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]

Thursday, March 22, 2001

• 0905

[English]

The Chair (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Colleagues, can we get started?

We have a very distinguished panel this morning, so I'd like to get going, because I know colleagues would like to ask them questions. We're lucky to have Mr. Johnson, Mr. Meyers, Mr. Julian, and Mr. Pal here.

I'm just going to take you in the order you are on the list, if I may. So I'll start with Mr. Johnson.

[Translation]

Mr. Johnson, we will begin with you. If each of you speaks for 10 to 15 minutes, we will have time for questions afterwards. Thank you.

Mr. Johnson.

Mr. Pierre Marc Johnson (Director, Symposium hémisphérique sur le commerce et l'environnement): Thank you, Mr. Chairman.

First of all, I would like to thank you as committee chair, and I would like to thank committee members, for having thought to invite me. I presume I have been invited to appear for two reasons: first, because David Runnalls of the International Institute for Sustainable Development, who is known to some of you, and I will have the pleasure of chairing a symposium to be held in Quebec City in the three days preceding the Summit. The symposium will focus on sustainable development and environmental issues associated with trade and the Americas. Second, for some years now I have been particularly interested in this topic, since I have taken on one of two other roles after leaving public life as a parliamentarian.

In essence, the environmental issues associated with the FTAA can be put, I believe, in the following terms. What significance will environmental issues be given in negotiations, in texts, in co-operation systems, and the forums and institutions available for civil society to have some input into the FTAA as it is implemented?

Mr. Chairman, you will understand that I do not at the outset question the fact that there will be an FTAA. I am not even making a judgment on its appropriateness. However, I do take it for granted for the purposes of this discussion that all countries in the three continents will come together as signatories to an agreement that might in part be similar to NAFTA.

[English]

In practice, I believe that when countries negotiate a free trade agreement, they essentially agree to three things. They essentially agree to the fact that they'll stimulate the circulation of goods, capital, and sometimes people among themselves. Second, they agree that they will diminish the capacity of government to intervene through regulation and legislation in a way that is against the movement of goods across borders. Third, they negotiate 3,000 pages of exceptions to these two principles, which is essentially what a commercial negotiation is about.

• 0910

[Translation]

There are consequences to this way of managing the increase in trade among states. Those consequences include one that seems obvious to me: we change the make-up of governance systems affecting society by defining limits in the agreements, limits that states voluntarily impose upon themselves in social, environmental and other issues. Here, I will focus on environmental issues.

There are a number of issues affecting the environment and sustainable development in the Americas: pollution—obviously—the depletion of natural resources, and a decline in biodiversity, as well as issues frequently associated with public health, not only the environment as such. What we need to determine is whether the heads of State will include those issues in their negotiations when they come together in Quebec City.

I respectfully submit that there are three ways of including those issues. The first would be to incorporate the Reilly provisions into the accord itself. We do not know the wording of the accord, and we will not know it unless it is made public during the Buenos Aires conference to be held in several days. The Reilly provisions are named after Bill Reilly, a US environmental minister at the time of the first George Bush's presidency. In NAFTA, the Reilly provisions provide for a number of specific references to the environment. There is such a reference in the preamble.

Second, we can give priority to legislative and regulatory provisions following from the application of major international environmental accords. Thus, those provisions would prevail over any free trade restrictions the State would impose upon itself.

Third, negotiators should draw inspiration from chapters 7 and 9 of NAFTA, insofar as they make it possible to establish clearly the fact that states have the freedom to set environmental levels and standards they deem appropriate.

Lastly, the text must contain a provision that binds states not to drive environmental standards ever lower to attract investment. NAFTA does contain such a provision: It is called the pollution havens clause.

All the above elements are based on the assumption that trade negotiations have given rise to a process of reflection on states' capacity to take environmental action.

You must also establish systems of co-operation.

[English]

Cooperative measures, I believe, Mr. Chairman, are the best way to ensure environmental enhancement on the three continents in the hemisphere. We have an extraordinary experience with the case of the North American commission on the environment, which, without being perfect, with very few resources, and with a very limited mandate, has managed, in the context of North America, to define a series of measures that contribute to capacity-building in the case of Mexico, to efforts towards harmonization of standards, to technical exchange, to transfer of expertise. It has managed also to identify a series of common activities, including transborder movement of pollutants, including corridors for transportation, including issues related to migratory birds. These cooperation systems are essential if we're not to ignore this fundamental component of what should come with increased growth.

• 0915

Finally, the third element that I believe should be part of any serious consideration of environmental elements is one that allows the creation of either an institution or a set of forums whereby civil societies can be continuously present in the process of implementation of the FTAA, if it is to be adopted. And there is a lack of such a forum at the hemispheric level at this point. There is one with Mexico and the U.S., the NACEC, which has strong public participatory processes. One would hope that in the context of the FTAA, the governments will agree to that, although there is much resistance.

But my time is up. Thank you.

The Chair: I assure you, you'll have more time later.

Mr. Pierre Marc Johnson: Merci.

The Chair: Mr. Meyers.

Mr. Jason Meyers (Chief Economist, Canadian Manufacturers and Exporters): Thank you very much, Mr. Chair, ladies and gentlemen.

Thanks for the opportunity to speak on our members' views on the free trade agreement of the Americas. As you know, the Canadian Manufacturers and Exporters, the members I represent, account for about 75% of this country's industrial production and 90% of this country's exports. Most of the large exporters Canada has are members of our association, but 80% of our members are small companies. A majority of our members are in very strong support, not only of Canada's participation in free trade negotiations, but also of the successful conclusion of a free trade agreement encompassing all of the Americas.

CME has been involved with FTAA issues since the Miami summit of 1994. We're a founding member of the Business Network for Hemispheric Integration, and have been meeting with the Americas Business Forum, concurrently with trade ministers' meetings, since 1994. We've worked very closely with counterpart industrial associations from across the hemisphere in identifying common issues, not only trade and investment issues, but common regulatory issues that are leading into this series of negotiations.

I mentioned the very strong support of our members for an FTAA agreement. We conduct a survey of all our companies once a year on international trade issues. The most recent survey showed that 79% of Canada's manufacturers and exporters were in favour of Canadian participation in FTAA negotiations. Over 55% of our members see an FTAA agreement as an opportunity for business expansion. Only 6% see such an agreement as a threat to their business.

I think that support for free trade right across the Americas reflects a number of factors. First of all, there is Canada's growing trade and investment activity, not only in the U.S. and in North America, but across South America, across Latin America, and the Caribbean as well. Of our members, 63% view the U.S., of course, as their priority market, but 30% report that they are expecting to expand their business into South America, 16% are going to be doing more business in Mexico, and 11% are going to be expanding their business in Chile. And, of course, a lot of that interest in expanding business in Mexico and Chile reflects the fact that we also have free trade agreements with those countries.

The support for an FTAA also reflects significant opportunities Canadian companies see in Latin America's dynamic marketplace. Together, North and South America comprise a market of about 800 million people and $17 trillion in business activity per year. It's a very attractive market, a very dynamic market, and it's a market Canadian companies should be a part of. The Canadian economy would benefit if our exporters and companies were taking an active role right across Latin America.

• 0920

It also reflects I think the benefits and opportunities that Canadian companies have seen as a result of their participation in free trade in North America. Today 70% of our members see NAFTA as an opportunity for them. Only 6% see our North American Free Trade Agreement as more of a threat to their business. But I think the support for the opportunity they see in the NAFTA agreement reflects the fact that a majority are doing more business with the United States and more companies are trading into Mexico. More companies are investing in the United States and Mexico, but one of the surprising facts that our survey shows is that over 60% of companies, as a result of free trade, are expanding business in Canada. I think that's a very strong sign of the dynamic position of our own economy as a base to do business right across the Americas.

In our view, Canada should take a very proactive role, a leadership role, in upcoming FTAA negotiations, in pursuit of four basic objectives.

The first, of course, is to open market access into Latin America and the Caribbean markets for Canadian goods and services. But the second is to ensure non-discriminatory treatment of Canadian businesses investing and operating throughout the Americas. I think that depends on a third objective, which is the establishment of clear rules not only governing international trade but clear rules and clear governance systems within all of the countries of the Americas—clearly enforced and strongly enforced regulations that deal with issues around the environment, around labour standards, as well as trade and investment.

Finally, the fourth objective is a process for resolving trade disputes that avoids unilateral trade action. Here I think Canada has a very important role to play in participating in FTAA negotiations, because if we are not at the table, the rules and the trade actions will be undertaken anyway, usually by our largest trading partner, the United States.

The FTAA negotiations, though, are taking place in a broader context and they must be seen in that context. I think the objectives of the FTAA themselves will go some way in obtaining the clarity of rules and regulations that are necessary in a broader WTO agreement. I think they will go some way in opening trade in services, better treatment—non-discriminatory treatment—for Canadian investment. All of these are also our multilateral trade objectives, and the FTAA I think is a very important stepping stone to achieving those objectives, at least on a regional basis within the Americas.

I think the FTAA as well should be seen in the context of our trade objectives within the NAFTA. That's really the second pillar of Canada's trade policy and it really reflects the critical importance of our economic and business relationships with the United States.

Canada's negotiating objectives within the FTAA should be pursued in line with what we're aiming to achieve in terms of our business relationship with the United States, and with Mexico, our other NAFTA partner.

I think it's very important in FTAA negotiations that Canada be sure not to dilute the advantages of market access that we now enjoy, the non-discriminatory treatment that Canadian companies now enjoy, under the NAFTA.

I think we also have to be very careful not to dilute the very efficient and what I believe to be the objective process of dispute settlement that's currently in force under the NAFTA. In fact, I think we should be using the NAFTA as a model for building upon in a more general FTAA agreement.

We believe that Canada's longer-term FTAA negotiating objectives will certainly be more easily achieved if short-term progress can be made in some very practical fields, especially in that of business facilitation—things like streamlining and harmonizing customs procedures, for example.

In this respect, we believe that the implementation of a number of existing market access commitments is very important. A number of commitments have already been made to facilitate market entry and streamline customs procedures across the Americas, but in reality not a lot has been accomplished to date. Canadian exporters still face considerable delays in getting goods into South American markets. This is primarily due to customs administrations, but it's also due to a confusing and overlapping system, and a not very well-enforced system, of rules and regulations that are being enforced domestically in countries across the Americas.

• 0925

Customs administrations, we find, are often poorly managed. They're underfunded; they lack the professionalism that's required to guarantee business consistent treatment and non-discriminatory treatment, and fair market access. For a lot of large Canadian companies these just increase the cost of doing business, but for smaller exporters they're really barriers that impede their ability to enter new markets. This is why I think an improvement in the business facilitation, improvement in customs procedures, and more effective implementation of the rules around customs is a good first step that we should be pursuing in the course of FTAA negotiations.

Another prerequisite, of course, to successful negotiations is to ensure greater clarity, greater accountability, and the effective implementation of domestic regulatory regimes affecting trade and investment but also affecting environment and labour standards.

Trade remedy laws and the application of subsidies, anti-dumping and countervailing duties are also very important priorities for Canada in the FTAA negotiations.

We believe that Canada has a very important leadership role in FTAA negotiations, recognizing that the objective is not only about liberalizing markets but also very much about designing and enforcing clear rules governing fair trade in goods and services, non-discriminatory treatment of investment, and the mediation of trade disputes.

A leadership role for Canada is a competitive advantage for Canadian exporters. We look forward to working with the Canadian government and with other business associations across the Americas in the course of FTAA negotiations.

As I said before, for CMA and its members, the FTAA agreement is as much about good government and ensuring economic development opportunities for all of the Americas as it is about expanding export opportunities.

While it's important that labour, environment, and other regulations are not used unfairly as discriminatory barriers to trade and investment, a priority for FTAA negotiators must be to ensure the development of clear and effective legislative and regulatory regimes in all countries of the hemisphere. These negotiations are a major part of building the rule of law and democratic regimes across North and South America. We recognize that the negotiations are going to be complicated by the fact that we have a number of small economies participating at different levels of development.

For that reason, we believe Canada has a leading role to play in ensuring that its own market liberalization commitments are met in a timely manner, that greater efforts are made to assist in the development of business and other non-governmental linkages between Canada and the Americas, that our international development assistance is provided to developing economies in Latin America and the Caribbean, and that all parties in the FTAA negotiations are committed to democratic principles and the rule of law.

Among all industrialized countries in the world, none depends upon trade as much as Canada does. Since the free trade agreement with the United States over a decade ago, we have demonstrated that our country is one of the most successful international traders in the world.

But just as we've benefited from seeing trade barriers come down, we believe that other countries in our hemisphere also stand to benefit greatly by increased trade and investment opportunities. As our trade ties grow, so does our recognition that we live in an interdependent world, that we must respect each other's rights, and that we have a common environment and common stewardship responsibilities.

Canadians have been enriched as we've increased our engagement with the rest of the world, but the world is also a better place because of Canada's growing role in diplomacy, in peacekeeping and the promotion of human rights, in culture and in trade. We believe the FTAA gives us the opportunity both to benefit more and to contribute more by helping build stronger and healthier ties among all countries in the hemisphere.

Thank you.

The Chair: Thank you very much, Mr. Meyers.

Mr. Julian, sir, from the Council of Canadians.

[Translation]

Mr. Peter Julian (Director general, Council of Canadians): Thank you, Mr. Chairman. Thank you for your invitation, and for giving me this opportunity to address the committee today. I represent the 100,000 members of the Council of Canadians. We consider this an extremely important topic, one we are facing this year and will face again next year.

[English]

The free trade area of the Americas currently being negotiated by 34 countries is intended by its architects to be the most far-reaching trade agreement in history. Although it is based on the model of the North American Free Trade Agreement, NAFTA, it goes far beyond NAFTA in its scope and power. The FTAA as it now stands would introduce into the western hemisphere all the disciplines of the proposed services agreement of the World Trade Organization, the WTO, and the General Agreement on Trade in Services, GATS, together with the powers of the failed Multilateral Agreement on Investment, MAI. This would create a new trade powerhouse with sweeping new authority over every aspect of life in Canada and the Americas.

• 0930

The mandate of the GATS, now being negotiated in Geneva, is to liberalize global trade in services, including all public programs. It will gradually phase out all government barriers to international competition in the services sector.

The trade negotiations committee of the FTAA, led by Canada in the crucial formative months when the first draft was written, proposes a services agreement for this hemispheric pact that is similar and even expanded. It also proposes to retain and perhaps expand NAFTA's investor-state provisions, which give corporations unprecedented rights to pursue their trade interests through legally binding trade tribunals.

Combining these two powers into one agreement will give the transnational corporations of this hemisphere unequalled new rights to compete for, and even challenge, every publicly funded service of its governments—including health care, education, social security, culture, and environmental protection.

As well, the proposed FTAA contains new provisions on competition policy, government procurement, market access, and dispute settlement. Together with the inclusion of services and investments, these could remove the ability of all governments of the Americas to create or maintain the laws, standards, and regulations that protect the health, safety, and well-being of their citizens and the environment they share.

Moreover, the FTAA negotiators appear to have chosen to emulate the tougher WTO rules, rather than the NAFTA rules, in key areas of standard setting and dispute settlement. Essentially, the FTAA negotiators—urged on by the big business community in every country—have taken the most ambitious elements of every existing or proposed global trade investment agreement and put them all together in this openly ambitious hemispheric pact.

Once again, as in former trade agreements like NAFTA and WTO, this free trade agreement will contain no safeguards to protect workers, human rights, social security, or health and environmental standards. Once again, civil society and the majority of citizens who want a different kind of trade agreement have been excluded from the negotiations. They will also be shut out of the deliberations in Quebec City next month.

[Translation]

As well, reports from the negotiators themselves have inadvertently found their way into the public domain. In October 7, 1999, a confidential report from the Negotiating Group on Services was recently leaked; it contains detailed plans for the services provisions of the FTAA. Sherri Mr. Stephenson, Deputy Director for trade with the Organization of American States, prepared the paper for a March 2000 trade conference in Dallas, Texas, in which she reported on the mandate and progress of the nine Working Groups by sector. FTAA websites and Canadian government documents contained important information as well.

Put together, these reports exposed a plan to create the most far-reaching trade agreement ever negotiated. The combination of a whole new services agreement in the FTAA combined with the existing, and perhaps even extended, NAFTA investment provisions represents a whole new threat to every aspect of life for Canadians. This powerful combination will give transnational corporations of the hemisphere important new rights, even in the supposedly protected areas of health care, social security, education, natural resources protection and all government services—federal, provincial and municipal.

I would remind you that NAFTA was the first international trade agreement in the world to allow a private interest, usually a corporation or an industry sector, to bypass its own government and, although it is not a signatory to the agreement, directly challenge the laws, policies and practices of another NAFTA government if these laws, policies and practices impinge on the established “rights” of the corporation in question.

Chapter 11 of NAFTA gives the corporation the right to sue for compensation for lost current and future profit from government actions, no matter how legal these actions may be or for what purpose they have been taken.

Chapter 11 was successfully used by Virginia-based Ethyl Corp. to force the Canadian government to reverse its legislation banning the cross-border sale of its product, MMT, an additive to gasoline that has been banned in many countries and that Prime Minister Jean Chrétien once called a “dangerous neurotoxin”.

• 0935

S.D. Myers, a U.S. PCB waste-disposal company, also successfully used a chapter 11 threat to force Canada to reverse its ban on PCB exports—a ban Canada undertook in compliance with the Basel Convention banning the transboundary movements of hazardous waste—and successfully sued the Canadian government for $50 million US in damages and interest.

Sun Belt Water Inc. of Santa Barbara, California, is suing the Canadian government for $14 billion because British Columbia banned the export of bulk water in 1993, thereby closing any opportunities for the company to get into the water-export business in that province. Obviously, this case could affect the right of provinces, including Quebec, to legislate.

Canadians have already seen a steady erosion of their social security under the new rules of economic globalization and trade agreements. Socially, Canada now looks more like the US than at any other time in its history, with huge gaps between haves and have-nots. In Canada, as in the US, while great prosperity abounds in some quarters, great poverty is growing in others.

In fact, Canada has experienced the highest rise in child poverty in the industrialized world in the last decade—the same years in which the number of millionaires has tripled, while workers' wages rose just 2%, less than the rate of inflation.

[English]

What this means is that Canadian workers have been losing ground in this brave new world of global trade agreements.

The cuts to social programs and unemployment insurance have been so deep that Standard and Poor's says the myth of a kinder Canada must be put to rest. The New York-based ratings institute says that in 1999, for the first time, Canada spent less on its elderly and unemployed than the United States did.

Canada's farmers have also felt the full blast of global competition, as the Canadian government has slashed farm subsidies and farm income support far more, and far faster, than its major trading partners have. As a result, 1999 and 2000 were the worst years for Canadian farmers since 1926—the year the Canadian government began keeping such records.

If the impact of trade agreements has been negative in Canada, it has also been negative to the south. Eight years into NAFTA, Mexico now has record poverty rates of 70%. The average minimum wage lost more than three quarters of its purchasing power in those years.

If the terms and recommendations of the FTAA negotiating groups are the substantive basis for a hemisphere trade pact, the whole process is unacceptable—and the citizens of the Americas will work to defeat it. In spite of government protests that they have negotiated these new trade and investment rules in full collaboration with their citizens, the proposed FTAA reflects none of the concerns voiced by civil society. But it does contain all the provisions considered most egregious by environmentalists, human rights and social justice groups, farmers, indigenous peoples, artists, workers, and many others. Every social program, environmental regulation, and natural resource is at risk under the proposed FTAA.

The national chairperson of the Council of Canadians, Maude Barlow, has said that the FTAA is nothing less than a charter of rights and freedoms for the largest and most powerful corporations on this planet. The corporate sponsorships around Quebec City, revealed this week, only confirm this perception.

I could go on; however, ten minutes does not do justice to the impact of the FTAA in agriculture, in culture, in energy, in water, and elsewhere. If any members of the committee want more information, I would invite them to go to the Council of Canadians website, www.canadians.org.

I would like to thank the committee for this invitation today. Quite frankly, we feel that the more discussion there is around the proposed FTAA, the more confident we feel that this agreement will be rejected—just as the Multilateral Agreement on Investment was two years ago. Merci beaucoup.

The Chair: Thank you very much, Mr. Julian. You mentioned water. You might be interested to know that in the next couple of weeks this committee will be receiving the bill on bulk exports of water from Canada. We'll make sure you're contacted when that happens. You might want to come and give some representations on the content of that bill. Your observations on it might be helpful.

Mr. Pal, sir.

Mr. P.K. Pal (Director, Transparency International Canada): Good morning, ladies and gentlemen. I represent an organization called Transparency International. I'm also on the board of the Canadian chapter of Transparency International.

• 0940

I will make my remarks orally. I do not have a presentation, but I do have a collection of our documents. They will be translated into French very soon, I'm assured, and if any of you would like to pick up a copy in English, you're most welcome to do so.

Let me tell you a bit about Transparency International. It's a not-for-profit non-government organization established to highlight corruption internationally. It's based in Berlin, with between 80 to 90 chapters in countries around the world. My particular organization is Transparency International Canada.

What I have to say to you during the next few minutes may or may not be a welcome change from the presentations of the preceding speakers. I'll be talking about corruption.

Corruption is unlawful and unethical enrichment in any way, shape or form. It increases the cost of trade—I'll talk more about that—and it increases the cost of investment in any country, including our own. It weakens public institutions. It erodes democratic systems, destroys belief in democratic values, and generally works against the principles of humanity.

In our work around the world, we at Transparency have come to the startling realization that the coalitions working for corruption are much stronger than the coalitions like us working against corruption. In almost every walk of life there are vested interests being met primarily by civil societies like ours—and of course by the governments.

To tell you again about the corruption picture we are up against, I will quote a report from the Carter Centre about a year ago. It summarized corruption as being the total of monopoly and discretion without accountability.

I said I'd talk about the cost of corruption. In a study produced in 1998, I believe, Price Waterhouse estimated that the cost of corruption—the money siphoned away from the people to whom it's due, whether workers or citizens—was $500 billion U.S. for 35 developing countries. But they didn't have a figure for the developed countries—they couldn't even estimate it. So that's $500 billion siphoned away that otherwise would have belonged to the people of those 35 developing countries.

I'll mention another figure from a more recent study by Price Waterhouse and the Carter Centre. They've developed what's called the opacity index. That is the cost of the lack of clear and transparent practices in everything from business to government. The cost of corruption is described as a hidden tax.

I'll give you some startling figures from Price Waterhouse's estimate of this hidden tax. If you take Singapore as the baseline of zero—somebody has to be the baseline—the United States is at five, the U.K. is at seven. Those are the good guys. Russia is at 43. In other words, if you are thinking of making an investment in Russia, you should allow for a hidden corruption tax of 43% of your income. In China the figure is 46. The list goes on. You can get this on the website.

The Chair: You're not going to tantalize us by not telling us where Canada is on the list? We're all sitting here waiting to know.

Mr. P.K. Pal: I'm sorry to say Canada didn't even make the list.

The Chair: Does that mean we're minus?

• 0945

Mr. P.K. Pal: That means we're either very good or very bad.

For our hemispheric countries, Chile is at 5, which is very good, and Colombia, 25. These are not surprising.

But like you, I was disappointed that Canada didn't even merit a rating.

The Chair: Was it your good offices that kept us off the list?

Mr. P.K. Pal: That's the work of Transparency International.

The Chair: We're lucky to have you there.

Mr. P.K. Pal: To get more specific, one of the matters we're pushing for recognition of in the summit is the OAS Inter-American Convention Against Corruption. There is an extract of that in my handout. It's a very broad convention, defining the obligations of the 34 countries to create, maintain, and strengthen integrity systems and pursue anti-corruption initiatives. I believe it has been ratified by 17 out of the 34 countries. Some have yet to sign on.

What we are pushing for is that the summit call upon the members to do a couple of very important things: complete ratification by all members and then the implementation of the convention. Too many of these conventions are written, signed, and just filed. They're not pursued. That is the dull part of any convention. The negotiation is very glamorous and very attractive; the dull part is the implementation and the enforcement.

There was a civil society activity going on for the summit, culminating in a recommendation, or a bunch of recommendations, in Miami this past January. In my handout there's an extract from that, dealing with transparency matters, calling for public participation and information in all government activities, calling for an independent judiciary in all these countries—without an independent judiciary, you may as well forget about corruption—and very important, and we're stressing this very much in Transparency's work, transparency in public procurement, the government purchase of goods and services. There has to be much greater transparency and a regime of clear and consistent documentation, and we call upon the various people who quote for government contracts to enter into what's called “integrity pacts”, a preliminary undertaking not to indulge in any corrupt activities.

I see time is running on. I'll quickly mention that there's another convention that Canada has signed. In fact, Canada's ratification made that convention binding. That is the OECD convention. The reason I mention it at this meeting is because three countries of the OECD are at the summit—that is, Canada, the U.S., and Mexico—and three other non-OECD countries that agreed to be bound by the OECD anti-bribery convention will also be at the summit. They are Brazil, Argentina, and Chile. So there are at least six nations in the summit that are bound by the OECD convention that refers to the bribery of foreign public officials. There is a corresponding Canadian act that made that convention binding on Canadians, and that makes it a criminal offence for a Canadian exporter to bribe directly, or indirectly through agents, a foreign public official.

We in Transparency International are working for an amendment of the convention to broaden it to bribery of political parties, and to go on even to bribery of private parties. We need to concentrate the attention of the summit members and the summit delegations.

I made a similar presentation to Mr. Marc Lortie. I've written him a letter, a copy of which is in the handout.

The very great importance of corruption is that it devastates internationally. It destroys human initiatives where you're talking about labour laws, human rights, freedom, democracy, and the environment. If all these regulations can be bypassed by a little bribe or a big bribe, then you haven't achieved anything.

• 0950

You can have the most wonderful environmental protection laws or labour protection laws and conventions, but if they're not enforced and if they're bypassed by bribe, by corruption, you have not achieved anything. In fact, you've probably done worse than before by giving the impression to people that you're doing something when actually you know full well that nothing will be done.

Corruption has brought down several governments. As we know, in Indonesia, the Philippines, and Peru, that which the terrorists could not do, corruption allegations have done. Basically what we are saying is, in the summit, please discuss this matter openly and explicitly. In the few handouts we've received from the summit up to now, the word “corruption” is not really coming to the forefront. It's covered under things like rule of law, social responsibility, and transparency. Why not use the “c” word? This is what we're suggesting.

To repeat—and I'll close now—there is a great need to ratify, implement, and enforce that OAS convention, to have the mutual review mechanism and the regulations on government procurement.

Finally, I would make this point. Corruption is an issue that does not divide people; it's one that brings the government and the protesters together. Who can be against corruption? It will bring the press, the government, and the protesters all in support. So we strongly appeal that this corruption issue be raised at the forefront in the resolutions or plan of action, or whatever comes out of the summit. We make that plain.

I think I've slightly overshot my time. Thank you very much for inviting us to be present.

The Chair: Thank you very much.

Mr. Pal, may I take advantage of your being here—colleagues, for one second—by asking you about something that is not directly relevant to the FTAA? As members of the committee are aware, we are presently writing a report on our trip to the south Caucasus and central Asia. I wonder if you could, in a few brief comments, situate that area on your transparency list. That would be helpful to us for our report.

Mr. P.K. Pal: I will give you a handout here that, as I say, is not official. You will find Transparency International's corruption perceptions index. This has been going on for the last few years. We rate about 84 or 85 countries, and I'm sorry to say that most of the south Asian countries are in the fourth or at least third quartile. It's not good.

The Chair: I see Uzbekistan and Kazakhstan on the list. However, for the members of the committee, I take it we could refer to your work as one way of helping us in our determination as to what our policy should be toward that area.

Mr. P.K. Pal: Yes, you'll find the index very good.

I should also take this opportunity to mention that this is a corruption perceptions index, countries that are the most likely to take bribes. There is also the opposite index, countries that are the most likely to give bribes. If you are a businessman in south Asia and you have a whole lot of foreign business or company people coming in, whom do you think you can touch for a bribe? Canada does well on both, but certain countries, especially our friends south of the border, fall back on the second index. In other words, they are seen as being more perceptible to giving bribes. It's not good. Both these indexes are here.

The Chair: Thank you very much. That's very helpful.

We'll move to questions, then.

Mr. Lunn.

Mr. Gary Lunn (Saanich—Gulf Islands, Canadian Alliance): Thank you, Mr. Chairman. I have a couple of very short questions.

First, Mr. Julian, I believe your organization is participating in a parallel summit in Quebec City, the people's summit. Is that correct?

Mr. Peter Julian: Yes, it is.

Mr. Gary Lunn: Can you tell the committee the amount of money you have received from the federal government for that summit, or the amount of money that the people's summit itself has received from the federal government to put on that summit?

Mr. Peter Julian: I do not know the amount that went to the people's summit. I can tell you that the Council of Canadians has received absolutely no funding for that summit. In fact, for our participation, we will be paying for the use of a chapiteau in Quebec City on the Saturday, which is when our teach-in will be held.

Mr. Gary Lunn: Apparently there has been $300,000 received collectively for the people's summit. You have not heard that or any numbers to that effect?

• 0955

Mr. Peter Julian: I've heard numbers around that, yes. That's the people's summit.

Mr. Gary Lunn: The people's summit. So you are aware that the government is providing funding, to the tune of $300,000 collectively for all the organizations, to put on the people's summit? About $300,000, give or take—that's pretty close to the number?

Mr. Peter Julian: Yes.

I'll just reiterate, though. For the Council of Canadians, we are paying for our use of the chapiteau, which is the principal organizing portion for the people's summit, out of our membership funds. So we are not receiving any government subvention.

Mr. Gary Lunn: Okay.

I just wanted to get that on the record because I knew you were one of the organizations, and that seems to be the number that's out there—$300,000 of federal moneys to fund. I appreciate it's not directly going to you; it's going to the overall body.

I want to go now to Mr. Meyers.

Mr. Meyers—and I want to put it on the record—I absolutely think this is appalling, that the government is actually funding this. We absolutely believe in people's right to peacefully protest and to put their views out there. We invite, as you can see, all organizations to our committee so we hear all viewpoints. I think it's very important in a democracy to do that.

I have a big problem, though, with this funding by the federal government to the tune of $300,000, actually paying these organizations, which are very clear that they're going to be engaging in civil disobedience and trying to disrupt these free trade talks, to come.

Can you tell us if some of your organizations or some of your members have been approached, maybe not directly, but are aware that the government is looking for sponsors to come? How is this affecting them? I'd like your thoughts on the government actually funding these organizations that have made it very clear they're going to engage in civil disobedience.

I'd like your thoughts on that, and how is it impacting these businesses that are trying to be good corporate citizens and come to the table?

Mr. Jason Meyers: Mr. Julian referred, at the end of his remarks, to the information that was in the press over the last couple of days about two corporate sponsors sponsoring events during the summit. I think one of our biggest concerns is the amount of misinformation that is in the media right now about both the intentions of companies in sponsoring the summit and more generally in terms of the role of business.

As far as I'm concerned, businesses that are approached and asked if they would sponsor events at the summit of the Americas or at any other negotiation, or any other meeting of public officials, are showing their good citizenship by helping to sponsor those events. I see nothing wrong with that.

In fact, the chairperson of the Council of Canadians participated in some of those receptions and events herself at the WTO negotiations in Seattle, which were also sponsored by corporations, both from Canada and from the United States.

I really am concerned when we see information in the press that tries to say that there is some ulterior motive here—that corporations, just because they are sponsoring these events, are in some way managing the course of the negotiations or managing the substance of the negotiations. That's just simply untrue.

Mr. Gary Lunn: One more last question, if I may, Madam Chair.

We've heard a lot from Mr. Julian, and, not surprisingly, I know his viewpoint. They're very public in their viewpoint of where they're going, which I don't share. In fact, I think it's completely inaccurate.

But, Mr. Meyers, I know you're very well versed in the NAFTA. What has been the impact? I know right now we enjoy a $95-billion-plus trade surplus annually. Can you tell us how, in your opinion, the NAFTA agreement has impacted Canada, and business and employment in this country, over its lifetime?

Mr. Jason Meyers: Just very briefly, if it were not for Canada's participation in the NAFTA, and if it were not for a free trade agreement, we wouldn't have seen either the growth in the economy or the growth in employment and investment that we have seen over the last ten years.

• 1000

During the course of the discussions leading up to the free trade agreement between Canada and the United States that was signed in 1989, and then into the NAFTA, there were a lot of critics of the free trade agreement who said there would be whole sectors of the Canadian economy wiped out. Manufacturing was one of those sectors that a lot of the critics said couldn't compete.

Well, since 1993, there have been 650,000 net new jobs added in the manufacturing sector. Most of that was driven by the fact that these companies now have a much bigger market that they can export to and develop technology for.

Realizing that the Canadian market is fairly limited in scope, the NAFTA agreement has allowed companies to expand. More than anything else, it's given them security of access into the largest and most dynamic market in the world. Now we're very integrated today. In manufactured products, 60% of what is produced in Canada is being exported to the United States, so the integration—the internationalization—of Canadian business is a fact of life today. We need rules in place, that Canada has a part in making, to make sure we get a fair shake in our trading relations.

But clearly, both from the economics and the statistics, from the growth in jobs and from the response of our members who are now doing business around the world, not only in NAFTA, they say NAFTA has been a very good thing for the Canadian economy. I think it's hard to dispute that when you look at where the jobs are coming from today.

The Chair: Thank you very much. Monsieur Paquette.

[Translation]

Mr. Pierre Paquette (Joliette, BQ): Thank you. Thank you for your presentations.

For the benefit of the committee, before putting my question to Mr. Meyers I would just remind everyone that the People's Summit of the Americas brings together all kinds of groups, which are not all against free trade. There will be a forum of parliamentarians on March 17, I will be there, and I believe that Francine Lalonde will be there as well, perhaps along with other parliamentarians from the House of Commons. Personally, I support free trade.

That said, we have now had two agreements with the United States and Mexico, and we can take heed of the lessons of the past, particularly those associated with chapter 11. I will have a question for Mr. Johnson on chapter 11.

As I was saying, there is to be a People's Summit of the Americas, to which the federal and Quebec governments have contributed very little. It also has a business-related equivalent: the Business Forum of the Americas, which is to be held in Buenos Aires in early April.

I would like to know whether the Alliance will be participating in the Business Forum. I would also like to know the composition of the Canadian delegation to the business forum, which has been recognized by the Summit of the Americas, while the People's Summit of the Americas has not. It is not recognized as speaking for civil society. Will you participate in the Business Forum, and will you have any information for us on the composition of the Canadian delegation to the Business Forum?

[English]

Mr. Jason Meyers: The Americas Business Forum, which usually accompanies the ministerial meetings of ministers of international trade during the FTA negotiating process, is meeting in Buenos Aires at the beginning of the month. We're very active participants in the business forum, as are a number of other business associations such as the Chamber of Commerce. We have participated actively in those meetings for some time.

Many other leading Canadian exporters, both large and small, also participate in those meetings. It's an extremely useful networking event for businesspeople, but it's also an opportunity, I think, to exchange views. Certainly last year's meeting in Toronto saw a very constructive exchange of views on a number of other issues that are not simply business issues but issues around labour and environmental standards, for instance.

In terms of participation, companies and associations participate in these because they think the meetings are important, and everyone's way is paid by the company or the association. Again, there's certainly no government subsidy or government funding provided for any participation.

[Translation]

Mr. Pierre Paquette: How many Canadians generally attend those meetings?

[English]

Mr. Jason Meyers: I'm not sure. We really haven't seen, I think, as many people likely to go to the meetings in Buenos Aires this year. Part of that is because, as nice a city as Buenos Aires is, it's a long way to travel. I think it's also because a number of other events are being organized that will also bring business people from around the hemisphere to Quebec City, Montreal, and a number of other fora. The number of business people from Canada will be maybe 20, but that's only a guess. I'm not sure how many will be going.

• 1005

[Translation]

Mr. Pierre Paquette: I would like to put some questions to Mr. Johnson, and perhaps Mr. Julian, on chapter 11 of NAFTA. We often hear that NAFTA is one of the greenest agreements around. Yet I believe some 98% of lawsuits by companies under chapter 11 hinge on environmental issues. I would like your comments on this. In devising an investment accord for the FTAA, should we draw inspiration from chapter 11?

Mr. Pierre Marc Johnson: I would say no. In principle, chapter 11 was designed—though we are not quite certain by whom, or clear on the motivation of those who fought to have it included—to protect companies from having their assets expropriated without compensation, from discretionary intervention by a State or by a government. We imagine that those provisions were designed to be applied at the WTO, in an effort to protect companies investing in developing countries from discretionary decisions by those countries' governments. We recognize that not all developing countries function according to the rule of law. However, the United States does, as does Mexico. Yet those provisions found their way into NAFTA anyway.

The net effect of this provision has been to allow US and Canadian companies to contest government decisions, alleging that, for all practical purposes, a provision in environmental legislation has had the impact of expropriating the company.

I agree with analysts from the International Institute for Sustainable Development, with Konrad von Moltke, who is a major expert. He is a European, but has worked both in the U.S. and in Winnipeg. They are of the opinion that the provision is being applied in a fashion that was not intended by the governments.

We will have to see how the issue is settled. A number of economic interests would like these provisions to be maintained, but the U.S. government, the Canadian government and the Mexican government are highly irritated by the way panels have interpreted chapter 11. In NAFTA, the result might be a directive from the three ministers responsible, that would for all practical purposes bind all future panels. NAFTA itself will not have to be amended. The three ministers might agree on a letter of interpretation, or an interpretation accord. Once that is in place, panels will no longer be able to change the “polluter pays” principle to the “you pay the polluter” principle.

[English]

The “polluter pays” principle might be becoming “you pay the polluter” principle.

[Translation]

I would say that the vast majority of negotiators, people associated with these negotiations, agree that the panels are interpreting these provisions in an abusive fashion. This was not intended by the governments.

The problem with the FTAA is that some might believe that Canada, the U.S. and other more developed countries in Latin America want to protect themselves against discretionary action by other states in the hemisphere. They might be tempted to adopt the provisions of chapter 11. If they do, we hope that they can ensure it will be interpreted in such a way that abuses I have described can be prevented.

• 1010

[English]

The Chair: Did you want to quickly add something on that issue?

[Translation]

Mr. Peter Julian: Yes.

The Chair: Please be brief, because we have far exceeded the time set aside for this question.

Mr. Peter Julian: Chapter 11 touches on a number of aspects. The actions we have seen so far, specifically those brought by Methanex and Metalclad, were environment-related. But other cases with broader implications are emerging. For example, UPS is suing in relation to postal services. Sun Belt is suing in relation to water exports.

Chapter 11 is broader than any individual litigation. Its effect is also to cool governments down—the governments know that any legislation they can adopt could be subject to chapter 11. We need to have the debate. A few moments ago, Mr. Meyers mentioned Ms. Barlow. He was insinuating something, but personal attacks will not solve the issue; only substantive debate will. We are ready to undertake the debate on chapter 11, and on all aspects of the FTAA.

The Chair: Thank you.

[English]

Madam Marleau.

Ms. Diane Marleau (Sudbury, Lib.): First of all, let me take a minute to congratulate Transparency International. I'm very pleased they're here. In my past life I had the opportunity to do some work with them. They are going to grow, I hope. The issue of corruption is a very big one, and he's right, it needs to be addressed in some form.

When we mention the rule of law, that's what we mean: we need transparent rules. I would hope that Transparency International will continue to observe all of these trade agreements and all of the rules in the countries where we trade. I happen to believe that contact between our countries is a help, but an awful lot of work needs to be done.

This is just a statement about Transparency International and to say I hope we continue to support you, both with cash and in other ways. And it's not bribery. You do need money to do the work you do.

I'd like to ask a question of Mr. Julian. It's nice to be opposed to everything. You talked about our farmers and how they're having such a hard time because of the international community and some subsidies that are going on, and you're right. But not having a trade agreement won't change that. As a matter of fact, we'll have even less control over anything. Don't you think that if you can get some decent rules and some form of enforcement, in the end our farmers may be better off? I cannot understand what your premise is. Is it that we put up walls?

I represent the riding of Sudbury, which was built on nickel. I would like us to always get a lot of money for our nickel in Sudbury. The reality is there aren't a lot of people in our community who can purchase it. So we sell it. That's how we survive. I would like to think the rules will help us to continue to sell it. It's not part of the trade agreement and it does trade on the international market, but this is just an example.

It seems to me your point of view is almost simplistic in that you're going to go back to the days when we could forget there was anything out there. That's over. I would rather be at that table trying to bring forward rules we can follow and that can be transparent and can help us. Yes, there are problems and yes, we should address them, and we're going to continue to work to address them, but closing our eyes and just opposing everything is not going to get us anywhere. Why would you take a stand like this, except just to be in opposition? I've been in opposition and it can be fun, but it's not very constructive.

Mr. Peter Julian: Thanks for your question.

Very clearly, we are in favour of fair trade. Our concerns we're raising today and have been raising over the past few months are very legitimate concerns that are part of public policy.

• 1015

The legal cases with regard to the investor-state provisions in chapter 11 are part of the public domain now. If we've seen public opinion starting to wake up to the concerns around NAFTA, I would believe it's in large part due to these chapter 11 cases, which are so over the wall in terms of their impact on the ability of municipal governments, potentially provincial governments, and federal governments to legislate in areas that are in the interests of ordinary citizens.

A rules-based system is fine, but the rules are in whose interest? What we see now certainly with NAFTA and the direction the FTAA is heading in is a rules-based system that favours corporations. It's a charter of rights and freedoms for corporations. It is not in the public interest to see our environmental protection and our public services gutted and to have the type of trade agreement we have under NAFTA and that is developing under the FTAA.

I should add as well, as I'm sure you're aware, that there was a global movement of opposition to the type of free trade agreement proposed by the MAI.

What we've seen is increasing solidarity internationally. There will be delegates from South America and Central America in Quebec City opposing the way the FTAA is being developed and the policy direction we see it being developed in. After we've worked to defeat this attempt to entrench corporate rights, we're hoping we'll be able to build a fair trade regime that really benefits the population of the country and of the hemisphere.

Ms. Diane Marleau: Can I just add a little bit more? There isn't one corporation sitting at this table. I'm not a corporation, he's not a corporation, nor are any of these people, unless they have something else going on the side. We're certainly there to do what's good for the country. You have to have a starting point somewhere.

You talk about the environment. We discovered the environment before anybody talked about it, and we've done something about it. I would like to think we could bring some of that expertise and some of what we've learned in terms of cleaning up our own environment to the international level.

I will address this question to Pierre Marc Johnson. We worry about the fact that it's now being said the U.S. will not meet the Kyoto Protocol, the agreement they made. I would hope we would not allow countries, including Canada, to renege on some of their promises on the environment. After all, the environment is something else. It doesn't matter where you pollute. In the end we all pay the price. So we should be at that table ensuring the rules are such that there will be less pollution and that we will be able to protect our citizens even more than we are now.

Thank you.

[Translation]

I should have asked you that in French. Please forgive me.

[English]

Mr. Pierre Marc Johnson: That's quite all right. I will answer in the language in which you asked me the question, Madam.

I think the letter from President Bush to four senators concerning the fact he believes CO₂ is not a pollutant is a very important political setback. President Bush didn't say in that letter that he reneged on the concept of bringing down CO₂ emissions. He specifically addressed the issue of CO₂ emissions in generating power. Still, that's a source of great concern for those who believe in the validity of international instruments such as the Kyoto Protocol. Canada usually aligns its position considering what the U.S. is going to do. We don't always align our positions behind the U.S., but you have to take it into account for obvious reasons, political, economic, and geopolitical. So that's a setback in North American terms, I would say, for the controlling of CO₂ emissions.

The second effect of that, unfortunately, is it sends a heck of a message to the rest of the hemisphere that the United States doesn't seem to be too concerned about the environmental agenda when it comes to negotiating hemispheric free trade.

• 1020

In the past few months, I've heard from Latin American negotiators to whom I was trying to preach my bid about what this accord should look like when it comes to the environment—and I cannot just posture myself against it; I'm just trying to address the issue of how you integrate these issues in that negotiation. One Latin American negotiator, a very senior official from a Latin American country, recently asked me why the devil we should put on the table issues concerning the environment if the U.S. is not interested.

I think that actually opens up for Canada a very important position. Canada will never be able to play the role the U.S. plays on these issues, because it doesn't have the clout, and it doesn't represent 75% of what the market is in the hemisphere, as the Americans do. At the same time, I think this opens up a position of leadership for this country on this issue.

The Chair: Thank you very much, sir. That was very helpful.

Mr. Casey.

Mr. Bill Casey (Cumberland—Colchester, PC): First of all, Mr. Johnson, I want to say I've never seen eight pages so full of information as the ones you've passed out here. The information that's chocked in here is incredible.

You really do highlight the challenge here with what you just said. One country is 75% of the GDP, five countries are 95%, and the other 29 are so small. It really raises the question of whether it is possible for these relatively giant countries to impose the rules on tiny countries with effectively no taxation systems and no revenue other than tariffs and income from duties. What is the chance of success here?

Mr. Pierre Marc Johnson: Well, we could go into economic theory and analysis for a long time here, but, in a nutshell, I would say the thrust in favour of free trade comes essentially from three main forces. The first one is an ideological and philosophical view that increased trade will bring about increased prosperity, which will bring about increased welfare for people—and I think that's quite a legitimate point of view.

The second comes from what I think is a profound belief that the world we live in, because of technology and because of globalization, is about much more than just the movement of goods. It's also about the movement of capital, the movement of ideas, the movement of people, the movement of data, largely because of technologies. That's what makes the globalization period so different from the Renaissance period or the 19th century. Globalization brings about the necessity for nation-states to adapt to an environment in which there are more and more constraints, because we live together.

And I think the third element is pretty factual. It's the concentration of capital. Even though it has a strong current within its society that is protectionist—and we're facing it in the case of lumber these days—the U.S. is also listening to the concentration of capital across the world that believes very strongly in the two first notions that I spoke about, plus the concept of profit—in which they not only believe but from which they're also the main beneficiaries of increased activities. That means the deployment of gigantic forces behind the concept of globalization.

The real issue that comes from that...in American society, in the U.S., you can find strong forces that express themselves in Congress, in the Senate, in a political system that is so different from ours, and that want this globalization process to take into account these major issues concerning the environment, concerning social equity, concerning human rights, because it's a very open society. It's a society in which the freedom to express oneself, as in Canada, is very strong. And these interests are there.

• 1025

Now, they express themselves in two ways. One of them is the traditional way, and I'd say maybe the Conseil des Canadiens is probably the Canadian pendant of that, in radical opposition to trade liberalization, even though the nuance once in a while is in the way it's being done. But there is no solution proposed.

Another approach is to take into account these factors, draw on the most dynamic elements of societies—including American society—and some of the values véhiculées by civil society in the U.S.A. and in this country, and harness enough power to get the leaders of the Americas to be more sensitive to these issues through various means. It includes the people's summit in Quebec City, it includes the symposium that I have the honour of presiding over, and it includes a series of meetings in gatherings that hopefully will stir the heck out of commercial negotiators who had the surprise of their life in Seattle. Their ministers were asking them what the hell was going on out there, because they didn't expect it. The environmental community and some people like the Conseil des Canadiens expected it because they were behind it, largely.

The message that is coming from civil society more and more, even within the United States, is that this process cannot be only about trade. It has to take into account other dimensions of what community life is about in all our countries. Ultimately, because they're 75% of the market, the United States will go on playing a major role.

One of the ways for Canada to help a process in which the dominance of the United States will not be so unilateral is to continue to foster processes that are multilateral, in which we feel comfortable, in which we can find allies, and in which we can sometimes water down a little some of the aspirations of our southern friends that we find to be a little overpowering.

The Chair: Thank you.

Dr. Patry.

[Translation]

Mr. Bernard Patry (Pierrefonds—Dollard, Lib.): Thank you. I have a question for Mr. Johnson.

We know that initially, the FTAA was based on four principles, one of which was to guarantee sustainable development and environmental protection. We know all the problems that are now associated with it, involving civil society, the environment, the right to work, and many other issues.

In the working document you provided, Au-delà du commerce international, you draw some parallels between the World Trade Organization and the Free-Trade Area of the Americas. You say:

We will have to interweave the two processes to deal with pending harmonization issues.

Now, we know very well that the Summit of the Americas in Quebec City is just one stage in the FTAA. What do you really expect from the Summit? How can the Summit advance environment- related issues? What statements should the heads of State make to rally environmentalists to the Summit of the Americas? In your view, will the FTAA cause as great a loss of sovereignty as the WTO did?

Mr. Pierre Marc Johnson: We cannot have free trade without some loss of sovereignty. We cannot have free trade or globalization without some vertical loss of sovereignty—either an upward loss to international regimes, be it for trade, the environment or other sectors, or a downward loss for central governments, insofar as they have to submit to the governments of the States of the federation, and even in some cases local communities, in applying the systems. Unless we can conceive of a world made up of 187 governments which meet, and which do not consist of human communities, there will be no globalization without some loss of sovereignty.

Secondly, what are we to expect in Quebec? To date, it seems to me that environmental issues have not been sufficiently considered. I say that they have not been sufficiently considered, but there again I have not seen the agreement itself. In principle, we have seen none of them. However, Mr. Julian does seem to have had privileged access; he seems convinced that the agreement contains certain provisions. What I am told is that the agreement contains many parentheses and question marks. Nothing is definitive yet. The negotiations will last for some time, but from what we hear they unfortunately do not seem to be focussing on environmental issues as yet.

• 1030

We hope that, in Quebec City, the heads of states will look beyond the democratic issues, which are fundamental, and beyond trade issues, which are pivotal and essential to the proceedings, and take social justice—though human rights will be largely covered by the democratic discussion—and the environment into account.

What does taking the environment into account mean? First and foremost, it means that all heads of State must publicly recognize the importance of environmental protection, and send a clear message to their negotiators saying that they want to take it into consideration in certain provisions.

Let me just add an aside here. There are two reasons why some people will resist this. The first is a technical, or institutional, reason. A free trade agreement is expressed through a simple legal instrument, familiar since the Second World War. GATT, and now the WTO, operate on the basis of clear legal instruments under which states impose limits on their own exercise of sovereignty, so that they can influence trade. These are well- known and simple rules, very familiar to negotiators.

But when we move into areas like social justice, human rights and the environment, things are no longer so clear-cut. The advantage we have with the environment, as opposed to the other two areas, is that the hemisphere already has 242 bilateral or multi- lateral environmental accords, comprising a considerable body of legislation and legal provisions. The heads of State will have to look at it.

You cannot leave these issues solely to environment ministers, who already have their hands full in their own countries, and who generally do not carry much weight in the formulation of their own country's foreign policy. The heads of State and heads of government themselves will have to take control of the issues, and send their executives a clear message to ensure that they generate environmental provisions that are useful and harmonize well with the trade provisions.

[English]

The Chair: I think I'll go to Mr. Martin and then come back to Mr. Patry.

Mr. Martin.

Mr. Keith Martin (Esquimalt—Juan de Fuca, Canadian Alliance): Merci beaucoup. Thank you very much for being here today.

Mr. Julian, I've always had a little bit of a difficult time actually understanding your position, if I may say so. Madame Marleau articulated it very well.

I've been in Colombia, and I just returned from the Sudan last night. As you know, the poverty in these countries is epidemic. On the issue of Colombia, the poor campesinos there are actually growing poppies and coca for drugs. What they want is to get away from growing those things. They want jobs and they want something else to grow that they can export.

The position your organization has taken on the surface sounds very reasonable. With all due respect, I would suggest that the positions you take are harming the very people you profess to help: the poorest people in the world. And while you say you want free trade and fair trade, that's exactly what is trying to be negotiated here.

I find it curious that when...in the situation that took place in Seattle, they were trying to develop stable and fair environmental laws, fair labour laws, laws that don't exist in many of the countries that are abusing the poorest of the poor. They were trying to establish the elimination of barriers to trade, like tariffs, non-tariff barriers, the issue of double taxation regimes. They were trying to remove the barriers to trade that help our country, but which help the people who are the poorest individuals of our hemisphere—and indeed the world—more.

Perhaps the failure of this whole movement has been the lack of transparency, the lack of putting preliminary positions on the table, the lack of, perhaps, inclusion in a structured fashion of people of rural grouping. That's maybe the failure of the system. But instead of people of your organizations supporting obstruction and opposition to these issues being debated at these meetings, why not develop ways that you can be included in them? Why do you oppose the removal of barriers to trade that are going to help the poorest people of this hemisphere?

• 1035

Mr. Peter Julian: I agree with you that this process has been a failure. I may disagree with you as to why.

In Seattle, for example, as we well know, it was the third-world delegates who felt, in many respects, railroaded, who were part of the process that led to the undoing of that millennium round of negotiations. When we look at the realities after a number of years now of trade agreements, what we see is that this promise of prosperity isn't being delivered. I mentioned during my presentation—I think this was before you arrived—that Mexico, eight years after the NAFTA agreement that was to bring prosperity to the country, now has a record high poverty rate of 70%. The average minimum wage has lost more than three-quarters of its purchasing power in those years.

So we're talking about a rules-based system, certainly, but the rules, as I mentioned earlier, are in whose interest, when in Mexico we look at record high poverty rates, when in Canada we see, in newspaper reports across the country last week, that the gap between the richest and poorest in Canada has grown at a staggering rate in the past 15 years, according to the most recent study of financial security, over a 15-year period of trade regimes? Half of all families held 94% of all the wealth in the country, leaving the other half with only 6%.

We're looking at staggering gaps between rich and poor in Canada. We're looking at record poverty rates in Mexico. So, yes, we can certainly do the marketing and talk about free trade agreements and the unprecedented prosperity they're going to bring. The reality on the ground is fundamentally different. As I mentioned earlier, the reason we see support starting to fall now for free trade agreements, for NAFTA for example, is partly that the public, citizens out there, are starting to see the difference between the rhetoric and the reality.

Mr. Keith Martin: Mr. Julian, it's been anything but a failure. If you see any failures in the system such as you articulated—and I think it's rather been a success—I suggest that you speak to the Mexicans again. They've actually had an expansion of their middle class, and those who are poorest in their country have actually seen their standard of living improved. You may want to check your statistics.

I'll close with this. Kofi Annan said that what the developing countries of the world need now is not aid, but trade. They need freer trade, they need trade liberalization. The converse of what at least my party supports was found in countries like Albania, the U.S.S.R., the former Eastern Bloc countries. They epitomize the opposite of the free trade we're trying to pursue here. I hope that rather than fear-mongering, rather than feeding the Canadian public a line that, with all due respect, in many cases is blown out of proportion or is untrue, you'll work with the process and try to make it fair trade.

The Chair: Shall we take that as an affirmation rather than a statement, rather than a question?

Mr. Peter Julian: Yes, it's a question, just so I get a chance to get my digs in.

I think we've agreed that fair trade would be beneficial to the world, but nothing I brought forward today, nothing that is available in the information we've circulated, and nothing that has been discussed right across the country, as citizens, members of the public, get together to discuss the FTAA and their concerns about it, stems from anything other than the facts. The gap between rich and poor is increasing at a staggering rate in Canada—that's undeniable.

The chapter 11, investor-state suits are proceeding now and having an enormous impact on environmental legislation, potentially on services, on water exports. We talk about Mexico and the impact that NAFTA has had on Mexico. I would suggest your statistics may be inaccurate, because our statistics are founded on the studies that have been done since NAFTA has been brought in.

So the reality we see is one where the rhetoric of these free trade agreements has not matched the reality.

• 1040

The Chair: Maybe you could help us, if you've got any documents that would show the link between the gap's growing and the free trade, or whether there are other social factors that produce the phenomenon. That's what confuses me. I hear what you say, but I don't know. It may well be true that the whole of society is much richer and the gap has grown bigger, but that doesn't necessarily mean it's the free trade agreement that's responsible for the gap. It may well be other social factors in the country. It seems to me we live in a very complicated world, in which all sorts of factors play. So that's the problem we have in understanding that argument.

Mr. Paradis, then we're going to go to Madam Lalonde.

[Translation]

Mr. Denis Paradis (Brome—Missisquoi, Lib.): Thank you, Mr. Chairman. First of all, I would like to thank all our witnesses for their presentation.

I will begin with a quote from Au-delà du commerce international, by Pierre Marc Johnson.

Heads of State, their ministers and their government [...] must resolutely direct globalization down a more human path.

With respect to the FTAA as it is envisaged, Canada has extraordinary assets. There are two legal systems in this country: civil law and common law. French culture and Anglo-Saxon culture live side-by-side. In addition, we are close to the United States: For trade purposes, we are much closer to the U.S. than Argentina, Brazil, Chile and other Latin and South American countries can ever be. In a Free Trade Area of the Americas, Canada would have enormous advantages.

My question is to Mr. Johnson. Earlier on, you talked about Canada's participation in multilateral accords, saying that it could do a great deal. Given the two legal systems in Canada, given the two cultures, given that it is close to the U.S. market, how could Canada gain a higher profile as facilitator in human rights issues, democracy issues and environmental issues—in other words, non-commercial issues? How can we do more there?

Mr. Pierre Marc Johnson: We would have to learn Spanish.

An Hon. Member: Excellent!

The Chair: Mr. Johnson, perhaps you could recommend that Parliament help us learn Spanish.

Ms. Francine Lalonde (Mercier, BQ): I have already asked the Speaker. His response was not positive.

Mr. Pierre Marc Johnson: You are referring to extremely important circumstances. In essence, the presence of Canadian diplomats, parliamentarians and experts in the negotiations might occasionally move the negotiations towards a direction that diverges somewhat from that of our neighbours to the South.

A Canadian diplomat, one of the NAFTA negotiators and one of its principal architects, once explained to me that Canada's general approach was to put three inches of demands on the table and watch them quietly melt away during negotiations.

We have to be somewhat more daring in what we put on the table. We have to approach the negotiations without too much fear, accepting that we must bring forward human rights, social justice and environmental concerns through our head of government.

Moreover, negotiating teams—which until two or three years ago were traditionally dominated by trade specialists—must consist of much larger teams of officials, diplomats, consultants and specialists from sectors other than strictly trade negotiations. As far as I understand, this has started happening in the past year or two, so that these concerns could be incorporated into the very complex, technical and impenetrable bureaucratic apparatus. But until we succeed in breaking this hyper-specialists' cocoon, we will not succeed in incorporating issues we are talking about here today, and which concern most politicians and parliamentarians in democracies.

• 1045

A few moments ago, I said half-jokingly that we had to learn Spanish. But we must understand how many of our friends from Latin American countries have extremely visceral reactions to these issues. They see our human rights, environmental and social justice concerns as a direct attack on their concept of sovereignty.

Moreover, they sometimes see our environmental concerns as a commercial political instrument used by U.S. and Canadian interests for their own benefit. They claim that we would use the environment to prevent their products from getting into our markets. The way they see it, we are being protectionist—we want to close our borders to their products, while we ask them to open their borders to our capital.

There are all sorts of sensitivities. I think that one of the things that Canada has to do is to take full advantage of the presence of Mexico. For seven years now, Mexico has been a full participant and partner in what is, both an agreement on free trade and an agreement on environment and labour relations issues.

There should be closer ties between Canada and Mexico. I think that Canada and Mexico should hold numerous bilateral meetings in the coming weeks leading up to the Summit because Mexico, along with the rest of Latin America, will be an outstanding broker.

The Chair: Thank you.

Ms. Lalonde,

Ms. Francine Lalonde: Good morning, and I would like to thank you all for coming here today. I would like to extend a particularly warm welcome to Pierre Marc Johnson, with whom I had the pleasure of working in a previous life.

Mr. Johnson, I find the text that you provided us very interesting reading. I was very happy in particular with your conclusion. I would like to quote you the following couple of sentences:

The environment and labour obligations attached to an eventual fast track agreement [...]

This is the fast-track proposal you talked about.

[...] would greatly influence the architecture of the FTAA. As in 1992 for NAFTA, the ability of american NGOs to network and mobilize public opinion around environmental issues, with a presidential campaign in the background, could make a difference to a “green” or a “grey” trade deal.

What I really like in this conclusion, and you reiterated it in other sections of your brief, is that you recognize the importance of mobilizing public opinion to force the head of State to lay out clear policies.

However, the Republicans won the presidential elections and we do not know whether they will want a fast-track system. In Canada and in Quebec, attempts are being made to use the Quebec Summit and the Summit of the Americas as an opportunity to rally public opinion. When public opinion is picked up on by members of Parliament, among others, it can help the head of State to clarify his stands.

In terms of the environment, what would you like to see happening? You have laid out two possible trusts, but which option would you prefer?

Mr. Pierre Marc Johnson: In terms of the environment, I would like to see a preamble similar to the one in NAFTA, the international agreement primacy rule, a clause on pollution havens and a mirroring of chapters 7 and 9 of NAFTA. I think that this would give a very consistent and meaningful framework, which I would just like to point out has never given rise to any problems between Mexico, Canada and the United States over the last seven years. It has however, set out a framework, which, as Mr. Julian has said, deters governments in their actions. If we can deter governments in terms of investments, why couldn't we dissuade them of negative action in terms of pollution havens? That is the first aspect.

• 1050

The second aspect deals with hemisphere-wide co-operation. I don't know how much progress can be made from now on till the Summit in developing mechanisms which would allow us to really consider—as Mr. Martin said earlier—the issue of the poorest nations and the very desperate situation in some Latin American countries. I think that countries in the northern hemisphere, OECD countries, and rich countries, such as the three NAFTA partners, could provide know-how, technical solutions, and could transfer both knowledge and technology to Latin American countries. The FTAA will not deal with this issue. This issue can only be addressed through a series of parallel co-operation policies.

However, it will be difficult to get the United States and Canada to sing from the same song sheet. As a rule of thumb, Canada advocates multilateral institution-based systems, while the Americans prefer bilateral relations, for obvious reasons. That enables them to use their power much more effectively. When 30 or so countries get together to talk about environmental co-operation, and I think that we have a special relationship with Cuba that the Americans don't yet have, it is then that the complexity of a co- operation-based system including the Americans and the Canadians immediately comes to light. I think that here, Canada has to play a major leadership role in terms of developing these co-operation- based programs.

The third aspect would be to set up a forum for civil society. Canadians and Americans do not really need that. One already exists in the shape of Mr. Julian, Mr. Pal, Mr. Meyers and me. I am saying that North Americans do not need this forum because, industry has pretty direct access to the various departments. Our meeting here this morning is an outstanding example of participation and we are seeing it everywhere. In our countries, we have no problem in rallying people. However, in many developing countries, in particular, in many newly democratic Latin American countries, the problem is that sometimes, if you are a member of an NGO, you are seen as belonging to the official opposition, and as such, you are generally not invited to parliamentary committees.

We can help the civil society which is emerging in Latin America. What we have to do is to provide fora. However, these fora should not be at a national level, because governments tend to set up national fora to give a voice to Canadians, for example. In the United States, a presidential committee will be put in place to hear NGOs. The same thing happens in Mexico. That is not the way to go. We have to set up a genuine hemisphere-wide forum, to which the various governments would have input under a type of blind trust system. To all intents and purposes, this would enable civil society organized on a hemisphere-wide basis to put forward its point of view. This is the third agenda that I would like to see developed.

The Chair: Let's move on to the following question. We have 11 minutes left. We have to discuss...

Mr. Pierre Paquette: My question is one that the Liberals would love to ask.

The Chair: Mr. Johnson, I am sure that you are aware that two weeks ago, Ms. Lalonde and I set up a multinational forum of the Americas, called the Inter-Parliamentary Forum of the Americas. This forum was held here and we did indeed discuss this issue.

[English]

Mr. Pal, for example....

In terms of corruption, the interparliamentary reform adopted several resolutions, exactly along the lines of your recommendations—that the inter-American corruption treaties be adopted and applied in legislation, etc. So work is being done at the parliamentary level on all these issues. We also adopted resolutions on the environment, etc.

We're going to go to Mr. Charbonneau—I've got a couple of questions. Then we want to have a few minutes to discuss future work, what we're going to do about the rest of the study of the Americas.

[Translation]

Try to keep it brief, Mr. Charbonneau.

• 1055

Mr. Yvon Charbonneau (Anjou—Rivière-des-Prairies, Lib.): Thank you very much, Mr. Chairman.

I will get straight to the point. I would like to say that the proposed symposium that we have before us seems very exciting. It is perhaps an exercise which could, in the long term, develop into something more major, in terms of larger and more permanent fora.

I am sure that the witnesses will have noticed that the Quebec members of this committee have a major interest in the free trade debate.

My question deals with the concerns of many people. Of course, I am talking about the fact that despite what the Minister of International Trade or the Canadian government might say, the day will come when American companies will break into services, education, health and even some government services. This will happen, despite the fact that the government claims that it wants to preserve them.

Some experts are saying that there is indeed a danger. The government refutes that, because their experts are telling them that if they are committed to these areas, there will be no danger.

Mr. Johnson and your colleagues, I would like to have your comments on that.

Mr. Pierre Marc Johnson: I thought that your question was for Mr. Julian.

The Chair: We are all aware of Mr. Julian's position. He was very clear on that.

Mr. Peter Julian: I would be pleased to... [Editor's note: Inaudible]

Mr. Pierre Marc Johnson: I believe that there is a danger and it is for that reason that we have to monitor negotiations very closely.

It goes without saying, given the very nature of a free trade agreement, that the premise is to facilitate the movement of goods and capital under a system whereby the signatory nations agree to cut back on any policies which hamper the movement of goods and capital. Then, there is a whole series of exceptions, which make up the rest of the agreement. Once these principles and their implementation have been laid out in various ways, the next stage is to negotiate the exceptions.

I would like to impress upon you that in terms of education, health and government services, we have to be vigilant on the issue of exceptions. We have to monitor that very carefully. I think that ultimately, in some sectors, the issue of exceptions will force countries, including Canada, which could be referred to as the only social democratic nation in North America or in the Americas for that matter to really identify what they want to protect. It is no longer enough for Canada just to say that it wants to protect the role of the State. It must find exactly which areas it wants to protect.

Is it more important to protect our ability to maintain a tax system which enables us to distribute wealth more appropriately and to have social systems designed to meet our needs and aspirations, or is it more important to protect the ability to choose companies to clean our public hospital system?

I think that these are fundamental distinctions that we have to make. Protecting the State's powers of intervention on environmental, social equity or human rights issues, does not mean that all areas of State intervention—unlike past definitions—are protected. We have to make strategic choices and strategic choices bring with them difficulties for politicians.

I would like to wish all members of the committee good luck. It is a great pleasure for me to observe your proceedings as a witness. Since our meeting is drawing to a close, I would like to thank you, Mr. Chairman, for inviting us here today. I would also like to thank the members of the committee for their interest and what the panelists at this end of the table have had to say.

Thank you.

[English]

The Chair: Muchas gracias, señor.

Mr. Julian, sir, but very briefly because I've got a couple of questions. Then we've got to move on to some other business, because we know where he's coming from.

[Translation]

Mr. Peter Julian: Thank you, Mr. Charbonneau.

That is a very relevant question. Earlier, I mentioned UPS and the fact that it is taking legal action against the Canadian government, under NAFTA's national treatment provisions, which probably mean that subsidies to Canada Post are illegal.

This legal action could potentially have an impact on other areas, including CBC and other sectors where there is competition between the private sector and the subsidized public sector.

• 1100

We expressed concerns when Bill 11 privatizing a part of the health system in Alberta was passed and we are currently reiterating these concerns regarding subsidies to the education system, for example, to Devry College, also in Alberta. Our concerns regard the fact that the mechanism whereby UPS may prosecute the Canadian government over postal services, may be extended to other areas.

I would like to thank the committee for giving us the opportunity to put forward our position here today.

[English]

The Chair: I've got a couple of questions too, so you don't have to give up yet.

Let me go to your last point, Mr. Julian, because it's a point that I've always worried about in the position of the Council of Canadians, and I think other members of the committee are interested in it, too. You mentioned Metalclad, chapter 11, and all these cases. It seems to me the problem with your position is that basically the rule says government shall not discriminate. It doesn't say government shall not legislate in matters of the environment. It says you shall not discriminate.

Why does the Council of Canadians believe that the Canadian government should have an ability to legislate in such a way that it allows Canadians to pollute, whereas it prohibits Americans or foreigners from polluting? I don't understand why you are in favour of a system that discriminates.

The Alberta examples you just gave me are exactly that. The problem here is partly because the federal government doesn't control the provinces in a way in which they can enact legislation, but you know the MMT case was exactly that. Several provinces were allowing Canadian companies to do what we didn't want to allow American companies to do. That's why they sued us. They didn't sue us because we had an international rule. It seems to me the rule on environment makes sense. Why on earth would you be in favour of a system that says, we won't let foreigners pollute, but by God, we're going to let the Canadians pollute as much as they like? Where on earth is the logic in that? I just don't get it. But that's what the rule says. It doesn't say you shall not legislate. It says you shall not discriminate. So what's the problem with that? I don't understand it.

Mr. Peter Julian: It would take far longer than we have to go through the problems we have with chapter 11 provisions.

The Chair: Okay, but chapter 11 just says it will apply the rules. It says it gets a regime to apply the rules. Now, what's the problem with the rules?

Mr. Peter Julian: The problem with the rules is the results. The results of the rules are what? They mean that local municipalities, as we've seen in northern Mexico, that are trying to avoid having an environmentally damaging corporate presence in their community can be sued by that corporation. It means that banning water exports leads to, again, an investor-state suit.

The Chair: If the rules are discriminatory.

Mr. Peter Julian: It means that publicly funded, publicly subsidized corporations like Canada Post can be threatened by foreign corporations that feel that those subventions are inappropriate.

And, I should mention, within the tribunals this takes place in secret. We don't even know how many chapter 11 cases are out there now. These take place in secret; there is no public participation. We've certainly seen with Methanex that the only right that civil society has to intervene is the right to fax. We can fax in a submission—that's it. There's no opportunity to hear the evidence, no opportunity to submit, aside from sending on a fax or sending a proposal.

Those are the concerns. It's the structure of these secret tribunals. Even The New York Times calls it “the secret little weapon of NAFTA”. The Public Citizen has called it “secret government”. It's the structure of these tribunals, and it's the results of these tribunals. We could argue the merits of each of the cases, but the reality is it is a fundamentally undemocratic structure leading to very negative results.

The Chair: I don't disagree that there are problems with the tribunals, and there are lots of problems today. I'm trying to get to the core of the issue, which is whether or not you or your Council of Canadians agree or would support a rule that said we don't permit discrimination. Will you accept the basic rule? We can then argue about how it should be applied, but I'm trying to understand what your objection is to the rule. Every answer you gave me told me you have no objection to that rule, the basic rule; it's the way in which it's applied that you don't like. If that's the understanding of the committee, then that's fine; we'll take that away.

But if you're trying to tell the committee, no, no, we want to have legislative freedom in Canada where we can discriminate in favour of Canadians against others, in terms of the environment and other things, I'm trying to understand that, if that's your position. By the way, I don't say it's an illogical position. I would disagree with you on the matter of environment. It may well be that, in terms of hospital administration or Madame Lalonde's point about the Quebec garderie, we may want to keep an ability to discriminate, so I'm not saying we shouldn't be able to discriminate. I'm just trying to find out on the environment where you stand, that's all.

• 1105

Do you think we should be able to discriminate in a way that allows Canadians to pollute in a way we don't allow foreigners to, or do you think that's a good rule?

Mr. Peter Julian: Obviously not, but the question of discrimination is much, much, much larger than that. What is discrimination? Is discrimination subsidizing postal services? Is discrimination not allowing water exports?

The Chair: Well, that's what I say. You might want discrimination in some areas. Water you might want, etc. I agree with you. Madam Lalonde's issue—I agree with her.

Mr. Peter Julian: We believe very strongly that our government should have the right to legislate for the well-being of the public, and we can see that being taken away.

The Chair: Okay. I understand that. So then, Mr. Johnson, I just want to come to one question to you because I think the way in which you framed how the environment should be protected through the free trade agreements was very helpful to us. The problem that we've been struggling with in the committee—and it's a problem that is an over-arching problem throughout all these agreements—is the enforcement issue. You said the agreement must contain a strong protection of the environment and include all these agreements.

The same argument was made to us the other day in terms of human rights, and I understand that, but I put the same question to Warren Allmand when he was before the committee. Okay, we put in the rule, and now the agreement's going to have to be interpreted in a way that will protect human rights and will protect the environment, but how do we enforce that rule without what I call exercising the nuclear option? That is to say, you expel the party from the trading agreement, which, once it's been going on for a while, becomes an unusual and unusable enforcement mechanism. So it seems to me that without the appropriate enforcement mechanism, we don't have a rule. Maybe your experience with the North American environmental accord and the way in which the fining works and things can help us, but is that the way we have to go? Anyway, that's my question. How do we enforce this?

Mr. Pierre Marc Johnson: Thank you. I agree that the enforcement issue is a central one. That's precisely why, in the sector of the environment, commitments by country parties within the NAFTA were quite numerous when it came to the concept of enforcement.

There is a tendency in Mexican legislation to have all local action in the sector of the environment. It's what I call the New Jersey approach. They have it in a couple of Latin American countries. They essentially translate the New Jersey statutes, which are the most demanding statutes when it comes to pollution control. The problem is, if you have two inspectors for the whole country to implement them, they're not very useful. You can have all the nicest legislation in the world, but if you don't implement it, it's not very good.

NAFTA addressed that pretty clearly in terms of the commitment of countries to apply their own legislation. Secondly, it opened in the parallel agreement the concept of a challenge by citizens to the fact that a given government is not implementing its own national legislation.

Third, there is the possibility for the commission to make public what is essentially a very embarrassing report. Ultimately, it also created the capacity for governments to challenge other governments around the concept that they're systematically not enforcing their environmental legislation. These provisions have not had to be applied up to now because they're pretty tantamount to a nuclear “press the red button”. If you say you're going to challenge a country's behaviour, when it comes to implementing its own environmental legislation, by saying that it is systematically not doing its job, you're pretty close to a declaration of commercial war here before you go to sanctions.

So there is a lot of rich substance. I might mention chapter 4 of my book on NAFTA and the environment, and you're the only ones to whom I'll say that you should buy it and read it. I usually tell my friends that they should buy it—they don't have to read it. But obviously, since you have an interest in that, you will find some answers in there in a more technical sense.

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

[Translation]

Do you have a brief comment, Mr. Paquette?

Mr. Pierre Paquette: A very brief one. One of the specific provisions of chapter 11 is that a foreign company may prosecute governments if it feels it has been discriminated against. National companies do not have this option. For example, Pope & Talbot is currently taking legal action against the federal government over the lumber agreement, but a Canadian company, from British Columbia or Quebec, let's say, cannot prosecute the federal government.

• 1110

The Chair: That's why we have the Federal Court and the various national level courts. They provide access to justice for ordinary citizens. This is not available in this case. Anyway, Mr. Johnson has explained the reason for this. I think that we now have to conclude our meeting. However, from what I have seen here today, the debate is far from over.

[English]

Colleagues, here's what we've done to try to accommodate the request of the Bloc and everybody in terms of future progress.

On March 27 we're going to have three sessions: two panels in the morning and one in the afternoon. On March 29 we'll have two panels of four witnesses each. As much as we can, we've tried to accommodate everybody's witnesses. That leaves us April 3.

Colleagues, I want you to reflect on this. I would strongly suggest that we do a report, some form of a compte rendu, of our proceedings. There has been some talk of this. But I highly recommend that if we do decide to produce a report, we should do it after the summit. We're not going to be able to write a report before then and get it into the House in a coherent form. But we might take what we've done here up till now, look at the results of the summit, and say, okay, now here's what we think.

[Translation]

Ms. Francine Lalonde: The negotiations are ongoing.

The Chair: That's right. The negotiations will continue for three years. Consequently, following the Summit, we will issue a report setting out what we like and what we do not like, etc. In doing so, perhaps we could...

Ms. Francine Lalonde: As far as I am concerned, I would prefer to hear more witnesses in the week leading up to the Summit.

The Chair: All right. Does everyone agree with this approach?

Mr. Bernard Patry: We need to do a post-mortem of the Summit.

The Chair: Yes, we do. We should perhaps include our comments to push negotiations in one direction or another.

Mr. Bernard Patry: That's perfect.

The Chair: Thank you very much. You are all very kind.

[English]

Thank you very much, colleagues, and thank you very much, members of the panel, for coming and giving us your time. We really appreciate it.

The meeting is adjourned.