status in the OAS, that would be a positive step.

The Chairman: Thanks.

• 1540

I have a quick question for Mr. Holt. We often hear, sir, that production efficiency.... Going back to Mr. Blaikie's point, you didn't establish the plant in Mexico; you bought it. It was an ongoing operation. We hear this all the time. We hear about the lower wages, but we also hear that productivity in Canada is higher, so that there's a kind of balance. What's the productivity versus wage levels experience of your firm?

Mr. Bill Holt: That's true. In our case, we're doing different product lines, so I can't compare apples and apples here. However, the thrust of your question is correct. Although we do have high-speed machines down there, too, there's a lot of labour, and the unions.... I could argue, from a management point of view, that we have too many employees, but that's what we have, and we'll keep them.

You're talking about civil society. I understand that you need domestic political support to create any international agreement. If you don't have it, you don't get it. I think the MAI was a great example of not having it. I endorse all that. Ultimately, all politics are local. Therefore you can argue that all trade is local. You have to go right to the individual and say “This is why it's good for you”. I believe that were you to take a view of the Canadian people today on the aspects of NAFTA, you would get a positive view. That view isn't necessarily there in the United States right now. In Mexico, I don't know.

The Chairman: You're obviously a very shrewd observer of the political process, Mr. Holt, because you reminded me that you're my constituent and you reminded Madam Debien that you have a plant near her riding. I mean, you recognize the local nature of things.

Members, before we break I want to make a quick announcement about Kosovo. We'll then break and go to the next panel. I want to read very quickly a statement the Prime Minister made in the House before question period to the effect that.... I'm quoting from his statement:

The House will remember that prior to commencing military action against the government of Milosevic, NATO had drawn up plans to deploy an international force to Kosovo to ensure the fair implementation of a just peace in that troubled province. Members will also remember that in February they debated Canadian participation in such a force. There was broad support across party lines.

I'm violating my own rule not to go too fast for the translator. I apologize.

I now rise to inform the House that Canada has received a formal request from NATO to initiate the deployment of our portion of the peace implementation force to the former Yugoslav republic of Macedonia. Today we intend to inform NATO that the government agrees to this request. ...The Minister of National Defence will provide the specific details...some 800 in total.

Mr. Speaker, I wish to assure hon. members that the purpose of this deployment does not extend beyond what has already been debated in this House.

And there's a further statement. He concludes:

I would also like to assure all members that if there is a NATO request to deploy Canadian troops in combat, the House will be consulted before any final decision is taken.

So the decision has been taken to send that part of the force to Macedonia to join the other 7,000 or 8,000 NATO forces there, but there's no decision to employ them in a combat role. There's the assumption they would be ready to go in if an agreement is made with the Milosevic government to accept an international force in Yugoslavia.

I thought I should bring all members up to date on that. You may wish to consult with your offices. It certainly is another evolution in the process.

Mr. Bill Holt: [Inaudible—Editor].

The Chairman: Yes, it is certainly an advancing mission of some kind. The waters are murky, as we say.

Thank you very much, panel. I appreciate your very interesting statements. I apologize to the others for being a bit late. Perhaps we could move into the next panel very quickly, please.

• 1545

[Translation]

Mrs. Debien: Order, please.

[English]

I'd like to welcome our next group of witnesses. I apologize for running late, but as you can see, it's always difficult to keep to the timetable when we have so many witnesses.

We're going to move back, members, into the more general subject of the WTO rather than the free trade area of the Americas. If the witnesses wish to address either one, they are more than welcome to do so.

I'm going to take you in the order in which you're on the list. I'd appreciate it if everybody could keep their introductory remarks to ten minutes, because that leaves more time for questions, and we really do like the opportunity to have some questions and answers with our witnesses.

I'll ask Mr. Alan Kaufman of the Canadian Courier Association to please start us off.

Mr. Alan Kaufman (Representative, Canadian Courier Association): Thank you, Mr. Chairman.

I am vice-president of legal and government affairs for United Parcel Service Canada, a company you might know as UPS. I'm representing the Canadian Courier Association this afternoon.

First of all, we very much appreciate the committee travelling outside of Ottawa as extensively as it is. It allows an organization like the courier association to present to you here today.

I understand you are primarily interested in issue identification, issues that might be placed by Canada on the negotiating table worldwide. Of interest today are the GATS 2000 negotiations coming up in the next year. In particular, we would like to urge the Canadian government to put the subject of express delivery service on the negotiating table at GATS 2000. This is a service issue, as you will recognize.

First of all, before I proceed, I probably need to explain to you what we mean by express delivery service. You'll know express delivery as package delivery—overnight, one- or two-day, and time-sensitive. For instance, you might have a package delivered—an envelope, say, or a contract—from Los Angeles up to Calgary.

The other type of express delivery that you may or may not be familiar with is the delivery of parts. I'm primarily referring here to goods that weigh less than 150 pounds.

To take a tangible Canadian example, Bombardier, a manufacturer known to all of us, might have exported a heavy product, such as a Sea-Doo, to the country of France. Bombardier then gets a request to deliver replacement parts to France. Let's say a steering wheel column is damaged, and they need one quickly because a customer over there wants to use his or her Sea-Doo for leisure activities and doesn't want to wait the two months for it to arrive by boat. They'll call UPS or FedEx for express delivery service, and ask for the part to be sent virtually overnight to France.

That's the kind of delivery I'm talking about when I say express delivery service under 150 pounds. It's not heavy cargo by any means.

• 1550

In our view, and in the view of the Canadian Courier Association, express delivery business really underpins the trade in goods that are not of heavy measure. After all, we can liberalize the trade in goods all we want across the world and think we've accomplished a great deal, but if we can't move those goods quickly for the companies that are relying on just-in-time delivery, we haven't accomplished all that much.

As I think you know, many companies are not maintaining large inventories of parts. They're relying on just-in-time express delivery service to get them their parts on a timely basis.

The barriers faced by the industry of express delivery, then, the barriers we want Canada to focus on in international negotiations under GATS, are as follows. First of all, we must be able to have landing rights. These goods are moving largely by air. Using my Bombardier example, if we're transporting those parts from Quebec to France, we have to be able to land in a major airport in Paris. We appreciate that there are physical limitations at airports, and that they can accommodate only so many aircraft, but if this subject of express delivery service is put on the agenda at GATS, you will have to address this issue of landing rights, of aircraft landing slots.

The next issue that comes up is with regard to customs rules and regulations, but I understand the issue of customs may not be on the GATS 2000 agenda. I therefore won't dwell upon it.

Next is the issue of ground handling. Once those parts arrive in say Paris, France, there are sometimes restrictions on the ground-handling ability of foreign companies that want to move the parts out of the Paris airport to a local municipality in France.

The next issue is the ability of an aircraft, having landed in Paris, to fly on to Lyon or Grenoble or another city in that country. Not all express couriers enjoy that particular privilege.

To rely on the example of a small package coming from Los Angeles up to Calgary, you might be surprised to know that even in that example, which we are most familiar with, if the aircraft that lands in Calgary wishes to go on to Edmonton, assuming it's an American aircraft that comes from Los Angeles to Calgary with an overnight package for a business in Calgary, it cannot fly on to Edmonton. It must unload all of its cargo in Calgary. It is an American aircraft, and it must then charter a Canadian-owned and -operated local aircraft to fly the package from Calgary to Edmonton.

The Chairman: Is that cabotage?

Mr. Alan Kaufman: That's a version of it, Mr. Chairman, that's right.

So these are some of the barriers that would have to be removed.

When we finally get a package into the country of destination, the foreign country, we sometimes find there are restrictions on the nationality of the person who may deliver it. So companies like UPS or FedEx, who have subsidiaries in these foreign countries, are not permitted to deliver because they're not local nationals of France or Thailand or where have you.

As you can see, if you put this issue of express delivery service on the agenda, you have to really come at it in all its various aspects. There are all these various barriers to free movement of goods that have an adverse impact on a business's ability to get these goods in a timely fashion.

I'll conclude with the thought that this subject of express delivery service is very important to small businesses and enterprises in Canada. These are the businesses that I know the Canadian government has encouraged to export, and export widely, to foreign countries. These small businesses would have a great deal of difficulty arranging on their own the transportation or the export of these goods to foreign countries, where, say, Canadians do not speak the language, are not familiar with the customs, or are not familiar with the airport landing rights. All they want is a company, an express delivery company, sometimes known as a courier company, who'll come to their door in Canada, pick up their package, and deliver it successfully in a foreign land.

This we can do. Our members can do this if only the barriers we face in performing express delivery service in these foreign countries could be removed on a worldwide basis.

Thank you.

The Chairman: Thank you very much, Mr. Koffman.

Next we have Stikeman Elliot. I believe Francine Matte is going to present.

Mr. Hunter, you're an old expert at parliamentary committees.

Ms. Francine Matte (Lawyer, Stikeman Elliot): He can answer all the questions.

The Chairman: You've decided to stay out of it, have you? You're very clever.

Ms. Matte.

Ms. Francine Matte: Thank you, Mr. Chairman.

I think everyone recognizes that there are quite a few challenges to be addressed—not so much challenges to competition law because of globalization but in fact vice-versa as well.

There is little disagreement amongst interested parties, including the private bar, the business community, that there is a necessity, and some urgency, for the promotion of competition policy, both nationally and globally.

• 1555

International competition policy does already exist, but arrangements are piecemeal and haphazard, and they have certainly proven to be insufficient to meet the scope of the challenges raised by the globalization of markets.

In summary, what we now have in place is insufficient. The way in which we address those challenges I think raises a whole bunch of questions, which we have highlighted in the paper we have presented.

First, who is to develop international competition policy? What is to be done, where is it to be done, how is it to be done, and when? What is Canada's role in all of this?

• 1600

[Translation]

Our objective isn't to find solutions to all the matters raised. We especially hope that this forum will allow us to think about the approach that the government should be taking during the next round of WTO negotiations.

[English]

The development of international competition policy depends on pre-existing national systems.

[Translation]

We shouldn't be surprised by the fact that most countries have different legislation, which can be due in part to political and social reasons as well as their history and their economic reality.

[English]

It is also legitimate and must be expected that nations, notwithstanding any ongoing practical cooperation between their authorities, will express significant differences of opinion as to the appropriate course of multilateral cooperation.

[Translation]

The proposals concerning an international policy framework that will be retained will greatly depend on the preference of the different countries.

[English]

So what is to be done? Emphasis among nations may vary.

The Chairman: That is the question, for sure.

Ms. Francine Matte: What is the proper scope of the term “competition policy”? Our paper reflects quite a bit on the distinction between competition and trade. You may think the priority should be looking at government restraints and distortions and how much competition policy is affected by that distortion. We may look, as a priority, to anti-competitive practices and how they might affect international trade. We may look at them both as sort of intertwining because they're so interdependent on one and other.

Likewise, emphasis among nations may vary greatly as to the national rules that should be co-ordinated. What exactly are we going to be looking at—substantive or procedural rules? We also have to recognize in the “what” that technical assistance is recognized as a precondition for many nations entering into international cooperation. For other nations it may be to deepen international cooperation that already exists.

There's certainly some kind of recognition by all, however, that there should be a collection of more systematic information on the frequency and impact of the various types of anti-competitive practices, readily available to all nations. That's sector by sector.

So there is this basis for agreement, and we're certainly not saying that nothing has been done. There have been successive efforts in different fora to arrive at some convergence or harmonization. Just to name a few, we can see what's happening at the OECD in terms of transnational mergers and hard-core cartel.

• 1605

Now, if we look at the “where” federal fora are offered to us, it could be existing or new international organizations, regional trading groups, or individual nations. But in looking at the comparative advantages of one forum over another, we must weigh the advantages of such a forum by looking at its membership, resources, character, and disciplinary concerns.

The WTO's primary disciplinary concern, the liberalization of international trade, stands out as both an advantage and a disadvantage, according to one's assessment of the fundamental compatibility of trade policy and competition policy. So if we are to look at the WTO, it should be in order to take advantage of the WTO's infrastructure and not its objective to promote international competition policy. In this way we will avoid potential conflict between trade policy and competition policy. So basically we see the WTO more as a facilitator than a driver.

How can that be achieved? Interested parties must find means that channel the contemporary concern about the challenges posed by the globalization of markets into a politically realistic initiative. We need to build on what has happened already; there's no point in starting from scratch. National governments can promote international competition policy through harmonization or conversion of laws. That can be done through agreements, codes, exchanges or dialogues.

There is also a bearing on the choice of a particular means that requires the choice of signatory. Will we have a plurilateral agreement or a multilateral agreement? In turn, nations can provide for a range of oversight of their arrangements from substantive review to monitoring.

When can this be done? Preferences as to the timing of the implementation of international competition policy will vary according to the circumstances, institutional endowments, expertise and resources of different nations. This appears to be true of developed nations as well as developing nations.

History suggests that cooperation in competition policy must develop over time. You must be very patient. It must be founded on mutuality of interest, trust, and purpose. It should be noted that only 80 out of 130 members in the WTO have competition laws now.

[Translation]

The way Canada played its role means that it can be seen as an honest broker. For quite a while now, at the international level, Canada has been recognized as knowing how to convince parties to arrive at a consensus. Moreover, it was the first country, over 100 years ago, to vote legislation on competition. Since then, it has signed many agreements with different countries to ensure co-operation, coordination and harmony amongst the different competition acts.

I will wind up by specifying that

[English]

Canada has considerable experience in competition matters. It is, I will repeat, the first nation in the world to have adopted an anti-trust statute. It has since entered into many cooperation agreements. There are some benefits for Canada from any advances in international competition policy, and it is imperative we do so out of necessity and urgency, as I stressed initially.

Thank you, Mr. Chairman.

• 1610

The Chairman: Thank you very much, Madam Matte. We'll get back to some questions on that later.

Next, from the Automotive Parts Manufacturers' Association, is Mr. Fedchun.

Mr. Gerry Fedchun (President, Automotive Parts Manufacturers' Association): Thank you for allowing me to be here today.

The Chairman: Thank you for coming.

Mr. Gerry Fedchun: The Automotive Parts Manufacturers' Association represents 90% of the manufacturers of automotive parts that go into new cars. Our industry has grown tremendously, more than doubling in size from 1991 at $12 billion, to last year at $27.5 billion in sales.

The free trade agreement and NAFTA have unequivocally and absolutely been of tremendous benefit to the automotive industry in Canada. In reference to someone who said they didn't see anyone who benefited, the automotive industry in Canada has benefited tremendously. Last year, Canada produced 2.5 million light vehicles and we only sold 1.4 million, so we produced an extra 1.1 million vehicles. That is by far Canada's leading export, and has been responsible for Canada having a net export trade balance with the United States.

In line with the dramatic increase in parts sales, vehicle sales have been relatively flat for that time period. The parts side has been able to obtain an increasing percentage of each vehicle. That is, the OEMs are outsourcing more and more of their production to the parts people, which tends to be Canadian-owned in Canada. That's because we can do it faster, cheaper, more competitively and at a higher quality than the OEMs are able to do themselves. That's because we're innovative and efficient and have the moxie and skills to make it happen.

That leads us to where we're going globally. As the OEMs continue to expand around the world, they are asking Canadian suppliers to grow with them. So an industry that was formerly basically Canadian-based is very rapidly globalizing. We globalize in many different ways. We globalize in straight exports, by forming strategic alliances with other companies, through joint ventures, transfers of technology, investments or any other business relationship business people can find. We also globalize by now producing for Japanese and European OEMs in North America, which we didn't do before. We now have firms that have various customer bases, while before we only had the old big three.

The global automotive industry itself has changed dramatically in the last few years. There are now the big seven—some say six—OEMs. They include DaimlerChrysler, Fiat, Ford, GM, Honda, Toyota, and Volkswagen. The others are either niche players in particular markets or niche players in particular kinds of vehicles, but they do not hold a candle to those big seven.

This leads us back to the auto parts people. As auto parts manufacturers, we now deal with companies all around the world. We deal with European-based companies, Japanese-based companies and North American-based companies. As an example, Magna, which is Canada's largest auto parts company, was formerly Chrysler's largest supplier and Mercedes' second-largest supplier. It's now DaimlerChrysler's largest supplier.

Ventra Group, a world leader in plastic and mechanical assemblies, has more sales to DaimlerChrysler, Volkswagen and BMW than to GM and Ford. Canadian companies have clearly established themselves as world-class traders.

I was on the Team Canada mission to China and the other one to South America. We recently came back from trade missions to the United States, Mexico, Brazil and Argentina. We're going to Poland next month. We'll be going to Germany and Austria in September, Japan in October, and probably Brazil and Argentina again in November. We are very active world traders as an organization, which really leads me to why I'm here.

On our recommendations for Canada's position at WTO and FTAA, we really don't differentiate between the two as a method of creating freer trade in the world. What we want the committee to consider is we have found over the years now that the non-tariff barriers are becoming more important than the tariff barriers. Quota systems, duty remission plans, bureaucratic entanglements, immigration and treaty restrictions and transportation bottlenecks can do more to deter increased trade.

One advantage of a customs duty is it's a known quantity, a certain percentage. But what's the cost if a delivery takes an extra week or two, or a month? You don't know. That creates uncertainty and a business risk that may not be acceptable.

• 1615

We have some specific recommendations in terms of the next round of negotiations. The first one is to avoid quota systems. If they are allowed for “emergency situations,” the mere existence of that emergency must be appealable in an expeditious manner to an independent international tribunal so it cannot be used as another way of a non-tariff barrier.

We believe duty remissions should be abolished and not allowed. I know Canada itself used it. I was very active in the auto industry in duty remissions before the Auto Pact came in back in the early 1960s, but we went away from them because in effect they're self-defeating. They stand in the way of increasing productivity, which is the real driver to higher standards of living.

Third, bureaucratic procedures must be streamlined, delays appealable, and remedies have teeth. Frankly, the bureaucracies in many third world countries use delay as an excuse for extortion. It often works, because they know they can get away with it. Simple import-export policy and computerized procedures should be built into any treaties. There's no reason there cannot be a universal computerized customs form that's generated only once, whatever the country of origin, electronically transmitted with the goods until it completes its journey around the globe.

Fourth, on immigration and entry restrictions, if a new facility or investment is set up in another jurisdiction, how is that facility to be managed or equipment serviced without experienced managers and service personnel who can enter and leave easily? Hand in hand with free trade and goods must come free trade in services, with unrestricted right of entry for short periods of time, mild limitations for periods of minimum length, and then normal restrictions for longer periods. The present NAFTA rules, liberally applied, would be a good starting point.

Finally, on transportation bottlenecks, from a treaty point of view I'm not talking about physical infrastructure, but unnecessary regulations are legal impediments to efficient transportation of goods, which in fact has just been presented very well by the Canadian Courier Association. There's no need for permits to transfer a container off a dock or from rail to truck. Regulations related to safe transport of goods should be clear and not capriciously enforced.

In summary, the Automotive Parts Manufacturers' Association urges the government to pay more attention to non-tariff barriers than to tariff barriers. It's very important that if there are violations of either, the violations must be expeditiously appealable and the remedies easily enforceable. If all of this can be achieved, trade will flourish and the world will be a more prosperous place.

Thank you.

The Acting Chair (Ms. Jean Augustine (Etobicoke—Lakeshore, Lib.)): Thank you, Mr. Fedchun.

Our next presenter is from the Mining Association of Canada, Mr. Gordon Peeling.

Mr. Gordon Peeling (President and Chief Executive Officer, Mining Association of Canada): Thank you, Madam Chair. It's a pleasure for me to be here with you representing the Mining Association of Canada.

I'm joined by a number of my colleagues today: Mr. Ted Yates, chairman of our trade committee, along with Mr. Douglas Brown and Mr. William Deeks, of the committee as well. Mr. Deeks has had long experience in the BIAC raw materials committee and is chair of that organization and an adviser to the OECD. Mr. David Bumstead is with us as well.

We are an industry that is competitive internationally. We are global leaders, and we are committed to taking the highest standards in the environment and health and safety with us wherever we operate. I want to touch quickly on a couple of numbers. I'll keep my remarks short. You have the paper, but I do want to leave time for questions from panellists.

In terms of production, we account for 3.8% of the nation's gross domestic product, and we produce over 60 mineral commodities. Eighty percent of everything we produce is exported out of the country, with a value of $44.4 billion in 1997. That number will be down from that in 1998 due to weaker economic conditions.

• 1620

We account for 15% of domestic exports and 26% of the net trade surplus in the current account.

The Canadian industry represents over 56% of annual rail freight revenue and 61% of port volume. For every billion dollars of mineral output, $615 million in purchases goes to Canadian goods and services. Over 600 domestic consulting services, mining, machinery, equipment companies, and engineering companies derive in excess of 30% of their revenues from servicing the Canadian industry, and 50% of that activity is abroad, following the investment of our industry abroad.

Trade and access to markets is a vitally important component of our performance. We are committed to a liberalized trading system as a mechanism for fostering economic growth, job creation, and raising living standards in all parts of the world. The mining industry believes the federal government should take advantage of this opportunity to encourage member governments of the World Trade Organization to meet their commitments of the last trading round—that is, the Uruguay Round. Also, it has an opportunity to set the stage for the next round.

Keeping markets open and transparent while keeping the WTO's rules up to date to reflect the changing global requirements of international trade will advance multilateral commitments to liberalize trade and investment and restore confidence and growth in the world economy.

Let me turn to tariff barriers. For the mining industry and the metals business, this is still an important area of concern to us. The Uruguay Round itself led to a tariff reduction package that lowered duties by roughly 40% on average, with an estimated gain in global annual income from tariff negotiations in the order of $235 billion by the year 2005. The OECD estimates that the gains for Canada could be in the order of $6 billion annually by the year 2002, even after considering free trade with the United States.

We still face, as an industry, a significant tariff on aluminum going into the European Union and significant tariffs on copper, zinc, and lead entering Japan, but I offer those only as examples.

We would like to see a continued or an ongoing commitment for a zero-for-zero negotiation in the next round and for continued commitment of members to live up to their obligations to reduce those tariffs from the last round. We also believe that should new members accede to the World Trade Organization, their period of adjustments and their bound rates on entry should be very carefully considered and have a timeframe that allows orderly adjustment but does not duplicate the situation we saw in Japan over the last 40 years. You will find remarks about Japan on the last page of our document. I won't repeat them here, but we can discuss those later if we so need.

MAC, the mining industry—

The Chairman: I'm sorry to interrupt, Mr. Peeling, but I have an awful suspicion that you're not going to get to the last page in the ten minutes.

Mr. Gordon Peeling: No, I'm not.

The Chairman: But we'll quickly look at that.

Mr. Gordon Peeling: Let me turn to non-tariff barriers. In agreement with an earlier comment, that is where see a growing area of difficulty and frustration for the industry.

We believe the WTO agreement on technical barriers to trade allows countries to adopt internationally agreed technical regulations and standards-related measures in a manner that does not impede market access, but this does need to be improved and expanded. We have certain areas with respect to the use of metals, and health and safety features, labelling, process and production methods, that are of growing concern to us in the non-tariff-barrier area.

I do want to mention the agreement on sanitary and phytosanitary measures under the WTO, because this is an area that tries to address the issue of the precautionary principle and it's one that is starting to affect us with respect to metals. We do not have a definition of “precautionary principle” at the moment, and I think we need it. I'm suggesting we follow the example of the sanitary and phytosanitary Agreement within the WTO and give it broader application.

• 1625

I think dispute settlement is one of the areas in which we made real progress in the last round. The simple fact that there have been 160 requests for consultation received by the dispute settlement body since the creation of the WTO speaks both to the lack of satisfaction with the previous structure and the degree to which real problems exist. We encourage the consolidation of the rules-based multilateral trading system and authority of the WTO in settling trade disputes.

Canada should encourage all WTO member governments to comply with the decisions of the dispute settlement body and avoid unilateral actions against trading partners and measures involving the extraterritorial or discriminatory application of national laws.

With regard to regional agreements, we see those as stepping stones to further liberalization within the multilateral trading system. Our preference, of course, would be for a single set of trade rules that are consistently applied at the level of the WTO, but we do recognize the regional benefits from agreements such as NAFTA and—if we see it materialize—the free trade agreement of the Americas. APEC has a commitment. We also have MECOSUR, etc.

In regard to trade and investment, again, we note the failure of the multilateral agreement on investment, but we still feel that there are benefits to be gained out of having strengthened rules for international investment, whereby those rules are known and consistently applied, policies are transparent, and disputes are settled through agreed procedures. Negotiating on a bilateral basis may serve our interests from time to time, but we do not know the degree to which other competitors are gaining advantages or not in those situations.

We believe there is a proven economic win-win with regard to increased trade and investment. That does not mean lowering health, environmental, human rights or labour standards. We think the very opposite can be the result of improved circumstances for investment and trade.

Today many nations have generally high standards of labour and environmental regulations, and the experience of our industry with respect to the “race to the bottom” has little substantive meaning. Countries do not compete by scaling back their labour and environmental standards. In fact, the very opposite is happening. We're taking our standards with us wherever we operate, and we are working with the Canadian government to help improve environmental performance and health and safety standards in the other jurisdictions we operate in.

With regard to trade and the environment, an area of continuing controversy and work within the World Trade Organization, we view the provisions of article 20, which allow for governments to take action with respect to protecting health and environment, to be largely adequate.

We do believe that the mining industry, as I say, is committed to the highest environmental standards, but we also believe that some additional rigour is required in the negotiation of multilateral environmental agreements with respect to the use of any trade provisions. They should, as a matter of course, be the least trade restrictive and they should have the involvement of the trade community.

Those agreements should have their own dispute settlement mechanisms, so that we do not muddy the waters as to who should be the arbiter in any dispute with respect to those provisions, and that we not have multilateral agreements turn to the WTO, which may not have the best expertise to solve those problems.

So there is much yet to be done and there are many areas on which there are a wide range of views. We certainly appreciate the committee giving us the opportunity to have our views heard, and we've enjoyed the opportunity of listening to a wide variety of views this afternoon in front of you.

I just want to conclude by saying that the Canadian mining industry is globally competitive. It is more than just mining today. It means mining, machinery, equipment, services, engineering, suppliers, and financing. Toronto is now the world centre of mine financing. We depend on our competitiveness to have access to world markets, and we encourage the Canadian government to continue to work to liberalize trade.

Thank you.

• 1630

The Chairman: Thank you very much, Mr. Peeling.

There was a representative of your association in my office the other day. She told me that Toronto Centre—Rosedale has more mining companies in it than any other riding in Canada. Some 300 head offices are there. So if all politics are local, somebody is making a point somewhere.

Mr. Gordon Peeling: You've heard a lot of that today. It's very local in Toronto. In fact, we now call Toronto the largest mining town in the world.

The Chairman: You made that point very forcefully to me.

That's the end of the presentations, because Mr. Plumptre, who was on the list, will be joining us in London, Ontario instead.

Mr. Obhrai, do you have a question?

• 1635

Mr. Deepak Obhrai: Thank you, Mr. Chairman.

Thank you, ladies and gentlemen, for your presentations. There was an interesting presentation in reference to the request for competition. This is probably my seventh or eighth hearing. We have heard from all kinds of groups. I've had personal experience with this. We've heard a lot about multinational corporations, and many of you are multinational corporations.

In reference to the involvement of civil society, labour laws, and environmental laws, I see that the mining industry has stated in one of the briefs that this seems to be of value as well. I'm just curious. I just want to know your point of view. We have heard this point of view for the whole morning. Now I want to hear your point of view.

What would you say to the involvement of the civil society, that it's going to be looking after the human rights and the environmental aspects of this? You have alluded to that. But what I've heard this morning is that many of the groups do not take your commitment seriously. So we have to take that into account. I just want your view.

But before you argue this, I want to dwell on a point on the same issue where these groups have made a point. In your submission you mentioned immigration and unfair restrictions. I know what you're saying. I saw that impact when I was overseas. But one would argue against that—and maybe you can say your point of view—that it would also be your responsibility as a corporate citizen to ensure that there is locally trained expertise available. At this given time, in many of the places that is not available. But as a corporate citizen, you could do that.

I'll give you the floor in a second so that I don't have to repeat the question.

The final point is on competition. It's a good point. I like that. There was something here you said, and maybe you can elaborate if you have time, about taking advantage of the WTO's infrastructure and not its objectives. Perhaps you would want to elaborate a bit on this competition point.

The Chairman: We should go in the order of the questions you asked. I think the first one was addressed to you, Mr. Peeling, and then Mr. Fedchun and Madam Matte.

Mr. Gordon Peeling: With regard to working with civil society, this industry is now involved with the International Development Research Centre in working on a mining policy initiative throughout Latin America and the Caribbean with regard to working hand in hand with civil society groups in that area, both environmental and of a social nature, to look at the relationship of the mining industry with regard to communities, impacts, and benefits. Although it doesn't use the same model because models don't necessarily transfer from society to society, it follows somewhat the impact benefit agreements that are part of the environmental assessment process in aboriginal communities, for example, when Canadian companies are operating in the remote north.

• 1640

As well, the industry is involved with other organizations, such as the International Council on Metals and the Environment, which has stewardship provisions and community responsibility commitments.

In working with the Canadian government on the free trade agreement with Chile, for example, we also are involved with labour discussions as a sidebar to that agreement, as well as the environmental agreement that goes with that agreement with Chile. So the Canadian industry is working with our colleagues in Chile in terms of improving performance on both the environmental and health and safety sides.

That's one of the benefits that goes with foreign direct investment. There's the transfer of management skills, technology, and knowledge to bring about improvement in these areas. Last week I was in Peru where over the last 28 years there have been 100 fatalities a year in the mining industry, which is something that would be totally unacceptable in Canadian operations. They are very keen to understand how we manage our health and safety and how they can learn from us and adapt those health and safety practices to their own operations in order to improve their performance. I think that's a benefit that can go with liberalized trade, because we do see a transfer of skills, knowledge, experience, and expertise.

Thank you.

The Chairman: Thank you very much.

Mr. Fedchun.

Mr. Gerry Fedchun: In terms of the immigration and residency restrictions, what we're referring to is that when you have a new investment in a location, at that point in time there probably is not someone locally who's available to do that, so you have to import your management talent to do the set-up and get it running. If you have sophisticated machinery, you probably have to import people from Canada to service that machinery because there wouldn't be anyone available to do that locally. That will go on for a relatively short period of time. It's measured probably in a few years. That's recognized in the NAFTA agreement, where you can bring in executives for three years and then renew that for a maximum of seven. If they haven't qualified for landed immigrant status at the end of the seven years, then they have to go home.

It's that similar type of thing where you set it up and train the local people in the technology and the management skills, and then the people from Canada probably wouldn't be there any more, unless they decided, gee, I like this place and I'm going to emigrate and qualify to be a citizen of the country. That certainly happens here and it happens there. But there's this idea of having this transition to the point that it could be run with local people. That works fairly well under NAFTA. That kind of regulation really needs to be built in so that you don't end up making an investment and finding that you can't properly manage your services over the short term.

The Chairman: Thank you.

Lawson Hunter.

Mr. Lawson Hunter (Associate, Stikeman, Elliot): I think what we're saying when we suggest that the WTO is an appropriate mechanism from an infrastructure point of view and maybe not from its objectives' point of view is that, in our view, there is a need for some multilateralization of competition policy, and I think we need to get more governments around the world engaged in an understanding that there is an issue here. The OECD, as Francine said, has been quite actively involved in that. In fact, the UN and UNCTAD in the seventies attempted some discussion as well. But I think it's important that governments get more involved in this exercise, and the WTO obviously is an appropriate forum to start that work.

I think a very important education role is involved here. One of the problems we in Canada have had with competition policy over the decades has been the fact that competition means too many different things to too many different people, and until we get a more common understanding of just precisely what is it we're talking about in competition policy, then we're clearly not going to achieve any sound objective.

• 1645

I have also heard, and I know the committee has heard, from others about whether the objectives of trade policy and the objectives of competition policy are consistent. At their highest level they clearly are, in the sense that both of them would be in favour of trade liberalization and the opening up of markets and reliance on markets, although I'm not sure that every member of the WTO would be a free market economy. So at the macro level they are, but I think the reality is that trade ministries and competition authorities do not act the same way today.

Let me give you some examples.

I think historically, at least in Canada and some other developed countries, competition policy has been seen more as a law enforcement function and less as a politically driven policy. I think that has been less true of trade policy, and I suspect that is still true in many parts of the world, that trade policy would be seen as a more political activity.

I think competition policy, by nature, is a medium- to long-term policy and objective. It is not attempting to fix inflation tomorrow. It is not attempting to protect domestic industry tomorrow. It is attempting to set the general rule so that in the medium to long term we maximize consumer welfare and the efficient allocation of resources.

I think trade policy tends to have more of a short-term objective and I think a lot of trade ministries tend to apply the law in a more short-term measure, so although at the macro level the objectives are the same, I'm not sure we have an understanding about how these links are going to be made. I think that's why we're saying the first step should be to start down the path of getting governments engaged in this discussion, use the WTO as the infrastructure and the means of doing that, but let's wait until we are sure we really do have common objectives before we sign on to some multilateral obligations.

The Chairman: Thank you very much, Mr. Peeling.

Madam Debien.

[Translation]

Mrs. Maud Debien: My question is meant for Mr. Peeling from the mining industry.

Within the context of our work, and sometimes during previous committees, we have heard commercial corporate organizations and some NGOs severely criticize the work done by mining corporations, especially in developing countries.

We know that our Canadian mining industry is very active in exploiting and exploring mining opportunities in developing countries, more particularly in Africa and in Latin America. We've often been told of practices whose consequences are awful for the environment, workers' rights and working conditions.

Has the mining industry given itself a code of ethics concerning ethical commercial practices abroad? In your opinion, should the upcoming WTO negotiations look at environmental matters, working conditions and a respect for human rights?

[English]

Mr. Gordon Peeling: Thank you, Madam Debien.

With respect to the investment abroad by the Canadian mining industry—and the Canadian mining industry is indeed very active in investing abroad—as I mentioned earlier, we take our best practices with us. The Mining Association of Canada was the first national mining association to have an environmental policy, the first line of which says that our members are committed to sustainable development.

In the mid-1990s, we extended that policy to include an environmental management framework to allow members to put that environmental policy within an overall management system for the management of environment within the member companies. Those policies apply both to operations in Canada and abroad, wherever Canadian members operate.

• 1650

As a result of two accidents abroad, we have recently developed a new guide to the management of tailings facilities. You'll recall there was the problem with the mine in Guyana and we had the Marcopper situation in the Philippines. As a result of the first event, the industry developed and set forth a two-year task force of 19 experts from the industry and the engineering side. We examined the engineering capabilities of the industry and looked at the Canadian Dam Association engineering standards and the International Commission on Large Dams standards. The conclusion is that the engineering standards were fine but we needed consistency of management.

I'm only telling you this background because we have now put forward that guide as part of our environmental policy so that it applies at all of our new member operations both in Canada and abroad. We have published this guide in English, French and Spanish and we have made it available to the industry worldwide, not just for Canadian companies. We felt this was a service we should offer the whole industry, because those are not the only examples of accidents, unfortunately, with tailings facilities. We felt this was a contribution we could make to improving performance of the industry around the world. We have continued to work with any interested parties and other governments and other industries to get that message out.

With respect to your question on labour standards, environmental standards, human rights issues with respect to the next round, it's our belief that the best organization to deal with the issue of labour standards and the normative practices in that area is the International Labour Organisation. Nonetheless, the World Trade Organization has taken certain decisions, or GATT, its predecessor, has taken certain decisions with respect to child labour and prison labour, for example, with which we're fully in accord. Indeed, there may be room for improvement in that area, but we would really look for the International Labour Organisation, where the expertise resides, to take the lead in this issue, just as we look to the United Nations environmental program and the United Nations Commission on Sustainable Development to take the lead in setting these standards among foreign environmental practices.

There is a trade and environment interface and we look to the work of the trade and environment committee to come forward with a set of recommendations as to how this interface should work between trade and multilateral environmental agreements. But we are not in favour of discriminatory practices if there are other mechanisms for achieving the same environmental outcome. We look to them as a mechanism of last resort and they should be a mechanism of last resort.

I'll stop there.

The Chairman: Thank you very much.

[Translation]

Mrs. Maud Debien: The environment committee has not met in twenty years.

[English]

A voice: I think Jerry has a short question.

The Chairman: Mr. Pickard.

Mr. Jerry Pickard: Gentlemen, there has been testimony that large corporate interests are advancing their positions very strongly. The trade agreements are becoming very, very technical, a lawyer's dream in fact, and democracy is losing out. Countries' interests are being diminished, in particular Canada's, in certain areas where the country is being challenged on its right to sovereignty in many areas. How do you respond to the kinds of suggestions that Canada's independence is losing out to large corporate interests and that our ability to work within frameworks is being diminished by our trade agreements?

Mr. Gerry Fedchun: Let me take that one.

Any treaty limits sovereignty. Any treaty you ever sign as a nation limits your sovereignty. The whole point is that you give something up and you get something in return, and the whole idea is that at the end of the day, if you're a good negotiator, you get a little more than you gave up.

• 1655

We gave up a lot in free trade, but we gained way more than we ever gave up. You can tell, because our imports from the United States are much smaller than our exports. We've doubled our exports. We haven't doubled our imports.

That's one of the things that happen with free trade; you end up giving up some sovereignty. But the other side gives up sovereignty. So it's a zero-sum game at the end of the day. But at the end of the day, is your country more prosperous and do you have a method of resolving disputes that's fair and equitable to all the parties so that you can come to a deal and say it was fair? I think that's where you really end up.

Mr. Jerry Pickard: There's a second question I might ask, and I think a response to the second area too. Free trade or our trade agreements have created jobs, but many of those jobs turn out to be lower paying and the general labour force in Canada in fact is not better off than it was before the agreement. How do you respond to that?

Mr. Gerry Fedchun: My industry is one of the best-paying industries in the country. Our employment has gone up about 30% to 40% over the 1990s. If they want a good paying job, what do people think of? I think it is the automotive industry, and that is a reality. Those are excellent jobs. The proof is that we have created that large number....

Our biggest problem right now is that we can't get enough skilled trades. That's another question I've raised with the federal government, the shortage of good skilled people in our system when we have a high rate of youth unemployment, 16% or 17%. At the same time, we can't hire enough skilled trades. These people should be our source, and our educational system, I don't think.... Well, that's for another committee.

Mr. Jerry Pickard: I'm not sure it is. Maybe I could come back with that as well. I think that is important. Is it not industry's role as well as government's, as well as educational institutions', in combination to bring the skills and technology together and universities together so that you do have the proper labour force? How would you respond to making certain that countries like Canada have in place expertise to help train people and move that educational side forward so that we can have the competitive people we need to work in your industry as well?

Mr. Gerry Fedchun: We are putting our part in. In our industry we hired a human resources development director to work with more cooperation between business and education. We have a committee, the same thing, in which we have representatives from the colleges and universities and business working together to create more cooperative ventures. What we're trying to do is get the students out into the industry earlier on. We're also taking the teachers out into industry so they understand what the industry is about, so they can come back to the classroom and say “These are great careers, careers that you'd like.”

We've just put out a video on careers in the automotive industry. We're right in the midst of doing a CD-ROM, into which we put $50,000 and the Ontario government put $50,000, demonstrating the skilled trades and the careers that are available in the industry. So we're working very hard at filling the gap on the skilled trades and the technical side. We're putting our money and our people where our mouth is.

Mr. Jerry Pickard: Thank you.

The Chairman: Mr. Deeks, I think you wanted to add something to that.

Mr. William Deeks (Chairman, Mining Association of Canada): Thank you. I'm Bill Deeks. Amongst other things, I'm a former chairman of the business industry advisory committee to the OECD. I'm here with the Mining Association group.

I would like to pick up on your first query, the suggestion that only low-wage jobs are created through the trade globalization commitments of Canada. I think you'll find, if you look at the statistics, that 80% of the jobs created in Canada over roughly the last 10 years have been, in effect, in high-wage, high-technology sectors of the economy, often through the formation and ability of smaller businesses to grow because of the opportunities made from free trade.

• 1700

I don't know whether you have ever worked for McDonald's, but often the idea of low-wage jobs is that they are hamburger-flipping jobs at McDonald's. McDonald's offers a superb training program for individuals, which allows them, if they move on from McDonald's, to operate their own business. I have a daughter who did just that.

So I disagree with the concept that McDonald's offers low-wage hamburger-flipping jobs as the only benefit that one gains from working for an organization like that. I think our world, to pick up the idea that you have to give something up to gain something better, in effect is evolving with benefit for all. If I go back to the time before trade liberalization, I could tell you that as an executive with Noranda I spent at least one of every two years fighting to preserve our market access to global markets. And we don't have to do that any more.

So there has been a lot of benefit through the process. When there are problems we have to focus on them and find solutions, and we have a much better ability today to settle disputes in a proper, let's say, judicially fair manner in comparison to unilateral political action taken by governments 15 or 20 years ago. That doesn't mean there won't continue to be problems, but at least we can see them when they occur, and we have an ability to negotiate.

Thank you.

Mr. Jerry Pickard: Thank you.

The Chairman: Ms. Augustine.

Ms. Jean Augustine: I have two short questions. Hopefully the answers will be short. We've been hearing the word “transparency” throughout the day and from several witnesses. I'm going to ask you, Mr. Peeling, when you refer to keeping markets open and transparent, what is your definition of transparency in terms of that discussion?

Mr. Gordon Peeling: Transparency in those terms refers to the availability of information and data with respect to regulations and customs procedures, or we may want data on, for example, the demand for the copper tube plumbing market in Europe, etc. It may be as simple as that. But it more generally relates to regulations on labelling, handling, material safety data sheets, how one complies with regulations, that sort of transparency that allows for ease of market access.

Ms. Jean Augustine: My second question—-and again I want to begin by saying I was surprised to find out, Ms. Matte, that 80 out of 130 countries have competition laws—is how then do we operate at present in terms of mergers and what we see happening on the international scene if only 80 of those countries have competition laws?

Ms. Francine Matte: Maybe Randall can supplement that. I can't tell you over time what the history or the background of these 80 countries was. I know it started a hundred years ago, and gradually developing countries are listening, or are being made aware or being sensitized, to anti-competitive behaviour. In terms of the merger front, there are two facets to merger review. One involves the pre-notification of some mergers that may need certain ceilings, and others may deal with anti-competitive behaviour as well.

So I'm not sure what your question refers to. We're obviously looking at concentration. We're obviously looking at mergers or transactions that would substantially prevent or substantially affect competition, and certainly when we look at the big mergers those countries involved right now all have a competition law.

Ms. Jean Augustine: So the ones without would be the smaller countries?

• 1705

Ms. Francine Matte: Yes, the smaller countries.

Ms. Jean Augustine: Does that have any relationship whatsoever with the different legal systems and codes? No?

Mr. Lawson Hunter: Let me try to answer that too.

As for the timing of this, I think there has been an absolute explosion in the passage of competition laws in the last decade. When I was the director, now commissioner, of the Competition Act for Canada and was going to the OECD in the early eighties, the only countries, even in the OECD at that time, that had serious competition laws were the Germans, the Americans, the European Community—-and Canada was sort of a little bit behind them—and the Australians. France, Italy and Switzerland didn't have laws. Even those countries didn't have laws.

Since the mid-eighties we've seen an absolute explosion. And with the falling of the Iron Curtain and the opening up of those market economies in eastern Europe, they've all passed laws. The South Americans are passing laws. It's a growth industry and it's wonderful for competition lawyers.

But they are at very varying degrees of sophistication, because it is very new for a lot of these people. Institutionally they don't have the same traditions. There's a real split. If you think about the world's legal system, we have common law jurisdictions, of which there are very few, basically the British Empire and the United States, and civilian jurisdictions everywhere else in the world. And the way in which civilian and common law jurisdictions think about anti-trust law is very different as well.

• 1710

On the merger front, although there are 80 that have competition laws, I suspect that if half of those have any notion of a merger review, that's probably a lot, and even of those 40 a lot of them are pretty unsophisticated. Again, it's a wonderful time for lawyers in the merger review business. I do a lot of transnational mergers; I've been involved in, to give you an example, the Guinness-Grand Met liquor merger, which had to be notified to over 100 countries around the world.

So it's great for lawyers, but I'm not sure how good it is for business. I think that's part of our concern. We've seen a proliferation, but it's very early in terms of the sophistication of most countries. I think also, as you say, the ones that don't have it would be largely the less developed countries.

Ms. Jean Augustine: Thank you.

The Chairman: I'm sorry, Mr. Hunter, about your emphasis on the role of lawyers. We heard Dr. Ostry saying this morning that the lawyers have taken over the WTO and now you're telling us they're taking over the merger business. There are a couple of lawyers on this committee and we're starting to feel more and more nervous. All the other members are hating us more and more, and you've just added fuel to the fire. I'm not grateful to you for that.

Mr. Bill Blaikie: We're not quoting Shakespeare.

The Chairman: No, I know. Mr. Blaikie is definitely of the Shakespearian view that the sooner they hang all the lawyers the better.

I'd like to quickly wrap up with a couple of questions, starting with you, Mr. Hunter. We had Mr. von Finckenstein, your successor, before the committee last week or the week before. Some of us asked him at that time about the relationship between competition law and anti-dumping duty, because some of us were in Singapore at the meeting before the Geneva one of the WTO where this competition law idea was floated. A lot of the developing countries thought that really what we were talking about was market access and how do we constrain the Americans on the anti-dump. The Americans were thinking about how they constrain everybody else in terms of mergers. So it was a dialogue de sourds-muets.

Mr. von Finckenstein made it very clear that he did not believe there should be a linkage between these two, that in fact we should keep them separate. Do you have any views on that, or do you believe there is a linkage or that we should make any recommendation in respect to that?

Mr. Lawson Hunter: There are different ways of coming at that question. I think philosophically, if one truly has a free trade environment, then anti-dumping laws, in my view, don't make much economic sense. I think back at the time of the negotiation of the Canada-U.S. Free Trade Agreement Canada's position was that they should be eliminated in the free trade zone and the Americans categorically refused to go along with that.

Then I think you move into the world of realpolitik. As for the Americans, I gather there is no way they are going to give up on their sacred anti-dumping laws. If that's the case, then it's a nice thought, but I'm not sure how practical it is and I think that it is in Canada's policy arsenal a useful thing as long as the Americans take that attitude. As to whether in the fullness of time that makes much sense I would have some doubts, but today I think it's a debate that's not going to lead to very useful results.

• 1715

The Chairman: Thank you very much.

Mr. Peeling, I have one quick question. You mentioned a couple of mining spills that were high profile. There was one in Kurdistan that got a lot of attention. Is that the type of thing the association follows and sees what it can do to try to upgrade standards and deal with it? How much of a role are you able to take with your member companies when something like that happens?

Mr. Gordon Peeling: We obviously don't get involved in individual corporate activities. That was in a different category of accidents as opposed to the tailings spills we had where we developed a specific guide for tailings facilities. But as a result of that spill we did meet with government officials to discuss how government and the industry collectively should react to those sorts of accidents.

In this case it was a cyanide spill in a river that had the potential to affect drinking water conditions at a local town. They did the right thing in bringing the World Health Organization, the Canadian Department of Health officials, and the Canada Centre for Mineral and Energy Technology people there. That's really our role in that. If we saw more than one accident, then we might feel that the corporation should look at their accident management procedures, crisis management procedures, and then try to see if there is a corporate gap there that we could help them fill by developing industry-wide standards. That was a specific incident, which hopefully will be the only one.

The Chairman: So this a form of, to some extent, transfer of technology by the industry association to other countries. Do you see that coming one day under one of the gas codes, or is this a parallel thing?

Mr. Gordon Peeling: I'm not sure that we'll see this sort of situation under the GATT codes. Where we did work with the government was in response to accidents, in terms of how should we respond both as a country and as an industry to accidents. What sort of expertise should be supplied? Did we have the right range of expertise, and could we identify it within Canada and quickly respond? That's where we see a corporate or an association response. Where we also see an association response is, as I say, to work with our own members to improve their internal operating standards from time to time, and that's why we have an environmental policy and why we've developed this tailings facility guide. We will continue to examine those opportunities as they arise and hopefully we'll get ahead of the game and not simply be responding to accidents.

The Chairman: Mr. Deeks wants to add something.

Mr. William Deeks: I thought I'd add that within industry, and particularly international industry, there's an increasing effort to reach what are known as the International Standards Organization standards of operation, management standards, ISO 9002, environmental standards, 14001. Those standards address every aspect of a company's ability to receive raw materials, produce things from them, and ship them to market. What we should be encouraging is an increasing participation in those standards by everyone operating not only domestically but internationally.

The accident in Kurdistan was a transportation accident. It was probably a faulty truck. We have three and a half faulty truck accidents in this city within 5 kilometres of Highways 400 and 401 every week involving chemicals. So this is an issue that has to be addressed from the bottom up, and we have to take responsibility as companies for the trucks we put things in when we're delivering them to a site.

The Chairman: Thank you very much.

I think we'll have to end this panel now, because it's 4 o'clock and we have our next group waiting.

We appreciate very much your coming to give us the benefit of your expertise. You'll all be getting copies of the report and you know that you can send us anything if you have any additional information you would like to provide the committee with. Thank you very much.

I wonder if I could ask the people at the back of the room who are members of our next panel if they'd be good enough to come and take their place at the table up here. If you have your name card, just come and bring it, and we'll know who you are.

• 1720

We would very much like to thank the next four panellists for coming and joining us as individuals.

I wonder if I could recommend that you keep your introductory statements to ten minutes in length. That way, we'll have more time for questions. We like to have about twenty minutes at the end to ask questions; that's usually the most rewarding part of the experience.

We'll start with Shirley Farlinger. I think it's Dr. Farlinger now, isn't it? Didn't you get an honorary degree, Ms. Farlinger?

Ms. Shirley Farlinger (Individual Presentation): I'd love to have that, but I can't claim it.

The Chairman: Well, you deserve it.

Ms. Farlinger and I were political opponents on one occasion.

Ms. Shirley Farlinger: That's right.

The Chairman: We sat beside one another at all-candidates meetings, not across the table like this.

Welcome to the committee.

Ms. Shirley Farlinger: Thank you very much, and thank you for holding these hearings across the country. I do appreciate it.

Noting the five principles you mentioned in your material, which were adopted in April 1998, I will address the nine negotiating categories established.

First is market access. The FTAA is intended to gain greater market access for Canadian and global multinational corporations and this is being done through the removal of tariffs and non-tariff barriers and the globalization of capital.

The experience of Mexico can give us a lesson on furthering the process throughout Central and South America. In 1995, the financial system in Mexico collapsed, requiring a massive influx of capital—$50 billion U.S.—from taxpayers. This is termed a bailout for speculators.

Since then, the political climate in Mexico has not improved. The indigenous people of Chiapas rose up in revolt. The effect this has on market access is to promote a backlash against foreign investment and to produce a workforce too poor to purchase Canadian goods.

Even now, in Nicaragua, banks are under siege. In Brazil, thousands of landless people are occupying empty lands. There were riots two days ago in Jamaica. In Colombia, death squads proliferate. These effects of globalization cannot be ignored.

One way of encouraging market access has been the privatization of state institutions. This is said to bring greater efficiency. In many cases, what has been built by taxpayers is being sold off to private interests for a fraction of the value. In Canada, we see tax money ending up in the pockets of private companies entering private-public agreements in such areas as health care—and I think this will be dealt with better by someone else in the group.

Second is investment. The privatization of national industries seems like a win for Canada's multinationals; they can invest in them at low prices. However, investing in developing countries has proved risky. Investment has shifted dramatically from developing countries in Asia to the United States as unrest in nations such as Indonesia has overthrown presidents.

Investors must be willing to pay local taxes, support microcredit organizations, agree to local currencies, and encourage alternate economies where this is the only support for poor and marginalized people. Investment must avoid megaprojects that displace people, ruin the environment, increase the gap between rich and poor, or increase unemployment in the country as a whole. Investment must conform to national rules on capital and to exchange controls. It should respect national constitutions, not change them, as was done in Brazil, and investment should not obligate countries beyond their ability to pay.

Next are the services. The provision of services to other countries must be with the consent of the countries involved. Any country should have the right to resist the technology revolution and foreign interference and to accept only those services that are appropriate for the people, the culture, and the environment. The tidal waves of the Internet and global entertainment are drowning local languages, cultures, and economies.

• 1725

Number four is government procurement. Again, the local government is the one to decide when and how to procure the goods and services it needs. It is the right of any government to use the purchasing power of the state to foster local industries and employment. Chapter 11 of the free trade agreement, making it possible for global multinational corporations to sue governments for lost profits for business not placed with them, is a travesty of justice and must be removed from all trade agreements immediately. Canada has already suffered from this action with Ethyl Corporation and the MMT dispute.

Number five is dispute settlement. Since trade affects human rights, economic and social rights, environmental sustainability, and democracy, no dispute settlement should operate outside parliamentary legislation, constitutions, or international United Nations agreements and commitments. To set up a separate system is to bypass and ultimately destroy the United Nations and to invite disaster.

The structure of the FTAA must be changed so that no country will have rules imposed on it. The FTAA negotiating group, as outlined in the documents I read, will disempower any one country from setting its own trade and investment path or from withdrawing from the FTAA. These decisions are the business of national parliaments, not of FTAA ministerial meetings or the trade negotiations committee. Regional agreements that differ from FTAA rules must be allowed.

Number six is agriculture. Canada set up marketing boards for wheat, milk, and cheese in order to protect our industries from seasonal price fluctuations and dumping. This must be allowed to other countries without retaliation. Cheap grain from the United States has already ruined Mexico's peasant agriculture.

There are disastrous effects now from agribusiness, soil depletion, and bioengineered and irradiated foods. We must support owner-operated and organic farming in all countries. The present system of chemically poisoned banana plantations in places like Costa Rica, where workers die young of cancer, must be stopped. Canadians suffer second-hand from these poisons. The introduction of terminator seeds, which must be purchased every year, will destroy seed diversity and impoverish small farmers.

Number seven is intellectual property rights. There is serious disagreement between developed and developing countries on this issue. Developing countries argue that this should be dealt with by the UN World Intellectual Property Organization. Increased patent protection would prevent countries from manufacturing cheaper, generic versions of essential drugs to meet national health standards. The patenting of living material would make it illegal for farmers and herders to renew their seeds and stocks without permission or payment. In India, the protests against genetically manipulated crops are huge and ongoing. A Canadian-educated scientist, Vandana Shiva, is leading the opposition.

Number eight is about subsidies, anti-dumping, and countervail duties. I'm going to skip that because that's not my area of expertise.

Number nine is competition policy. Competition has been touted as the way of the future, but Canada did not get to the top of the UN human development index on competition alone. In a cold, sparsely populated, large country, we could not have survived without state intervention. Government assistance has meant old age security, what's now called employment insurance, medicare, pay equity, and subsidized public transportation and education.

Do we want anything less for the people of Central and South America? So far we see a race to the bottom in wages, environmental standards, health and safety rules, and local creativity, as well as the breaking up of unions. The result of all this competitiveness has been the erosion of actual and potential buying power, the enslavement of workers—mostly women—in export processing zones, the destruction of forests, the pollution of mining areas, the loss of sovereignty, the disabling of democracy, and the rise of protest.

Every WTO and APEC meeting is now accompanied by a parallel meeting and a group of protesters. The answer is not more pepper spray: competition must give way, not to mega-mergers and oligarchies, but to cooperation by all on a global scale.

• 1730

We made a good start when the United Nations was set up in 1945. Every attempt to displace or disempower it has led to more problems, not fewer. The WTO replaced the International Trade Organization. NATO has replaced UN peacekeeping forces. Nothing so far has really replaced the UN code of conduct for transnational corporations.

Accompanying my report is a proposal for a treaty of corporate and state compliance to be presented to the UN General Assembly. Please consider supporting it. Canada has been a prime supporter of UN declarations and conventions over the years, and these must not be swept away by trade agreements.

The present FTA arrangements will have the following results if there are not drastic changes—and I apologize for trying to foresee the future, because it's a difficult thing. The ecosystem on which all trade ultimately exists will be severely damaged; we can see the damage ongoing. The people of Central and South America will suffer starvation and illness. The have-nots will start targeting the haves, including CEOs of corporations, as never before. The global economic system will continue to have major crises leading to further bailouts. Developed countries will turn to military solutions, resulting in catastrophic loss of life.

On the other hand, maybe women will devise an economic system that is friendly to women and children. Indebted countries might cooperate to default on their debts, or we might carry on the Jubilee 2000 campaign and forgive the 50 poorest countries their debts.

Perhaps goods from rich countries will be boycotted by the poor countries. The WTO, along with the International Monetary Fund, the World Bank, and other trade bodies have overlooked an important fact. The success of any trade deal depends on two sides: sellers and buyers. The ability of the buyer to buy a product depends as much on disposable income as on any other factor. That is why the race to the bottom is as harmful to the rich countries as to the poor. Globalization as it is being carried on is heartless and unethical.

Thank you.

The Chairman: Thank you very much for your comments.

I'd like to ask if we could now hear the People Against the MAI, Jean Smith.

Ms. Jean Smith (Spokesperson, People Against the MAI): Right. I'm one of the people. Thank you.

The Chairman: Collectively you're representing it.

Ms. Jean Smith: That's right. I'll use the royal “we”.

The Chairman: We appreciate that, thank you.

Ms. Jean Smith: In May 1996 Peter Munk, who is the chairman of Barrick Gold, in an address to its shareholders praised Pinochet for having transformed Chile from a wealth-destroying socialist state to a capital-friendly model that is being copied around the world. When asked about human rights, he admitted that some people who were in jail would disagree with his view, adding, “That's the wonderful thing about our world, we can have the freedom to disagree.”

Canadian officials apparently didn't worry about Chile's human rights record either, because in spite of the thousands jailed, tortured, and killed by Pinochet's police; the drastic increase in poverty; the breaking of unions; and lax environmental, safety, and health laws, Canada signed a trade deal with Chile in November of that year, 1996.

Considered as a prelude to Chile's inclusion in NAFTA—and now it would be the FTAA—the deal accepts Chilean anti-union laws and lax pollution regulations, etc. This is not only problematic for Chile; it could force lower standards in Canada. In fact, Canadian federal officials have suggested that “regulatory harmonization is inevitable in the global marketplace”. This fits the Canadian mining industry's demand that environmental standards in Canada be lowered.

Canadian and Chilean workers and the two countries' environments are thus being pitted against each other in a race to the bottom for the benefit of multinational capital. That's what are called the terms of the global marketplace to which we are supposed to be beholden. We do not agree with that directive. We find those terms objectionable.

PAMAI, or People Against the MAI, came about because a few of us got together after a conference on globalization that alarmed us. We set about organizing meetings, visiting MPs and MPPs, and checking with the e-mail and a wide variety of news media. We quickly came to the conclusion that the negotiations about the MAI entailed secrecy, and the terms were unconstitutional, misleading, and completely undemocratic.

• 1735

We also learned, to our dismay, that our government was not fulfilling what we consider to be its primary mandate, i.e., protecting and promoting the public good for Canadians. Otherwise, why would they sign or consider signing an agreement that eviscerated their governing powers to regulate and adjudicate economic and social matters within the country?

We also came to realize that although our initial concern was about the destructive terms of the MAI, it was only one part of a parcel that includes the IMF, World Bank, NAFTA, FTAA and the WTO.

In an article about the trilateral commission, Ralph Nader was quoted as saying, in regard to NAFTA:

What's really at work in all of these proposed agreements is the yearning by multinational firms to break free from the constraints of national sovereignty. They want global commerce, but without global law to hold them accountable.

Our Canadian government seems to be prepared to go along with that line of thinking.

The members of PAMAI prefer to see globalization as a vehicle for the increase in international cooperation, understanding, and exchange in such a way as to facilitate, benefit, and enhance the lives of the largest possible number of people in the world. But it would seem that our government is bent on ensuring that industry makes lots of money, and those services that rightfully belong to society are forgone and the population devastated.

The government's guide is the mercantile belief that business success is paramount and that the needs of people and the environment are inconsequential. It is a belief that says that to create jobs we must chew up the land and pollute the world; to attract business, we must lower taxes so much as to shut the libraries and starve schools; to prevent inflation, we must keep an army of unfortunates unemployed; to motivate workers, we must have unequal wealth; to raise productivity, we must fire people; for efficiency, we must sacrifice equity; and so on. I'll say more about efficiency later.

We are told that foreign investment is essential. But in my area, doubts are being raised—my area being up around Alliston. Honda was greeted with open arms in Alliston, and it was agreed that everything must be done to meet the investors' every wish. Things went along smoothly for quite a while. You need more water? Certainly, we'll build a multimillion-dollar pipeline to bring water from Georgian Bay. You need a bigger highway for transporting the finished vehicles? Of course. And to widen existing roads, we don't mind cutting down 100-year-old trees that have helped to retain the groundwater quality and level. The kids need a better sports facility? Oh, sorry, but there's no money for that. Homelessness? It's not our concern. You want sidewalks so that children can walk to school rather than being bussed? Oh well, not this year. The library up there is only open four days a week.

Another example is Bauer skates—I think they're from Kitchener—which was sold to a foreign buyer who promptly fired the 400 employees, packed up the equipment, and shipped it to a lower-wage country. That was not beneficial to that community, the unemployed workers, or the local business community. But the buyer had no responsibility for the fallout from his purchase. There were no performance requirements for his foreign investment; indeed, they are prohibited under NAFTA and MAI terms, and I presume they would be under the FTAA. Our government should not be prepared to sign deals that ignore the needs of people in the country.

The foreign investment in Chile of Barrick Gold and two other mining companies, Placer Dome and Nova Corp., is certainly not a boost for most Chileans. That's especially true for the miners at Barrick Gold's two mines, El Indio and Tambo, where one-third of them are chronically sick from silicosis, pneumonia, bronchitis, kidney failure, arsenic poisoning, and lung and testicular cancer. While they pay few taxes down there, they all have deferred taxes in Canada, which as of 1998 amounted to $187 million for Barrick Gold, $164 million for Nova Corp., and $104 million for Placer Dome.

These firms would be members of the BCNI, which advises the government on taxes, investment, and trade measures. I referred before to the undemocratic nature of the MAI and others—I hope I did, anyway. It is exemplified here by the presence of the BCNI, but the absence of input by civil society—educational, health, labour, and environmental groups, etc.

We keep hearing about how much more efficient the private sector is. But that is a narrow view of efficiency. Efficiency is not restricted to business. Business does have its own purpose, with the aim to make a profit, and we have no problem with that. But we think they should have to pay all the costs of production, including the cleanup for environmental damage caused by their operation.

Efficiency would also include adherence to health and safety rules that are there to protect the people working in or living in the proximity of the industry in question. Efficiency does mean doing things well, so that the end result is the best that can be expected. Public service—the provision of clean water, roads, streets and sidewalks, statistics and record keeping, public disease prevention, public transport, and so forth—and public play and environmentally wild places for interaction that's freely accessed, and enjoyment of shared life should meet that measure of efficiency. They should be in place, and they should function well and be reliable and available to all. Revenue from taxes pay for these services or amenities whether everyone uses them to the same extent or not, since such services benefit the whole community, including the business that are there.

• 1740

When a government acts as if business success is paramount, money for those services that support the larger society are forgone and the population devastated. Money seems to be the only value worth considering in the type of global trade and investment deals represented by NAFTA, MAI, WTO, and others. It is the western nations that control these deals, with the U.S. in the dominant position. Society in our own country is being riven by the tensions caused by worry over the lack of any kind of security. Other societies are being destroyed.

Why is this happening? Greed is at the bottom of it. Some think or hope that if they go along with the current paradigm, then maybe, just maybe, they will get onto the gravy train too. But more and more people are falling off the survival train in a world of depleted and contaminated soil, polluted water, dirty air, and the lack of any kind of health care. A recent report estimated that over 1 billion people are unemployed in the world. Promises of prosperity and a decent life are entailed in the public relations blurbs of the MAI, NAFTA, and others, but they are worse than empty promises; they are untruths, and the people promoting them know it.

• 1745

Investors from any quarter should have to answer the question: how will it affect the people in our area? Then the government should take into consideration the benefits, the short- and long-term costs, and the compatibility of that industry with what is already there, the effect on the environment and on other people locally and beyond.

We think the world would be better off without NAFTA, the MAI, the IMF, the World Bank, and the WTO, because they certainly aren't helping to bring about a better quality of life for everyone, which we think should be the objective of any international organization. Therefore, perhaps we could have, under the aegis of the UN, a kind of world protection organization against damaging trade and production practices.

Thank you.

The Chairman: Thank you very much, Madam Smith.

Next is Marion Odell.

By the way, thank you all very much for bringing a copy of your presentation. It's helpful for the record, and we appreciate it.

Ms. Marion Odell (Individual Presentation): Thank you for inviting us.

I will first speak about our national interest. The World Trade Organization has evolved to be extremely powerful, not just in trade and investment matters. Their rules and policies and trade agreements developed under its rules have been integral to the redevelopment of the post-war global economy. Trade negotiations have been conducted by trade ministers without the awareness that agreements may have unintended consequences in other policy areas.

Prime Minister Brian Mulroney, on being asked if there had been an environmental assessment of the proposed FTA, replied that none had been made, that the subject had never come up, and that the free trade deal was entirely a commercial agreement. But this agreement dealt with agriculture, energy, environmental standards, forests and fisheries. Social programs, including health, were also affected.

It is possible that many of our members of Parliament do not understand the full ramifications of these agreements or of the proposed free trade area of the Americas agreement. At the time of the last federal election, my own MP was of the mistaken belief that medicare was fully protected under the reservations in NAFTA obtained in chapter 11. Neither has the Canada Health Act been reserved under chapter 1, which covers financial services, including insurance. Since the provinces did not reserve their health insurance plans, our public health insurance plans are vulnerable to a challenge in the NATO tribunal by private insurance companies as a state's monopoly.

The Chairman: Pardon me, Madam Odell. You may mean “NAFTA tribunal” there, rather than “NATO tribunal.”

Ms. Marion Odell: I meant NAFTA, sorry.

The Chairman: I know we all have Kosovo on our minds at the moment. It has driven all thoughts of everything out of our heads. I appreciate that; we'll amend it.

Yesterday in a committee hearing, somebody was saying that ILO had no teeth. I said I suppose you want to give that to NATO to enforce too. But we don't want that in here.

Ms. Marion Odell: I sometimes do get my murds wixed up.

The Chairman: Don't worry. We all do.

• 1750

Ms. Marion Odell: The implications of marketing health care services are a major concern to me. In her book, Colleen Fuller, research associate for the Canadian Centre for Policy Alternatives, describes how corporations and their allies in medicine and government are pushing to transform Canada's health care system into a profitable business. The federal government essentially endorsed foreign investment in our health care system when it signed the FTA and NAFTA.

Monique Bégin wrote in October 1988 in the Toronto Star that “free trade will destroy our precious Medicare”. John Turner also recognized the threat, and perhaps paid the political penalty for his defence.

According to Colleen Fuller, federal policy-makers, led by Industry Canada and External Affairs, believe that by linking Canadian health companies, both non-profit and for-profit, to foreign, mainly U.S. companies, they are paving the way to global health care markets. There is the expectation that there will be substantial investment in the Canadian health care economy, as well as foreign profit for Canadian companies. No one has asked the Canadian public if they want to sacrifice our publicly funded, universal health care system in order to make profit out of the purses of Canadians, as well as the citizens of developing countries.

The U.S. health care system is the most expensive and inefficient in the world. Over 45 million Americans have no health care coverage at all, and another 35 million are only partially covered by insurance. Their health care system takes up over 14% of their GDP, while ours gave universal, comprehensive coverage for around 11% before the cuts, since 1993. I believe it's now down to 9.6% or something. Many American corporations in health-related industries earn huge profits—often 20% or more. We've only to look south of the border to see what a mess it is.

On the impact on sovereignty and democratic rights, national treatment under NAFTA means that foreign corporations have rights that Canadian citizens do not. Under an FTAA, this would probably be extended to all countries of the western hemisphere. Under current rules, we cannot deny a foreign corporation that has carried out unethical or illegal practices in their own country or elsewhere entry into our economy. The NAFTA tribunal dispute settlement mechanism has precedence over our own courts.

The chilling effect of being sued in the NAFTA tribunal was behind the federal government's caving in on the MMT affair. Now we have a known neurotoxin, which has been banned in some of the U.S. states, polluting our air, soil and water.

Along with the World Bank and the IMF, the WTO forms a part of the international trade and investment regime that becomes a constitution for transnational traders, investors and their companies. With powers that sometimes supersede the rights of governments and the ability to circumvent national constitutions, bills of rights, transnational corporations have reached a new zenith of power. Such concentrations of power are likely to lead to the abuse of power. Historically, this kind of power has always led to exploitation, oppression and subjugation.

The impersonal forces of the global marketplace, combined in the new industrial age, are now in greater danger than ever of destroying the environment and the peoples of the Earth. The world may never recover if current trends are not reversed. Already, unprecedented numbers of people around the world are living in abject poverty and economic enslavement to feed the greed machine of corporate profits.

• 1755

What should be done? Professor Emeritus Ursula Franklin stated at the Ten Days for Global Justice seminar in Toronto that we Canadians must consider ourselves as living in an occupied territory, controlled not by military force but by market forces. We are not so much constrained by market forces as by the belief that they limit us. We Canadians have the capacity to grow and develop nationally and internationally in a way that empowers people and states to take on common action problems, like the environment and poverty.

We have been fed the corporate globalization line through everything from the popular media, entertainment, right-wing think-tanks, and even some academics. It is amazing, however, how many people around the world are waking up to the inherent dangers in the global situation.

Since corporations are primarily concerned with the bottom line, it seems more than a little naive to expect them to police themselves. Standards of behaviour need to be imposed through appropriate agreements, with effective enforcement. I would suggest that nations should be able to sue parent companies for violations of their laws and regulations, and be able to deny entry into the country of corporations or their subsidiaries, where they have been convicted of offences in other countries, or if they consistently fail to meet local regulations, wherever they operate.

A paper published by the World Bank in 1996 said that because privatization is politically dangerous, governments must ensure that various interest groups are excluded from the process. Are the 85% of Canadians who want medicare preserved a special interest group?

Canadians have been kept in the dark too long. I am encouraged that Ottawa may be displaying some unease in the negotiations for the FTAA, and hope this is true. Transparent negotiations and even more widespread consultation should be undertaken and widely publicized, involving as many nations as possible.

These consultations are looking at the effects of the free trade agreements, and should be used to assess what ethical standards of behaviour and penalties should be imposed on international traders, investors and their companies. The UN code of conduct for transnational corporations would be a good model, at least to start with.

We should reassess Canadian participation in the WTO if it cannot be used to support our national interests, as defined through our political institutions, by our Constitution, our bill of rights, and the democratic principles that undergird our history of interdependence and concern for the common good.

I am reminded of King Midas, who starved to death because everything he touched turned to gold. If pursuit of economic efficiency and concentration of wealth lead to the destruction of the social and environmental infrastructure of the world economy, turning them to gold, so to speak, then ultimately no one's interests will have been served.

Thank you.

The Chairman: Thank you very much, Madam Odell.

Professor Valleau.

Professor John Valleau (Individual Presentation): Thank you, Mr. Chairman. I'm very happy that Minister Marchi and other members of the government have at last agreed that there is an urgent need for a genuine public dialogue about the issues raised by Canada's role in trade and investment agreements.

The focus of my remarks concerns the implications of that commitment for the government, and I guess for your standing committee, as a key forum in making such a dialogue useful. However, controlled one-way hearings such as this, while they may of course be a very useful preliminary, do not by themselves constitute what is required, because a dialogue requires two parties.

• 1800

In my view, the proponents of liberalization, including our government, have not yet begun to play their part in a way that allows for fruitful discussion and a possible approach to consensus. To do so, they must be willing to make clear to the Canadian public the arguments and evidence that make them believe that the current stances regarding international agreements on trade and investment are likely to be to the general benefit of Canadians. They also need to respond in a thoughtful way to the large body of evidence that has been published and seems to point in the opposite direction.

Several developed nations, with Canada as a leader, it is said, are now proposing to launch a new round of negotiations in the World Trade Organization. The intention made clear by Minister Marchi and others is to institute in the WTO an investment agreement to replace the failed MAI, the multilateral agreement on investment, embodying the same principles.

The MAI failed at the OECD very largely because of widespread and intense public disquiet about those very principles—disquiet that has by no means abated. This argues for a pause while the public's concerns are acknowledged, examined and allayed, if they can be, by a public dialogue.

Not only is this a democratic imperative, it is clearly in everyone's interest, for should this government attempt to proceed further with the liberalization agenda at the WTO or toward an FTAA before seriously addressing the public concern, there will certainly be increasing disquiet and unrest. When it comes to furthering this dialogue, the ball is really in the government's court.

In my written submission, which I believe you have copies of, I illustrate this point by surveying many of the essential issues that still await being addressed seriously in the public domain. In the few minutes I've been allowed here, I will only be able to touch on one or two of them. I hope you will read the others.

The examples fall into two classes. In one class the issue is whether the proponents of the so-called liberalization have their macroeconomics right. Of course, there is a history of nations getting these things wrong.

In the other class, the questions concern the associated diminution of our democratic sovereignty, which has been mentioned previously in this hearing, I heard earlier, and thus of the ability of Canadians to apply their moral, social and environmental values—life values as opposed to money values.

Let me just look at a couple of things. Turning to some basic economic considerations, we could ask whether free trade is necessarily beneficial. To claim that free trade as opposed to trade itself is generally a good thing, one usually depends on the law of comparative advantage, due to Ricardo in the last century. But it's easy to see that law depends on the assumption that capital as well as labour of each nation is restricted to that nation. Otherwise it is no longer true that free trade need be mutually beneficial. Its effect could well be to destroy some national economies.

However, the flow of investment today is very easy between countries. There is also some evidence that Canada is being slowly deindustrialized. The question is, if there is nothing automatic about the benefits of free trade, where are the arguments that it is actually to Canada's benefit?

Let's look at a second question. Who gains from investment liberalization? Investment flows need not by themselves change the aggregate demand for goods and services. If they don't, we have a zero-sum game. One nation's gain will be another's loss, with Canada's prospects far from obvious.

Overall demand could be increased if there were policies to redistribute income and wealth toward the less affluent. However, the freer flow of investment is having the opposite effect of redistribution from the poor and the working class toward the already wealthy of the investment and corporate world. That is because in choosing the locations of their investments to seek low labour costs, investors are driving down salary incomes almost everywhere and causing widespread unemployment in countries like Canada.

This strategy is attractive to many investors, since whatever negative effects it may have on aggregate demand are more than overcome by the upward transfer of wealth and income associated with the higher profits and lowered salaries. So the answer is that the rich gain by investment liberalization at the expense of impoverishing most of the rest of us worldwide.

• 1805

What is more difficult to understand is why the government of a nation such as Canada would seek such policies. The national interest need not, after all, be the same as that of its monied class. Of course, there has been a quasi-religious dogma under neo-classical economics that what it calls liberalization is somehow necessarily good, but actual evidence to that effect seems to me to be lacking, according to any specification of well-being most Canadians would find acceptable. Indeed, the period of increasing liberalization has been associated with falling real salaries, massive unemployment, deterioration of social services, and so on. Nor does there seem to be any convincing theoretical argument that the outcome of the policies could be expected to be any different from the disasters we see. Indeed, the fallouts were rather accurately predicted long ago by the opponents of the prototype FTA and NAFTA agreements.

So what are the substantial arguments that we could expect anything but more of the same under a widening of such policies under the WTO and the FTAA? We have not been offered such arguments, and one must therefore wonder whether they exist.

This leaves one at a loss to understand the wish of the Canadian government to pursue policies that seem to be damaging most Canadians. It may be that the government has been too willing to rely on advice from a narrow part of our world. It was noted by John Klassen, director general of trade policy in DFAIT, in the first of this series of WTO consultations on February 9 that the department is “consulting continually” with the BCNI, the Canadian Chamber of Commerce, and the Alliance of Manufacturers & Exporters, as well as a number of sectoral advisory groups on international trade, or SAGITs, of which the memberships appear to be secret but which are admitted to represent corporate interests. This does not appear to be a balanced selection of advisers. Indeed, it consists entirely of a sector that may be suspected of having its own agenda of self-interest quite apart from any connected with the general welfare of Canadians.

There is no mention of ongoing consultations with those representing other views, such as the Canadian Centre for Policy Alternatives; churches; unions; environmental groups such as CELA, the Canadian Environmental Law Association; or the Ecumenical Coalition for Economic Justice, to give just a few examples, nor of dialogue with the several authors who have published extensive and detailed studies of these matters. Indeed, the widely published and well-documented critiques by such groups and authors have not been accorded the respect of a thoughtful response in defence of government policy.

What I want to emphasize is that detailed and documented criticism of the current policies and those that seem to be proposed is already in the public domain. Civil society has already done its bit, in fact. It is up to the government now to attend seriously to these views and to offer similarly thoughtful and documented replies to positions with which they disagree. Then a sober public debate on these matters can at last take place. Until this is done, the ball remains in the government's court, and it would appear irresponsible to proceed with any further negotiations based on these policies while at the same time pretending to seek wider public input.

Turning to the other class of criticisms that have been offered having to do with sovereignty, the purpose and effect of the rules of NAFTA and the WTO and those anticipated in any new round of the WTO, FTAA, etc., is to put strong limitations on the freedom of governments to enact laws and policies wherever they may be considered a hindrance to the ambition of an international investor or corporation. The scope of such laws turns out to be very wide, and the purpose is unacceptably narrow. In a supposedly democratic nation such as ours, such limitations are precisely severe limitations on democracy itself, as was noted earlier, that is, on the right of citizens to make decisions about their way of life on an ongoing basis and based on their own values, which need not coincide with those of the financial world.

In my written submission I remind people of several aspects of the rules of these organizations that entail a loss of national sovereignty. I presumably needn't go through those or try to in my short time. I'm talking of national treatment, most favoured nation status, the performance requirements, and the rules governing expropriation. In every case what these do is prevent Canadian citizens from taking democratic action to protect themselves; to protect their health, the environment, and their industries; to avoid importing goods from maquilas and from places that use child or slave labour; and so on. Things we would expect our governments to do on our behalf are prohibited. To many people that seems entirely unacceptable.

• 1810

Another aspect of that is the famous dispute resolution, which is so central to these organizations. Effectively, this means judging Canadians in a form external to Canada and in effect giving it priority over our legal system. The resulting judgment may be made in private, without appeal, and no explanation of the judgment is required. The tribunal need only hear what witnesses it chooses. There's no knowing on what basis they may judge. There is no body of precedent such as governs our courts and ensures some balance. This pseudo-court is accountable to no democratic party.

It was our government's expectations of the judgment of such a tribunal that caused it to back down in the MMT case, which I'm sure I don't need to remind you about. Personally, I'm astounded and outraged that Canadian governments could have accepted such tribunals that are removed from our traditions of jurisprudence and with no democratic accountability. How can this be explained?

Let me close by just briefly raising a different issue here. That concerns constitutionality. The natural question is whether the governments involved actually had the right under our Constitution to make such extraordinary commitments on behalf of Canadians. As you may know, a case is before the Federal Court in which it is claimed that doing so was indeed unconstitutional, that is, C. Fogal and the Defence of Canadian Liberty Committee v. the Queen in right of Canada.

I am not a lawyer, and I will not try to summarize here the comprehensive and extended arguments. If the applicants are correct, the signing of agreements such as NAFTA and the WTO and even their negotiation without the explicit direction of Parliament are invalid under the Canadian Constitution as repatriated in 1982. So are the legal rights extended to foreign corporations, which actually exceed those of real Canadian citizens, and the removal of the constitutional rights and responsibilities of provincial and municipal governments without explicit legislative authorization by the provinces.

These are serious matters. In view of their importance, one might have expected that the federal government would have wished to expedite resolution of the legal questions. I am very sorry to report that the government's response so far has been more consistent with a desire to impede that resolution. I want to urge this committee to impress on the government the desirability of ensuring that the legal base on which they act is rendered less ambiguous. They could do so not only by ceasing to impede this legal case but also by welcoming it and proposing that it be taken directly to the Supreme Court.

Thank you very much.

The Chairman: Thank you, Professor Valleau.

I'd like to turn to questions. Mr. Obhrai.

Mr. Deepak Obhrai: Thank you.

Thank you for coming here. That was an extremely interesting point of view. Many of the views I do not share; nevertheless, it was quite well put and a point of view that needs a little consideration here.

I am a little disturbed by a submission here, and if I'm not right, perhaps you can indicate that to me, madam. In this submission you are actually saying to encourage the black economy for the support of the poor and marginalized people. Is that right?

Ms. Shirley Farlinger: I don't know what your understanding of black economy is. Perhaps that's the wrong word. We now see the rise of micro-credit in poorer countries. We also know, for instance, that the people who live in the favelas in Rio de Janeiro have their own economic system.

Mr. Bill Blaikie: Unofficial.

Ms. Shirley Farlinger: Unofficial. Thank you. That's a better word for it.

The Chairman: Underground.

Ms. Shirley Farlinger: Yes. That's how people live in very bad circumstances. We should be careful that can be preserved or even encouraged. They should have clean water, for instance, which they don't have. They should have ordinary services. We should not be doing anything to prevent them from raising their standard of living.

• 1815

Mr. Deepak Obhrai: I've just come from Africa, and I'm quite a big supporter of micro-credit myself, but I do not consider micro-credit to be an unofficial economy, and neither do I want micro-credit to become an unofficial economy.

In Bangladesh, the government is now involved in it. I do not buy it at all that you have to create an unofficial economy or a black economy over there. If your goal is to uplift the standards of the poor, then I would suggest that micro-credit be part of the economy, and that it would need to operate legally.

So I would suggest that I strongly disagree with this statement.

• 1820

Ms. Shirley Farlinger: All right, take micro-credit out of the alternate economy. I'm thinking more of the poor people who manage to buy and sell among themselves to support themselves. I don't think our trade agreements allow for that type of economy to exist.

In fact, we see the flooding of people from their farms into the cities, where they have nothing. They live in shacks. I think that's one of the things we should be trying to address. That's all I'm saying.

Mr. Deepak Obhrai: I thank you for bringing this up here, but I don't think there should be a free hand in the free trade regime. Some guards have to be put in to see that rights are not violated. I'll agree to that concept, but I don't think I can go as far as your presentation does, that the free market has not helped.

My own experience has indicated...and my colleague from the NDP keeps refusing to do so, but I will say it. I come from a background where I've seen poverty increase, and I've seen the need, and where free market has really helped. I do not agree that it should be an open, blank cheque, but I also do not think it should be abolished.

I think there should be a balanced approach, and in this presentation I find there is not a balanced approach.

That's all I have to say.

Ms. Shirley Farlinger: Well, you're calling it a point of view; I'm calling it evidence.

Voices: Hear, hear!

Mr. Deepak Obhrai: I can dispute that evidence quite strongly as well, madam.

The Acting Chairman (Ms. Jean Augustine): Thank you, Mr. Obhrai.

Before we go to Madam Debien, I want to apologize on behalf of our chair, who was called out on an urgent matter. I'll be sitting here for the rest of the presentations.

Madam.

[Translation]

Mrs. Maud Debien: Good afternoon, ladies, sir. I thank you for your comments, and I share your concerns to a certain extent. You've raised real problems and concerns that many Canadians and Quebeckers we have met have raised with us.

On the other hand, I have a question of my own that I am putting to you now. Mr. Valleau, among other things, you say in your text that Canada, in all conscience, must not participate in any new round of negotiations either with the WTO or the FTAA.

I must say that globalization and the WTO negotiations beginning in December seem to be an almost irreversible process to me. When you ask Canada not to participate in this new round of negotiations, that scares me a bit. Taking into account the often untoward consequences of the NAFTA and GATT negotiations, shouldn't Canada ensure leadership during the negotiations with a view to civilizing them and seeing to it that they are fair, transparent and equitable?

• 1825

In my opinion, you're better off being part of the battle rather than standing aside. Even if we're not there, the battle's consequences will affect us in any case. One of Canada's main roles should be to take the leading role to civilize trade throughout the world. I'd like to hear what you have to say about that.

[English]

Prof. John Valleau: Thank you, Madam Debien. I guess we have a different viewpoint on these things.

I wish I thought that Canada's effect was to civilize these negotiations, but I really don't have great confidence in that. It's not that there's any ill will on the part of Canadian negotiators; it's just that, as I hope I made clear, there is a high risk that they have adopted a basic point of view that cannot be justified.

I mean, we have practically stated that we are in favour of a so-called MAI-type liberalization of investment. My claim would be that there are strong arguments that this in itself is a danger to not only Canada but also the rest of the world. I restricted my comments to implications for Canada, but I guess one also has to be very concerned, as you are, about the effect on the developing nations and so on.

My vision of what is happening is that the developed nations are attempting to rush the developing nations into agreeing to things, and that those nations are in fact not ready to do so. I hope they will balk and not agree to do so, but they are being pressured to. These poor nations are not in the position to undertake the detailed activity that's necessary to get through such negotiations in the short term.

So from that point of view, a delay—I didn't say stop—is exactly what we ought to do on behalf of those nations.

I guess the other thing I would like to say is that you seem to accept the inevitability of this whole process. I do not.

As well, if Canada were to forge its own line rather than go along with the whole liberalization ethos, I do not believe we need suffer. I believe the reverse would be the case, in fact.

What I'm trying to say is that there are many people who don't accept the presuppositions that I think you're making in what you say to me.

The last point is that what I said was not that we should stop—and maybe we should, maybe we should not—but that we should pause long enough to examine, really, some of these basic issues that have been raised to make sure we know we're doing the right thing.

Thank you.

[Translation]

Mrs. Maud Debien: I'd like to tease you a little. If you don't trust the Canadian government, nor its officials, can you trust the Opposition to actually ask the right questions?

[English]

Prof. John Valleau: Oh, oh. I'm not sure what is meant by “the opposition”, but—

[Translation]

Mrs. Maud Debien: The Opposition...

[English]

Prof. John Valleau: —the opposition to which I was referring in my talk was that of the considerable body of Canadian citizens who have tried to formulate, in a rather detailed way, the criticisms of the thrust of recent government policy. My point was that I don't think their arguments, which are after all detailed and provided with much evidence, have been given the dignity they deserve. They ought to be examined. We ought to see if we cannot approach some kind of consensus on this, because at the moment the gap is deep and wide.

• 1830

The Acting Chairman (Ms. Jean Augustine): Thank you.

Mr. Blaikie.

Mr. Bill Blaikie: I too want to thank the witnesses for their presentations and make a few comments, and then I have one particular question.

I cannot help continuing the debate with my Reform colleague who says he's interested in a balanced approach. I would say that is precisely what we're arguing for here. The fact is that at one time in this country we did have a somewhat balanced approach. It may not have been just the balance that some of us were looking for, but it was a balance nonetheless, it was an ideological compromise, it was a mixed economy, it was a bit of a social contract between labour and capital, government, etc. What we've had over the last 15 years is a project seeking the destruction of that balance, of that compromise, precisely because it has taken on the sort of quasi-religious nature that Professor Valleau talked about.

I've been at these WTO meetings and I have some training in theology, and the language that's used is the language of salvation. It's like being at a revival meeting. People speak of trade liberalization as if it will solve all our problems. Whatever your problem is, all you need is a bit little more trade liberalization and things will come along great.

What's happening here is a form of—it's after the end of the Cold War, etc.—triumphalism on the part of one particular ideology, which is not balanced. Triumphalism is never balanced, and that's part of the problem. Now we see being done through this momentum, this triumphalism, this sort of political monoculture, what at one point could only have been done by force.

I cite Chile as the example. In the 1970s, you had to have an authoritarian state and death squads to achieve what is now done through free trade and persuading people that it's good for them. Of course, the interregnum period was the Thatcher-Reagan-Mulroney thing in the 1980s, and it's no coincidence that Margaret Thatcher is a big fan of Augusto Pinochet and keeps coming to his defence, because Chile is in fact the model nation for the paradigm that's being foisted on the rest of the world in the name of this.

This leads me to this other question, which I think is interesting. You didn't read it. But at the end of your presentation you say, in a footnote—and I would like to know more about this—that the present war in Kosovo is connected to the condition in the Rambouillet agreement that Serbia be mandated to adopt a free market economy.

I can remember reading articles before the bombing started on March 24 about there being an ideological dimension to this, which has certainly not been part of the public debate. But you raised it and so I ask you. I have to say I'm not aware of that condition in the Rambouillet agreement, but I'm like a lot of Canadians. All of us have been going off to war because somebody signed an agreement that none of us have read. No copy has ever been available to members of Parliament, surely, and perhaps not to anyone else. So if there's an aspect of the Rambouillet agreement that in fact does say this...because you refer only to an article by Chossodovsky in a book that was published in 1997. The Rambouillet happened in 1999, so I don't see the connection there, but I'd like to know what the source of your claim is.

Ms. Shirley Farlinger: The source of my claim is the fact that I read the Toronto Star and the Toronto Star put in a summary of the Rambouillet agreement. It was not word for word. Since that time, I have downloaded this particular part of the Rambouillet agreement, which you can get on the Internet, and it does say that the free market is mandated.

• 1835

I don't know, none of us know, what part of the Rambouillet agreement Mr. Milosevic is opposed to. But it seems logical to me that this may be a stumbling block for him, in view of what happened to all of the former Yugoslavia just before the war began, when there was a massive privatization of state institutions, when there was high unemployment, when there was a huge number of bankruptcies, and this information does come from Dr. Chossodovsky's book. Chapter 13 is on Yugoslavia and tells how this destruction of the local economy led to one ethnic group blaming the other ethnic group for their problems and eventually taking up arms.

I just don't see that this should be a condition for making peace in the Balkans. I think it underlines a hidden agenda here, and the hidden agenda is that the United States wants a free market economy in every country. And we've seen what happened in Russia. I mean, it's not as though we're dealing with something we don't have evidence of. We have tons of evidence of what has happened in Mexico, in Russia, in Indonesia. We've lots of evidence, and only smart people learn from evidence, you know.

Mr. Bill Blaikie: I once had an Old Testament professor who said the only thing we learn from history is that we don't learn from history.

Ms. Shirley Farlinger: That may be true. But I'd like us to learn something now.

Mrs. Maud Debien: The winner of this war is Boeing.

The Acting Chairman (Ms. Jean Augustine): I want to take the opportunity to say thank you for a very interesting presentation. I'm sure your paper, Professor Valleau, which you didn't read in total, we will take the opportunity to read. All the remarks are there for perusal later on.

You have provoked us with the question that we should reassess Canadian participation in the WTO if it cannot be used to support our national interests. That is interesting, and I think this is the purpose of this exercise.

We thank you for putting in the time and the effort, for giving us copies of the presentation that we can study later on. If there is anything further that you want to convey to the clerk or to the chairman of the committee, we'd be more than pleased to add this to the future deliberation. We thank you for coming.

I will ask the next panel to approach the table. Welcome. We will be going in the order listed on the agenda.

• 1840

Joan, it's always good to see you. You'll be first, followed by Dr. Rose Dyson, then Steven Kerr and Ann Emett. We'll go in that order.

Thank you so much for coming. Our committee, as you know, is in two parts. One part is in western Canada right now, and this is the section of the committee that is covering eastern Ontario to Manitoba.

We'll hear from the National Action Committee on the Status of Women, Joan Grant-Cummings, president. Joan, please begin.

Ms. Joan Grant-Cummings (President, National Action Committee on the Status of Women): Thank you.

We're pleased that the Government of Canada is actually making some attempt to ascertain from a more representative group of Canadians our vision and values as they apply to trade, specifically with regard to the World Trade Organization and the upcoming negotiations.

We feel that many times there is an assumption that trade is genderless and raceless, and women, certainly aboriginal peoples, people of colour, recognize that this absolutely is not so because we see the evidence of that in our lives every day.

Canada has no scientific way at the moment of gender mapping the impact of current trading systems and agreements on women's equality rights, and we feel that this is highly unacceptable, especially as women's groups are not being taken seriously when they speak of their experience on trade liberalization. We feel that the resounding backlash from Canadians about the secret negotiations of the MAI, which was done in such a blatantly anti-democratic way, seems to have been heard to some extent by the government.

We hope that what we share with you today isn't something that is just politely thanked and recorded, but that the sharing that feminists and women in Canada want to do within this environment is actually going to inform the government's action within the World Trade Organization negotiations.

Canada has numerous commitments to women's equality rights and domestic rights legislation, and I'm talking about the Charter of Rights and Freedoms, so when we go to the international fora we have the International Covenant on Civil and Political Rights, and the International Covenant on Economic, Social and Cultural Rights; we have the Convention on the Elimination of All Forms of Discrimination against Women, the International Convention on the Elimination of All Forms of Racial Discrimination, and we have the Beijing Platform for Action.

Canada acknowledges, through Status of Women Canada research, the importance of policy analysis of the impact of laws, policies and practices on women, because policies and legislation, in the words of Status of Women Canada, affect women differently because women's social, political, physiological and economic circumstances are different from those of men.

Statistics Canada goes on to further detail how this difference comes about. We see it in the labour force; we see it in the wage gap; we see it in terms of women's assignment primarily as caregivers in our society. Whether we look after spouses, the elderly, the sick, our children, we are the primary caregivers. Therefore, trade systems that impact all our social systems and our everyday life obviously impact women differently in view of the fact that we already enjoy an unequalled status economically and socially.

In light of Canada's commitments to women's equality and the fact of women's persistent economic inequality in Canada, then trade policies that perpetuate the status quo of women's economic inequality are exacerbated and violate Canada's human rights commitment. The separation of trade policy from human rights commitments and from women's equality is not intellectually, morally, or legally credible. Canadian governments are obliged by their human rights undertakings to protect and promote the equality of women, including their economic equality.

Canada cannot contract out its international human rights obligations by signing regional trade or investment agreements that weaken their capacity to protect and promote the human rights of women.

Trade is not just about the movement of goods and services. Trade is an everyday vehicle by which people interact. Trade affects our social lives, our health, our economic lives, the environment, our political system, our democratic rights. The fact that in today's global trading system genetic materials and the movement of peoples play such an integral role fully necessitates that trade policy be negotiated within a human rights framework.

• 1845

The World Trade Organization is a multilateral institution, currently comprised of 133 countries, both developing and developed. Its role in controlling the new global economy is underscored by its areas of emphasis, and as we see it, these are the areas: to oversee all future negotiations governing world trade and payment; to settle disputes between and among member states; to monitor trade agreements; and to authorize retaliation in cases where member states do not comply with agreements and decisions.

But women want to know who is the World Trade Organization. Like the “market”, it seems to have a disproportionate amount of rights and power compared to the peoples of the world. Besides NATO, it seems to be the ultimate club for rich nations to wield their unbridled power.

For women's groups, one of the clearest laws in our global trading system is the fact the north and south countries, so-called “rich” and “poor” nations, already are on an uneven playing field, and considering that the world's poorest people are women and children in the south, and are women of colour, this indicates that already there is an inherent bias in the political structure of the World Trade Organization.

We staunchly oppose any negotiation of investments within the World Trade Organization. We feel that this will further exacerbate women's and peoples' human rights. Already the balance is that corporations—those nameless, faceless entities—seem to enjoy more rights than people do, and that fact will be advanced if the MAI is also negotiated within the WTO.

Women know what the facts are. It has already been laid out to us by the UN. Canada is a member state of the UN. Sometimes we forget that the statistics that the UN comes out with include us.

The UN has stated persistently over the last number of years that women control only 10% of the world's economy and own only 1% of the world's land. Yet we perform two-thirds of the world's work, and we give $16 trillion worth of unpaid work to this global capitalist economy. So for a woman it is very clear that the “free” in free trade is women's free, devalued, and unpaid labour. That's the only “freeness” in free trade.

Compared to the GATT that we used to have, the WTO has new features that are significant to women.

We have the General Agreement on Trade in Services, called GATS, which covers areas like telecommunications, banking, insurance, and the movement of “natural” persons.

We have trade-related investment measures, which affect a country's ability to compel transnational corporations to buy locally and employ people from the local community or country in which they operate. They have a major impact on women's access to the paid workforce, women's pay, and workers' rights, among other things.

We have the trade-related environmental measures, which affect the ability of countries to put in place environmental or ecological laws that govern how products are manufactured, and so on.

Then we have the trade-related aspects of intellectual property rights, TRIPS, and we're talking about the establishment of the protection of the “indications” that identify goods as originating in a locality, country, or region. Yet women want to know, if the WTO actually protects our rights, especially on the TRIPS, then why is it that an American company can claim to have a patent on basmati rice, which grows in a particular locality and region in this world? So where is that protection? How then can these global trade policies claim to protect women, our families, and the environment?

• 1850

For us, one of the fundamental flaws within the WTO is that is has increased the disparity between rich and poor people, rich and poor nations. For women in particular, we have seen an increase in violence against women globally.

We have seen the new phenomenon of trafficking. We used to talk about prostitution; now we're talking about trafficking in women and children, not only in terms of sexploitation but in terms of labour. Women are sold as labour and as sex slaves under this new global economy. We have the phenomenon of countries trafficking in women and children to get foreign exchange, U.S. dollars. That is not a phenomenon that was seen before within our global environment.

We have also seen an increase in child labour with this new global economy. What about that United Nations Convention on the Rights of the Child? Where is that?

• 1855

The other flaw we see is that the workings of the WTO—its dispute mechanisms and how votes are taken and decisions are made—require that so-called poor countries must have access to major resources to fight decisions. So if most of the countries represented on the WTO are disadvantaged by the dispute system because of lack of access to resources to even engage that dispute system and have some kind of a fair play, what is the value of this to the globe?

Because Canada may benefit.... If Canada is a multiracial, multi-ethnic, multilingual country given to equality, why are we tolerating and actually advancing this inequality amongst nations through the systems of the WTO?

I want to just end by giving you what we submit as our recommendations.

We submit that all undertakings by Canada pursuant to trade agreements must support full compliance with Canada's pre-existing human rights commitments and obligations.

In its deliberations on a trade agreement and at the WTO, Canada should take the lead in ensuring that international financial institutions, the WTO, and other similar bodies operate within a human rights framework and are held accountable for the effects of their policies on the implementation of international human rights commitments to women's equality.

We submit that Canada should immediately fulfil the commitment it made in 1995, pursuant to the Beijing Platform for Action, to review and modify, with full and equal participation of women, macroeconomic and social policies with a view to achieving equality for women.

Thank you very much.

[Editor's Note: Applause from the audience]

The Acting Chairman (Ms. Jean Augustine): Thank you. That was a powerful presentation.

Our next presenter is Dr. Rose Dyson from Canadians Concerned About Violence in Entertainment.

Dr. Rose Dyson (Chair, Canadians Concerned About Violence in Entertainment): Thank you for this opportunity to appear at these hearings.

Canadians Concerned About Violence in Entertainment is an independent, national, non-profit public interest organization. It is committed to increasing public awareness about the effect of cultural violence in society.

Established in 1983, CCAVE is currently chaired by me. I'm a media education consultant whose doctoral thesis included an analysis of media violence policy formation and the lack of it—mostly the lack of it—since the release in 1977 of the LaMarsh commission report on violence in the communications industry, which was set up by the Ontario government. There are over 55 recommendations in it and it's available at the National Library in Ottawa as well as at the library at the University of Toronto.

I work with various scholars and researchers throughout North America, George Gerbner being one of them. George is professor and Bell Atlantic chair in telecommunications at Temple University in Philadelphia, and I am among those who helped him found the “cultural environment movement” in 1996. Gerbner is widely acknowledged as one of the most foremost researchers and commentators on media violence, both in the United States and internationally. I was talking to him yesterday, and he had just returned from Hungary.

One of our most urgent messages is that in an era of globalization there is increasing evidence of reliance on the cheap industrial ingredients of sex and violence, because they sell well in an information-based economy and translate easily into any language.

The cultural environment movement's founding convention, at Webster University in St. Louis in 1996, and the second one, held at Ohio University in March of this year, built upon the broad international grassroots coalition of over 250 independent organizations in every state of the U.S. and in 60 other countries on six continents. The cultural environment movement represents a wide range of social and cultural concerns united in working for less violence in media and for freedom, fairness, diversity, and democracy in media.

• 1900

Today it is no longer parents, schools, or church leaders that inspire and create most of the stories our children hear. In many parts of the world, it isn't even the native country. Increasingly, this is the case in Canada. Our children are now born into a cultural environment whose dominant storytellers are a small group of global conglomerates that have very little to tell but a great deal to sell. This has far-reaching implications for human socialization and governance.

Channels multiply, but communications technologies converge and medias merge. Cross-media conglomeration reduces competition and denies entry to newcomers. Fewer sources fill more outlets more of the time with ever more standardized fare. Alternative perspectives vanish from the mainstream. Media coalesce into a seamless, pervasive, stereotyped, and increasingly homogenized and globalized cultural mainstream that has drifted out of democratic reach.

In a previous presentation, a statement was made by a lawyer that he would be in favour of elimination of anti-dumping laws. The cultural environment movement agenda for action, which includes 25 recommendations, would be in favour of the opposite. Our specific recommendation on the whole subject of dumping is this one. We would recommend that a global marketing awareness task force be set up to expose the dumping of cultural products worldwide, which drives out home-produced and quality materials.

Other distortions of the democratic process include the promotion of practices in popular culture that pollute, hurt, poison, and kill thousands every day: portrayals that dehumanize and stigmatize; cults of media violence that desensitize, terrorize and brutalize; stories that polarize and spur the growing siege mentality of our schools and cities but ignore the drift toward ecological suicide; the silent crumbling of our infrastructure for civil society and the widening gaps in some of the richest countries, which are rapidly developing some of the most glaring inequalities in the industrial world.

One only has to consider the tragic shooting at the high school in Colorado last week to get a clear and recent reminder of this. Of course this has been followed by endless hand-wringing within the media, most of it carefully focused on analysis of whether or not they contribute to these problems rather than on solutions for prevention and change—and there are plenty of them around and I'd be happy to discuss them with you.

The cultural environment movement was founded to meet this crucial challenge of our time, to promote mechanisms of independent citizen initiative and participation in cultural decision-making. We insist on fair recognition of our constitutional rights, human rights, and civil rights.

Evidence of corporate invasion into the lives of ordinary people is now accelerating in all sectors of society, and of course you've heard examples given by the previous speakers.

We share the concerns of many individuals and organizations around the world over the multilateral agreement on investment, which first originated with the WTO and is now back there following unprecedented worldwide opposition to its negotiation within the OECD. We share the belief that the MAI was designed to make it easier for investors to move capital, including production facilities, from one country to another, despite evidence that increased capital mobility disproportionately benefits multinational corporations at the expense of most of the world's peoples and both the natural and the cultural environments.

Clearly, unless the WTO drastically revises its mandate to accommodate itself to the regulatory requirements of a post-corporate world, it will continue to threaten rather than facilitate long-term human sustainability.

Much like cancer, which kills its host and itself by expropriating and consuming the host's energy, the institutions of capitalism are expropriating and consuming the living energies of people, communities, and the planet. Like cancer, the institutions of capitalism lack the foresight to anticipate and avoid the inevitable deadly outcome. We have a collective cancer, and our survival depends on depriving it of power by restructuring our economic rules and institutions to end absentee ownership, rights without accountability, corporate welfare, and financial speculation.

• 1905

Canada has a unique and important role to play in this restructuring process. We are among those who are appalled at the way in which our government has been championing free trade agreements while capitulating, as they did last year, to Ethyl Corporation of Virginia by killing its own environmental bill banning the gasoline additive MMT and paying the American company nearly $20 million of our tax dollars, all under the guise of free trade, as negotiated under NAFTA.

I will not review similar examples—you've heard them from other people—negotiated under NAFTA, but I would urge you to avoid additional suicidal treaties through expansion of this ill-thought-out agreement throughout the Americas. Instead, my purpose here today is to focus on the need to address this cancerous growth in its multidimensional forms, including its proliferation within the mass media, and in turn our cultural environment.

First, however, I wish to congratulate the Canadian government for the world leadership it is showing in calling for an international tax on financial transactions by passing I think it's motion M-239 in Parliament on March 23 of this year. We join other NGOs in offering support for the promotion of measures to control currency speculation in ways consistent with the Tobin tax. I won't say any more about that now.

On the subject of cultural protection, we've been closely watching the Canada-U.S. cultural trade war over split-run magazines, and we approve of Heritage Minister Sheila Copps' attempts through Bill C-55 to protect the Canadian magazine industry and at the same time, avoid retaliations, as the Americans have threatened. It is essential that a message be sent out that Canadians will not be intimidated by trade bullies any more than bullies are to be tolerated or excused in the school yard.

The cultural-environment movement supports the Canadian position, by the way. Our right to cultural sovereignty is understood and appreciated within this movement.

At the second international convention—which I mentioned earlier—that just concluded in Ohio in March of this year, a resolution to that effect was passed at the plenary session, demonstrating that there are leaders and educators within both Canadian and American societies who do not share the myopic, profit-driven rationale espoused at the WTO in negotiations with Canadians on this issue on behalf of American multinationals.

However, this initiative by Sheila Copps is woefully inadequate in relation to the dimensions of the problem globalization is wreaking on both Canadian cultural sovereignty and our cultural environment globally.

While we sympathize with her outrage when she was personally attacked by the American pornographic magazine Hustler, which sells split-runs in Canada, and we support her decision to sue Hustler, we agree with observations made in mainstream coverage on this development that she evidently found nothing wrong with the magazine, well known for many years for its victimization and objectification of women and children, until she and her own daughter were attacked personally. Her carte blanche attitude toward all Canadian magazines and protection for their advertising dollars, regardless of content, is not good enough, given the growing crisis in our cultural environment.

In this context, Sheila Copps has remained unmoved when she has been contacted by CCAVE and other groups with which we work on numerous issues. She has always received copies of our correspondence, at times directed to her personally, involving, for example, objectives to the silence of our federal regulator, the Canadian Radio Television and Telecommunications Commission, CRTC, in cases where the Canadian film and television industry have made a mockery of their own promises and commitments for self-regulation over issues involving violent content. Unfortunately, our concerns have seldom even been acknowledged.

Despite evidence that many corporate decisions have been in violation of the industry's own codes of conduct, as set out in criteria for the Canadian Association of Broadcasters, with enforcement through its Broadcast Standards Council, no effort has ever been made by the heritage minister to call them on it. As a result, the envelope is being pushed in Canada as well as in the United States more and more on the use of sex and violence as chief industrial ingredients in all forms of popular culture.

The $200-million national television fund, a partnership between the federal government and the cable industry, has increased dramatically in recent years. While there's much celebration of the boost to local economies and jobs being created, the nature of the content being produced is still a non-issue, contrary to the recommendation that certainly violent content become one in both the Lamarsh commission report that was released in 1977 as well as my own pieces published in 1995.

• 1910

As pointed out in coverage in the Globe and Mail of April 14 of this year, complaints have arisen over competition between producers of teenage werewolf movies, joint American-Canadian horror films, and similar content counterproductive to the long-term sustainability of a healthy Canadian cultural environment. Any serious commitment toward cultural protection inevitably requires addressing known harmful pollutants now proliferating at an unprecedented rate. As U.S. Surgeon General C. Everett Koop put it at an international conference at the University of Toronto in 1984, pornography and violence in the media are the most serious social and mental health problems in North America. Matters have only gotten worse since then. As the technology has proliferated, so has the content.

We are faced with deadly choices. Humankind may have had more bloodthirsty eras, but none as filled with images of violence as the present. We are awash in a tide of violent representations of the kind that the world has never seen before. There is no escape from the massive invasion of colourful mayhem into the homes and cultural life of ever larger areas of the world.

Violence, whether serious or humorous, is essentially a demonstration of power. It shows who can get away with what, against whom. Those who watch a great deal of television express a greater sense of apprehension, mistrust, and insecurity. Gerbner calls this phenomenon the mean world syndrome. In other words, whatever real dangers lurk outside people's homes, viewing violent television cultivates fears and dependencies that make some groups more vulnerable than others to exploitation and victimization. Ultimately, therefore, marketing mayhem contributes to domination and repression.

In the wake of the Colorado massacre, my contacts in the States have been telling me that messages from all over the world have been pouring into Denver making links between the NATO aggression in Kosovo and what happened in the school yard. On the one hand we have Clinton recommending peaceful, non-violent ways of conflict resolution for Americans in his own country, while he's practising the opposite internationally.

The irony here with violence in popular culture is that even though audiences are desensitized to violence, they don't really like it. Why then is there so much of it? Well, here's how it works. What appears on television is not what people want; it's what advertisers think will attract an audience at the least cost. Cost per thousand is the unit of measurement, where the size of the audience is divided by the dollar cost of the time the advertiser pays to insert the commercial message. Viewers are the fish; programs are the bait.

Production costs are climbing above what domestic advertising markets can support, which is why producers and syndicators reach for the global market. This is where the same cancerous growth that is pervading other aspects of the global market is very much at work in the cultural sector. Only on cultural matters, these trends are especially critical because unless we start to address issues of cultural pollution and how it socializes our children, it is unlikely that we will make much progress on other issues of sustainability and the promotion of a culture of peace and non-violence.

There's much more, of course, that I could say, but I'll stop there.

The Acting Chairman (Ms. Jean Augustine): Thank you for a very interesting presentation.

We'll move now to Mr. Kerr, who is a concerned citizen.

Mr. Steven Kerr (Spokesperson, Concerned Citizens): It's Concerned Citizens.

The Acting Chairman (Ms. Jean Augustine): Is that an organization?

Mr. Steven Kerr: Yes.

Thank you for the opportunity to speak.

First of all, before I talk about the case of the parliamentary approval of treaties, I would just like to express my profound shock and horror at the policies the Chrètien government is pursuing in Yugoslavia.

I used to be a teacher at the St. Petersburg State University in Russia, so I have a special concern for what's going on there.

The war in Yugoslavia is undeclared and illegal. I'm here today in solidarity with the people of Yugoslavia who are being murdered by this government, and in part also by the inaction of this committee. So I urge this committee to look into those issues.

However, on trade, the current government has substituted and confused the formalities of execution of treaties for the substance and the understanding and approval of Canadians. Canadian sovereignty is under direct threat from Canada's accesion to bilateral and multilateral treaties in general, and multilateral trade and investment protection agreements in particular.

• 1915

These agreements bind Canada into the indefinite future, but the process by which such agreements are negotiated is subject to no parliamentary oversight and is conducted by unelected officials with an exceedingly broad mandate conferred upon them by the crown.

This mandate falls under the crown prerogative. Many recent treaties specify the rollback of domestic laws at all levels of government, laws that were democratically conceived and determined to be in the public interest.

FTAA support materials, which one can obtain on the Internet, contain schedules of existing so-called non-compliance laws that one assumes will be rolled back upon Canada's accesion to the FTAA. It's unclear as to whether the Canadian public has understood the past or the current intention of governments in negotiating and acceding to such terms for Canada.

The effect of Canada's accesion to these treaties, as evidenced over the past ten years from NAFTA and from WTO rulings, and also as evidenced from the outcome of the MAI negotiations, which are being continued in secret and unannounced to the FTA and WTO, has been to unduly fetter the discretion of all levels of government in enacting laws for Canada.

The solution is to confer, in part to Parliament and in part perhaps to a royal commission on trade and the public good, the oversight of the exercise of crown prerogative in negotiating and acceding to international trade and investment agreements so as to ensure the representation of the public interest in the discretion of the crown.

Over the century, the royal prerogative has been consistently narrowed by courts of law in interpretations. The democratization of this power by virtue of adopting a measure of parliamentary involvement in the treaty-making process is warranted, if not long overdue.

Australia is ten years ahead of Canada in this respect. In 1995, Australia, through a Senate constitutional legal references committee, established a joint standing committee on treaties. The Australian Senate committee found that it was perfectly constitutional for its parliament to oversee the treaty-making process. I'll get to that a little bit later.

Australia is not even subject to the chapter 11 rules in NAFTA that grant corporations standing in private international law, something unprecedented. As we all know, Canada has been liable for damages from Ethyl Corporation and Monsanto, and presumably will continue to be into the indefinite future.

Previous revocations of our laws implicit in WTO and NAFTA rulings on fisheries, magazines, genetically modified food, MMT, public support of domestic manufacturing and of magazines and publishing has had a chill effect on governments in Ottawa and the provinces, who are unduly fettered from acting in the public interest for fear of being found liable.

Now, if Australia, which is not subject to chapter 11, finds it necessary to increase the participation of its parliament in the treaty-making process, Canada needs to do at least as much, if not more.

Let's put this material into its proper context. In 1992 the Conservative government attempted to communicate to lawyers across the country its progress in negotiating NAFTA. You should look at the 1992 document entitled The North American Free Trade Agreement: An Overview and Description.

Negotiations at this point, of course, were in their final stages, and yet the government of the day chose to give the most important aspect, chapter 11, a single, modest line. It said:

Special provisions described in the Investment Section set out procedures for international arbitration of disputes between investors and NAFTA governments.

NAFTA, I think we all agree, would never have passed if Canadians had understood what the real implications of chapter 11 were. It would not have passed if it were subject to the intense scrutiny and public debate that would have revealed this fact to the general public and made it common knowledge.

So the truth was hidden in plain sight. There was no dangerous public debate about its implications and possible results, which I think we all agree have been undeniably vast.

With regard to the royal prerogative that gives the government the authority to negotiate on behalf of Canada, John Locke had an interesting comment that I think would be wise to remember. In The Second Treatise on Government, he says:

...they have a very wrong notion of government who say that the people have encroached upon the prerogative when they have got any part of it to be defined by positive laws; for in so doing they have not pulled from the Prince

—or the crown—

anything that of right belonged to him, but only declare that that power which they indefinitely left in his or her ancestors hands to be exercised for their good was not a thing which they intended when he used it otherwise.

• 1920

The legal basis for the exercise of crown prerogative comes to us, of course, from English common law. I'd like to make a brief notation of the various precedents.

The first, from the Case of Proclamations, 1610, states: “The King hath no prerogative but that which the law of the land allows him.”

The second, from the Case of Monopolies, 1602, states: “No new prerogatives can be created.”

The third, from the crown v. Keyser's Royal Hotel Ltd., 1920, states: “The prerogative can be abolished by statute.”

The fourth, from the Zamora case of 1916, states: “The Crown cannot by act of State change domestic law.”

We should pay particular attention to that. The government today represents that it can change domestic law by treaty when it draws up schedules of non-compliance laws and negotiates international instruments on the basis that such laws will be rolled back once negotiations have concluded. It cannot possibly know that or promise it, and should not represent that it can to other countries, without prior agreement of Parliament.

This is the situation we have today. The Canadian public gets one version of negotiations when quite the opposite is happening. White is black, black is white. It's rather Orwellian.

The burden of proof is always put on Canadians to demonstrate that trade and investment agreements, which change our entire way of life and reconceptualize everything in culture as trade barriers, are harmful. The onus is somehow on us all the time, when government is free to act to change whatever it likes without parliamentary oversight and approval, and need not prove a thing.

Consider that the Honourable Sergio Marchi, in a speech to the Centre for Trade Policy and Law on February 13, 1998, made the following assertion about Canada's negotiating position in the MAI talks:

As International Trade Minister, I am Canada's “Minister in Charge of Deals”....

That's a rather interesting interpretation of Mr. Marchi's responsibilities, I think, and a rather irresponsible one.

He later states this:

I want to assure Canadians again, with absolute clarity, that I will not accept an MAI that lacks any of the following elements, among others.

First, a narrow interpretation of “expropriation” that makes it entirely clear that legislative or regulatory action by government in the public interest is not expropriation requiring compensation, even if it has adverse profitability consequences for companies and investors.

I'm sure the mining lobby who was here previously would have an interesting take on that speech.

Second, ironclad reservations—at both the national and provincial level—that completely preserve our freedom of action in key areas, including all of the following: health care; social programs; education; culture; programs for Aboriginal Peoples and minority groups.

And finally no standstill or rollback requirements in any of these areas of reservation....

In fact, Canada made no specific reservations protecting Canadian culture, contrary to Mr. Marchi's assertion, and the reservations it did make gave no protection to such important areas of provincial jurisdiction as health care. I mean, one would think the negotiators hadn't read the Canadian Constitution, which separates clearly the areas of federal and provincial jurisdiction and where in fact there is overlap. That was completely botched.

If passed, the MAI would have allowed corporations to take provincial governments to court to roll back our laws for their benefit, contrary to Mr. Marchi's assertion.

One also has to wonder about Mr. Marchi's speech in light of the fact that Canada has been liable to Ethyl Corporation and that Canada is too afraid to enact its own proposed legislation on split-run magazines. I mean, we can't do anything, it seems, without Washington's approval. The Kosovars get bombs and we get trade wars. They're two prongs of, or two instruments of exercising, the same policy.

Now, we're an independent country, or at least I hope we still are. Think about what the government is doing and think about the following interpretation of the powers of the crown by Madam Justice Newbury of the B.C. Court of Appeal, who writes, in Pharmaceutical Manufacturers Association v. B.C. Attorney General, 1996, the following:

...the Crown may not interfere with the “rights, duties or liberties” of its subjects without legal authority. If it does so, it will like any other person be held accountable in a court of law.

I believe the Defence of Canadian Liberty Committee is trying to do that right now.

...the author notes the following limitations on the exercise of prerogative and executive power, namely:

(c) the Crown may not suspend laws or the execution of laws without the consent of Parliament, nor dispense with laws or the execution thereof;

(d) the Crown may not shield its ministers and servants, by means of pardons, from parliamentary inquiry into illegal acts;

—well, I wish this committee would inquire—

(e) the Crown may not tax without the consent of Parliament, which must be embodied in statute and expressed in clear terms; and

—one might ask what privatization is if it's not a tax on the poor for the benefit of the wealthy—

(f) any claims made by the Crown on the basis of prerogative are reviewable by the courts both as to the extent and manner of exercise of the prerogative.

In Canada, the Charter must be placed at the head of this list since it significantly limits the exercise of legislative and executive authority by government.

• 1925

It seems even our Constitution is going to be construed as a technical barrier to trade. It awards or recognizes that Canadian persons—not non-natural persons such as corporations but persons, living people—have natural and inalienable rights that certainly supersede the WTO.

I ask the committee to maybe think about that, about the legal precedence in law of, for example, the Universal Declaration of Human Rights and the charter versus the WTO. What takes legal precedence?

I don't think anybody has thought about that, and I think it's certainly an area that needs to be thought about.

If Canadians have a right to free speech that conflicts with the right of Hearst Publishing to make a profit by dumping split-run magazines like Sports Illustrated into our market, then I guess we have to buy our freedom by the word or maybe the kilobyte.

Next is the issue of proposals for reform. Reform in Australia has largely come at the insistence of a senator named Vicky Bourne of the democrat party.

The Acting Chairman (Ms. Jean Augustine): Two more minutes.

Mr. Steven Kerr: Two more minutes? Then I'll quickly go to the recommendations of the committee.

The Senate committee recommended that legislation be enacted to establish a joint parliamentary committee on treaties. The function and powers of the committee should include the function of inquiring into and reporting on any proposals by Australia to ratify or accede to any treaty, proposed treaty or international instrument; the function of inquiring into and reporting on whether Australia should make any reservations; the function of inquiring into and reporting into any other proposed treaty actions such as the removal of a reservation, the making of a declaration that subjects Australia to additional obligations under a treaty; and determining to which treaties Australia is already a party.

I don't even think we could list all the international instruments to which Canada has agreed. I propose in a document called “The Citizens Trade Oversight Act”—which I'll gladly give to anyone who is interested—a further step along the lines of Senator Bourne's trade parliamentary approvals bill, which is that the Canadian Parliament—

• 1930

The Acting Chairman (Ms. Jean Augustine): We have that attached to your brief.

Mr. Steven Kerr: Yes. I'll very quickly summarize the intent of the bill, which would be that the Parliament of Canada should confer upon the executive a specific mandate, from which it should not be allowed to stray, to negotiate certain issues that are deemed to be in the public interest by Canada, and that the Parliament of Canada should grab hold of its constitutional right, which it's not utilizing right now, to confer its authority upon Canada's trade negotiations.

Currently, the executive is acting without parliamentary approval and authority and very often without the knowledge of parliamentarians. I think that's obscene. And this committee has to take it upon itself to press for the parliamentary approval of treaties, because Canadians and their laws are being very poorly served by the current government and the current trade policies.

Thanks for the time.

The Acting Chairman (Ms. Jean Augustine): Thank you very much, Mr. Kerr. And thank you for the research that went into this brief. I'm sure we'll have an opportunity to review it later.

Ms. Emett.

Ms. Ann Emett (Individual Presentation): Late in 1994 the multilateral agreement known as GATT was delivered of an agency called the World Trade Organization. Conceived and brought to maturity behind closed doors, its midwife and nannies were unelected and largely unaccountable government agents who mainly represented business interests.

Throughout eight years of the Uruguay Round, small cliques of major nations met regularly in green rooms where they made rooms that they planned to then force on other GATT signatories as consensus positions. Corporatist lobbyists like the business coalition called the Intellectual Property Committee, which included IBM, Dupont, General Electric, and Pfizer, bragged that its close association with U.S. trade representatives and the Department of Commerce permitted it to shape the U.S. proposals and the negotiations.

• 1935

Worldwide, most legislators had little idea what they were approving when, late in 1994, they welcomed the latest corporate offspring into their brave new world. Most of them relied, as usual, on their negotiators to tell them when to raise their hands. In some countries, probably through what trilateralists would call excess democracy, some of the common people had got wind of the proceedings and demonstrated their concerns.

There were anti-GATT street riots in the Philippines. In Spain public opposition kept the vote off the parliamentary agenda until on Christmas Eve, without public notice, a rump session of parliament approved the deal. In Belgium, protesters had to be dragged from the scene when their elected officials rubber-stamped the proposal. India was the most unruly. There there was powerful public opposition. Parliament was forced to eliminate provisions in the Indian bill to implement the World Trade Organization. Specifically, it eliminated the World Trade Organization's intellectual property rules.

The Indian parliament only approved a portion of the World Trade Organization's text. It did not agree fully to membership or to abide by all the World Trade Organization rules. The Indian prime minister then reinstated the intellectual property provisions by executive decree, making India a full WTO member despite parliament's opposition. Six months after that the Indian parliament vetoed the prime minister's action.

Meanwhile here at home, Canadians, like brides of Dracula, slumbered, uninformed, unasked, unknowing, while their elected officials, most of whom probably—judging from the experience I had in discussing the MAI with MPs—had very little idea of what they were about, delivered them to the international blood bank.

While I appreciate being consulted about future international trade negotiations, and while I rejoice that Sergio Marchi has acknowledged the relevance of input from us common folk because international trade has become a local issue, rather than being grateful or impressed by this opportunity, I'm offended and very angry. I am offended by the hypocrisy of token hearings and I am angry at what I view as the treasonous compliance of the past two governments of this country in the transfer of power and wealth from this government and from this nation to transnational corporations through scandalous agreements and faltering at the MAI, culminating in the submission to what is a world parliament that's far removed from the democratic process.

This hearing comes too late, and we are debating the wrong question. Here we sit discussing the agenda of the World Trade Organization and the upcoming FTAA when what we should be debating is the World Trade Organization itself, the validity of the FTAA, and for that matter the FTA, the NAFTA, the umpteen other bilateral agreements that have already been signed, sealed, and delivered. We are debating the locks for a stable from which the prize stallion has long since been stolen and sold.

Sylvia Ostry, who represented Canada in the first round of Uruguay GATT talks, giving a public lecture a couple of years ago at the University of Toronto said, “In every country, at every level of government, all the rules must be changed to meet the needs of global trade.” The hall was packed and people sat in stunned silence, sullen, and those who managed to get to the mike in the little time that was allowed for questions unanimously opposed what she was saying.

Now 40% of global trade takes place between corporations owned by the same transnational corporation conglomerates. Shouldn't this move us to question the wisdom of making trade the raison d'être of our economic system, the wisdom of sacrificing democracy and social justice to the needs of global trade?

• 1940

In a recent interview, Peter Mansbridge asked Lloyd Axworthy if Canada was at war with Yugoslavia. Axworthy, horrified, replied no. Mansbridge observed that we are dropping bombs, whereupon Axworthy said “Oh, for some time now we've been referring to that as the human security agenda.” If the absurdity of this Orwellian strategy escapes one, or, if understanding it, one is not repelled, no degree of explanation will deliver its import. It's rather like the punchline of a joke; you get it and laugh or you don't.

I refer to the example merely to illustrate the alarming perspective that seems to dictate current political and economic decision-making. It's the kind of problem-solving that some time ago happened to witches. To prove their innocence or guilt, you tied them to a mill wheel and chucked them into a pond. If they sank, they were innocent and dead.

Canada's trade and foreign affairs policies under Brian Mulroney and Jean Chrétien have been either that senseless or that demonic. The MAI definitely qualifies as demonic. Signing on Canada to the World Trade Organization falls into the same category and indeed may be just what the new world order needs to rescue the MAI from the democratic process.

Let me list a few of my objections to the World Trade Organization.

The founding of the World Trade Organization has been totally undemocratic. Through its negotiation, its adoption, and its implementation, my MP never raised the subject. Had anyone ever raised it with him, I wonder.

The World Trade Organization was not in the original plans agreed upon in the terms of reference for the Uruguay Round of 1986. It's a global executive branch to judge compliance with trade rules, to enforce the rules with sanctions, and to provide a legislative capacity to expand the rules in the future. It is the latest piece of international infrastructure that gives trade rules a permanent organizational structure and a legal status equal to that of the UN.

There are no binding provisions in the definition of its functions and scope that incorporate any health, labour or human rights provisions. There are no procedural safeguards of openness, participation or accountability. Several key provisions require that documents and proceedings remain confidential. The dispute resolution system is totally unacceptable. Secret tribunals of foreign trade bureaucrats from a pre-set roster will sit in judgment, with no guarantee of impartiality or economic disinterest. All documents, transcripts, and proceedings are secret. Qualification for panellists ensure that they will put trade and profit first.

When countries join, they authorize the World Trade Organization to conduct ongoing negotiations on World Trade Organization provisions. Many may never be submitted for approval by any elected legislatures. It's as Sylvia said; as the MAI stipulated, laws present and future, at every level of government, must conform. Each member state ensures the conformity of all its laws, regulations, and administration procedures with its obligations as provided.

Thus the Clinton administration has announced that all future U.S. environmental proposals should be put through trade reviews that ensure their compliance with U.S. trade obligations. Think of that—national sovereignty. If we can't keep laws that we pass because we think they are in our best interests, if we can't pass laws to safeguard the environment, what kind of national sovereignty is that? What kind of a trade is that?

The World Trade Organization is worse than GATT. GATT at least had to have, for example, unanimous approval to impose sanctions. The World Trade Tribunal authorizes it unless everybody—all the members—votes to stop it within 90 days. And there are other ways in which it is worse.

• 1945

In 1995 the New York State budget listed laws to be eliminated because they conflicted with the rules of the World Trade Organization. The list includes things like a tropical timber procurement ban and a law requiring that states only purchase from Northern Ireland companies that maintain certain human rights standards. By giving up whatever right they had to make investment in a country conditional on certain standards, or the entry of products into domestic markets conditional on certain national rules, countries have eliminated whatever leverage they had on corporate behaviour.

The World Trade Organization at the global level institutionalizes the externalization of the environment and social costs to boost profit.

The Acting Chairman (Ms. Jean Augustine): You have one more minute.

Ms. Ann Emett: In short, the international infrastructure—notably the IMF, the World Bank, the World Trade Organization, and the trade regimes they have spawned and imposed—divides us into winners and losers. Corporations win power and wealth; people and nations and the environment lose security and democracy. We are globalizing poverty, destruction, and corporate rule, and we are promoting a new economic model that Chomsky has described as islands of enormous privilege in a vast sea of human misery.

In a democracy, the role of government is stewardship. Being elected is not like being given a deed to the property. This nation was never any government's to trade away—never!

I for one will be working to undo the treachery of the past two to three decades, to identify and support a new kind of government, one with the smarts, the integrity, and the guts to retrieve this country from the clutches of its corporate rule and make a start on a new economic model, one that values and enhances life just as surely as the present model is death oriented.

The Acting Chairman (Ms. Jean Augustine): Thank you, Ms. Emett. I must say that you make compelling arguments. Thank you.

We'll now do the rounds. I think, Mr. Chairman, I would like to give you back your seat.

Mr. Bill Graham: I think you're doing a very good job there. I think you should stay right where you are.

The Acting Chairman (Ms. Jean Augustine): Keeping with the time, if we can keep our questions and/or remarks or comments brief, we can do this in 15 minutes or so.

An hon. member: Half an hour.

The Acting Chairman (Ms. Jean Augustine): Half an hour can bring us to 6.30 p.m.

Mr. Deepak Obhrai: I'll probably finish quickly; I have a meeting.

Thank you very much for your presentation. It was quite powerful.

There are certain questions I should ask Joan. You talk about trafficking in women and you talk about child labour. To me, these are criminal acts and those issues should be addressed under the Criminal Code. I don't understand why you want to tie that to trade, when you're talking about trade. Under the Criminal Code this is a far more serious issue than it would be coming along under the trade act.

There was one more thing you mentioned, which I think is a valid point we can think about, and that is that poor countries are disadvantaged in dispute mechanisms. I think you brought in a good point on this that needs attention.

Dr. Rose Dyson made a lot of points that I thought would be far more appropriately handled by the cultural heritage committee than by the WTO committee, by the international trade committee. You addressed some points that this committee could handle.

• 1950

My concern comes from what we heard throughout the day. There are a lot of red flags raised that need to be addressed, but would it not be more appropriate to put forward solutions to handle that than to come along and say scrap it?

I'll leave the floor to you.

The Chairman: All right. Who is going to join in? Perhaps Ms. Grant-Cummings first, and then Dr. Dyson?

Ms. Joan Grant-Cummings: Fortunately, the League of Nations, the UN, and the UN's rapporteur on violence against women recognize that women's five human rights are indivisible and inalienable. So our economic, political, social, civil and cultural life are all interlinked.

When we come up with a policy that forces women to move themselves from their communities, become the urban poor, remove themselves from their communities to have any kind of economic health, that's why we now have what is called the “feminization of migration”. When we make them more vulnerable with our trade policies, they're more vulnerable to acts of aggression like trafficking, and that is where there is a direct connection between trade and trafficking.

I believe the rapporteur has made it extremely clear in almost all parts of Asia, in Latin America, in the Caribbean.... The RCMP has already alerted the government to the fact that over 100,000 women are trafficked across Canada too. But we don't even have any way of dealing with this, and all of this situation has arisen with the new types of economic policies we have come up with.

If Canada would only take the responsibility, like some nations, to gender-map the impact of our economic policies on women's lives, we wouldn't be able to say that trade and trafficking aren't linked. Women know that they are linked.

The Chairman: Dr. Dyson.

Dr. Rose Dyson: I'd like to comment on what Joan has said. I agree with her that women and children being trafficked in the sex area is much more complex than just being a criminal matter.

But when you mentioned, Deepak, that you thought some of these issues would be better addressed in the cultural sector, like the cultural heritage committee, I'm curious as to what you mean. In your view, would this come under the auspices of UNESCO? Do you think it does?

One of my concerns, and certainly these are shared by other people I work with in the cultural environment movement, is that more and more cultural decisions are being made at the World Trade Organization level. They're really not made by any other area. And this notion that somehow cultural sectors are exempt is a myth.

We just have to look at the kinds of negotiations the Americans are carrying on over split-run magazines. For years the Americans have been arguing that culture should not be exempt. On the one hand, they insist on having these commodities handled like pork or lumber or anything else, and yet somehow we think of it as being exempt.

I'm not clear on where you would see that being addressed—unless you want to give the cultural environment movement a mandate to handle it through the UN, and we'd be delighted to help.

Mr. Deepak Obhrai: Let me start by saying that of course I feel you're entitled to the picture you have presented, whereas I see that free trade is advantageous. I will disagree on that. I'll say that quite clearly. That's from my own experience. However, that doesn't mean red flags should not be raised. I say there have to be red flags raised and some issues addressed.

One of the concerns I've been expressing since this morning, after hearing a lot of people, is that because of the dispute mechanism that exists in the WTO, the WTO seems to have become this all-powerful body. My concern is that the United Nations has been bypassed. I'm saying on this issue, instead of addressing the issues to the WTO, we should address the trade, and the trade does get carried out into different issues that impact human rights and everything.

But then, should we have bodies, cultural bodies, labour bodies, in the United Nations? Why isn't there pressure put by all your groups for those groups to have teeth in them to address many of these issues?

• 1955

Ms. Joan Grant-Cummings: Precisely because the WTO has actually come up with policies that undermine the ILO, for example, that undermine the UN Commission for the Status of Women, that undermine the UN Conference on Trade and Development, all of these places you're talking about. In the ways the WTO works, they're beginning to impact all other UN bodies and making them irrelevant to the process. That's what we are saying, that you can't move things from a realm of a more democratic structure to one of an almost totally anti-democratic structure.

The Chairman: Mr. Kerr.

Mr. Steven Kerr: I'd like to address that point as well.

If you take a look across a broad spectrum of trade actions that have happened over the past five years, you'll see that many of them are at the instigation of unilateral action by the United States government, which is not historically friendly to the United Nations and hasn't paid its UN dues for a very long time. So it's not a coincidence that the United Nations is bypassed, believe me.

We'd love to see the United Nations with teeth, but to do that, of course, you'd have to change the entire way it works. If the Canadian government wants to make a move to start doing that, we'd be right behind you.

Mr. Deepak Obhrai: Do I have more time?

The Chairman: You have another minute or so.

Mr. Deepak Obhrai: The problem I have is that you're coming along here and saying this WTO is the worst kind of bad wolf out there, that it needs to be chucked out. The concern or the issue I have is that while I may agree with many of the recommendations or the red flags you are raising, I strongly feel from my own experience that trade is beneficial, not just to the rich.

Sure you have multinational corporations. I'm no friend of multinational corporations; let's get that straight. But I can see its impact. There are small-scale businesses and medium-sized businesses included in part of all these things. What happened? None of the people have come here and talked about small-scale businesses or medium-sized businesses. They don't have the capability of...[Editor's Note: Technical difficulty].

So I'm saying yes, raise the flag, but to raise it and say it's totally wrong, I have difficulty buying that at this time.

Mr. Steven Kerr: Actually I'll just speak to the question of small businesses.

You might take a look at the effect of companies like Wal-Mart on small business. When Wal-Mart moves into a community, what happens to the small businesses that operate and sell on a small scale to local residents in the downtown core? They go out of business, Deepak, almost everywhere that Wal-Mart sets up an operation.

Mr. Deepak Obhrai: You had Zellers and K-Mart and all those—

Mr. Steven Kerr: Yes, but they operate on a completely different basis. If you want to talk about it, we can get into it later, but it's the retail end of a system of economic exploitation that was invented after Zellers came onto the map.

The Chairman: Ms. Emett.

Ms. Ann Emett: You keep saying because of your experience you have an attitude to free trade. I don't know what your experience is, but I've done a lot of reading and thinking, I've gone to a lot of conferences, and I've talked with many people from all over the world about the impact of free trade deals on their societies, and I am absolutely and utterly horrified at the truth.

Read Michel Chossodovsky's book, for example, on the globalization of poverty. I am appalled and dismayed at the misconceptions that some people in those victimized countries have of free trade agreements that they expect will benefit them.

You talk about small business. Small business in this world of free trade has one outcome only, and that is to be gobbled up by big business.

The trade deals are not about trade. That's the other part. When I first began to study free trade, it was with the first free trade agreement. By the time I had finished reading through that and considering the weight of the comments that I had and all the rest of it, the title for my submission was—this was the NAFTA, I'm sorry—NAFTA: Less than Free, More than Trade.

• 2000

If you have read the MAI draft, you have to know what these people are really about. It's about transferring power and wealth from those who have the least to those who have the most, whether it's within a particular country or between rich countries and poor countries.

The IMF, the World Bank, and now the World Trade Organization are the only international infrastructures operating out there. You and I have no power to influence that whatsoever. And as Herman Daly, an economist for six years with the World Bank, points out, all of these agreements and this infrastructure have allowed corporations to escape from governments and communities out there, where they can do what they pretty well please—and they mean to. If you've read the MAI, you know that.

The beauty of the MAI is they are by now so arrogant that it is so blatant that anybody who can read can understand it. I have to tell you, from speaking to hundred and hundreds of Canadians, when they find out what is in the MAI they are outraged, appalled, very angry, and frightened.

[Technical difficulty—Editor]

• 2005

Believe me, they will see to it that at some point—or there will be some other way—the provisions of the MAI come to pass, because they are determined to have things that way. It is frightening, and it is not about free trade.

On the question of free trade, when the first free trade agreement was put forward, the proponents of it argued that David Ricardo knew what he was talking about. He explained all this business about comparative advantage and how free trade worked. But David Ricardo himself said the only reason free trade would work between nations was because it was so difficult to transfer capital from one country to the other. That is certainly no longer the case. Neither Ricardo nor Adam Smith, who is so often used to justify these things, would ever support what's going on in this world in a million years.

[Translation]

The Chairman: Mrs. Debien.

Mrs. Maud Debien: My first question is for Ms. Grant-Cummings. In your brief, on page 10, you say that if the World Trade Organisation negotiations were to begin, you would recommend that the Canadian government make room for volunteer organisations or NGOs, civil society as well as other international institutions such as the ILO, UNIFEM and UNCTAD. I'd like to know what shape the participation of those organisations in WTO negotiations would take.

I'd like to open a little aside. You emphasized that the major international organisations had become very weak and had almost no powers while the WTO, on the contrary, was a very strong tribunal. The reason is very simple and you know what it is: the major international organisations have no executory or sanctioning powers while the WTO does have them. That's the difference between the power of the WTO and the "weakness" of those international organisations.

To come back to my first question, what shape should the participation of civil society and NGOs take during WTO negotiations?

The following question if for Dr. Dyson. You raised very important questions about violence in the media which, in turn, raise all the questions of commitment and parental responsibility or grandparents' responsibility because today a lot of grandparents take care of their grandchildren while the parents are working. Or even the commitment and responsibility of the schools and the State. Concerning the responsibility of the State, you suggested setting up an instrument that would prohibit cultural dumping. I'd like you to be more specific on that. What would that instrument be, what role would it play and, in this Internet universe, how could it be controlled?

I have another question for Dr. Dyson. You talked about the cultural exemption. A working group, the Cultural Industries Foreign Trade Sectoral Consultation Group was set up and suggested the creation a new international instrument to emphasize the importance of cultural diversity in WTO negotiations on trade relations.

• 2010

On the other hand, others have said that we absolutely must maintain the cultural exemption as it is because creating a new instrument would take too long whereas, during the next negotiations, Canada must absolutely continue to demand cultural exemption to protect its cultural diversity. I'd like to hear what you have to say about that.

Mr. Kerr, you talked about the Australian legislation. During the debate we had in the House on the Canada-Chile and the Canada- Israel agreements, the Bloc Québécois suggested the Canadian government should follow the example of the Australian legislation and indicated it had the means to do the same thing.

Madam Emett, I have no specific question for you. I really appreciate the comments you made and especially the fine critical thinking and analytical skills you have shown in all the questions you have put and all the major debating points you have raised. In years to come—there certainly isn't much of an age difference between us—I would like to have some of your dynamism, your analytical capability and your finely honed critical skills in dealing with the great societal questions we are now facing.

[English]

The Chairman: We would all like to have Ms. Emett's energy. It's all right. It's not just you, Maud. Let's not make this a feminine thing and let someone else in on the energy too.

I think your first question was directed to Ms. Grant-Cummings.

Ms. Joan Grant-Cummings: There are two things I want to say. I want to make it absolutely clear that from NAC's perspective and the perspective of equality-seeking women's groups in Canada, the WTO should not exist, period. That's our position.

The fact that a Canadian government and nation insists that it exists for us means if this is some credible body that's supposed to be doing this work on behalf of all of us, then all of us must be there. All of us must be able to engage, debate, discuss and put forward our views, because what comes out of it impacts our everyday lives. Certainly as women, we know we're already in this uneven state.

We need to be in the face of the WTO if it's going to exist, so whatever policies come out are framed within human rights. The reason, from our perspective, all of these human rights environments within the UN have been weakened is precisely because our government has totally abrogated their responsibility to act within a human rights framework. There has been a deliberate move to undermine all of these bodies. UNCTAD is where these trade agreements should be talked about.

So as Ms. Emett has pointed out, this is not about trade; this is about power and money. The fact that this is about power and money and just a select group of people in the world means the WTO is not a people-based institution. This is our point in putting forward this recommendation. We know that unless our governments are going to be responsible and act within a human rights framework, they will never agree to anything like this.

• 2015

The Chairman: Dr. Dyson.

Dr. Rose Dyson: I'd like to begin with your point that it's really a responsibility of parents and teachers to deal with problems of violence, although I don't think you were implying that everybody didn't have a role to play.

The problem is becoming more and more serious for them all the time, as popular culture assumes a greater socializing role than any other kinds of influences, as I tried to indicate in my presentation. But also, the way in which globalization impacts on the diminishing ability of parents and teachers can be seen in shrinking budgets for education programs, at a time when there's less and less money to provide help for the number of adolescents who require mental health care, partly as a result of a lot of violence in the media and so on. It's not the only cause, but one of them.

Media literacy courses were discontinued here in Ontario last fall. At the same time, the age a child can carry a gun was decreased from 15 years of age to 12, I think, and five provincial governments are fighting gun control legislation here in Canada. I think that's something that should be seriously challenged, given the fact that most people want the gun control legislation, as I understand it.

What do we mean by dumping and who would handle the dumping of cultural products? It's my understanding that this is really what the split-run magazine issue is all about. We would end up having our advertising dollars siphoned away from Canadian productions because American magazines would be able to offer much cheaper rates, having made their money back home. This is what happens with a lot of cultural products around the world.

William Stevenson is a Canadian writer who first pointed out these problems where pornography was concerned in the 1970s. Third world countries were getting extraordinarily violent videos, many of them very well produced with the latest communications technology and production techniques and so on, socializing people in these third world countries in a way that many Americans have objected to.

Violence also exacerbates violence in areas, and there have been many examples of how it's actually contributed to and exacerbated local tensions and wars around the world.

So that's one question. You had another one.

[Translation]

Mrs. Maud Debien: I was wondering what this anti-dumping instrument should be, concretely.

The Chairman: Mrs. Debien, I think there was a bit of confusion here. When Dr. Dyson talked about dumping, this was more about the dumping of cultural products. She didn't talk about institutions...

Mrs. Maud Debien: Unless I had some problems with the interpretation, what I heard was "a new instrument to counter cultural dumping". That's what I understood. Isn't that it?

[English]

Dr. Rose Dyson: In other words, who is going to police this or who is going to handle the dumping? I suppose we're relying on Sheila Copps and support for her in the government. I think she's taken a very courageous step, and she deserves the support of all Canadians. But as I said in my presentation, I'd like her to go a little further.

The Chairman: Okay.

Mr. Blaikie.

Mr. Bill Blaikie: I think it was Ms Emett who lamented the general approach of the political realm to the WTO when it first came into being. I just want to say for the record that there were nine of us in 1994 who voted against the WTO implementing legislation, for a lot of the reasons you brought up.

• 2020

With respect to the whole question of cultural environment, I have to say, again with respect to my colleague's comment about the role of parents, that I just think it's getting tougher and tougher. Parents can't fight this thing. It's not even just economics; it's also the technology. It's just the technology of the channel changer. You can walk out of the room, and your kids can sample 15 different programs by the time you've got a sandwich out of the fridge or something. It's a whole different thing we're dealing with here.

I'm not suggesting that's what you're suggesting, but it just seems to me that parents are overwhelmed. And not only that, they find it harder and harder to be home, because in order to make ends meet, a lot of them have to hold down jobs they wouldn't otherwise have to hold down.

So there is pressure on family life and on the ability of parents to regulate what their children might see or not see on TV, and I think your point about Canadian content is well taken. I'm all for Canadian content, but I don't find a lot of Canadian TV to be superior to other TV in that respect. Canadian TV is not all Don Messer and Front Page Challenge any more.

Dr. Rose Dyson: I couldn't agree more. I didn't have time to talk about that.

Mr. Bill Blaikie: I have just a few other points here.

With respect to the treaty-making or lack of treaty-making power of Parliament, this is something we've actually been debating recently, not in the context of free trade agreements but in the context of NATO, which is a treaty that the Government of Canada entered into in 1949 and that they changed through the enlargement of NATO—the admission of Hungary, the Czech Republic, and Poland—by Order in Council. Now, we're the only NATO country that did this by Order in Council and without a debate. The constitution of every other NATO country, with the exception of the U.K. because they have the same system as we have, would require a debate in their congress or their parliament in order for a change to be made in a treaty like NATO. In the U.K. it's not required, but they did have a debate. Only in Canada, you say? We could change the NATO treaty without so much as a sentence of debate in the House of Commons, and do it by Order in Council.

So there's a large debate there about the role of Parliament, or the lack of a meaningful role for Parliament, when it comes to these treaties. With respect to the FTA we did have votes. They weren't required votes; that's the problem. The government could have sidelined Parliament, but even Mulroney...there was a vote to mandate the government to negotiate, there was a vote on the elements of the agreement, there was a vote at the end, but all these things were not necessarily required.

So I think your point is well taken. We need to do something different when it comes to that.

I think the reason there are no SMEs—small or medium enterprises—here is that this whole debate is not about business; it's about power and money, as you said, and these people aren't in that game. The whole trade debate is between the MNCs, between the BCNI, between the big business and the people, really, and the SMEs are kind of lost somewhere in the middle of the debate. But it's really a debate between democracy and business. That's why we don't have....

I'm trying to answer my Reform colleague, who isn't here at the moment, but we'll have an opportunity to carry on the debate, I'm sure.

So I have just those few comments, not directed to any of you in particular. Again, I think you missed the point about the way the economy has an effect on everything else relative to the point of view about sexual trafficking or trafficking in women. It's the same with the environment. You can say that the destruction of the Amazon rain forest is an environmental question. Well, it's not an environmental question if the reason people are destroying the rain forest is in order to create exports, either in the way of beef or whatever, turning it into pasture land in order to get hard currency in order to meet their debts. That's ultimately an economic question.

• 2025

To separate these things off as if they're environmental or they're criminal when in fact we know it's the economy and the way it's designed that causes people to behave in certain ways, or even compels them to behave in certain ways, I think is to miss the mark.

Dr. Rose Dyson: There was one question I didn't answer earlier, and you raised it again, Bill, and that is this business of our helplessness in the cultural sector because of the Internet. I think we have to guard against buying into what Linda McQuaig calls the cult of impotence. She demonstrates in her book, I think quite effectively, that it is possible to handle financial transactions in a world involving this kind of communications technology and we could do the same if the political will, both nationally and internationally, was there.

An international conference on hate on the Internet took place here in Toronto a few weeks ago. I attended that, and it was quite interesting to hear about the kind of legislation that is being contemplated and implemented in certain places. Progress is being made among different jurisdictions on addressing and tracking down child pornography. In fact, those who worry about hate literature are taking examples from that because of the proliferation of hate sites and racism and anti-Semitism, and so on, on the web.

So we can do it if we want to. There's plenty of evidence. Germany is probably leading the world in developing appropriate measures to address the proliferation of extraordinarily harmful cultural products on the Internet, in my view.

The Chairman: That's a good lead for us, then.

Mr. Kerr.

Mr. Steven Kerr: Yes, I have just one comment.

As Rose pointed out, there's enormous experience in other countries with regard to the impact of treaties. Again, my presentation pointed to the Australian experience, and Madam Debien kindly cited her party's awareness of that. I would urge every member of the standing committee to contact the Australian treaties committee and discuss with them their experience. They have a very similar constitutional system to our own, and much of what is applicable there is applicable here.

The Chairman: Thank you for that observation. Actually, we have the report of that committee, and believe me, Mr. Turp, Madam Debien's colleague, will make very sure we study it. It is a matter of great concern in a parliamentary democracy, I quite agree with you.

Did you have any questions, Madam Augustine?

Ms. Jean Augustine: Well, I'm very conscious of the time and the staff we have working for us, but I want to make the comment that what you have done for us today is put on the table some very important issues. With the level of emotion and the depth of your discussion, I think you've left us with some messages that take us all the way back to root causes and to initial steps. I think it's very important, in the process we are going through, that we have been able to hear you today, so we will continue to read your documentation and to pay attention. I want to thank you for your presentation.

A lot of things you say have found resonance with me. Sitting as the chair, I couldn't applaud or anything like that, but I want to express appreciation. Thank you so much.

The Chairman: On behalf of all of the members, I'd like to thank you very much. Please excuse me for having to be absent for some part of the presentation, but Dr. Dyson knows where to find me and often does. I'm sure Ms. Emett will now know too, and we'll continue this dialogue. We appreciate you very much.

There was a request by someone from Activist magazine to take a photograph. If he or she is still here, now would be the time to do it. That person is not here? Very well. The clerk had told me that.

Then we're adjourned until nine o'clock tomorrow morning in the same room. Thank you very much.