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37th PARLIAMENT, 1st SESSION

Standing Committee on Foreign Affairs and International Trade

COMMITTEE EVIDENCE

CONTENTS

Tuesday, February 19, 2002

0910

The Clerk of the Committee

Mr. Stan Keyes (Hamilton West, Lib.)

The Clerk

The Chair (Ms. Jean Augustine (Etobicoke--Lakeshore, Lib.))

Mr. Keyes

The Chair

Mr. O'Reilly

The Chair

The Clerk

The Chair

Mr. Marc Lortie (Assistant Deputy Minister (Americas), Department of Foreign Affairs and International Trade)

0915

0920

0925

0930

0935

0940

The Chair

Mr. John Duncan (Vancouver Island North, Canadian Alliance)

Mr. Marc Lortie

Mr. John Duncan

The Chair

Ms. Francine Lalonde (Mercier, BQ)

0945

Mr. Marc Lortie

0950

The Chair

Ms. Diane Marleau (Sudbury, Lib.)

Mr. Marc Lortie

0955

The Chair

Mr. Bill Casey (Cumberland--Colchester, PC/DR)

Mr. Marc Lortie

1000

Mr. Bill Casey

Mr. Marc Lortie

Mr. Jon Allen (Director General, North America Bureau, Department of Foreign Affairs and International Trade)

Mr. Casey

Mr. Marc Lortie

Mr. Bill Casey

Mr. Marc Lortie

1005

Mr. Bill Casey

Mr. Marc Lortie

Mr. Bill Casey

Mr. Marc Lortie

Mr. Bill Casey

Mr. Jon Allen

Mr. Bill Casey

Mr. Jon Allen

Mr. Bill Casey

The Chair

Mr. Bill Casey

Ms. Aileen Carroll (Barrie--Simcoe--Bradford, Lib.)

Mr. Marc Lortie

Ms. Aileen Carroll

Mr. Marc Lortie

1010

The Chair

Ms. Francine Lalonde

1015

Mr. Marc Lortie

1020

Mr. Jon Allen

The Chair

Mr. Bernard Patry (Pierrefonds--Dollard, Lib.)

Mr. Marc Lortie

1025

Mr. Jon Allen

Mr. Marc Lortie

The Chair

Mr. Bill Casey

Mr. Marc Lortie

1030

1035

Mr. Bill Casey

Mr. Marc Lortie

Mr. Casey

The Chair

Mrs. Marlene Jennings (Notre-Dame-de-Grâce--Lachine, Lib.)

1040

Mr. Marc Lortie

1045

Ms. Marlene Jennings

The Chair

Ms. Marlene Jennings

Mr. Marc Lortie

1050

The Chair

Mr. Jon Allen

The Chair

Mr. Marc Lortie

1055

The Chair

Ms. Francine Lalonde

The Chair

Ms. Francine Lalonde

The Chair

1105

Ms. Francine Lalonde

The Chair

Ms. Marlene Jennings

1110

The Chair

The Clerk

The Chair

Ms. Francine Lalonde

The Clerk

The Chair

The Clerk

The Chair

Mr. Pat O'Brien (London--Fanshawe, Lib.)

1115

The Chair

Mr. John Duncan

The Chair

Mr. John Duncan

Mr. Pat O'Brien

Mr. John Duncan

Mr. Pat O'Brien

The Chair

Mr. Bill Casey

The Chair

Ms. Aileen Carroll

The Clerk

Ms. Aileen Carroll

Ms. Marleau

Ms. Carroll

The Clerk

Ms. Carroll

The Chair

Mr. Pat O'Brien

The Chair

Mr. Pat O'Brien

1120

The Chair

Mr. Pat O'Brien

The Clerk

The Chair

The Clerk

The Chair

CANADA

Standing Committee on Foreign Affairs and International Trade

NUMBER 057

1st SESSION

37th PARLIAMENT

COMMITTEE EVIDENCE

Tuesday, February 19, 2002

[Recorded by Electronic Apparatus]

¿ (0910)

[English]

The Clerk of the Committee: Honourable members, I see a quorum. Pursuant to Standing Order 106(2), your first order of business follows the receipt of this letter, which I will now read for members:

To: The Clerk of the Standing Committee on Foreign Affairs and International Trade

From: Bill Graham, Minister of Foreign Affairs

Date: February 18, 2002

Subject: Resignation as Chairman of SCFAIT.

Dear Mr. Knowles,

Please be advised that as of today, February 18, 2002, I am resigning as Chairman of the Standing Committee on Foreign Affairs and International Trade.

Thank you,

Bill Graham.

I am now ready to receive motions for the election of chair.

Mr. Keyes.

Mr. Stan Keyes (Hamilton West, Lib.): It's unfortunate that Bill Graham, our chair, who has done a terrific job, decided to leave us. I think it's regrettable.

Some hon. members: Oh, oh!

Mr. Stan Keyes: I think we should pass a note back that says we think he should be back in the chair.

Mr. Clerk, it is a privilege and an honour to put forward the name of Jean Augustine as chair of this esteemed committee.

The Clerk: Moved by Mr. Keyes, seconded by Madam Lalonde and Madam Marleau, that Ms. Jean Augustine take the chair. Is it the pleasure of the committee to adopt the motion?

(Motion agreed to)

The Clerk: I invite Jean Augustine to take the chair. Welcome.

The Chair (Ms. Jean Augustine (Etobicoke--Lakeshore, Lib.)): Thank you very much, Stephen, and thank you to my nominator, my seconder, my mother, my...

Some hon. members: Oh, oh!

Mr. Stan Keyes: You forgot Bill Graham.

The Chair: Yes, thank you, Bill, for moving upstairs.

I'm very pleased and honoured, and also humbled, by this honour. I will attempt to the best that I possibly can in this job. We've always worked collaboratively. We've always worked in partnership. We've always worked in a supportive fashion and have produced some really excellent documents. I hope we'll continue to do this.

The next item of business is the election of vice-chair of the committee.

Yes, Mr. O'Brien.

Mr. John O'Reilly (Haliburton--Victoria--Brock, Lib.): It's O'Reilly; O'Brien is the rich one and I'm the handsome one. I'm sure not the rich one.

Some hon. members: Oh, oh!

Mr. John O'Reilly: It's my pleasure to nominate Bernard Patry as vice-chair.

The Chair: It's Dr. Bernard Patry as vice-chair, seconded by Ms. Marlene Jennings.

(Motion agreed to)

The Chair: Do we go to the opposition vice-chair?

The Clerk: The opposition vice-chair is already in place. It's Mr. Pallister.

The Chair: I see.

So we can move on now to the business of the day, pursuant to Standing Order 108(2), the study of North American integration and Canada's role in the light of the new security challenges.

We have a briefing session today from officials of the Department of Foreign Affairs and International Trade. With us is Mr. Marc Lortie, the assistant deputy minister with responsibility for the Americas. Most of you will remember Mr. Lortie's work at the Quebec summit. With him is Mr. Jon Allen, the director general of the North American bureau, and Mr. Michael Welsh, acting director general for the Latin America and Caribbean bureau.

Welcome. We're very pleased to have you with us this morning, and we'll ask you to proceed.

Mr. Marc Lortie (Assistant Deputy Minister (Americas), Department of Foreign Affairs and International Trade): Thank you very much, Madam Chair.

First, on behalf of my colleagues, I would like to offer to you, Madam, our congratulations on your election.

[Translation]

We would also like to congratulate Mr. Patry who has been elected vice-chair of the foreign affairs committee, which is considered by the Department of Foreign Affairs to be a very important committee. All of the department's officers will be only too happy to appear before you.

[English]

This morning we're going to talk about Canada-Mexico, I believe. Therefore, in my initial remarks I would like to give an overall perspective on the state of the relationship, the tremendously dynamic relationship, between Canada and Mexico. It is, I would say, one of the most fascinating examples of the last few years... how we have developed this relationship. And that's not only we the government; it's also on the civil front, from tourism to academic relations to cultural relations to parliamentary relations. Therefore there is a tremendous dynamic relationship with Mexico.

We will take the opportunity today to review the state of the relationship and put it in not only a bilateral context but also in the context of the trilateral relationship in North America.

¿ (0915)

[Translation]

It is a great pleasure for me to appear before the Standing Committee on Foreign Affairs and International Trade. My colleagues and I welcome the opportunity to take part in your meeting.

Mexico is our most important commercial partner in Latin-America. It is the Latin American country with which we have the most substantial and broad political agenda. This relationship helps us to influence the totality of our relations with the hemisphere.

Madam Chair, you were kind enough to allude to my role as a personal representative at the People's Summit of the Americas. It is the quality of our relationship with Mexico over the past few years that inspired the enthusiasm exhibited by the Canadian government in building the agenda for the Americas. In examining the bilateral relationship between Canada and Mexico, we must never lose sight of the fact that at this time our ties to Mexico and the rest of the hemisphere are closely related. It is therefore most appropriate to study this country and the bilateral relationship that exists between our two countries.

Why is Mexico important? As a result of the July 2000 election of President Fox, Mexico is undergoing significant political, social and economic changes. He set out a platform for reform which included: consolidation of democracy; promoting social equality; combating poverty; human capital development; revitalizing federalism; transparency, accountability and good governance; and public safety. These broad objectives were laid out by President Fox in his inaugural address to the Mexican Congress. His commitment to this program was reiterated during his state visit to Canada in April 2001, on the eve of the Summit of the Americas.

For the first time in Mexican history, these values were incorporated into foreign policy. We would be happy to further discuss the way in which the new government is changing Mexico's foreign policy during the time set aside for questions.

With almost 100 million people, Mexico is the 11th most populated country in the world. Its per capita GDP of $6,000 US places Mexico among the region's most wealthy countries. That figure also demonstrates the gap between Mexico, on the one hand, and Canada and United States on the other.

The Fox government faces major challenges in stimulating economic growth while maintaining social justice. Nonetheless, it has made considerable progress. For example, in its first year in office it has made important institutional reforms in an attempt to improve respect for human rights. The creation of a special prosecutor to investigate crimes committed during Mexico's “dirty war” of the 1970s and 1980s, the appointment of an under-secretary position in the Ministry of Foreign Affairs and approval of a law on indigenous rights and culture are three examples. The Mexican government acknowledges, however, that much remains to be done.

Mexican foreign policy, under the Fox regime, has become more open and proactive. Mexico was recently elected to a non-permanent seat on the UN Security Council opening a door to more involvement on global issues. This is a first in Mexican foreign policy.

¿ (0920)

With a GDP of over $575 billion US it is the world's 16th largest economy, and about to pass Brazil to become the largest economy in Latin America.

With imports and exports of over $300 billion US, it is Latin America's largest trading power. A convinced free trader, Mexico has signed 10 free trade agreements with 31 countries on 3 continents.

While the Mexican economy has suffered a downturn, along with the rest of North America, the fundamentals remain strong, with the government committed to prudent fiscal and monetary policies.

In recognition, both Fitch and Standard and Poor's, for the first time, have awarded Mexico their “investment grade” ratings, citing sound economic policies, transparency and integration into the North American economy—a move which should encourage enhanced foreign investment. And this is without doubt an invitation to all foreign investors to take an interest in Mexico.

[English]

Canada-Mexico relations have been significant for some time, but were given a boost following the election of President Fox. They are significant because we have been partners in NAFTA since the beginning of 1994, which is not very long--only seven years ago. Mexico now sees Canada as a valuable partner in its efforts to address its many and deep-seated social, political, and economic challenges.

Cooperation on governance has provided the new focus to bilateral relations. Over the past year, senior Canadian officials have shared information with their Mexican counterparts on managing the machinery of government, including budget planning, rationalization of government expenditure, access to information, and government coordination and strategic planning. More recently, we have embarked on collaborative efforts to assist Mexico in modernizing its highly centralized federal system to make it more flexible and responsive to the needs of its citizens.

Canada is clearly committed to helping Mexico reform its government institutions so that it may address overriding concerns of poverty and regional disparity. In addition, CIDA, primarily through the Partnership Branch, has disbursed an average of $7 million per year in Mexico over the past three years. This includes the Canada Fund for local initiatives, with $500,000 in annual funding for grassroots projects, most of which is disbursed in the poorest states in southern Mexico.

NAFTA has proven to be the high-powered engine for economic growth for North America as a whole. Both Canada and Mexico are committed to the consolidation of the NAFTA relationship. Largely as a result of NAFTA, Canada ranks as Mexico's second most important export market. That is a big difference in the last seven years. We have now, for Mexico, become the second most important export market. This is a new dimension in our relationship. In 2000, Mexico exported more to Canada than it did to all 15 countries of the European Union.

Mexico is Canada's fourth largest export market after the United States, Japan, and the U.K., with Mexico very close to surpassing the U.K. to become number three. From the latest statistics available--January to November 2001--our exports to Mexico were up by 12%, with Mexican exports to Canada rising by almost 1%--an indication that the economic downturn has not affected our bilateral commerce unduly.

Canadian direct foreign investment in Mexico amounts to almost $5 billion, with Mexicans investing over $600 million in Canada. I think when you travel to Mexico, Madam Chair and the committee, you will see to what extent there is a new Canadian presence because of this level of trade and investment in Mexico, not only in Mexico City but throughout Mexico.

One of the fascinating aspects, in addition to economic figures and trade and commerce, is on the people-to-people side. Now almost one million Canadian tourists travel to Mexico annually, with over 180,000 Mexicans visiting Canada. Canadian educational institutions host over 10,000 Mexican students annually, and 11,000 seasonal Mexican agricultural workers come to Canada.

¿ (0925)

I think this figure is an important figure, Madam Chair, and I'd like to insist very much on the educational side. The fact that we have a large number of Mexicans coming to our schools, I think, is a guarantee of a great future in the relationship. At the same time, there is a large number of Canadians going to Mexico, learning Spanish, discovering the country, and I think that is also a source of success for the future.

Canadian studies in Mexico are growing in popularity. A vibrant Mexican Association of Canadian Studies, with membership of over 250 academics, seven Canadian study programs at major universities, and over 350 university-to-university agreements is at the core of academic cooperation.

Finally, with President Fox's activist foreign policy agenda, we see Mexico as a potentially valuable partner on regional issues, such as the FTA, the summit of the Americas process, and also closer cooperation with Mexico in various multilateral fora, such as the United Nations, certainly the OAS, the Organization of the American States, and the OECD.

The official relationship is a dynamic, wide-ranging, and healthy one, involving many federal government departments. Well over half of our ministers have met with their Mexican counterparts in the past year, several more than once. A number of provincial governments have established strong linkages with their counterparts in Mexico.

On to the North American agenda, the trilateral relationship. During his first visit to Canada in August 2000, President Fox reiterated his campaign call for North American integration. The long-term elements included common currency, customs unions, and full labour mobility.

At the first trilateral meeting between President Bush, President Fox, and the Prime Minister, immediately after the Quebec City summit, and in Quebec City in April of last year, President Fox proposed a social cohesion fund designed to eventually bring Mexico up to North American living standards.

Our initial reaction was that the concept was not within the overall hemispheric strategy mapped out through the summit of the Americas process. During this meeting, North American leaders commented favourably on the extent of intergovernmental cooperation, as well as the extensive contacts among business and civil society, and called for more public discussions, research, and reflection on the emergence of a North American community.

I believe, Madam Chair, what the committee is doing is very much in that spirit, examining the North American community, finding new avenues for cooperation, looking at it, inspiring government, opening new alleys for future cooperation.

The government supports the development of a North American relationship. President Fox has said that common currency and customs unions are long-term goals. Over the short term, we are working to identify issues that would be best served through trilateral engagement. Possible themes will be explored further with Foreign Minister Castañeda when he visits Ottawa later this week.

¿ (0930)

North America is really about four relationships, three bilateral and one trilateral: Canada-U.S.; Canada-Mexico; U.S.-Mexico; and the three of us, Canada-Mexico-U.S. The Canada-Mexico relationship is the least known. It is growing but it needs nurturing. It deserves its own space. We should not view trilateral relations as an alternative to either Canada-United States or Canada-Mexico, but as complementary and enriching.

Already at the level of governments we have an active agenda of trilateral engagement: trade and investment under NAFTA; environmental under the commission created under NAFTA; labour issues also under that commission; education; and energy, which was launched for the first time at the trilateral session in Quebec City last April.

There has been substantial collaboration on hemispheric and multilateral issues, and I would cite as an example Colombia. The three of us exchange views on a regular basis. The committee has travelled to Colombia, where at the level of the government, together with Mexico and the United States, we also exchange views in a trilateral context .

In order to further the process of identifying new areas for policy convergence, we are pursuing active outreach on the future of North America within Canadian research centres, universities, and other institutions. Our academics have been encouraged to join with their U.S. and Mexican colleagues to discuss these issues. The Government of Canada has identified North American linkages as a priority area for study and analysis within government and in partnership with the academic community. As well, we support a joint project called Integrating North America--it's brought together the Brookings Institution, Inter-American Dialogue, and the National Policy Association from the U.S.; the Consejo Mexicano de Relaciones Internacionales and the InstitutoTecnológico Autónomo de México; and the Public Policy Forum, a group from Carleton University, and the Policy Research Initiative from Canada--to explore the long-term challenges governments will face should further economic and social integration take place.

You have had before the committee, Madam Chair, some of the most thoughtful academics, and they gave you their perspective on it. On the government side we're working very closely with them. We have a very open and constant dialogue with those groups. We try to encourage them to pursue their research, because we need new ideas.

Closer to home, a Mexico Week will be held during the last week of February, supported by several government departments, FOCAL, Carleton University, the Policy Research Initiative, and the North-South Institute. The event is designed to increase understanding of the Canada-Mexico relationship within North America and to further the bilateral dialogue on North American linkages.

¿ (0935)

[Translation]

Madam Chair, I will now conclude on hemispheric issues.

What we are doing in North America cannot be divorced from what is happening in the hemisphere. All countries of the hemisphere, at the Quebec City Summit, agreed upon a strategy and set priorities for the region. That vision for the hemisphere—including North America—is based on the pillars of security, democracy, prosperity and social development. The Quebec Summit placed this vision of the Americas at the forefront of current discussions on hemispheric integration and gave Canada an unparalleled opportunity to place its mark on the future of the Americas.

Canada believes that the Summit of the Americas process is inclusive of, but goes far beyond trade—adressing also democracy, social development and connectivity. For the Quebec City Summit, Canada put forward an agenda of cooperation: a coherent and balanced approach, centred on people, our citizens.

The resulting action plan is based on the assumption of good governance, trade liberalization, more equitable distribution of wealth and access to opportunities, as well as measures to promote the protection of the environment and workers' rights that can, and should, be mutually supportive. The plan of action aims to convey to our citizens that integration requires not just open trade policies, but also sound institutions and policies in a range of social and political areas. It is not a coincidence that our approach to the hemisphere closely mirrors that toward Mexico.

I will conclude the formal part of my brief by reiterating what I said at the outset. Our relationship with Mexico, which has been quite dynamic over the past years, is a source of inspiration and the foundation for our relationship with the entire hemisphere. We must always keep that in mind as we continue to develop our close ties with the hemisphere.

Finally, Madam Chair, your committee will be travelling to Washington and Mexico within a few weeks. You will be meeting with high-level officials, and our embassies are already hard at work organizing your program. Our embassies in Washington and Mexico, as some committee members might have noted during their recent visit to Mexico, are of the highest quality. I recommend these people to you. They represent the best elements of Canada's foreign service and diplomatic corps. Our embassies in Mexico and Washington are staffed with top-notch personnel and I know that you will be well served when you travel to these two North American capital cities.

Thank you.

¿ (0940)

[English]

The Chair: Thank you very much for that overview and also for the information, Mr. Lortie. This will help us greatly as we meet for lunch today with the Ambassador of Mexico. It will give us a few points that could be part of our luncheon discussion.

We will now open the floor to questioning from the members, and we hope you would accommodate the questions as we go around the table.

We will go to Mr. Duncan.

Mr. John Duncan (Vancouver Island North, Canadian Alliance): Just very quickly, I thank you for some of the background. I have one sort of philosophical question, I guess, but it has its practical side as well.

I see that we're spending money in Mexico through CIDA, and I am quite sure we don't do that with our other NAFTA partner, the U.S. At some point, I would think, this is going to become quite an inappropriate activity for us. Has this been discussed? Is there a phase-out plan, or is there any direction that you might offer, in terms of us carrying out CIDA activities with our NAFTA partner?

Mr. Marc Lortie: CIDA activities in Mexico remain very minimal. It is to help out, to create some partnerships between institutions. Mainly, when Canadian universities are seeking to have a program with Mexican partners, CIDA has an institutional program that is instrumental in developing that relationship.

In addition, CIDA has a very innovative industrial co operation program to help small- and medium-sized enterprises to start new trading relationships in countries south of the Rio Grande. Therefore, this is the amount of CIDA exposure in Mexico. At this very moment we have not shared it with other NAFTA partners, or discussed it in any way or form.

The embassy as such, like all of our embassies in the Americas with the exception of the United States, has a local initiative fund. In Mexico it is valued at half a million dollars per year. It gives the occasion to the embassy, especially in the poorest region, the poorest states of Mexico south of Mexico City, between Mexico City and the border, to invest in some small projects there and help out some communities. When you put it together, the total value is about $7 million per year.

Mr. John Duncan: I've made my point, Madam Chair.

[Translation]

The Chair: Ms. Lalonde.

Ms. Francine Lalonde (Mercier, BQ): Thank you, Madam Chair, and congratulations.

Thank you for being here, Mr. Lortie.

Since we do not have much time, I might quickly reiterate—both you and my colleagues are aware of this—that Gilles Duceppe, Yves Rocheleau and I will be visiting Mexico to discuss three issues.

The first one, which, from the outset, was inspired by Mr. Fox, deals with a social and structural fund, and I will come back to that; the second one involves a security perimeter negotiated by three countries or, at the very least, by Canada and the United States with Mexico as an observer during the Canada-United States negotiations and vice-versa; and the third one involves a monetary institute for the Americas which would examine the possibility of having a common dollar or currency, which merits our attention in view of the value of our dollar, not only in North America but in all of the Americas.

When Mr. Pastor appeared before us, he pointed out that more than half of the deposits in Canadian banks at this time are in dollars and most of the transactions for large companies are in dollars as well. When I say dollar, I mean, of course, the US currency.

We are studying integration, which is something you had asked us to do. We are trying to see further down the road. That has been the role of the committee from time to time. It is easier for parliamentarians to do this than it is for the government.

Would you not agree that this proposal for a social and structural fund for the Americas within NAFTA would contribute to a rapid development for Mexico, which would not go against the interests of Canada or the United States? Would it not, on the contrary, be considered as an aid to trade development, to the purchasing power of the Mexican people and to their capacity for exporting to Canada products that are not yet available to us, in other words, to a greater equality in the standard of living? The problem lies with their infrastructure and also their education infrastructure.

I would like to hear what you have to say because my hope is... It's because you said, Mr. Lortie: “our initial reaction has been...”. You did say “initial”. What that means is that you are giving it some thought and I know that they are doing the same thing in the United States. So I would like to hear what you have to say about that.

¿ (0945)

Mr. Marc Lortie They're giving it a lot of thought and we've discussed this at length with our Mexican friends. I must say at the outset that the Americans do not have much interest in the creation of such a fund. First of all, it is not their practice, and up until now, they have shown no interest in the various conversations that we have had with our Mexican colleagues.

Having said this, we have looked at the tools that the Canadian government has at hand to achieve the goal of a social cohesion fund. We have organizations—and I think that some colleagues have mentioned this at the table—such as the World Bank and the Inter-American Development Bank, two organizations that have been created by governments in order to participate in the development of infrastructure and in the social sectors such as education and health in developing countries, mainly in the Americas.

If we take Mexico, and we look at what the World Bank, Americas section, and the Inter-American Bank are doing, we can see that they are investing $2.7 billion per year in the development of Mexican infrastructure.

There is a fund that has financial resources and that belongs to the Americas, in a way. These are not foreign institutions. The Inter-American Development Bank reports to the governor of the bank; 85% of the bank's shareholders come from the American continent and the great majority of these are North Americans.

When we take a close look at the creation and the launching of a new fund, a new tool, we should study what we already have. Should we change what the World Bank and the Inter-American Bank are doing in the Americas? Perhaps, but should we push them aside in order to create something new? Until now, our initial reaction was to say that this was not necessary. We do not need to create a new institution, a new mechanism, but we could examine what we are doing and see if it really corresponds to the wishes of the Fox government, to existing growth requirements that we are trying to develop in North America and even in the Americas.

Therefore, there are significant financial resources. I would encourage you, when you visit Mexico, to go and meet with representatives of the Inter-American Development Bank and the World Bank in order to find out what they are doing in Mexico. You will see the whole range of their activities, which goes from the building of highways in the south of the country to the electrification of Chiapas, from education in the most disadvantaged provinces to the development of sanitary facilities and health services.

We may need to adjust our point of view. We need to do so on an ongoing basis in order to ensure that these international organizations are doing the work we have asked them to do and complying with the wishes of the people expressed at the Peoples's Summit of the Americas.

That is my response as regards the structural fund

I could give you an update on the security perimeter, because we're doing some interesting things in this area.

¿ (0950)

[English]

The Chair: I think we'll get to that a bit later, Mr. Lortie.

We'll move, then, to Madame Marleau.

[Translation]

Ms. Diane Marleau (Sudbury, Lib.): I would like to continue in the same vein as Ms. Lalonde, if you would be so kind.

You are quite right to say that there are institutions that are investing heavily in Mexico. But do you not believe that given the special relationship that we have with Mexico and the United States, it would be a good idea to invest above and beyond what is already being done? I firmly believe that the more we work with the Mexicans, the better it will be for us.

[English]

The more we invest in Mexico, in education, in the development of the population, the better it is for us--you help others to help yourself. Frankly, I would like us to develop a special fund, if at all possible, with the United States, to do more to help in the development of Mexico. That's my first point.

My next point has to do with what we call transparency. There is still considerable lack of transparency. How can Canadians feel comfortable doing business in Mexico if they feel that perhaps the court system is less than transparent if there is a problem? I'd like you to give us a little bit more of an expanded view of what is happening in terms of transparency.

I know that Vincente Fox has promised to do some work there, but it's an incredibly difficult issue, and the lack of transparency is incredibly widespread. So perhaps you could touch on that, because to develop our trade with Mexico to a fuller extent, I think our people need to know that they will be well treated in the courts.

Mr. Marc Lortie: Thank you very much.

First, on social funds, we're trying to do a lot with Mexico, in a strategic way, in support of their reform. You mentioned the field of education; we need to do a lot in the field of education. One field we have engaged in with the Mexicans in the last year, and that's brand new, is in sharing our experience in connecting Canada, and now how to connect Mexico. It's a big challenge for them. That's an example of where we could be helpful to the Mexicans, sharing our example of what we have done with SchoolNet, for example, that is opening new avenues of collaboration.

Should we embark a little bit further in finance? Perhaps yes, but the demands on the system are pretty wide-ranging.

At this very moment it is important to develop that relationship, and therefore maybe you will come out with recommendations supporting the creation of new activities. We have been innovative with our colleagues at CIDA; we've been very innovative in the last few years vis-à-vis the Americas. We are doing things with countries, in Chile, in Argentina, and in Brazil, and maybe we should do it with Mexico. But we're not there yet, because Mexico is at a much higher level than the other countries in terms of revenue per capita. But we remain open-minded.

On the question of transparency, it is fundamental. The Mexicans are convinced it is the only way to attract foreign investment to their country. If the rule of law does not prevail, foreign investment will not come. They came to that conclusion after many, many generations of a failed system of government that they had. That's why the election of President Fox is a breath of fresh air for the Americas. Why? Because it was the most transparent election in the recent history in Mexico, the first gesture.

Now, his agenda is to ensure that his government is transparent, opening up to civil society, forcing the system to be more transparent, including the court system. He has a long way to go. But what we have seen so far, in his first 14 months in office, is very encouraging. And that's where the Government of Canada could make a difference, in encouraging President Fox, helping him out in the so-called governance aspect. We could make a difference in providing not guidance, but sharing our experience of that.

One of the most important, perhaps, would be in the judicial system. We have been in very close collaboration with the Mexicans on the electoral system. It's not known, it was very quiet, but if you were to invite Jean-Pierre Kingsley, the Elections Canada director, here, he would tell you that he's been working with his colleague in Mexico since 1994-95. It was a long process, but at the end it paid off. It took six years, and it paid off. Now we are doing the same thing with la presidencia in Mexico.

The Clerk of the Privy Council travelled to Mexico last week to talk about the machinery of government and share our experience with them. Therefore, poco a poco, as we say in Mexico, we're going to bring about our experience of governance. The Mexicans are welcoming that, because they have realized that if they want to be a welcome land for foreign investment, they have to improve the rules-based system.

¿ (0955)

The Chair: Thank you, Mr. Lortie.

Mr. Casey.

Mr. Bill Casey (Cumberland--Colchester, PC/DR): Thank you for your presentation.

I didn't hear the word “transportation” in your remarks, although it's my understanding that transportation issues are of great concern to Mexicans with respect to increasing trade; apparently, that is the biggest impediment they have to increasing trade between our country and their country. Again, it involves three countries, but do we have a structure or a committee or anything to address transportation issues, especially truck issues, between Mexico and Canada?

Mr. Marc Lortie: The trucking issues are basically a U.S.-Mexico problem. We don't have any problem with the Mexican trucks, but the Americans had a problem until very recently. No Mexican trucks could travel more than 20 miles inside the United States. Therefore, in terms of transportation... And most of our trade is done that way. It goes from Mexican trucks to American trucks or Canadian trucks 20 miles from the Mexican border, and then up to Canada or vice versa.

Therefore, we have not looked at transportation as such, because transportation for us is not an impediment to our trade. I mean, our trucks travel through the United States without any problems. Sometimes we face traffic. But what we are going to do with the Mexicans is look at how to improve border management, because we realize that there is a great waste of time at the Mexican border, and it is a great subject of concern for them to improve it. They have been looking at what we've done recently with Governor Ridge in the United States to modernize the border up north. They are very interested to see how they could apply some of the recipe down south, because the border there is a big challenge to manage.

Transportation for the Mexicans is a big challenge. Why? Because they don't have a network of highways from the Guatemalan border up north, and therefore most of their industrial sector remains up north; it's not in the south. So you have a big difference between northern and southern Mexico.

But that is something that has to be looked at with the Inter-American Development Bank, how to invest in the development of infrastructure. The Mexicans have launched a huge initiative called the Puebla-Panama plan, which is essentially how to develop infrastructure from Puebla, south of Mexico City, to Panama. This engages the IDB, with our support, in financing the development of highway gasoductos--pipelines--electricity, and building the infrastructure of Central America and southern Mexico, because southern Mexico and Central America are very connected in a sense. They're very similar but not well connected. And that's what the objective of the recently launched Puebla-Panama plan is all about--dealing with transportation issues.

À (1000)

Mr. Bill Casey: Can a truck leave Mexico today and drive to Canada?

Mr. Marc Lortie: Crossing the United States?

Mr. Jon Allen (Director General, North America Bureau, Department of Foreign Affairs and International Trade): A truck cannot leave Mexico and drive to Canada right now. Under the previous regimes, when Bill Clinton and President Zedillo were in power, we had some trilateral meetings--Minister Axworthy, Secretary Albright, and Secretary Green in Mexico--and there was discussion at that time of green transportation corridors, an effort to consider the possibility of putting a transponder on a truck and having it go from Winnipeg through the United States down to Guadalajara, for example.

We didn't advance that agenda as far as we would have liked, and I think that's something the Mexicans would like to discuss. But as Mr. Lortie said, I think the Mexicans and the Americans are going to have to sort out their trucking issue at the border before we can move to a continental approach. I think they're in the process of trying to do that.

Mr. Bill Casey: Can a truck leave Winnipeg and go to Mexico City?

Mr. Marc Lortie: Yes.

Mr. Bill Casey: They can go that way, but they can't come back. A Mexican truck can't come to Canada. A Canadian truck can go to Mexico.

Mr. Marc Lortie: Well, the regulations between the United States and Mexico are an impediment. But trucking companies do that trade all the time. If a Mexican exporter hired a Mexican trucking company, it would go immediately, and the goods would be delivered to Winnipeg. And we wouldn't even know which companies were transporting those goods. It goes from truck A to truck B to truck C, and moves forward.

À (1005)

Mr. Bill Casey: That's very inefficient and costly.

Mr. Marc Lortie: It could be.

Mr. Bill Casey: It is.

Mr. Marc Lortie: But they have also found that they could be very efficient, in a sense. You have to look at insurance, and you have to look at registration to cross states and the cost of that. Therefore, the impediment is more with the Americans.

Mr. Bill Casey: Oh, no question. But it affects the Canada-Mexico relationship, because they happen to be in between.

I'm interested to hear about the committee that was set up to establish the green routes, or whatever it was you called it.

Mr. Jon Allen: The green corridor. The three foreign ministers were meeting to discuss a larger agenda, and that was one of the items on it.

Mr. Bill Casey: Is there any interest on Canada's part to re-establish those discussions or improve that type of transportation? Canada is a partner in this.

Mr. Jon Allen: Certainly transportation is one of a number of areas--there's also labour, governance, and parliamentary cooperation--where we're more than interested in sitting down with our American and Mexican partners and looking at broader cooperation.

Mr. Bill Casey: Switching completely...

Am I done?

The Chair: Yes. We'll come back to you.

Ms. Carroll.

Mr. Bill Casey: Thank you very much.

She's an awesome chair already, showing her power.

Some hon. members: Oh, oh!

Ms. Aileen Carroll (Barrie--Simcoe--Bradford, Lib.): Thank you.

Merci, Monsieur Lortie. This is excellent, and I think very positive. Although I knew of some of the initiatives you've described, I certainly didn't realize the full extent of what's being done. As I said, I think it's very positive indeed.

You mentioned the sharing. Well, you touched on it, but you detailed a little more to Madam Marleau, with regard to best practices and governance. I think that's key. Other members have been down there, however briefly, and the sense I got is that you have this very innovative and forward-thinking new government, but they're sitting atop a bureaucracy that was ruled for 70-some years, if I'm right, by the previous government with a different mindset. So however forward-thinking the government is, it is going to take time before they can have their vision seep down and become the practices of those who implement the policies they're attempting to do. I got a sense of some of those dilemmas in chatting with cabinet ministers.

The other concern I have, which I would ask you to address in your response, is rising expectations. There's that old sixties term we used to use, to date myself yet again. With all the best intents and all the best programs, as quickly as they can bring them about under the Fox government, can it happen quickly enough to meet the expectations of the people in Mexico? The poverty is still very pervasive. I think that's a dilemma.

Finally, with regard to the aid issue that was mentioned, I think we should be doing what we're doing. I agree completely with the initiatives. This is not to catch you off guard, but what's USAID doing? Are the Americans involved in programs there? Are they assisting, outside of the banks that you, in your response to Madam Lalonde...? Is there any direct bilateral aid going into Mexico from the Americans?

Mr. Marc Lortie: My answer to your last question is yes, but I would not know the figures.

Ms. Aileen Carroll: No. I was just curious about whether it's a substantial amount.

Mr. Marc Lortie: President Fox deserves to be supported because his vision for transforming his country is one of profound change for Mexican society. We all know, and he knows, it will not happen overnight, but his first 14 months in office have given it the right direction.

But the road for President Fox is going to be tough. He does not have a majority in his congress, and he also has to reform the relationship between the national government and the state governments, and how both levels of government provide services to the citizens. Therefore, he has embarked on huge reforms in governance, and has the problem of not being able to carry a majority in congress. He has to spend a lot of energy dealing with congress, while at the same time trying to sell and implement his reforms. It is not easy.

When you say it is top-down, in a sense it is top-down, but Mr. Fox was elected on the basis of profound change. That was the will of the Mexican people. They wanted to have profound changes in their society by electing Vincente Fox. So it is also the other way around. The people expressed themselves forcefully in the July 2000 election, and the expectations are there.

Is he able to show enough progress? The jury is out, and you will see that when you travel to Mexico. He has a lot to do. He has a non-renewable mandate of six years, and this is it.

You will meet parliamentarians. They are elected for a non-renewable four-year period, and are in the process of looking at the possibility of changing that. Madame Lalonde m'a dit trois ans et six ans. In terms of governance, there are big issues to change in the culture of the political parties, the way of doing things, the way they have done things, and so on. It's a big agenda for President Fox and the Mexicans.

À (1010)

The Chair: Madam Lalonde.

[Translation]

Ms. Francine Lalonde: It is wonderful to observe Mexican democracy. I had the opportunity to spend almost a month in total immersion, with the television y periodicos. It was a living, breathing democracy. The elections were clean, and their Parliament certainly has more powers than the Canadian Parliament. It is a presidential system. No one party has a majority, and everyone has to make compromises, which can cause difficulties such as the case of the Indian Act that Mr. Fox had more or less negotiated with Chiapas, and that members and senators changed to the great displeasure of the Indians. I read this morning that a group of members want to resume negotiations.

I would like to speak to several issues. There's the issue of foreign policy, and that of energy, that you did not mention today but that is very important.

As concerns foreign policy, Mr. Castaneda is an outstanding minister. Mexico has a seat on the Security Council. The country has a non-intervention policy, and also a tradition of not always aligning itself with American policy.

My question, which deals not only with foreign policy, is the following: is it not in Canada's best interest to intensify its relationships with Mexico—the United States would not mind—in order to try and somewhat balance relations which, in both cases, are out of line?

Secondly, I would like to have some information on what is happening in the energy sector. Mexico must change its constitution because they do not have the right to sell any part of Pemex. Meanwhile, Mr. Fox has said that Mexico absolutely needs investment. Mexicans are appalled by what has happened at Enron, and everyone is using the Enron case to say that they will not get rid of the company they already have. Well, at the moment, they're burning off gas because they are unable to invest in energy. Can you tell us something about this situation?

À (1015)

Mr. Marc Lortie: Thank you very much, Ms. Lalonde. Those are two very important points.

From a foreign policy perspective, the changes were also quite profound under Jorge Castañeda, the Mexican Minister of Foreign Affairs. We see changes daily. We meet with them regularly, not only in Mexico, in theCiudad de México, but also in Washington, as members of the Organization of American States, where over the last two years we have developed a very special relationship with Mexican diplomats, not only to get to know their perspective and to know what direction they are headed in, but also to share our goals with them.

We put together the agenda of the Summit of the Americas by working very closely with the Mexicans, especially the new Mexicans who arrived after December 1, 2000, and were interested in certain issues, when all of a sudden... The traditional Mexican diplomacy, for example, was quite forbidding, completely negative to put it mildly, as regards the idea of engaging civil society in the discussions. There was a change in attitude with the arrival of Castañeda. All of a sudden, we saw consultation and transparency, which changed the role of Mexican foreign policy.

Having said that, they're facing a great challenge because, all of a sudden, they are faced with the management of world affairs, because they are on the Security Council. They have just come on board. They are chairing the Security Council this month. Therefore, all of a sudden, Mexican diplomacy is faced with subjects that they have ignored for generations. They never got involved because of their basic principle of non-intervention in the affairs of other states. So they were unaware of a great many world issues because of adhering to this principle.

They are sort of learning as they go, sitting directly in the chairman seat at the Security Council. We consult with them regularly on all kinds of subjects affecting foreign policy. And I must say that in the process we are deepening a relationship that we never used to have with Mexico.

As regards hemispheric issues, Mexico has a unique perspective on the hemisphere, which is very useful to us, as well as on other issues; I am thinking, for example of Africa, where they have to be committed but also of the Caribbean. President Fox has just come back from a visit to Cuba, where he spent a few days at the beginning of February. On all of these issues, we've had an exchange of points of view, and this would be the central theme of the meeting between the Minister of Foreign Affairs, Bill Graham, and Minister Jorge Castañeda Thursday and Friday here, in Ottawa.

The energy issue is a good one, a substantive one. We have established a working relationship between the Mexican Department of Energy and the Canadian Department of Energy at the ministerial and senior bureaucratic levels, that never used to exist. This working relationship has flourished over the course of the fall. The Mexicans know what they are facing in the area of energy reform. If they want to attract the foreign private sector, and particularly the Canadian sector, to come and invest in this area, they must proceed with a reform, but they are not there yet. They're in the midst of a review. They're searching for solutions and they are examining all possible avenues. One direction that they believe holds great promise is that of separating oil from natural gas, to develop natural gas in light of a new reform and to allow not only for exploration but also exploitation of natural gas. At the moment they are importers of natural gas. And everyone agrees that it makes no sense for Mexico to be an importer of natural gas when they should be an efficient producer of natural gas, possibly even an exporter of natural gas. But they have not yet reached that point because of the difficulties of managing reform in the energy sector. We have established a very close relationship with them, both on a bilateral and on a trilateral level.

This subject was discussed during the meeting of the three leaders in Quebec, last April. We have set up a task force on trilateral energy issues, a group that is presently reviewing each other's rules and regulations.

Therefore, the ball is in the Mexicans' court as regards energy reform. President Fox invited the great Canadian captains of the energy industry to his ranch last July 16, to encourage them to invest and get interested in Mexico. He told them that he was committed to major reform in the energy sector, but we have not yet seen the full results of this.

À (1020)

[English]

Mr. Jon Allen: If I could add to that, Madam Lalonde, vis-à-vis the United States, obviously Mexican foreign policy has gone through a major transformation as well, in part because of Foreign Minister Jorge Castañeda. You saw President Fox on September 7 before the U.S. Congress seeking the confidence of the American people and the American legislators in order to be able to advance what he considers to be a key agenda, labour mobility and immigration reform, with the Americans. But it does reflect a whole new view of that relationship; it's very positive, and of course that benefits us as well because we can work as a threesome if that relationship improves.

The Chair: Thank you, Mr. Allen, and thank you as well, Madam Lalonde.

Dr. Patry.

[Translation]

Mr. Bernard Patry (Pierrefonds--Dollard, Lib.): Thank you very much. Thank you, Mr. Lortie.

In August 2000, when he was president-elect, Mr. Fox put forth the idea of a NAFTA plus. That was an idea he suggested. Last April, in Quebec City, President Bush, President Fox and our Prime Minister met above all to strengthen trilateral and economic cooperation, with the possibility of a broader North American community.

Is there any point in thinking that this North American community could have other concerns than those related to trade, and if yes, is Canada currently giving any thought to this or to some kind of non-economic strategy with Mexico and perhaps with the United States?

Mr. Marc Lortie: There is no strategy as of yet, but there is certainly a will, on the part of the Canadian government, to examine all possible avenues in terms of trilateral cooperation, or triangular cooperation in North America.

How can we achieve this? We have held discussions with the Mexicans and the Americans on a host of topics, including foreign policy. A little earlier on, I mentioned the discussions that we have had on Columbia, for example. The Mexicans have a unique perspective on some rather difficult and delicate matters like Columbia.

There are also ministers who meet regularly on a trilateral basis, but on the Canadian side, we have given our universities and our research centres the mandate to explore this relationship in detail as well as to examine the parameters of a North American community. What effort and work could be involved? What type of intellectual activities are required to achieve this?

We are currently considering all of these matters, and the work of your committee, Mr. Vice-Chair, is part of this consideration. Will we end up with a new strategy, will we expand NAFTA to include areas other than economic and trade-related matters? Perhaps, but at present, we have made a unique commitment in the history of Canada-Mexico relations to deepen this relationship. Good governance is an avenue that both governments have identified. The Americans are watching us. They are not involved very much. However, being very pragmatic, the Americans will get involved, for example, when we set up a working group on a specific issue like energy. It is economic in nature, as it is to encourage investment. But the Americans have created something that we do not have. When President Fox toured the United States, they created, under the responsibility of the American Deputy Secretary of the Treasury, a group to promote private American investments in Mexico that they call the Partnership for Prosperity.

À (1025)

We do not have that group as such, but there again, that is an area that is entirely economic. They are looking at how to promote American investments in Mexico.

We are currently thinking about that, and fortunately, the academic and research communities in Canada are contributing to our consideration of what a North American community should be. Some people are comparing it to the European Union; others are comparing it with what MERCOSUR is becoming in South America. As part of this work, a very dynamic process has been launched, with which the Canadian government is highly satisfied, and which for us is a great source of satisfaction in our relations with Mexico.

[English]

Mr. Jon Allen: When Mr. Pastor appeared here, he put before you a number of ideas. I think his view on institutions was, create the institutions and the ideas will flow. I think our perspective is, create the ideas, the relationships, the substance, and then perhaps move toward institutions--not complicate it unduly.

[Translation]

Mr. Marc Lortie: I would just like to conclude, if I may, Madam Chair.

My colleague has just pointed out that Foreign Affairs is not working on these ideas alone. The same is being done at the department responsible for energy and at the Department of Health, CIDA and in other Canadian government departments where people are looking at how to better integrate our ways of doing things, how to better integrate ourselves into the North American context, and also how to better integrate Mexico.

[English]

The Chair: Thank you.

Mr. Casey, now's your opportunity. You have five minutes.

Mr. Bill Casey: My understanding is that the Mexican government is not enthusiastic about certain aspects of the perimeter security program, as quoted by the Americans. Do you feel comfortable in telling us what their opinion is on the military aspect and the customs and immigration aspect of a perimeter security program, involving Mexico, the U.S., and Canada? What is their opinion of this proposal? What are they against? What are they for?

Mr. Marc Lortie: Mr. Casey, those are big-ticket items.

Mr. Bill Casey: We have five minutes.

Mr. Marc Lortie: Let's go one by one.

Mr. Bill Casey: All right.

Mr. Marc Lortie: They like the overall concept of a security perimeter. They like the idea that from a conceptual point of view North America should be considered as one entity. The reason they like it is that their overwhelming objective is how to resolve the case of labour mobility with the United States. And they say, wow, if we were to have a North American security perimeter, our workers could go north and back and north and back, and that will resolve the case of three million illegal Mexican workers in the United States.

That is the theory. The reality is that they have a non-existent border with Guatemala. Therefore, the Central American migrant workers go across that border in southern Mexico and end up in the United States on the border and eventually to our border as well. We should never forget that 40% of the refugee claimants we receive come from the United States. Where are they from? A large majority are coming from down south, from Central America. They come through that border in Mexico. Therefore, suddenly the Mexicans don't have a secure border south of Mexico. They have one north of Mexico, but not south of Mexico. When you mention that to the Mexicans, they say, oh, yes, that's true; we should invest in better management of that southern border.

Therefore, that is the first point vis-à-vis immigration. They feel, however, that on immigration they'd like very much to be very coordinated with us and the Americans, to say we don't want Mexico to be used as a territory for outside forces to enter North America via Mexico. They want to prevent that. Therefore, the cooperation on immigration matters there is wide open. We have established the Puebla process on immigration to exchange views, to exchange best practices with the Mexicans, with the Americans, and with other countries in South America to prevent that phenomenon on immigration.

On customs, at the beginning, after September 11, Foreign Minister Castañeda came to the then-Foreign Minister Manley and said “Why don't we sit, all three of us together, and discuss customs issues and how to improve border management?” We said no at that time. We said no because we told the Mexicans that their problem with the United States was far different from our problem with the United States. We have an open border, basically. On September 12 we had some problems, but we were able to arrive at some solutions.

On September 12 Mexico also had a huge problem, because you have 1.2 million Mexicans crossing the border every day. You have some people sending their kids to school in the United States. Suddenly, on September 12, they could not go to school any more. You had all kinds of problems with the Mexican borders, so that the Mexicans were looking for a way to improve their relationship with the United States, inviting Canada to sit down at the table.

We had a good conversation with Foreign Minister Castañeda, saying that the best way would be to proceed, on the bilateral basis, to identify the best way to proceed, and to share information. We are in the process of doing that with the Mexicans. We arrived at a 30-point action plan with Governor Ridge on December 12 in a meeting between Minister Manley and Governor Ridge to improve the management of our border on the customs and immigration side, and also to modernize the border. Therefore, we are moving in implementing that border.

À (1030)

In December we shared our strategy with the Mexicans. They are very interested in and intrigued by the new concept on the customs side of clearing goods away from the border. That concept they like. They will receive Governor Ridge in the first week of March in Mexico, and you will see that a lot of ideas they will propose to the Americans are ideas that we established with the Americans on December 12. On the customs side, we are moving in the same direction.

But there is a major difference with the Mexican borders. Illegal immigration is a huge problem. You have a wall in the United States. You have soldiers on the U.S. border at every 900 feet. You have a drug trafficking problem. Therefore, you have tremendous problems of a different nature on the Mexican border. But the Mexican government overall would like to remove that wall to favour labour mobility and to ensure that their border is similar to the Canadian border up north. That is the overall objective. But we have a long way to go. The best approach for us with the Mexicans is to sit down, open our books, and tell them how we have engaged the Americans, how we deal with the agencies, and how we deal with customs.

Their final objective, which is a little different from ours, and that's their way of doing things, is they would like to see created a binational commission to manage border issues, states, and municipalities, and all the various agencies would sit on that commission. We don't have such a commission, we are more on an ad hoc basis with the Americans.

À (1035)

Mr. Bill Casey: One word on the military.

Mr. Marc Lortie: On the military, the Americans have been moving since September 11 into the new approach of UCP, the Unified Command Plan for North America. That should include, in their approach, Mexico. Secretary Colin Powell and Secretary of Defense Rumsfeld had conversations with the Canadian side. We have sent our officials to Washington to see what they are doing.

We have a long-standing cooperative relationship with the United States on the military side. NORAD is one example, starting from the Ogdensburg agreement of 1940, and so on and so forth. The Mexicans don't have any of that.

At this moment, when they look at North American defence, and North American security, there their military have to embark on a new way of doing things. It is brand new for them. Dealing with the Americans on security matters has never been, since the war between the two countries, part of their agenda. Therefore, it is a new dimension, and we don't know exactly to what extent they are going to develop the confidence and trust that exist on security matters between Canada and the United States.

Mr. Bill Casey: Thank you very much.

I think we'd better end there, or the new chair is going to be really mad at me.

The Chair: I have been so generous; I won't even tell you the number of minutes you had.

Madam Jennings.

[Translation]

Mrs. Marlene Jennings (Notre-Dame-de-Grâce--Lachine, Lib.): Thank you very much for your presentation, Mr. Lortie, Mr. Allen and Mr. Welsh. I want to touch on a topic where I have perhaps some concerns or some simplistic concerns, but which stem from something I have experienced over the past two years.

In your presentation, you stated that Mexico, convinced of the benefits of free trade, has signed agreements with 31 countries. You also mentioned that thanks to NAFTA, Canada has become the second largest market for Mexican exports, and that in 2000, Mexico exported more goods to Canada than to the 15 countries of the European Union combined.

I am a member of the Canada-Europe Parliamentary Association. I had the privilege of attending three parliamentary assemblies in Strasbourg. We have permanent observer status and Mexico has also obtained permanent observer status. Mexico, based on my experience, is investing a lot of energy in resources to establish links with all European parliamentarians, to the point where there is a delegation there on an almost permanent basis. As it is always the same team, it is much easier to establish solid and ongoing links than it is for Canada, whose team is never the same. The only constant is the chair or the vice-chair. There is always rotation among parliamentarians; so each time, we must start over from scratch.

My parliamentary colleagues from both sides of the House have told me that the Mexicans had followed Canada's example in that they observed our involvement in the Parliamentary Association and the committees on which we have sat, where we have invested our energy, and they have learned from our experience, from our performance. Now, they are leaving us behind, because they are devoting resources to this. I look at the situation and I say to myself that if Mexico is investing so much in the Parliamentary Association, it is doing so, I am convinced, to improve its relations with European countries, be it at the trade, direct investment, or social level, in short on all levels. So we want to improve our relations with Mexico.

On one hand, I was very happy to hear you say that Canada takes its bilateral relations with Mexico seriously and that we have substantially increased the number of areas in which we want to work with Mexico. But at the same time, I am concerned that Mexico is devoting the bulk of its resources to Europe. If we do not increase our resources to establish links with Mexico on a bilateral level, we might well, in five, six or ten years, no longer be the second largest country for Mexican exports; it may well be the European Union, all countries combined.

What do you think about that?

À (1040)

Mr. Marc Lortie: Ms. Jennings, you are raising a fundamental issue. I want to make two comments.

First of all, the Mexicans have always been and continue to be very active diplomatically with respect to Europe. Once they had negotiated the free trade agreement with the United States, they quickly turned to Europe and wondered how they could increase their involvement with the Europeans and the European Union. They did it, and they used modern means. They used parliamentary diplomacy to get in contact with European decision makers, whether they were in Brussels or Strasbourg, to make sure that Mexico remained on the European agenda.

They are also doing so because their diplomacy is based on a principle that is very much similar to a fundamental principle of Canadian diplomacy: establishing a counterbalance to the omnipresence of our respective relations with the United States.

We know that 90% of Mexican trade is with the United States. We are at 87%, and the Mexicans are at 90%. They feel that they must turn to the Europeans. They are doing so. Good for them. I think that is a very healthy approach. For Mexican development and for developing good relations, I think it is very healthy on their part to try and attract the Europeans and the European Union.

Having said that, a bit like us, they are somewhat disappointed in their relations with the Europeans, because despite their efforts, the Europeans are fundamentally concerned with building Europe, and deepening their relations with the European Union by neglecting some of their traditional partners, including Mexico and Canada, to some extent.

Being active diplomatically in Strasbourg is very good, but experience shows that the agreements they have signed in recent years are moving more and more towards greater North American integration.

Will the Europeans leave us behind or not? I do not know, but the indicators are not there. The quality of the Mexico-European agreement is not at the same level as that of NAFTA.

À (1045)

Ms. Marlene Jennings: I greatly appreciate your explanations. First of all, I find that reassuring. It is not because I do not want things to go well for Mexico. On the contrary, I prefer that as Canadians we benefit from privileged relations with Mexico and the Mexican government, precisely because we are all North Americans and it is in our best interest to establish these bilateral relations.

Here is my last question.

[English]

The Chair: C'est fini. The first question was the entire limit.

Some hon. members: Oh, oh!

[Translation]

Ms. Marlene Jennings: My last question deals with the security perimeter. You did a good job explaining the movement of human beings. The issue of moving between Mexico and the United States is completely different from that of moving between Canada and the United States. In the short term, apart from the customs issue, do you see any points on which the three countries could work together in order to establish a security perimeter? Are there aspects other than customs issues that could be the subject of discussions and perhaps resolutions or trilateral agreements?

Mr. Marc Lortie: I think that the future will lead us to discussing more and more security matters with the Mexicans. The topic has not been on the agenda for the past 10 years. It is topic that will be on the agenda more and more, especially as regards immigration matters. Immigration is a key theme. There is a new phenomenon: we have had conversations and established ongoing working groups with the Mexicans and other partners, which was not the case in the past. This is a new dimension.

Continental security is also a new dimension. It is a shift in American policy. American policy had commands for the entire world, except North America. All of a sudden, the American policy is to have a unified approach for North America. This is a new dimension that is appearing on government agendas.

But the main area of interest, at present, for the Mexicans, and you will see this when you are in Mexico, is immigration. President Fox has promised changes, transparency and reforms, but he also made another major promise during his election: to come up with a solution to the 3 million workers considered illegal in the United States. That is a major challenge that the Mexicans want to undertake. When you take the discussion further with the Mexicans, they will tell you that within 10 years, they want these 3 million workers to come back to Mexico, to find jobs in Mexico, and to enrich Mexican society by coming back to Mexico. That is how they see the next decade. Coming up with the necessary solutions with the Americans in this area is a major challenge.

When President Fox appeared before American Congress last September 7, he said that what the Mexicans lacked was the confidence of the Americans. He said that the Americans did not have enough confidence in Mexicans. President Fox, in his new diplomatic approach, is attempting to get Canada to sit down with him and the Americans to increase the level of confidence of its American partner.

So immigration will be a major topic of discussion, because it is a major concern for President Fox and the Mexican people at present.

À (1050)

[English]

The Chair: Thank you.

Mr. Allen.

Mr. Jon Allen: Perhaps I can just add that at the heart of American concern, and at the heart of their proposals on North American security, is the issue of security. And at the heart of our relationship with the Americans is a law enforcement and intelligence cooperation that backs that relationship. So on customs and on immigration, we can have a deep and profound sense of sharing, because behind it we have a very deep and profound sense of cooperation.

Right now, because of the issues perhaps of transparency and development, that doesn't exist between the Americans and Mexicans. It will come. And as it comes, there will be an ability, I think, to then deal as a perimeter.

The Chair: Thank you very much.

It was a most interesting presentation with the follow-up discussions and clarifications for us today on this important item.

Mr. Lortie, if you were to select some areas for North American cooperation, would it be possible to give us one, two, three, or four on a list of priorities? What would be your priority areas?

Mr. Marc Lortie: Number one is to use the NAFTA institutions we have created to their full extent. We have a commission and we have two working groups--labour and environment. Both are very important for our respective citizens, therefore we need to improve the mechanisms and the workings of those current institutions.

On trilateral, I would say energy matters, transportation issues, and immigration issues. On education, we need to ensure that our younger generations get interested in Mexico. We need to teach Spanish to our kids.

I would also say, at this very moment, governance. In governance I would include what the three governments can do together to exchange their experiences, including parliamentary relations. I don't think the three of you have parliamentary relations. It would be a tremendous boost to government cooperation if parliamentarians from the three countries met on a regular basis.

Finally, we need to encourage our civil society representatives--our interested groups--to meet on a regular basis. It could be done in an academic function, but experience over the last few years has demonstrated that when we are able to put together Mexican, American, and Canadian civil society representatives, it improves the agenda for hemispheric cooperation.

This is a long list--maybe too long a list--but it is a menu on which we need to work. We are working on all those ticket items, but if we work diligently on all aspects, it will give shape to the North American community.

À (1055)

The Chair: Thank you very much, Mr. Lortie, and thank you from the committee. I think you've given us wonderful pieces of information that we will follow up and follow through on.

Thank you as well to Mr. Allen and Mr. Welsh.

We'll just take a break for two minutes.

À (1057)

Á (1102)

The Chair: We will now resume the meeting. There was a draft agenda sent out to you. Although we didn't call for an in camera, we'll start with the disposal of a couple of motions we have before us.

Madam Lalonde.

[Translation]

Ms. Francine Lalonde: Thank you, Madam Chair. I wanted to bring up the motion that I sent in regarding the appearance of Mr. Gagliano, who was appointed Ambassador to Denmark and whose appointment we learned about in the regular way.

I would like him to appear before the committee as custom dictates. I have had the minutes that exist since this regulation came into force examined. Each time a committee member made a request, the committee agreed to call the person who had been appointed or who was to be appointed.

[English]

The Chair: The notice of motion was given and duly circulated. It is in order.

I also want to bring it to the attention of the committee that Mr. Casey had previously tabled before us the intent, although not in the fashion in which your motion is constructed. So he did indicate to us that he also was making a similar motion, a similar request.

We have called before us other members, other appointees. In keeping with your motion, I would ask then to call the question.

(Motion agreed to—See Minutes of Proceedings)

[Translation]

Ms. Francine Lalonde: Madam Chair, is it possible to determine the time right now? I have looked at the calendar. We could hear from him on the morning of Tuesday, March 19, and continue in the afternoon.

[English]

The Chair: I think we have a steering committee, which does look at the committee's work and its agenda. Maybe we could bring the item of the date to the steering committee, keeping in mind the suggestion you've made. Hopefully at the steering committee we can make that resolution, looking at the committee's work.

We have another item, I think item 4, which we can dispose of. We have a date given for this. Pursuant to a recommendation of the committee's December 1998 report, Canada and the Nuclear Challenge, we had asked Canada's Ambassador to the United Nations to come before us on April 25.

Some hon. members: Agreed.

The Chair: At the last meeting of the committee, we adopted a motion to meet and to offer lunch to the foreign affairs committee of Croatia. Looking again at the agenda, it seems as though the likely date would be in May.

Can I have some agreement on this, that we pursue May, or do the invitation for May?

Some hon. members: Agreed.

The Chair: On our next item, most of you have the information on the committee hearings in Atlantic Canada and Quebec. Dr. Patry is going to chair the section in Quebec. A witness list is being compiled, and it's coming along nicely. Any further suggestions would be accepted.

For those of you who commit to various parts of committee travel, you will have the information sent to your offices. I just want to ensure that the information is agreeable.

Á (1105)

[Translation]

Ms. Francine Lalonde: Madam Chair, in calling groups in Quebec who could come for the consultation on Africa, such as the AQOCI which, as many of you know, is an association of the groups involved internationally, namely in Africa, I was surprised to see that the Department of Foreign Affairs is conducting parallel consultations, in such a way that people will prefer to attend a consultation organized by Mr. Fowler. So there are consultations organized by Mr. Fowler and other consultations by the Department of Foreign Affairs, and we were not at all informed of that.

I'm a bit uncomfortable with that, because I have been trying to get a commitment from the AQOCI, for example, to come to Montreal, but because there is a meeting here, in Ottawa, on the 25th and 26th, the association has decided not to come because it did not have the time, given the new information that it will have, to come on Wednesday or Thursday. To my mind, this is quite serious. It means that we, as parliamentarians, are doing consultations more or less at the same time as the department, and there is no coordination. Is that clear?

[English]

The Chair: I'm not too sure we have any information on the other meeting or the foreign affairs meeting.

Do you know about this, Madam Jennings, the parliamentary secretary?

Ms. Marlene Jennings: I simply wish to point out that when Mr. Fowler came before us, he did in fact mention that part of the process for the G-8 Kananaskis was going to be consultation with the general public, with NGOs and that.

I think possibly our mistake, and it's my mistake as well as everyone else's, was not to click in; if these consultations were going to be happening, how would that impact on our own consultations? I think the point Madam Lalonde has raised is that because they have more resources than we do, their consultation has begun before ours, and now we are going to be in a position, possibly not just in the Atlantic and Quebec but in other parts of Canada, where, if the other consultations have happened already, those groups may not wish to come before us, because it's going to be a doubling up and they don't necessarily have the kind of resources to spend to repeat the same thing twice and three times.

So perhaps the committee, or the steering committee or the clerk, can contact the responsible parties to find out how their dates are spreading out and try to do some kind of collaboration so that we're not always after the fact, that in some cases we may be the first ones to do the consultation in certain parts. We've missed the boat, it seems, for at least Quebec; I don't know about Atlantic Canada. But let's try to not miss the boat for our consultations in the other parts of Canada.

Á (1110)

The Chair: Good suggestion, Ms. Jennings. The clerk will follow up on that. Thank you.

The second item on the draft agenda that was given to you is the adoption of the travel plan and budget for committee hearings in the west and in Ontario on the G-8 and North American study--so again, looking at Quebec, Atlantic Canada, and now the west and Ontario for committee travel. You have before you the budget request.

I'll ask Stephen to speak to this for a minute.

The Clerk: Madam Chair, we've simply laid out what we think would be the appropriate cities, and I think this reflects some of the previous conversation of the committee. We presumably would take two days in Toronto, two days in Vancouver, and one day in each of the other cities indicated.

At this stage, we of course would value any input and guidance from the committee. But at least this is what we, at the staff level, would like to put before you.

The Chair: Are there any comments?

[Translation]

Ms. Francine Lalonde: I want to go back to what I suggested earlier.

According to the notice we have received from Mr. Knowles, the deadline for hearing Mr. Gagliano would be April 12. So we would have to fit that into the period prior to our meeting with Mr. Gagliano.

[English]

The Clerk: Madam Chair, I'll be in touch with the Department of Foreign Affairs today on that, that's for sure, but with Easter and weeks off, and with the requirement to table the G-8 report by the end of April....

The Chair: It's a very tight schedule, but we'll talk at the steering committee and see how we can manage that item.

Do we have approval, then, for the clerk to continue working on this plan of action?

Some hon. members: Agreed.

The Clerk: So that would go to the liaison committee and the budget subcommittee, Madam Chair, and then to the House. Hopefully we'll have the House motion. We'd need the House motion before the House rises for Easter.

The Chair: Thank you.

The next item is number 3 on the draft agenda. It speaks about the consideration of a plan and budget for travel to Latin America by the subcommittee on trade.

Mr. Harb, the chair of that subcommittee, is not here, but perhaps Mr. O'Brien could highlight some things for us.

Mr. Pat O'Brien (London--Fanshawe, Lib.): I'd be happy to, Madam Chair.

Of course we all know the initial meeting of the FTAA was held about a year ago now in Ottawa. Some of us participated in it. We all know there's a three-track policy in our trade--bilateral, regional, and WTO. This is one of those three components; this is the regional component, and it's a very important initiative. It will help us to further our cause at WTO.

It's very important that we have some parliamentarians visit these sites. We know some of the outstanding issues with Brazil--I won't belabour the point. We know about the recent bilateral with Costa Rica and some of the concerns that were expressed on both sides of the table, about sugar specifically, and investment. It's really critical that we have a group of parliamentarians go to these particular countries at this point in time.

This subcommittee that Mac Harb chairs is doing a lot of work in this area. It wants to show the proper attention and respect to these countries by this trip. I think it's an important trip. We hope the committee would support it, of course.

Á (1115)

The Chair: Mr. Duncan.

Mr. John Duncan: I just want to ask the chair if she has any information on the request, put forward by the subcommittee on international trade, for committee status.

The Chair: I have no information on that, Mr. Duncan, but we can pursue it, and maybe the parliamentary secretary can follow it through.

Mr. John Duncan: Does the parliamentary secretary have anything he could add?

Mr. Pat O'Brien: It's been discussed with the Minister for International Trade. I don't want to speak for him, but certainly I can say it's an idea worthy of consideration. I don't know where it sits at the moment. I think it's still at the exploratory stage, Mr. Duncan.

But I think there's a case that could be made that there's enough happening in trade for it to be a separate committee. This committee's extremely busy, judging from my year on it. I guess there are arguments pro and con about separating out trade, so I still think it's at the exploratory stage.

Mr. John Duncan: Well, it did have all-party support from participants when the request was made, and I just wondered what state it was in terms of the process it would take.

Mr. Pat O'Brien: As I said, there hasn't been a decision taken, but I'll undertake to talk with the minister on his return and let the committee know.

The Chair: Thank you, Mr. O'Brien.

Thank you, Mr. Duncan.

Mr. Casey, do you have a comment?

Mr. Bill Casey: It's just a comment. I find it interesting that nine members going to Brazil, Chile, Costa Rica, and Peru cost the same as eight members going to Vancouver, Edmonton, Calgary, and Saskatoon. I think it's a reflection on Air Canada, maybe.

But we would support this.

The Chair: Maybe we can bring to the attention of the committee members a chart that was handed out at the beginning of the session with some planning dates for 2002. As we begin to add things to the agenda items, keep in mind that you have before you some things that are preplanned, and we try to work our schedule around this.

The steering committee will continue to work and to make sure the agenda is fixed for the committee.

Ms. Aileen Carroll: May I ask, Madam Chair, while we're together, that you remind Mr. Knowles that you were going to take a look at that list. You'll recall at the last meeting of the steering committee a lot of us didn't get notices. I don't know if the technology was down that day, but I want to be sure I'm notified of the next meeting.

The Clerk: Madam Chair, if I may, I have looked at that list, and indeed those members who were supposed to be on it are on it. The list is dated from the middle of October, and at the previous subcommittee meeting all members did attend.

In speaking to some of the offices, I think probably what happened, Madam Chair, is that the sub committee has met so seldom some of the staff probably thought, “Ah, my member is not a member of this subcommittee”, and with the thousands of e-mails and notices you get, I guess they felt in one or two cases that it was not applicable. I think it was an honest mistake on their part.

Ms. Aileen Carroll: But it wasn't just me; there were a number of us whose staff didn't put it on.

It's the steering committee of the whole, I mean.

Ms. Diane Marleau: I wasn't notified either. Nobody knew.

Ms. Aileen Carroll: Well, that's good, as long as we...

The Clerk: I did phone the offices to find out.

Ms. Aileen Carroll: Send it in hot pink.

The Chair: Mr. O'Brien.

Mr. Pat O'Brien: Madam Chair, do you want a motion on the FTAA subcommittee travel?

The Chair: Yes. At this point in time we can have a motion on this, and then of course the dates would have to be dealt with at the steering committee level.

Mr. Pat O'Brien: Yes. I can give you the tentative dates, if you want. They were looking at April 15 to 25, if my memory serves.

Á (1120)

The Chair: We have some deadlines. We have two reporting deadlines in April. Can you leave those dates with us and not make that part of your motion, so that we can deal with this at the steering committee?

Mr. Pat O'Brien: Sure, absolutely. I'll move the adoption of the proposed budget for the subcommittee trip to study the FTAA.

The Clerk: That means the budget is adopted, but the date is to be fixed.

The Chair: Yes. Is that agreed?

(Motion agreed to)

The Chair: Thank you very much.

We meet for lunch with the Ambassador for Mexico, in room 602 of the parliamentary restaurant, at 12:15.

The Clerk: Madam Chair, I told the Ambassador 12:30 in case there were problems.

The Chair: Fine.

The meeting is adjourned.