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 29, 2001

• 0911

[English]

The Chair (Mr. Bill Graham (Toronto Centre—Rosedale, Lib.)): Colleagues, we have a quorum for the purpose of hearing evidence.

Before we get going, we have a small matter to deal with first. You'll recall that two meetings ago we adopted and approved a letter to go from the committee both to...sorry, Mac, but it's a letter to Mr. Zoellick. And who else was it to go to? Was it the minister?

Mr. Mac Harb (Ottawa Centre, Lib.): To the minister, yes.

[Translation]

Ms. Francine Lalonde (Mercier, BQ): [Editor's note: inaudible]... of Pierre Paquette.

The Chair: No, it's only for the letter we approved the other day.

Ms. Francine Lalonde: Good.

The Chair: It's his thing. Lets wait a couple of minutes.

[English]

While we're waiting, I'll just welcome Professor Kirton, Mr. Molestina, who has come all the way from Ecuador—thank you very much for coming, sir, I appreciate that very much—

Mr. Oswaldo Molestina Zavala, (Vice-President, Conferencia parlementaria de las Américas, National (COPA); Member, National Chamber of Representatives, Ecuador): Thank you.

The Chair: —and Mr. Yussuff and Monsieur Pierre Laliberté.

[Translation]

They're not on the list, but they are welcomed anyway. Even if you're not on the list, we're here to listen to your testimony.

[English]

I'm going to start by asking Professor Kirton if he could begin, but we're going to interrupt when we get Mr. Paquette here, just to get the matter of this letter settled.

It's a procedural thing we have to do, Professor Kirton, so don't be upset if we interrupt for a minute. Perhaps you could begin your presentation anyway.

Try to keep everything to ten minutes, and then we can have time for questions. We have two panels this morning.

Professor John Kirton (Department of Political Science, University of Toronto): Thank you very much. It's a great pleasure to have been asked back to this committee to speak about an issue that, as we all know, is of immense importance to Canadians, and one that I think all Canadians now recognize is important not only for a Canadian foreign policy, but for their daily lives.

The media has done an excellent job of acquainting Canadians with a few particular dimensions of the forthcoming democracy summit, as I think we can call it. In my few minutes, I would like to go back to some basics and focus on the benefits and the opportunities of occasions such as this. In doing so, I'll be drawing on my work over many years both as a scholar of Canadian foreign policy, but also as director of the G-8 research group at the University of Toronto, and from my work in various capacities in the trade and environment field.

You may recall that in February 1995 the Prime Minister and Canadian government offered a quite unusual vision of Canadian foreign policy that highlighted Canada's potential for leadership in the hemisphere and in the world, and concluded by declaring:

Canada can further its global interests better than any other country through its active membership in key international groupings, for example, hosting the G-7 Summit this year and the APEC Summit in 1997.

• 0915

I think we can now quite properly add the Quebec City democracy summit of 2001 to that list.

The hosting of these summits—in particular, plurilateral, institutionalized summits—is, I think, a uniquely powerful instrument of influence for Canadian foreign policy. This particular summit in Quebec City offers Canada an outstanding opportunity to forward many of its core interests and values, and it provides an occasion to take specific initiatives that can more effectively govern the ecological and social values that we in the hemisphere share.

First, why summitry? Why is hosting such summits such an important instrument of influence? Let me quickly review the basic six elements.

First, summits get attention from foreign leaders, their societies, their media, and their mass publics. They thus offer an unparalleled opportunity to send a message about what Canada and its colleagues in the Americas want and represent.

Second, they give access to foreign leaders. Sustained contact at the highest level, over three days and in a setting where other leaders are present, allows a unique occasion to bond personally and to mobilize peer pressure, something that no bilateral encounter or orchestrated, broadly multilateral meeting can do.

Third, summits establish an agenda, bring new issues to the table, and codify these in the communiqués—communiqués that are the essential ingredient of transparency and the accountability that follows.

Fourth, summits set new directions, with a comprehensive agenda and with the unique ability of leaders to transcend particular portfolios. They're the ones who establish new linkages, set new directions, make trade-offs, and introduce new principles. The link between trade liberalization and the overarching value of democracy, the balance between trade and environment, and the balance between debt relief and democracy, are really ones only leaders themselves can make. When leaders share a deep reservoir of common values, they can go beyond competing national interests in ways that reflect these common goals. Here, it is worth recalling that, amidst the broad array of summit level instruments available to Canada, the G-8 and the Summit of the Americas are Canada's only two such forums with a comprehensive agenda where democracy is the common bond.

Fifth, summits take decisions, often ones that are timely, well tailored, and ambitious, with hard targets and timetables.

Finally, they produce real change. They make the commitments that count, the personal products of the leaders that are difficult to ignore by others in government back home. Particularly when leaders know they will again soon meet their peers at these institutionalized summits, they have to take their commitments seriously. When these summits have available to them consequential international organizations with resources to implement the decisions, real change can result.

What does the democracy summit promise to deliver on these six dimensions, given the advances that have already been made that are in the system as it's being prepared?

First, we know we'll get exceptional attention, given its timing, its location, the innovative televising of its opening session, and the large number of citizens who will come to express their views. The vigour and variety of those voices, and the restraint of the security forces in response, I think are a powerful message from and to the hemisphere about what democracy is really all about. It is something that should be celebrated.

Second, the summit offers access to otherwise unavailable but important foreign leaders at a critical time. Of course, it gets the new U.S. President to Canada, a country to which not all U.S. presidents naturally come. It engages the new President in the Americas, and thus the world, and does so in ways that are attractive to him and his administration. And it can help Canada better manage its bilateral softwood lumber dispute with the United States and its regional jet dispute with Brazil.

• 0920

Third, it establishes an agenda that highlights democracy as a fundamental value, and one with real and pervasive force.

Fourth, it sets several new directions by declaring that democracy is non-negotiable; that collective intervention to preserve democracy is legitimate; that trade liberalization should respect and promote cultural diversity—introducing that preambular provision that was stolen from us by the failure of Seattle; and that civil society inclusion in these processes of global governance is now a necessity.

Fifth, it will take hard decisions not only in its comprehensive action plan, but by declaring, in a broad north-south family with enormous diversity and in the aftermath of Seattle, that we do indeed, north and south alike, want full free trade, and we want it fast, by the year 2005, at least.

Finally, it will promote real change, especially given Canada's energies from the beginning in linking the summit process to the Organization of American States and its work with the multilateral development banks in trying to ensure the needed resources will be there.

Beyond these existing advances, what more can our democracy summit do, even at this late stage of preparation and while recognizing the great diversity the community contains? I know this committee has had and will provide a wealth of well-meaning suggestions. Mine are a most modest addition to that list.

First, it can be used to get attention for some vital messages. One is that Canada cares about all of the Americas showing solidarity, amongst other ways, by providing $1.2 billion to Mexico and $500 million to Brazil in the recent past, when those countries were afflicted by financial difficulties. Being a member of the family has its real rewards.

A second message, and an important one, is that the pioneering trade environment regime introduced by NAFTA really works. It works for trade, it works for the environment, for the poor as well as the rich members, and for civil society as well. Moreover, experience shows trade sanctions to enforce environmental standards are simply not necessary to make that trade and environment regime work so well.

Secondly, the summit can give even greater access to leaders for leaders, and to citizens on the outside, by promising to convene more often. Perhaps as the community develops, the leaders can convene even once every two years, as Canada does with our Commonwealth and Francophonie friends.

Thirdly, it can adjust its agenda by restoring to the first rank the fourth pillar of sustainable development that was featured at Miami in 1994, where the whole process began.

Fourth, it can set more new directions. It can add the NAFTA to the preamble of the free trade agreement of the Americas, that this free trade agreement will be used to “strengthen the development and enforcement of environmental laws and regulations”. Canada can promise that the Quebec City advances in civil society participation in democratization principles will be used as a minimum platform for Canada's host when we mount the G-8 summit next year.

Fifth, the Quebec City democracy summit can take some hard decisions. It can start a process to develop a framework collectively, as a community, to assess on an ongoing basis the FTAA's environmental effects. It can promise to conclude that FTAA before the existing 2005 deadline and before other potentially delaying presidential elections loom.

• 0925

Finally, it can be used to produce real change by some innovative steps in capacity building. Following the model of our G-7 partners, it could invite the 1,000 largest corporations in the hemisphere to contribute to a new additional fund for sustainable development and democracy, one which governments themselves could match the contributions to according to their wealth.

Thank you, Mr. Chairman.

The Chair: Thank you very much, Professor Kirton. We appreciate that.

Before I go to our next witnesses, I'm going to go back to our petite cuisine issue of the letter to Mr. Zoellick and the report that Mr. Harb, as the chair of the trade committee, wants to put into the House at 10 a.m. That's why we're doing this, because if he's going to get it in the House at 10 a.m., we have to approve it now. We now have a quorum, so we can approve it.

[Translation]

Mr. Paquette, I believe you were in agreement with the amendments made to the report.

Mr. Pierre Paquette (Joliette, BQ): It was discussed yesterday afternoon and it suits me just fine.

The Chair: So everyone on Mr. Harb's committee agrees. All parties agree on the terms of the letter. Is that right?

Mr. Pierre Paquette: All those present were in agreement.

The Chair: Okay. We will assume that those who were not there are in agreement.

A voice: We hope.

[English]

The Chair: So, colleagues, you saw the letter the last time. I understand some minor modifications have been made. Can we adopt it, then, as a report of the committee?

Some hon. members: Agreed.

[Translation]

The Chair: Everyone agrees.

[English]

Thank you very much. Thank you, Mr. Harb.

Could we also request that Mr. Harb, in the name of the committee, put it in the House for us?

An hon. member: Yes, please do.

The Chair: I'll ask Mr. Harb to do that.

Thank you very much, sir.

Mr. Mac Harb: Could you sign it, sir, and then we'll be gone.

The Chair: Do we want a government response?

Mr. Mac Harb: At this point we already have it in the report. Because of the time element, I don't think it will be necessary.

The Chair: You put the government response in your report. This is very clever. Why don't we do that more often? That's the problem with our parliamentary secretary. If he could just do the response before we do the report, it would be a hell of a help.

Thank you very much. Thank you, colleagues. And witnesses, I hope you'll excuse us. At least we got that done.

We'll go next to the Canadian Labour Congress, Mr. Yussuff. Thank you, sir.

Mr. Hassan Yussuff (Executive Vice-President, Officer Responsible for Health, Safety and Environment and Anti-Racism and Human Rights Departments, Canadian Labour Congress): I want to thank the subcommittee for the opportunity to be able to present. This is not the first time we have been before this committee on the question of trade, so, once more, we're glad to be here to repeat some of the things we've said in the past.

In regard to our brief, we have done somewhat of a summary, which is slightly different from the version I think your colleagues may have around the table. So without further ado....

The Canadian Labour Congress represents about 2.5 million workers across the country. Again, we thank the committee for the opportunity to present.

The Canadian Labour Congress would like to take the opportunity to renew its concerns with regard to both the content and the process of current negotiations on the free trade area of the Americas, the FTAA. With regard to the content, at least what we know of it, we are disappointed by its narrow concern to protect trade and investors and the absence of a clear, coherent development strategy aimed at raising income and employment through the Americas. But before going any further, a few words about the process are in order.

To be blunt, like many others in Canada, we are finding it more and more difficult not to see consultation exercises such as this one as purely pro forma. While the Canadian government talks a good game about actively engaging civil society, the fact is most of these consultations appear to be window dressing, exercising their influence on the rhetoric around the negotiations but none of its content. Contrary to the round tables of the world, as far as the so-called civil society is concerned, it seems recommendations never percolate into Canada's trade agenda.

Given the high stakes inherent in all multilateral or regional trade agreements and the legitimate apprehensions of several stakeholders to be faced with yet another fait accompli at the end of the day, the CLC calls on the Canadian government not only to make the text of the draft agreement available as soon as possible but to bring the final version to Parliament for final debate and approval.

For the CLC it is worth repeating that the question is not whether Canada should engage in international trade. Of course, we should. However, we take exception to the single-minded focus on liberalization of trade and investment as the answer to economic and social development.

• 0930

When it comes to trade, the Canadian policy-makers not only confuse ends and means by presenting trade liberalization as an end in itself, but also make dangerous leaps of logic. First, they equate trade liberalization with growth and then growth with development and general prosperity. The only place where this is shown to work is in economics textbooks. Reality is more complex, and the pathways between these indicators are much more difficult to pin down than they usually acknowledge.

Despite widespread belief to the contrary, there is simply no empirical evidence that across-the-board liberalization is systematically associated with a higher growth rate, nor for that matter with the reduction of poverty. As for the linkages between growth and social development, we only need to refer to a recent Pan American Health Organization report, which concludes:

An examination of the findings with respect to poverty, inequality in income distribution, unemployment, real wages, and wage gaps reveals that economic growth in the region, especially in Latin America and the Caribbean, has not contributed to improve the severe human underdevelopment that persists in these societies.

In fact, if recent history shows us anything at all, it is that countries that have succeeded economically have done so in contravention of the very precepts that are currently advocated or imposed around the world today, namely, explicit government strategies to favour domestic industry, including tariff barriers, some restrictions on capital flow, not to mention a healthy disrespect for patent rights. Indeed the comparative advantages tend to work best to the extent a country derives it from relatively high value-added products as opposed to sweat industries. This is true for Canada, but is especially true for developing countries where we are so eager to proselytize.

Almost two years ago we expressed concern to the subcommittee in regard to the questionable premise behind the current Canadian trade policy, it's potential nefarious impact on labour, sovereignty, and the environment, as well as problems with the process around trade negotiations in general. Unfortunately, since then we have had little to cheer about. Economic developments are corroborating many of our apprehensions, and despite the rhetoric, civil society groups have not gained an access to the negotiators nearly equal to that of the business community.

Indeed, far from integrating our concerns, the Government of Canada has pursued a corporate-sponsored trade liberalization. The subcommittee itself appears to have internalized the business mantra in its report on the FTAA.

Since this is typically the only official interface between our elected officials and the population, this is indeed very disappointing. This perhaps explains why many stakeholders will be in the streets come April. A well-functioning democracy is not supposed to happen in the streets. However, when people do not recognize themselves in the crucial policies of their government, this is often the only recourse left.

Be that as it may, the Government of Canada keeps pushing a model of growth and development that is very questionable. We have, in past briefs, stated our reservations. They bear being repeated since hardly any of them have transpired in the recommendations made by the subcommittee on apparent priorities of the government.

The FTAA and labour rights and conditions. When it comes to—

The Chair: I'm sorry, Mr. Yussuff. On a point of clarification for the members, when you say the subcommittee, you're referring to the recent FTAA report that the subcommittee of this committee made?

Mr. Hassan Yussuff: Yes.

The Chair: Thanks. Sorry.

Mr. Hassan Yussuff: The FTAA and labour rights and conditions. When it comes to NAFTA, WTO, or the FTAA we have repeatedly expressed our concern that bringing countries at widely different levels of development into the same economic sphere will create undue pressure on wages and labour conditions at both ends of the equation.

In the case of FTAA and NAFTA, it appears events have proven us right. After over ten years of free trade, and despite a deepening of our trade relationship with our neighbours, the United States especially, real wages have been stagnant and have failed to keep track with economic productivity growth. This phenomenon is even more pronounced in Mexico where real manufacturing wages have fallen 18% since the NAFTA came into force, while productivity has increased over 36% over the same period.

This should come as no surprise. The goal of these agreements was precisely to provide corporations more flexibility, if possible, to seek out profits and opportunities. And so they did. In Mexico they have been able to take advantage of the largely unenforced labour laws. In Canada and the U.S. real wages have kept in check by the threat, real or imagined, of closures or relocation.

For the CLC, as for our counterparts in the rest of the world, a necessary condition for a successful economic integration is respect for minimal labour and environmental standards.

• 0935

In a world where capital is free to move and where large segments of the world's population remain underemployed and unpaid, it is easy to see that the emerging separation between productivity and labour compensation is bound to worsen unless workers in developing countries have the same means to negotiate their fair share of free trade benefits. For us this is not only a question of basic human solidarity, but it's also a matter of self-interest. For the average Canadian most of the benefits of free trade will accrue when the standard of living of Mexicans is high enough that they can buy our products and services, and the faster the better.

Further to our experience with NAFTA and parallel agreements on labour, the North American Agreement on Labour Cooperation, the NAALC, has convinced us that unless violations of basic labour rights are sanctioned, or other infringements to the NAFTA, they have no meaningful impact on the behaviour of economic agents. As members of the committee are no doubt aware, since 1994 22 charges have been made under the NAALC. Of these only 10 proceeded to some sort of investigation. None went to the expert panel of arbitration and, more significantly, none have yielded anything close to an improvement in the actual situation of the workers.

We thus recommend including in the FTAA provisions a requirement on parties to enforce not only their own legislation, as in NAFTA, but also the International Labour Organization core labour standards. Since most countries in the hemisphere are already committed to respecting these standards, this will not come as a foreign imposition. We further recommend that all core labour standards be subjected to the same dispute resolution mechanism and remedies as other potential violations of agreements.

Of late there has been some noise from the Canadian government about the possible inclusion of a democracy clause in the FTAA. While the CLC cannot object in principle to this inclusion of such minimal standards in the agreement, and we'd certainly like to see it adopted in other forums, such as the WTO, we want to make it clear that we do not consider such a clause to be an adequate replacement for the inclusion of basic labour standards. As we have witnessed in Mexico, even a formal democracy can fail to enforce basic labour rights. The honourable members of the committee might be surprised to hear that this remains true under the government of Vincente Fox, just as it was under the rule of the PRI.

Now I come to adjustment measures. Since Canada signed the FTA, thousands of Canadians have lost their jobs to the restructuring of the Canadian industrial base. For many, particularly older, workers this has meant prolonged periods of unemployment, and for most of the people affected it has also meant dipping into their life-savings to sustain themselves. If it is true that free trade generates more winners than losers, we believe it is fair for the winners to compensate in part the losers. This is why we would like to reiterate our call for adequate mitigation measures to help workers adversely affected by such development.

In the area of income security we propose two concrete and easily implemented initiatives that are well within the purview of the federal government. First, the government should stop penalizing the unemployed who receive severance packages as a result of layoffs. Second, they should build it in as a new feature of the EI system.

As guiding principles for a balanced approach to trade, we have specific comments with regard to the treatment of investment that we'll skip over here. Many we want to refer to you in your discussion. But before ending our presentation, we'd like to offer what we think are appropriate principles for a balanced approach to trade.

In our opinion, trade liberalization can only bear its fruit if it is done in the framework of a broader program for sustained growth and development. This program would include measures to provide practical enforcement of an environment for trade and investment by restructuring speculative capitalist measures to coordinate micro-economic policies at the international level; measures to reflate the economies of the south and combat poverty, such as debt relief and increased development transfers; and last, but not least, measures to empower the organization of civil society all over the globe by holding governments to their commitments with regard to human and democratic rights, particularly when it comes to the situation of women. Those are necessary conditions to ensure win-win outcomes everywhere.

While much of this program goes beyond the bounds of a trade agreement, we believe that it should nonetheless inform the broad philosophy behind the trade policies of Canada. Such is not an easy case today. With respect to liberalization of trade, we suggest that the following guidelines act as the guiding principles for this and future trade negotiations. Free trade is a means, not an end. There are costs to openness, not only benefits. Rules of international trade must accept diversity of national norms and institutions, but fix some of the minimal standards. No non-democratic countries or those where the fundamental rights of citizens are not respected should be able to count on the same trade privileges as those who respect these principles.

• 0940

Trade agreements should integrate as much as possible and enforce existing international agreements in the areas of labour standards, environment, and norms. Trade agreements should not seek to enforce a false symmetry on countries at widely different levels of development, and should make allowances for the specific needs of developing countries.

Proper mitigation measures have to be put in place to compensate workers at the losing end of the restructuring that follows the relaxation of trade barriers. When the Canadian government decides to take an approach of genuinely balancing the needs of the people with the interest of corporations, it will be able to count on our full and public support.

Thank you very much.

The Chair: Thank you very much, sir.

Our next witness is Dr. Molestina, who has come from Ecuador. Thank you very much, sir, for coming so far to speak to us about this issue, which is important for your country as well as ours. We're grateful to you for sharing your views.

In fact, Mr. Molestina, since you've come so far, perhaps you could speak now and then we could ask you questions, but I would ask you to stay when we have the next panel, when there may be extra questions for you.

Mr. Oswaldo Molestina Zavala: Thank you, Mr. Chairman, ladies and gentlemen.

My name is Oswaldo Molestina Zavala. I am a national member of the Ecuadorian Congress and former president of the Foreign Affairs Commission of the Ecuadorian Congress. I am currently vice-president of COPA for the Andean region.

On behalf of the president of the Parliamentary Conference of the Americas, a member of the Brazilian Congress, Geraldo Magela, who apologizes for not being here today with us, I wish to thank the Standing Committee on Foreign Affairs and International Trade for inviting COPA to participate in this most important hearing on the Summit of the Americas and the free trade area of the Americas. I am honoured to represent COPA here today as its vice-president for the Andean region and as a member of the National Congress of Ecuador.

My presentation is in two parts. I will first present COPA, its organization, services, and objectives, and then state the position of our organization towards the creation of the free trade area of the Americas and the upcoming Summit of the Americas.

The Parliamentary Conference of the Americas is composed of a general assembly, an executive committee, a general secretariat, and five regional secretariats. It also includes the Network of Women Parliamentarians of the Americas. The general assembly is the supreme organ of the conference. It gathers, every 18 months or so, delegations from the unitary, federal, and federated states, as well as regional parliaments and interparliamentary organizations of the Americas. The executive committee is elected by the general assembly. It formulates recommendations that are submitted to the general assembly and ensures the implementation of its decisions. The general secretariat assists the executive committee and the president of COPA in carrying out their duties. It coordinates all COPA events and meetings and works in close collaboration with the regional secretariats, established in Central America, the Andean region, the south cone, and the Caribbean.

The Network of Women Parliamentarians gathers the women members of the parliamentary assemblies and organizations of the hemisphere. The network meets in conjunction with the general assembly and promotes equity between men and women, as well as an increased participation of women in the decision-making processes of our societies.

These organs of the conference work in conjunction to offer various services to the parliamentary community of the Americas. The COPA website, along with all the relevant information on our organization, provides useful data and statistics on all the parliaments of the Americas, as well as electoral and legislative calendars.

• 0945

COPA News is an electronic newsletter that is published every other month. It covers COPA activities as well as events relevant to the parliamentarians of the Americas.

COPA Magazine is published twice a year. It presents in detail a review of the work of COPA and addresses various issues related to the integration process of the Americas.

The parliamentarian networks that are being developed are Internet-based discussion forums that will allow parliamentarians to maintain a permanent exchange on specific issues related to continental integration, such as the free trade area of the Americas, democracy, and the environment. Each network will come with its own database and will gather legislative and international tools relevant to the area of discussion. The first networks will be launched soon.

Third, the creation and history of COPA. Why was COPA created? During the Miami summit of 1994, the heads of state and government declared their intention to reinforce representative and participatory democracy. They sent a clear message to the parliamentarians of the continent inviting them to intensify the dialogue among legislative assemblies.

Indeed, the creation of a free trade area of the Americas will initiate a process involving multi-dimensional impacts that directly concern parliaments as central institutions of democratic systems.

In 1997, in the absence of an intercontinental parliamentary forum allowing legislators to exchange their ideas and present them to the executive authorities, the National Assembly of Quebec decided to gather for the first time in the history of the hemisphere the parliamentarians of the unitary, federal, and federated states of the Americas. This was done in association with the Parliament of Canada. Over 1,000 participants, including 450 parliamentarians from 28 countries of the Americas, responded to the invitation.

The conference unanimously adopted the final declaration providing for the creation of an international committee responsible for the establishment of this inter-American parliamentary dialogue on a permanent basis. This committee met three times: in Puerto Rico in 1998, in Guatemala, and in Quebec in 1999.

The COPA second general assembly took place in Puerto Rico in July 2000. Over 200 parliamentarians from 20 countries adopted the guiding principles of the organization, thereby creating the first permanent interparliamentary forum of the Americas.

Four, COPA, the Summit of the Americas and the free trade area of the Americas. As is stated in the final declaration of Puerto Rico, COPA supports the objectives of the Summit of the Americas and the creation of the free trade zone of the Americas. Thus, the purpose of COPA is not to oppose these projects but rather to ensure that: (a) legislators from all jurisdictional levels are informed and that their preoccupations are heard; (b) the FTAA negotiation process is transparent; (c) the impact of the creation of the FTAA on populations is properly evaluated so that all citizens benefit from it; and (d) the free trade area will respect the existing regional integration agreements and processes.

These expectations stem from some basic democratic principles. It is the duty of the legislators to see to the defence and promotion of the interests of the populations they represent and to work toward improving their living conditions. Through direct and continued dialogue with citizens, parliamentarians are able to stimulate public debate on the issues related to the impacts of hemispheric free trade.

• 0950

Since the anticipated agreement will require ratification by the parliamentarians of the Americas in order to go into effect, it should be strengthened through the participation of parliamentarians of all jurisdictions of the hemisphere, through transparency in the debates on the creation of the free trade area and through the ongoing dissemination of the results of the negotiations underway by the heads of state and governments of the Americas.

It is clear that the democratic nature of the economic integration processes can only be reinforced through dialogue between interparliamentary organizations and intergovernmental organizations, as is being done in Europe and within the Andean integration system called the Andean Community of Nations, or CAN, and the MERCOSUR, for example.

Given its autonomy with respect to the executive power and its pluralist approach, COPA favours the free expression of concerns and objectives of the community through their elected representatives from all political views. This is an essential complement to the executive powers of the states, to unilateral organizations, and to those offices responsible for the application of its agreement.

Thus, COPA wishes to establish a frank and open dialogue with the heads of state and governments of the Americas in order to achieve the rate of transparency and inclusion in this debate. That is why, in Puerto Rico, the participants demanded that each parliamentary assembly of the hemisphere hold public consultations on the impacts of the creation of the free trade area, as this committee is presently doing, and as has been done by the National Assembly of Quebec and the National Congress of Brazil; that the heads of state and governments officially inform each parliamentary assembly of the hemisphere, six months before the first Summit of the Americas in April 2001 at the latest, of the state of advancement of negotiations on the free trade area—this has not been done; and that representatives of COPA be allowed to take part in the Summit of the Americas in order to present to the executive authorities of the Americas the interests and aspirations of the populations of the hemisphere regarding the impacts of the integration process. A specific request has been addressed to the host of the third Summit of the Americas to that effect, and it has been rejected so far.

To conclude, I would like to let you know about the special meeting the COPA executive committee will hold in Quebec City from April 17 to 19, just prior to the third Summit of the Americas. In addition to the executive committee members, all presiding offices of the national parliaments have been invited. The participating parliamentarians will discuss their role in the free trade area negotiation process and in the reinforcement of democracy. A final declaration will be adopted and transmitted to the heads of state and governments of the Americas. Parliamentarians will also have the opportunity to participate in some activities of the People's Summit, which in turn will present its final declaration of the COPA meeting.

The participation of the Parliament of Canada in this event is extremely important to COPA. Establishment of an inter-American parliamentary dialogue necessarily implies the creation of a new synergy between the legislative leaders of the different assemblies, regional parliaments, and interparliamentary organizations of the Americas. Close collaboration and the coordination of the parliamentarians' efforts are essential. It is in that sense that our president, Mr. Magela, wrote a letter to the president of the Inter-Parliamentary Forum of the Americas, or FIPA, Mr. Bill Graham, expressing his hope to establish a dialogue between COPA and FIPA. The parliamentarians of the Americas must work together efficiently toward a common goal.

Also, we would like to extend a special invitation to Mr. Graham, president of FIPA and of this committee, to attend our executive committee meeting next April.

Thank you for your attention.

The Chair: Thank you very much, Mr. Molestina, and again, thank you for coming.

• 0955

Colleagues, I just want to remind you that we do have a possible vote once the bells start. It's between 10 a.m. and 11 o'clock, according to what the whip told us.

I also just want to remind everybody that this session only goes to 10:30 a.m. From 10:30 a.m. to noon, we have another session with other witnesses. Keep your questions in mind, bearing in mind that we only have 35 minutes to ask questions of the witnesses.

So I'll go to Mr. Lunn.

Mr. Gary Lunn (Saanich—Gulf Islands, Canadian Alliance): Thank you, Mr. Chairman. I first want to apologize—

The Chair: Where did you pop up from?

Mr. Gary Lunn: I apologize for being late, but I had a conflict this morning. In fairness to my colleagues on the committee, I'll defer, as I was not here for the presentations.

The Chair: No problem. Thank you very much. I'll go to over to Madam....

[Translation]

I will go directly to Mr. Paquette.

Mr. Pierre Paquette: First of all, thank you for your presentations. I think that they are consistent with a number of positions that the Bloc Québécois defends and has defended in the past, including the position it took in the subcommittee report.

I will begin by addressing Mr. Molestina. He spoke about respect for the integration processes that were underway. I imagine he had both MERCOSUR and NAFTA in mind. I would like him to develop this idea of respect and to tell us how strengthening regional agreements could be compatible with the idea of continental integration as suggested in the Free Trade Area of the Americas.

Then, as we will perhaps not have much time, I would like him to speak about the declaration made at the COPA conference in Puerto Rico, in which the problem of the foreign debt was alluded to. It seems to me that it is an issue that is not discussed enough in Canada, and I would like him to speak about it as well.

[English]

Mr. Oswaldo Molestina Zavala: Thank you. I must apologize, because my English is not so accurate. From time to time, I'm going to ask the lady who is here with me to translate what I am trying to say.

The Chair: No problem.

Mr. Oswaldo Molestina Zavala: In the first place, I would like to point out that there are many integration processes in place in Latin America. One of the most important processes in Latin America is precisely the Andean Pact, which is right now called the Comunidad Andina. In a political way, and also in a legal way, it's a very advanced process. It's not only a free zone, but they have only protectionist barriers against third countries. This organization has been in existence for more than thirty years.

Another integration process is MERCOSUR, and there is also the Caribbean integration process and the Central America integration process. But they are on different levels.

I would like to remind you that, in 1960, Latin America began a free trade experience that was called the Latin American Free Trade Association, the LAFTA. It concluded its work in 1980, when it was substituted by another organization that was called ALADI. Many people think this was very regressive, because the free trade zone was the real way to go to a bigger integration process than this, which means there will be only bilateral or multilateral treaties, or preferences between one country and another. But for Latin America, it is a very important economic thing, as it is for what was asked about our international debt, which is harming the economies, and also our social problems in most of the countries in Latin America.

So for us, respect for the existing integration processes is very important.

• 1000

So for us, respect for the existing integration processes in Latin America is very important, as is a consideration for the debts. We don't really think it's going to be possible to succeed with this process before we have preliminary conferences about these two issues that I consider—and all of us in Latin America consider—to be very important.

I can't imagine a free trade association with the United States, with us taking our barriers out and having a free trade with any preferences given to the United States. Perhaps we would talk about Canada the same way, because it's a developed country. We are just underdeveloped countries.

Also, talking as an Ecuadorian, right now, Ecuador has a very big difference in development in relation to the power of the economy of Brazil or Mexico. The differences in and the consideration of the underdeveloped country are very important for us.

Let me tell you also that, in the Andean Pact, Ecuador and Bolivia, in relation to Venezuela, Colombia, and Peru, are underdeveloped. This differentiates them. That's the reason why, in the Acuerdo de Cartagena, there were established preferences for Ecuador and Bolivia in connection with the other three countries that were forming part of the Andean Community of Nations.

So we think it's important to have a very open discussion about these things. We don't think the governments are the only ones who have this obligation. It is very important for everybody that the governments take the initiative to go to the parliaments first. That's precisely the democratic forum of all the countries, so why not go to the parliaments, especially when, when they finish their discussions, they are going to send these documents or treaties to our parliaments for ratification? We can't change even a letter in them. Either we approve or we disapprove. That's the position of the democracy of these two powers that are the institutional base of the democracies in the world.

The real thing is that parliaments, in this field, don't have enough power to do things working in conjunction with the governments. We think we can help. We can debate things very openly. We can be the main forum to organize these debates. We can have our opinions, and the governments will be obliged at least to listen to our main opinions connected with these important points that constitute, from our point of view, the future of America as a whole. Otherwise, especially in Latin America, for the big problems that we have, like poverty, narco-traffic, and external debts, we are not going to find a solution. The differences between the United States or Canada or Mexico or Brazil and the less developed countries are then going to be so big that there is not going to be enough power in the world to end these differences in a peaceful way. That's my opinion.

So my presence here is also to tell you how we, as Latin Americans, feel we have to begin this debate and these discussions in order to try to convince the governments, especially in this open discussion and debate, that if we don't find solutions for these big problems, perhaps we are not going to find a good solution for the existence of the free trade area of the Americas, or any free trade system.

• 1005

That's all, Mr. Chairman.

The Chair: Thank you very much. That was a very comprehensive answer.

We've gone well over the time, but perhaps I could ask a question. Then we can go back around the table. I don't see a lot of hands up.

I want to ask Mr. Yussuff a question that ties in with Mr. Molestina's observation. Mr. Molestina is saying that the parliament in his jurisdiction isn't being sufficiently consulted. Representing the Canadian Labour Congress, you too are obviously of the view that it has not been sufficiently consulted. We hear a great deal about the openness of the discussions—is the text available?—and we're wrestling with those issues ourselves.

A problem I have is.... This committee conducted hearings into the free trade area of the Americas. We conducted hearings under the WTO linking the same issues over and over again—and as you know, the ministers are consulting again around this process.

Mr. Laliberte, you were at the stakeholders' meeting I co-chaired yesterday with the Canadian Labour Congress. There's a whole host of consultations.

Mr. Yussuff says, “Well these are just pro forma; they're not designed for real discussion, but just to give a pro forma look.” But when you have a large number of stakeholders—and we do in this country, and we try to consult them through the committee, through other ways and means—it seems there is a difference between saying, “Hey, we've never been listened to, we're not consulted,” and “ Wait a minute, a political choice was made here and that choice was different from the one we said we wanted.”

I put it to you that it confuses the debate to say, “Well, nobody listened to us.” We've been listening in this committee. I happened to be listening yesterday, and the ministers were there to listen. There's been an enormous amount of consultation.

It's a different debate between whether or not we consult and whether or not the ultimate decision arising out of those consultations is one you like or don't like. That's a totally different...but that's politics.

We had an election here recently and consulted the people, and the people who were against free trade, if I can put it that way, were largely the NDP, and they got 11% of the vote.

So there's a whole host.... That's the question.

Mr. Pat Martin (Winnipeg Centre, NDP): I haven't sat on a committee where the chair can take leave of his position and ramble on with a biased editorial opinion.

The Chair: Well, no, I'm sorry—

Mr. Pat Martin: Maybe I don't sit on committee as often as people here, but this—

The Chair: I don't interfere very often, but I'm just trying.... Let me explain.

Mr. Pat Martin: —is a virtual lecture. Actually maybe you should be at this end of the table as one of the guests to make a presentation if that's—

The Chair: Okay. If other members of the committee have a problem with—

Mr. Gary Lunn: I will go to your defence. I think it's perfectly reasonable for the chair to intervene when he has a question.

The Chair: This question bothers all the members, because we hear this a lot about the lack of consultation, and we're trying to sort out in our minds where consultation is effective and where is.... I see Mr. Laliberte nodding.

I'm not trying to be adversarial about it. I'm trying to put the problem, if you like, to the witnesses.

I apologize if it seems like I went on too long, but it is a problem that bothers us, and maybe you could help us resolve the issue.

Mr. Hassan Yussuff: Far be it from me to tell the committee how to conduct itself. I assume you have some rules and I'll assume you're going to sort this out on your own.

But in regard to your editorial comment about the last election, I want to make it very clear that the last election was not about free trade. It wasn't a debate about free trade, so it would be an unfair bias to express that the NDP vote, whatever it was, was a reflection of those who were anti-free trade. Let me put that in context.

There is no question, Mr. Graham, that there have been lots of consultations, and I have been to them when government officials, ministers, and others have asked for input. The reality is, despite all the objections and issues we have raised, none of it has been reflected in any way, shape, or form in regard to how the trade negotiations have been conducted today, nor is it reflected sometimes in your own parliamentary committee's submissions to the minister and to the House as a whole.

• 1010

I think that raises a troubling question, because we are a civil society, and the point of coming before you is not just to express our rant; it's to have you consider and reflect on it and see that in some way we make up a broader part of society. What has been consistent, both with your committee and with others in the government, is that one particular line has been reflected—the business line that the free trade mantra should continue to be pushed and nothing should get in the way in regard to how this government reflects on its trade negotiations.

Again, there's this underlying sense that nobody is listening to what we're saying. I understand you're listening here this morning to what we're saying, but I mean not listening in the sense that there's no reflection even in terms of our criticism.

I think the issues have been consistent. I would characterize them as being in three areas: the whole question of human rights and the reflection of human rights in the context of trade; the whole question of labour rights in the context of trade; and the whole question of environmental protection. They have been a consistent argument for quite some time.

We've looked at your parliamentary committee's report and we have looked at the government initiative. Yes, there have been a lot of discussions, a lot of meetings. Some days we question our logic as to why we even bother coming to these things, because we think we could spend our time in other places trying to influence Canadians rather than trying to influence the committee. We do accept that you are the representatives of the people, but at the same time, in the context of a democratic society, you should listen to those of us....

I'm an elected official, by the way. I'm not here as some individual who just walked in off the street. I represent 2.4 million people and I get elected by that body.

So in the context of engaging you in a discussion, we hope there's some reflection on the kinds of issues we're raising; otherwise it becomes a pretty hollow engagement between us and you as parliamentarians.

The Chair: Obviously I'm going to get into trouble with Mr. Martin again, but I want to go back to the WTO report the committee did. I don't know if you appeared before us on that, but if you look at that report, you will see that we, this committee, specifically said in the report that we did not believe free trade should go forward unless environmental rules, labour standards, human rights, and cultural diversity were respected. That was in our report, and I understand from talking to Mr. White and others from the Canadian Labour Congress that they welcomed this reflection.

You may not find that completely in government policy. I'm trying to set the record straight, but I'm also trying to understand what more we can do as a parliamentary committee. So I appreciate your answer. I understand—

Mr. Hassan Yussuff: Why not make the same reflection on the FTAA negotiations as opposed to the—

The Chair: I understand that. I'm going to come back. Mr. Martin wanted to make an intervention, I think, and then I have Ms. Marleau

[Translation]

and then Ms. Lalonde.

[English]

Mr. Martin, sir.

Mr. Pat Martin: Thank you, Mr. Chair.

I'd like to thank those who gave all three of the presentations I heard. There was one common theme. Given that we have a limited amount of time, I'll limit myself to one common thread I heard in all three of the speeches. It was that legislators should be informed, and legislators should be involved, at the negotiation stage and not just at the ratification stage, after the fact. I heard that clearly from Mr. Molestina Zavala.

I would ask you, then, what is your opinion on the situation in this country where many parties—not just the 11% who vote for the NDP but many Canadians—are demanding to see the text of the document prior to anything being signed? We're asking to see what is in fact on the table because we're legitimately apprehensive about what might be bargained away on our behalf at this round of bargaining. Would you agree that maybe not the general public but at least the elected legislators in this country should have access to the actual text of the document, should know what's being negotiated on our behalf?

I'd ask if all three of you could give me your opinion on that, perhaps Mr. Molestina Zavala first.

Mr. Oswaldo Molestina Zavala: Yes, I think so. The parliamentarians must have the right to have those documents and use them in an appropriate way. Because there are some elements of discussion that perhaps have not been resolved yet, you must not use it because it can cause some problems in the population. But as the deputies and the representatives are elected by the people—and especially in some cases, some people are elected, some deputies.... They at least need to know what is going on, not precisely to know what is in all the documents, but what is in them that is directly deciding their future.

• 1015

As you say, when we talk of free trade, perhaps we're talking about the free trade of commerce, but we are not asking ourselves what is going to happen with labour. Will it also benefit labour? Is this going to introduce some terms and decisions to protect the people from the great menace of what could happen if free trade increases and we are going to put in more factories and other things? These are points that everybody must know, because it means we have to protect our security and our health. We don't know the multi-dimensional possibilities that this free trade can originate.

I think that at least the congressmen who are involved in these things, in this case an international commission, are obliged to know. And if we are part of an inter-parliamentary organization, such as COPA or FIPA, and ask to see the documents of the negotiations, I think those who are in charge of these negotiations must feel obliged to give us the documents. Otherwise, if we have to ratify these treaties, perhaps we are not going to approve them because we haven't had enough information. Perhaps we are going to disagree on one, two, three or four points. If that's so, we can't change a letter; we have to ratify all the negotiations, and this I think might not be in the interests of our countries.

The Chair: Dr. Kirton.

Prof. John Kirton: Let me answer as a veteran of the International Trade Advisory Committee, where this issue, as you would imagine, did surface before. I think at this stage of the FTAA process the critical ingredient for this committee is very frank reports from the actual negotiators, the Claude Carrières, the Marc Lorties, and their counterparts from other delegations and countries, of just what the state of play is.

I say that for a few reasons. One is that a document, which is of course collective, and is inevitably riddled with square brackets, isn't particularly illuminating about how the new U.S. administration, which is important to the piece, will be arriving at a policy that is not yet locked in.

I think a useful element as well would be to encourage our partners in the community to follow the example of the Government of Canada and release their negotiating positions so we would all be free in seeing just how the collectivity is coming together from the components up, which is really the stage we're at. I would be particularly looking to see what the positions of our partners in NAFTA, in the Canada-Chile Free Trade Agreement, Costa Rica, Central America, and, as it emerges, the Caribbean would be and how they relate to Canadian positions.

I have one final thought, which is that unlike NAFTA, unlike the Canada-U.S. Free Trade Agreement, this is not a free trade negotiation all by itself. It's a part, and in a sense a subordinate part, of the larger community-building process. I think the critical state of play now is getting the leaders, not even the trade ministers in the first instance, to affirm principles that will be carried into their preamble of component agreements, including the FTAA, in preambular principles that are carried forward that govern the interpretation of the agreement. The specific trade legalese and tariff annexes and schedules as they exist now are something that even my most dedicated academic colleagues don't have time to absorb.

• 1020

Mr. Hassan Yussuff: I have a two-part answer. First, I think of course the parliamentary side, your colleagues and yourself, should have access to the document for the obvious reason. You are the elected representatives of the people of this country and your ability to see what the government is doing.... On the other hand, in the context of the negotiations as they're evolving, we have unelected bureaucrats crafting policy for a nation who have never been elected by anybody. I think in terms of your responsibility, of course, there's an added influence there.

The importance of having the text released is paramount because the point is we want to influence. If we believe that the negotiations are going in one direction, the obvious choice is that we can maybe influence it to go in another direction. Given the importance of these documents, if they remain too secret for too long, the process has a life of its own and it can't be changed.

So whatever may come out of Buenos Aires in terms of the bracketed text, at least we know where the parties actually have disagreements or concerns where maybe they can't agree. But more important, the sooner that becomes available, the sooner it provides an opportunity for your colleagues and others to debate in the House and for those of us in civil society to engage government and influence them in another direction.

If we don't know what it is at the end of the day, as was said before, Parliament will be asked to ratify a document when it's too late to make any changes, despite your concerns as committee members who have been hearing all kinds of arguments being made before this committee about what the government should or shouldn't do in regard to the negotiations.

So I think it's two-pronged. As parliamentarians I think you have an added responsibility. More importantly, I think the text itself should be made available to the public, because it should be a transparent process. There's nothing here that should be secretive. If unelected bureaucrats can see it, I think those of us in society who have political responsibility should also have the opportunity to look at it.

The Chair: Thank you for a helpful debate on that issue because it's certainly one that has come up here a lot, there's no question about it, and we're trying to wrestle with it.

Madame Marleau.

Mme Diane Marleau (Sudbury, Lib.): I want to say to all of you who have been presenting here that we're all parliamentarians, regardless of which party we've been elected to, and we all share your concerns.

When you look at the agenda for the summit, you have to realize that your concerns are being reflected in the proposed action plan that they're going to be discussing. There are three areas. One of them is democracy and how democracy is impacted, and how in all of these talks we can better participate together.

It's a question of, do we do nothing? Then I believe we should be accused of allowing those big corporations to set their own rules, to do what they want, not to listen to populations. I think by engaging leaders, by allowing the kind of discussion that goes on, by bringing forward the issues of democracy, the issues of human rights, the issues of labour, the issues of training, of education, of the environment.... It's very important for us to all sit down and to know that these things are at the table.

I worry very much when people say, just don't do anything. I think we're not doing our job if we do that. We need to go on to the next level.

People talk about unelected bureaucrats. You're right. Bureaucrats are not elected. But bureaucrats do not go into these negotiations without the direction of governments. Governments are elected. In this case the Liberal Party is in power.

I can tell you that our Liberal government, and our Prime Minister and our ministers, are very concerned with what the members of Parliament say. They listen—every week they listen—to what their own members in caucus have to say. They listen to their fears, to the things they want to see for the future, not only for Canada but for the hemisphere. They also listen to the members of the opposition. That's what guides the bureaucracy in the way they negotiate.

So my question is, if you don't want us to participate or to have these meetings, what is your alternative to what is going on in the global scene with the rapid new technologies, with globalization, and with the things that are happening without our intervention? Is your suggestion, some of you, that we should sit out and let it all happen? I fail to understand why there is this wish to stop the talk between governments, the one thing that's essential to bring our message forward. Can you tell me what other alternative you have?

• 1025

We can all be very comfortable in our little democracy here in Canada and say, “We're elected, we're democrats, and we do all the right things”, but the reality is, with new technologies, things are happening so quickly, so fast, that we have to engage at that other level. We have to ensure proper rules because we want to protect people—our own people and other peoples.

So could you please tell me, what is your alternative to this?

Mr. Hassan Yussuff: We both will respond, but first let me quickly say that not by any stretch of the imagination am I suggesting that you not carry out your responsibility to engage Canadians. Not by any stretch of the imagination am I suggesting that we stop talking. But in the context of debate and dialogue, we also have to listen to what people are saying.

On this whole issue of democracy, of “Isn't democracy important?”, sure it is. However, at the end of the day, certainly we can make an argument that Cuba can't come to the FTAA first ministers meeting in Quebec City because it's not a democracy, which is true, but on the other hand, China, which isn't a democracy, can have ascendancy into the WTO, and nobody says anything about it.

So we have to be somewhat consistent in the kinds of argument we're making. And I'm not saying this committee is saying that. I'm telling you what has been said about why countries should or shouldn't be included.

The problem with democracy is, yes, of course it should be debated, because this hemisphere has had countries and governments dealing with these challenges. Beyond that, we need a broader dialogue around how we respond to globalization and how we respond to the so-called model. The model is just a neo-liberal model, and the only way we can continue to deal with this is to accept that it has to be free trade and there's nothing else in between.

I think the context for this is the NAFTA model and then the FTAA model of the United States. They're not good models to use to further talk about trade globalization in the hemisphere. That's been a consistent argument we've made from the CLC. We're saying these are not the models you should be using. You should be using a different one. Mr. Graham mentioned earlier the parliamentary committee report around the WTO, which has, again, put forth some very good recommendations. Those should be evaluated and find some way into the discussion of the FTAA.

At the end of the day, we're not suggesting by any stretch of the imagination that we stop talking.

I also want to make it very clear that I spent a lot of time in Latin America and central America and the Caribbean carrying out part of my responsibilities, meeting with my colleagues, engaging in the same issues you're engaging in, and going through the same frustrations you people are going through. Sometimes I say that I feel my government is not listening, but when I go to the other parts of the Americas I learn that they feel the same way.

The trade ministers are going to meet in Buenos Aires in a couple of days, and there's going to be absolute turmoil in that country over what's happening economically. My colleagues are going to be there in the streets. Why are they upset? They're not mad people. They're not crazy people. They're losing their livelihoods. They feel threatened by the system.

At the end of the day, of course, Parliament will have a tremendous role to play, but I also think it's interesting to listen to what people are saying. I'm not suggesting by any stretch of the imagination that you shouldn't be engaging.

I'll let my colleague also make some comments.

Mr. Pierre Laliberté (Senior Economist, Social and Economic Policy Department, Canadian Labour Congress): I think you've pretty much covered everything I would like to have brought up.

[Translation]

I will explain this in French. I think that, basically, we have a genuinely different idea about the "why" and "how". It is perhaps true that we generally share the "why", but it remains to be determined how this is to be done. That is why we are still pressing for basic working standards. A floor is essential.

We're not saying that people in South America need to have the same working conditions as we have here in Canada. That is not what we're saying. But what we see here is that the door is being opened to investors. They are being given privileged access. Constraints are being removed. These countries are being forced to abdicate pieces of sovereignty. Intellectual property rights are being protected, but when issues concerning the people who work every day come up, it's a sensitive area.

This is fundamental to us. If it is not included as part of what is being presented as an alternative and a model, then frankly, you can perhaps understand why there is a problem.

• 1030

Ms. Diane Marleau: I just want to say that I am convinced we want this to be a part of it. That is what I want to say, because from our standpoint, we want it there too...

Mr. Pierre Laliberté: But it has to be included.

Ms. Diane Marleau: ...but you have to start somewhere.

Mr. Pierre Laliberté: It has to be part of the bargaining positions.

[English]

The Chair: Mr. Lunn.

Mr. Gary Lunn: I'll be very short, Mr. Chairman. This is more of a comment.

We've heard a lot about releasing the text. I want to say that I absolutely agree, we should release this text. Let's not have any illusions: there are 34 countries out there, and they all know the other countries' negotiating positions—there aren't any really big secrets here.

That being said, I also see the other side. Some people are reluctant. I just want to put this on the record. If you take this great big text, which is the position of 34 countries, then you'll get some people who, for their own interests, will grab one paragraph out of it that has absolutely nothing to do with where we're going. They'll exploit that, to try to engage the public and move their own agenda—which does not represent the discussions. I think one concern of putting it out too early is that too much information there is not representative of where the discussions are going.

Having said that, I do support having a text out there. Parliament should be engaged fully in the debate.

I want to say one other thing. With respect, the time to have your input is.... These negotiations are going to go on for another couple or three years. There's no agreement signed in Quebec City. This is a two- or three-year process. So if you want specific hearings before the committees in the next two or three years, we can have more of these debates.

I'm quite sure we're willing to have our negotiators get there and listen to specific proposals. I'm sure I'll probably have different viewpoints from some of the witnesses—I'm a big believer in free trade, as Tony Blair is. I think it will be great for the people of the countries involved in these discussions.

I just want to end by saying, Mr. Chairman, that we hear a lot about the protests and civil disobedience. I would urge the people with any influence there to realize that those actions are not the way to bring constructive, meaningful suggestions to this discussion. They lose credibility. This committee represents all political parties in this country, and we want to have a meaningful dialogue. We may not agree on all the issues, but these meetings are the best way to have meaningful, constructive input into the final outcome of any free trade agreement for the Americas.

The Chair: We'll take that as more of an observation than a question. It was a comment.

It is now 10:30, so we're going to have to break this panel and move to our next.

Before I do, I'm going to ask Mr. Molestina if maybe you could stay for the next panel. We won't ask you to repeat your presentation, but if you could just remain, you will actually be at the table if more questions arise.

We have another reason for keeping you here: we want to congratulate Ecuador on beating Brazil yesterday in the soccer game.

Mr. Oswaldo Molestina Zavala: I didn't know.

The Chair: There you are—our excellent researchers here at the Library of Parliament know everything.

Voices: Oh, oh!

Mr. Oswaldo Molestina Zavala: I'm pleased.

The Chair: I'm informed that Ecuador beat Brazil in the World Cup qualifier yesterday. We congratulate them.

I just want you to know that because Canada lives beside the United States, we like to see Ecuador beat Brazil for certain reasons.

On a point of order, I want to recognize Mr. Lunn.

Mr. Gary Lunn: Thank you, Mr. Chairman.

While the witnesses are changing, I would like to just take 30 seconds and seek the committee's consent to put forward a motion that between now and May 18, we invite both the Minister of Foreign Affairs and the Minister of International Trade to come before the committee with respect to 2001-2002 main estimates. We would request that they provide us with any relevant information and documents on the future plans and priorities of their respective departments.

May I have the leave of the committee to put that motion on inviting the ministers with respect to the estimates?

The Chair: It's usual—we always get the ministers for the estimates, so there is no problem with anybody. We don't have the 24-hour notice, but that's normal. May 18 is the last date we can do it.

Mr. Gary Lunn: As long as we have both ministers here before May 18.

[Translation]

Mr. Denis Paradis (Brome—Missisquoi, Lib.): Mr. Chairman, did the executive committee plan for that somewhere?

The Chair: The date has not been set, but the committee is still considering the budget forecasts.

[English]

It's Standing Order 81. We have to do it. We're going to approve it either this time or next time, so we might as well approve it now.

• 1035

[Translation]

Mr. Pierre Paquette: Since we're talking about invitations, I would like to ask the Committee if we could invite the Minister of Canadian Heritage. Culture is a major issue in the negotiations and the Committee has not discussed heritage. It seems to me that this Committee should take it into consideration.

The Chair: There is a problem with time.

Ms. Francine Lalonde: Is Robert Pilon going to come?

The Chair: I agree with you that it's very important because cultural diversity is in the hot seat. As for time, as I told you, there will be sessions afterwards. Thus, before submitting a report, perhaps we should hear the Heritage Minister.

[English]

On that point, Mr. Harvard.

Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.): I have a point of order of my own, Mr. Chairman. I want to add something to what Mr. Paquette said. I'm a member of Heritage, and the Bloc there at that committee....

I'm really having trouble talking when there's so much disorder.

The Chair: Colleagues—Madam Lalonde—we're still conducting a meeting here. I've asked the witnesses to change, but because we're under such time pressure we're trying to get business done at the same time. Normally we'd take a break, but I'm trying to move it on. So perhaps we can move and talk at the same time.

Mr. Harvard.

Mr. John Harvard: For the benefit of the committee members, a similar motion was brought before the Heritage committee. We were informed that Minister Copps was not prepared to talk about heritage or cultural matters as they pertained to the summit, because those are the responsibility of Mr. Pettigrew. She was prepared to talk about her engagement in what she calls international cultural instruments. So for the benefit of Mr. Paquette and others, I think it may be a bit of a waste of time to ask Ms. Copps to come here—because she will not talk about any matters relating to the Summit of the Americas. That's Mr. Pettigrew's responsibility.

I simply bring that to your attention. You can do with it what you like.

I also want to put it on record as an observation, Mr. Chairman, that I don't take issue with you, as the chairman of this committee, raising questions on your own. This particular chairman brings a certain intellectual rigour to his questions. The question he asked—yes, it was partly an editorial, but I think it added spice to the proceedings, and bore fruit. I think we benefited from that engagement as a result of your question.

I also want to say, Mr. Chairman, that I want you to have members and witnesses observe our five-minute time limit. I think it is disrespectful to members and witnesses who may be down near the bottom of the list to have to listen to people's long-winded questions and answers. We have a time limit here of five minutes, and while I don't expect you to be precise to the last second, you've got to show some enforcement.

In the last session, you know we had one engagement that went on and on. The material was fine—the answer was very comprehensive and complete. But I wanted to hear from some other people as well, and we did not have that opportunity.

Time around here is very finite. That's the reason we have time limits.

The Chair: I appreciate the observation, but maybe I could share just one reflection with you. Sometimes when I allowed things to go on, I didn't have anybody else on my list to ask a question. I didn't want to get to the embarrassing point and say, there are no other questions.

So if there's a long list—believe you me, I will do my best to enforce. I appreciate the comment; it's always helpful to be reminded, because I do tend to allow it to go on. Thank you very much, Mr. Harvard, for your observation.

Now I'm going to introduce our next panellists. From the C.D. Howe Institute, we have Mr. Alan Alexandroff; from the University of Toronto's Department at the Latin American Faculty of Social Sciences Argentina, Dr. Diana Tussie; and from the North-South Institute, Dr. Ann Weston. Thank you very much for coming to join us today.

Perhaps we'll just take you in that order. Again, if you can keep it to ten minutes, then we'll have time to ask questions.

Mr. Alexandroff.

• 1040

Mr. Alan Alexandroff (Fellow in Residence, C.D. Howe Institute): I appreciate it, Mr. Chairman. I want to thank you for the opportunity to be here with the committee. It's always a pleasure to meet with you, Mr. Chairman, as we visit the globe on occasion.

I'm only going to speak very shortly on two matters. One, why should Canada expend the limited resources of its bureaucracy to negotiate the FTAA agreement? What objective should it be seeking in such an agreement?

Two, what protection is required for Canadian investors—and why is it necessary? Those are the two questions I'm going to try to deal with.

First, let me just identify my credentials for you. I am a Fellow in Residence for International Policy at the C.D. Howe Institute. I'm also the director of research for the program on conflict management and negotiation at the Munk Centre for International Studies at the University of Toronto.

I am a Canadian director of a corporation called LECG Inc.—a global economics and finance consulting firm with ten offices in North America, and offices in Europe, Australia, New Zealand, and also in Argentina.

Lastly I'll point out that I have acted, and continue to act, as counsel to a law firm that has represented the complainants in all the current cases in Canada under chapter 11. As a result, confidentiality provisions restrict what I can say, other than to talk about matters that are on the public record. Obviously, I can only answer questions as long as they're in the public realm.

The first question is, why would Canada expend its limited resources? I sometimes think the broader public does not understand that we do have a limited bureaucracy, a limited set of negotiators. We cannot do all things.

It seems to me that negotiations as comprehensive as the FTAA suggest a multilateral framework. It assesses whether or not the Government of Canada believes it's possible to enter into broad-ranging negotiations at the WTO. It may well be that in that determination, and given the current circumstances, it's not likely we'll be able to proceed on that multilateral track from the WTO. If that's the case, then it does seem that a broad western hemispheric negotiation, and a possible concluding agreement, is useful. But it's useful only if we extend what we've already done. Negotiating an agreement that's not NAFTA-plus, or not WTO-plus, seems to me to be just expending an enormous amount of effort over many years and gaining very little.

So it is crucial that those concerned with negotiating the FTAA should make that measurement. The chairman and I had an opportunity to speak to it privately when we were both in Seattle for the WTO negotiations—which, of course, failed to move ahead.

Earlier in the negotiations, I was talking to WTO officials. We were joking around about what we were going to call this round. We thought maybe it should be called the Millennium Round, and the Americans were talking about calling it the Clinton Round. Then one bright fellow stepped up and said, “No, no, we'll call it the Protectionist Round.” That's exactly what was going on there. Everyone was so concerned about protecting their own turf that there was little if any discussion about liberalization. Indeed, at the end of the day, it was clear that no deal was possible—because every country wanted to restrict itself to what it needed to protect its own particular domestic interests.

If we're going to go into this broad 34-country negotiation, at a minimum we need to do something to take us beyond the current state of liberalization in the global economy.

• 1045

Secondly, what's necessary for protections for Canadian investors? And why is this an important issue? One of the things the minister, Mr. Pettigrew, has said in the past is that he hopes such a negotiation could lead to a new framework in which Canadian business and other organizations will have the opportunity to trade, invest, and in doing so, ultimately lessen our dependence upon the United States. That is a reasonable objective, it seems to me.

But in order to do that, you have to provide as broad a set of protections as possible. And why is that? The reason is, I think, relatively simple. You need economic security and an understanding of the framework in order to allow Canadian business to go out into, in this circumstance, the western hemisphere—the Caribbean, Latin America, Central America—into an environment that is not known to them, in terms of business. Indeed, therefore, you need to provide protections that give a certain broad protection. Otherwise, Canadian business will simply go to those environments it knows best. And the environments it knows best are Canada and the United States.

So you can't ask Canadian business to go out into the world, an unknown world in most circumstances—looking at the volumes of trade, you know we trade in the United States and Canada, not in these other parts of the world—if they have no sense of what the certainty is about their investment.

I was involved in some of the early discussions on chapter 11 with respect to the government's negotiation with the other two NAFTA parties. It was very clear at the time—objectives may have changed subsequently—that the objective of chapter 11, the investor-state protection, was there partly because of stated declarations by the American negotiators that, to encourage investors in Mexico, it was necessary to provide a commercial tribunal to give the necessary confidence to U.S. investors, and presumably, Canadian investors, to go out into Mexico and begin to invest and trade. It seems to me that hasn't changed a bit. And if the minister wants Canadian business to go out into the world, then necessary protections have to be provided.

I'll end my comments here, but I'm happy to reflect on anything. And I would suggest that the minister himself has made comments about chapter 11, most recently—at least as far as I'm aware—in the March 23 editorial in the National Post. Some of you may indeed have read his reasons for questioning some of the decisions of the NAFTA tribunals that have already occurred and, more broadly, a discussion about what is necessary. I think it's fair to say the minister has not suggested that there not be a chapter 11-type arrangement, but that he is concerned about how broadly these panels interpret and limit government objectives and government policy.

Let me just say, as one last comment here, the reality is, of course, that chapter 11 provides no capacity for a tribunal to negate Canadian law or Canadian administration. The only remedy available under chapter 11 is compensation. So this discussion about restricting government legislative public policy purposes seems to me beside the point. The tribunal has no capacity to terminate Canadian law. What it has is the capacity to compensate somebody who, it believes, has breached an obligation that Canada has undertaken, particularly under article 1105 with respect to minimum standard of treatment. And the minister himself has talked about article 1110, which is the expropriation section. I would point out, by the way, that Canada has never suffered a reverse on section 1110 with respect to expropriation in the few cases it has had to deal with. So I don't understand the minister's concern at all.

• 1050

Lastly, article 1102 is the basic national treatment obligation that Canada has undertaken, not only in NAFTA but in the WTO and everywhere else that it's been involved in global international agreements.

Thank you.

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

Dr. Tussie.

Dr. Diana Tussie (Director of the Research Program on International Economic Institutions and the Latin American Trade Network in Buenos Aires; and Senior Research Fellow in the International Relations Department, Latin American Faculty of Social Sciences (FLACSO) Argentina): Thank you very much for the opportunity to participate in these timely discussions—timely, I guess, not only because of the meetings next week in Buenos Aires and then later on in the month in Quebec, but also because of the upheaval at the moment in MERCOSUR. This upheaval in MERCOSUR will certainly have an impact on the negotiations and vice versa. Whatever happens in the FTAA, and the content and the scope of the FTAA, will mean a lot to the way the present upheaval will be resolved.

I will just summarize what has happened last week in Argentina. Argentina applied for a temporary waiver to raise the common external tariff on final goods to 35%, the level bound in the Uruguay Round of the WTO. It applied for a waiver to increase the common external tariff on final goods and to withdraw altogether from—that is, to bring the tariff to zero—capital goods.

This move has been followed with relief and with a lot of pleasure, I think, by Uruguay, Paraguay, and Chile, and has been accepted by Brazil as a temporary suspension of commitment. So in a way what we have now is a temporary suspension of commitments in MERCOSUR to become a customs union. This is temporary. If this is going to go on or not, I cannot tell yet.

[Translation]

The Chair: Did you say that it was felt that MERCOSUR would become a customs union?

[English]

Dr. Diana Tussie: No.

The Chair: A customs union?

Dr. Diana Tussie: No, it has suspended its commitment to become a customs union.

The Chair: So it's now backing off of that.

Dr. Diana Tussie: Yes, that's right.

[Translation]

The Chair: Did you understand that, Ms. Lalonde?

[English]

Dr. Diana Tussie: Backing off...a temporary waiver not to apply the customs union. Let me clarify this point: the free trade area is in place. Free trade among the four countries of MERCOSUR and Chile has not been suspended. Is that clear?

The Chair: So it's just not willing to go that further step at this time?

Dr. Diana Tussie: That's right. A common external tariff had been applied on about 80% of goods, so at the moment the application of this common external tariff has been suspended.

The Chair: Okay.

Dr. Diana Tussie: As I said, this has been requested by Argentina for financial reasons or because of conditions of financial fragility. It was a move that was expected—awaited—with relief and some pleasure by the smaller countries that had been suffering the costs of trade diversion caused by the common external tariff. The only country that had the power to change the scenario was Argentina, and it finally did.

This must be seen against the backdrop of the FTAA. This is something I want to raise. It might be quite hidden from you in Canada that the FTAA is also surprisingly very much a game of playing off one big neighbour against the other.

It is a game for Uruguay, Paraguay, and Chile playing Argentina against the U.S., and the U.S. against Argentina; for Argentina playing Brazil against the U.S., and the U.S. against Argentina. This is where countries get the room to manoeuvre. This is hidden from you, but I think it is a very important issue that is driving the FTAA forward.

This means, in a way, we have seen in the last three years, especially since the last presidential summit, that the negotiations proceeded very quickly, more quickly than we all expected. They have gained momentum. Both the public sector and the private sector have heavily invested in this process. They have invested time and all types of resources, which in a way has led to a sort of self-propelled engine. These negotiations seem to have a self-propelled engine with public and private participation.

• 1055

But this evolution, this change, is caused not only by this engine. There has also been a change in the attitudes and perceptions of other Latin American governments, which have shifted from the two extremes of a certain naive enthusiasm for the FTAA or the very stubborn obstructionism that we used to have a couple of years ago towards more interest and very constructive engagement.

The content and the scope of the FTAA remains yet to be determined. I think the crucial decisions will be taken in the next month, in the ministerial meeting next week, and in the follow-up to the presidential summit in Quebec.

The heart of the FTAA lies in its nine negotiating groups, intellectual property, competition policy, market access, agriculture, the treatment of foreign investment, etc. But again, around that hard core, there is a soft belly that has come from civil society and from non-trade ministers who have expanded the agenda to include broader development objectives such as the quality of education, transparency, institutional strengthening, strengthening of the judiciary, the regional or hemispheric fight against corruption, the development of infrastructure, the eradication of poverty, the respect of rights for minorities, human rights, and overall democratization.

This is seen as the “soft” side of the whole negotiation, but one should not underestimate this.

Back to trade.... All the negotiating groups have presented draft texts and so has the consultative group on small economy that was set up in 1998. We have not seen these drafts and that is a problem. But I will raise that later on.

So what does Latin America expect out of the process? This is a difficult question. There are millions of answers; there isn't a single Latin America. The region encompasses countries with different levels of development, different levels of institutional strength, different economic structures, different sizes, and of course more relevant in terms of the FTAA, different trade concerns.

All countries have shed import substitution, but the depth of that reform varies from country to country. The competitiveness of sectors of course is different from country to country. If one goes to the micro issues, the dairy sectors of course are of export interest worldwide to Argentina. It is definitely off the negotiating table and wants protection in the Andean countries. You could go on. For example, bananas are a strong export interest for Ecuador and Central America. Argentina does not want to protect itself from competitive bananas from Ecuador and Central America.

Another difference, of course, as I said before, is if a country belongs or doesn't belong to a certain trade bloc. I think this is the case for Mexico, for instance. Mexico has a very keen interest in diversifying itself, diversifying its trade overall. For most countries, I think diversification is of importance. And as I said, playing one big neighbour against another is important, and the FTAA process allows this.

But more importantly, the FTAA is part of the race to attract foreign investment—foreign, national, whatever.

Behind each trade policy, one must see an investment decision. That's where the core of this sort of juggling game is.

• 1100

Another basic expectation for Latin America now, generally considered, is to achieve some sort of redress of the disappointment with the WTO process, which was seen to benefit developed countries and did not take into consideration the interests of the developing countries.

What will be the impact on welfare? I think one cannot know for certain. There will be winners and losers, and Latin America is renowned as being the region in the world with the most unequal distribution of income. That is of course a ground on which the liberalization of trade will happen. The liberalization of trade will lead to resource allocation, and there will be disparities as to which parts of the population will be winners and losers.

These political-economic issues have been taken into consideration in the Santiago presidential declaration in two ways. There are two initiatives in the Santiago presidential declaration that consider the impact on losers. One takes into consideration that there is a consultative group for small economies that has been drafting a text, which we have not seen, but in which I understand they put forward the interests of the smaller economies. There is also the question of participation of civil society.

Latin American governments overall have not endorsed the participation of civil society very actively. They have been concerned that it might be opening the door for resistance or for making the free trade slower, for protectionism, and for creating an uneven playing field. Still, this cannot be wished away. The interest in participation, and the demand for accountability and transparency will not be wished away and will have to be addressed somehow or other.

I will end there. Thank you very much.

The Chair: Thank you, Dr. Tussie.

Perhaps I should have drawn to the attention of the committee that you are up here for an IDRC meeting. We appreciate your taking the time to come and share your experience with us. We've had the opportunity this morning of hearing two voices from Latin America. We hope you'll answer questions about what Mr. Cavallo is going to do about the economy of Argentina, when we've finished.

I'd also like to signal that we have Mr. Rius, from IDRC, here also, and he can answer questions as well.

Dr. Weston.

Ms. Ann Weston (Vice-President, North-South Institute): Thank you, Mr. Chairman. It's a great pleasure to be able to appear before the committee.

I have only a few relatively brief points to make, and I suppose one of the reasons for brevity sometimes is the fact that we really don't have the details that we need in order to be able to contribute meaningfully to this sort of debate.

My first point is to underline the frustration that many of us as researchers have about the process we're engaged in here today and over the weeks preparing for the summit in Quebec City. It's very difficult for us to provide an intelligent commentary on a process and a proposed new set of rules without access to the drafts of those rules, which already exist, at least in a preliminary form.

I think everyone would agree that secrecy can only breed suspicion and frustration, and I hope the committee will recommend a very different approach for the future. There are very many examples that you can draw from of successful and much more transparent processes of consultation, with full disclosure, where exchanges between governments, researchers, representatives of the people—like you are—and representatives of civil society can actually lead to constructive policy dialogue and policy change.

We've done it in some respects in the NAFTA. I'm not referring to the negotiation of the trade agreement in itself, but there are processes in NAFTA on the environmental side where we, governments and civil society, do sit down and share great detailed information about what we're proposing to do on the environment, and there is a constructive process. This includes even the Mexicans, who typically are referred to as being in opposition to increased engagement with civil society.

• 1105

We're much more transparent within the WTO itself. We've been talking about the need to make the FTAA a WTO-plus process if it's to be worthwhile. In the WTO, you can find on their website the proposals that a number of governments have made in a whole variety of issue areas. I'm not saying we're seeing the final text or even the draft of the text, but we certainly have much better information in the WTO. Yet, for some reason, in the FTAA process we don't have access even to the detailed submissions of the government. So I really hope this committee will recommend that this change.

To turn to my next point, coming from the North-South Institute, you might expect that I would underline the need to make development a centrepiece of the FTAA. That means that we do need to take the differences seriously.

When we're designing these rules, not only are there differences in levels of development, to which Diana Tussie has just referred, but they have different needs, different capacities, in terms of being able to live up to new commitments and implementation of new rules.

So there has been a tremendous problem as a result of the WTO process. Many developing countries have not been able to put in place the institutions they need to enforce the commitments to which they've already agreed in the WTO, and now what we're proposing is to go further. This is something that has frustrated developing countries and has been one of the reasons they've been quite resistant to taking the WTO to the next step, into launching a new round. Within the context of the FTAA, we also have to be sensitive to those needs.

How can we do that? How can we show that we are serious and understand the particular problems of developing countries within the hemisphere?

One of the ways I would propose we can do that, at least coming from Canada, is that we can make changes in terms of opening up our markets more rapidly than we have been prepared to do in the context of the Uruguay Round.

This morning we've already referred to the disappointments that many developing countries face or felt following the Uruguay Round, and the recognition that many of the benefits they had been promised in terms of increased access to developed country markets didn't materialize.

Certainly we've been able to go a lot further through our preferential arrangements with the U.S., Mexico, and Chile, and this has led to some problems. If you take the particular case of the Caribbean countries, for so-called sensitive items like clothing, you'll find that the Caribbean countries still pay 20% tariffs on their exports, and in some cases face quotas on their exports of clothing to Canada.

If you look at what has happened in terms of their share of our market, you'll find that in the case of Jamaica, for instance, our imports from Jamaica fell by 60% from 1996 to the year 2000, while our imports from Mexico actually more than trebled.

I think we need to do something within the context of the FTAA to remedy that. So that means accelerated market access to the countries in the hemisphere.

At the same time, though, I'd like to say we shouldn't use the FTAA as an excuse for not doing more for the least-developed countries. Haiti, of course, is a least-developed country, and it stands to benefit from whatever access we offer under the FTAA. But in May of this year there will be a summit, a conference, on least-developed countries. Canada so far has not really made a very committed effort to opening up its markets to least-developed country products, and I hope this committee will recommend that we go further.

If you look at what the European Union has done recently, they've offered to open up their markets to everything but arms. Canada has made some improvements, but we're still quite restricted when it comes to products like clothing. So I hope you will recommend that we go further.

There was a recent World Bank report that you might want to have one of your researchers find, which was quite critical of the extent to which Canada still maintains tariffs, compared to other developed countries—the extent of our tariffs that restrict imports from developing countries. I can provide you with the reference if you need it.

One of the issue areas where I think Canada probably shares the concerns of countries like Brazil is the issue of anti-dumping duties, and I think we should be very clear that this is something we want the Americans to get rid of within the context of the FTAA. It's important for developing countries, it's important for us, and it will certainly help to mend the rather fragile relationship between Canada and Brazil.

In terms of some other ways in which we can show that we're sensitive to development needs, I would suggest—notwithstanding the breadth already of the summit agenda, to which Diana Tussie referred—that we could broaden the parallel summit agenda to address issues of debt and adjustment funds, funds to help countries adjust to the new trade regime that the FTAA will involve.

We can broaden the FTAA itself to include principles relating to human rights, labour rights, environmental sustainability, and gender equality. We can ensure that trade is subordinate to human development and efforts to eliminate poverty, rather than making those other aims subordinate to trade.

• 1110

What does this mean? I think this means that in some cases not only will some countries require longer to implement the same rules we're going to sign on to in Canada and the U.S., but they might also need lesser commitments. They also will need trade-related technical assistance.

In terms of lesser commitments, we might want to review TRIPS, the Trade-Related Aspects of Intellectual Property Rights, particularly as they affect plants and medicines. I'm sure a number of witnesses have already drawn your attention to this particular issue.

Also, there's the issue of the investor-state rules, to which reference has already been made this morning. I think from a development point of view, there are a lot of concerns about the rules limiting the right of states to impose requirements on investors, particularly foreign investors.

Finally, in terms of the FTAA itself, I think we need to make sure the agenda isn't too broad. As I have already mentioned, many countries have had great difficulty in terms of digesting the commitments they already signed on to in the context of the Uruguay Round. So in the context of the FTAA, we have to be very careful that the smaller economies, the less advanced economies, are able to cope with whatever we require of them. Otherwise, I don't think it will be sustainable, and it won't contribute to their development needs.

Thank you.

The Chair: Thank you very much, Dr. Weston.

Now I'll turn to questions. I have Mr. Lunn, Madame Lalonde, Mr. Martin, Mr. Harvard, and Mr. O'Brien on my list. We'll start with Mr. Lunn.

Mr. Gary Lunn: Thank you, Mr. Chairman.

I'll be very, very brief. I won't be able to stay for the answer. I have to step out for a call. My staff is not being friendly to my schedule today. But I will read the blues, because I'm very much interested in this answer.

Mr. Alexandroff, I want to ask you one question. You said that if we negotiate anything that's not the NAFTA or the WTO-plus—and I emphasize the word “plus”—it's probably not worth the effort. I'm paraphrasing you, but I think you said something like that in terms of that reference. I would like your comments specifically on the plus. What do you envision that plus should be? Where should we be going on the plus? I really would be interested to hear your views. What is the plus we're really after in this?

I do have to step out. I apologize for not being here, but I'm going to read it. Trust me. I'm looking forward to that answer.

The Chair: This is a very unique political trust, to say, “Well, I'll read it.” Anyway, we're interested in your answer, Mr. Alexandroff.

Mr. Gary Lunn: I am, too. I'll only be outside for ten minutes. Unfortunately, it's the wrong ten minutes during which I have to step out.

Mr. Alan Alexandroff: I think Dr. Weston has at least raised what is a reasonable approach.

We can differentiate between a variety of countries and their needs. The WTO recognizes developing countries. Special and differential treatment is accorded. I think the rules are too loose in the WTO, and they need to be tightened if we're going to apply them in the FTAA. As an example, there's special and differential treatment, which is the developing country advantage in a variety of areas; different rules with regard to subsidy; and so forth. What we need to do is to be clear as to who can benefit from this. In the WTO it is not clear, and in fact it's self-declaratory in some manner, as to whether or not you are a developing country, although not completely so. So in devising those differences, which is perfectly appropriate, it seems to me you need to be clear about who benefits from the variety of rules.

Then, it seems to me, developed countries need to step up to the bat—and I agree with Dr. Weston again in this area—on what is sometimes called soft infrastructure, so that training and the ability to deal with the variety of obligations that are going to be undertaken by these countries can in fact be met.

I don't think we should back away from agreements such as the TRIPS. I'm not sure we could in any case because you have WTO obligations already for many of these countries. But one of the limitations has been that these countries cannot meet the cost of enforcement. It seems to me it's in the developed country's sphere to extend the protections in order to provide the means by which those courts, administrative tribunals, regulatory agencies, and the training of bureaucrats and lawyers can be undertaken so that those obligations can in fact be met.

• 1115

Once you've done that, you can extend, and you can accelerate tariff reduction. Rather than trying to find every means possible to exclude different sectors, you can accelerate tariff reduction, extend the services negotiation with regard to the FTAA, and structure it differently than has been done in the WTO.

So a variety of things can be undertaken here, but it does require that governments, particularly the developed governments, make it clear that they are going to provide that soft infrastructure support.

The Chair: Thank you.

I was attracted by Dr. Weston's reference to getting rid of anti-dumping as being one of the pluses. Do you have a quick, 20-second answer?

Mr. Alan Alexandroff: The 20-second answer is it would be a great idea. I don't think there's any likelihood that this current administration or any other American administration is going to be willing to significantly deter or move away from the anti-dumping regime we currently have. I simply point out Seattle as an example of their unwillingness to even consider that as an option.

The Chair: Okay.

Madame Lalonde.

[Translation]

Ms. Francine Lalonde: I negotiated for a long time. Negotiation is what happens when common interests are being sought, but it is also something that can happen when interests are very different. There can be dialogue when the specific objectives of all parties have been established, and each party is aware of the needs of the others.

If there is mistrust at that point, it is because one party does not really know what it wants from the other party. Here, the issues are extremely important, but they are most important in Central America and South America. That being the case, would it not be more useful to state what the various parties need to obtain for agreement to be reached, so that everyone can know?

I am very pleased to hear rom people from South America. I hope that we will be able to hear others, because we need to do some policy work here as well. I would therefore like to know what are the primary objectives that ought to be sought by negotiators from the Latin American countries.

[English]

The Chair: I think, Dr. Tussie, that's for you. Here's where your Fulbright scholarship gets to pay off.

Dr. Diana Tussie: It isn't an easy question.

I think in principle I would agree, and if everything were on the table, things would be simpler. But we're moving on moving territory, and multiple games are being played here. Just to put forward an example I know of, Argentina wants one thing from Uruguay, another thing from Paraguay, another thing from Chile, another thing from Canada, and another thing from the United States. So there are multiple games here. That's what makes this negotiation so difficult and—this is not an excuse—I think that's part of the reason for the lack of transparency. There's a multiplicity of games. That's one part.

The next part is that because there are so many games, the territory is constantly shifting. That's the second part.

The third part is something I think we all have to bear in mind, that this is a negotiation and that we're all going to lose. A negotiation is by definition a negotiation. We're not going to win everything, so we have to be prepared to lose. I think this is very important for policy-makers to remember, because otherwise the expectations are extremely high and frustration is going to be even higher. The important thing to be said is that we are all going to be losing. People are misled into the expectation that this is a zero-sum game—you lose, I win. No, this is not a football game.

• 1120

The Chair: Dr. Weston.

Ms. Ann Weston: I don't want to contradict my friend and colleague Diana, but one of the lessons that—

The Chair: Don't hesitate. This is a multiple game we play around this table too.

Ms. Ann Weston: One of the lessons from the Uruguay Round is that a lot of countries signed on to commitments they thought were the right sort of thing to do. They knew they were making concessions and they knew they were going to be gaining something in another area. So they thought the balance was right for them at the time. But you have to recognize that many countries—and this is what was underlined yesterday in our meeting at the IDRC—do not have within their bureaucracies the researchers they need to work out what the full consequences are, either of the rights or of the obligations for which they're signing on.

So that's why transparency is important. It's still not going to give you full knowledge of either your losses or your gains. But what's happened subsequently? People in the World Bank have done studies that have shown that for developing countries the costs of intellectual property rights are enormous. The cost of setting up some of the institutions is very high, and in some cases it's more in just four areas of the Uruguay Round than the total amount of money they've got in their annual development budget.

So the question has to be asked, from a development point of view, was this a sensible deal? That's why, I think, people are concerned. It's an unfair bargain, because people who have got more resources, in other words, the Americans, maybe the Canadians, and probably the Brazilians, are going to be able to assess what they're signing on to in a much fuller way than others. So the rest of us really want to be able to sit down and do some of that analysis, in order to help make sure that the bargain is a fair one. We're not saying we want to undo the bargain necessarily, but at least we can begin to point out what some of the trade-offs are, so that perhaps it can be a little more balanced than it might otherwise be.

The Chair: Thank you very much. Very quickly, Dr. Tussie.

Dr. Diana Tussie: I don't disagree with that.

The Chair: We're well over the five minutes, so I'm mindful of that, and Mr. Harvard's next on the list. Maybe, Dr. Tussie, since you're here from Argentina, you could have a very quick addendum.

Dr. Diana Tussie: I just wanted to say that I didn't disagree with what has just been said, and maybe I was misinterpreted as saying that was the reason for the lack of transparency. I can understand. I'm not saying I'm justifying.

The Chair: All right. Thank you.

If chapter 11 was any example.... Maybe a little more understanding of that before we signed it might have been interesting too, but I recognize that's a trap going in.

Mr. Harvard.

Mr. John Harvard: Thanks, Mr. Chairman. I have three questions for Mr. Alexandroff, but I just want to say that I think Dr. Tussie's advice is timely. I think each country has to realize it has to put a little water in its wine going into very complex negotiations of this kind. We can't expect to win it all.

Mr. Alexandroff, to take you a bit further with respect to this question concerning WTO-plus and NAFTA-plus, put your Canadian hat on—perhaps your Canadian parochial hat. I want to ask you, what would be an example from a Canadian point of view of what we need, one or two concrete examples of what would make it WTO-plus and NAFTA-plus for us Canadians?

I'll give you the other two questions. You mentioned investor protection. Give us an example of, again, what Canadians would need, Canadian investors, to provide them with that comfort level they require.

And you mentioned chapter 11, and you said it can't be used to terminate Canadian law. But I suspect some people would argue that compensation has a chilling effect and would be tantamount to negating Canadian law, or at least in some instances, preventing enactment of Canadian law.

• 1125

So those are my three questions.

Mr. Alan Alexandroff: Let me answer you, I hope, briefly.

For Canada it does seem to me that the expansion into services is clearly an area where it would be, wearing my parochial hat, “a win” for us. And we need to draw as broad an interpretive view of extension of those service-at-market access elements as we can. I can't imagine Canada and Canadian business.... At the end of the day, these agreements are frameworks, and then what we say to Canadian business is, go out and do it. Because we ultimately believe that Canadians' trading and investing have positive benefits for Canada—otherwise I can't imagine we'd enter into these discussions—both with respect to a standard of living and with respect to employment. So that's why we're doing it.

I would suggest we turn the current WTO version of services on its head and we go to the NAFTA version, which is the negative view. That means everything is in unless you exclude it. As you know, the current view of services in the WTO is the reverse of that: everything is out unless you put it in. In order to extend liberalization, you want to go with the NAFTA format, rather than the WTO format.

With respect to the other two issues, which are to do with chapter 11, what does Canadian business need? I suppose Canadian business needs the certainty that if actions take place that expropriate their investment or amount to that, or they are treated in a discriminatory way, they have recourse to a tribunal and are able to gain redress, where a tribunal identifies that a government has not treated a foreign investor fairly. This is promoted from the view that foreign investors, almost by definition, when they're in a foreign country, have less influence than would a domestic business or investor, simply because they're from outside the country. So you want to provide that framework for them to feel that they will be reasonably treated by a tribunal.

I must say, you also want to take the position that the governments don't automatically seek to appeal or judicially review decisions that are made by what I would believe to be august international tribunals. I'm not sure the Government of Canada today agrees with me on this. But in any case, we'll see what the future holds. It seems to me that is important.

Lastly, if people believe compensation is tantamount to changing government policy, I don't know what to say to that. But that is not the assertion, I must say, Mr. Harvard. The assertion is that we cannot achieve our public policy objectives, that our environmental laws, our environmental objectives, are being somehow limited, or might be limited in the future. I think that's the most serious allegation, that somehow it impinges on Canada's ability to protect the environment or other public purposes.

I simply take the position that these obligations are clear and will be interpreted by tribunals. I don't know what the original intent of the Government of Canada was, or the United States, or Mexico. To now try to change the rules of the game, in any environment where you begin to seek what are called clarifications, it seems to me begins to promote the notion that having seen where certain decisions are made, now we're going to alter things so that the consequences are different. I think that would be, ultimately, not beneficial to Canada, not beneficial if we extend those rights more broadly to the free trade agreement of the Americas.

The Chair: Thank you very much.

Mr. Martin.

Mr. Pat Martin: Thank you, Mr. Chairman. I have about two pages of things I would like to talk about, but I'll have to limit those, I suppose.

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I can say one of the things that makes my party apprehensive about going into further liberalized trade agreements is the sentiment that we've sensed there are some people who think there's a surplus of democracy in the world and it's interfering with the free movement of capital or goods and services. This came up during the MAI, from Ruggiero himself. He was the head of the WTO at that time, when he made a comment along those lines.

Further and further, I think the use of chapter 11 has gone far beyond the history outlined by Mr. Alexandroff. Originally, I suppose it had some justification or rationale, but we're now seeing elected people, like those of us in this room, being bypassed altogether or superseded by this charter of rights for corporations. It bypasses freely elected governments. That summarizes the apprehension that not only members of my party but the people we represent feel about these trade agreements.

I'm a lay person—and I'm not even a member of this committee; I'm substituting for the proper member of this committee. Could anybody explain to me why we would allow situations like the Ethyl Corp. situation in Canada to exist? We as a country wanted to ban a gasoline additive that we thought was bad for Canadians, and now we have to pay damages for lost opportunity to the company that produces what we say is a damaging chemical.

How about UPS? We, as a country...our postal service makes a lot of money from its courier in the overnight Priority Post aspect, and we use the profits to offset the cost of regular mail. Now UPS is suing Canada for lost opportunity for $230 million because UPS believes it should have a right to perform that function.

Are we or are we not losing our ability to have our own economic sovereignty in this country as we go further with these liberalized trade agreements? That's a question for anybody.

The Chair: Maybe we'll go to Dr. Weston first.

Ms. Ann Weston: I was just going to say I agree with you.

Mr. Pat Martin: Somebody in this room agrees with me. It's kind of refreshing.

The Chair: Some of us partly agree with you. It's the “part” that's the problem.

Mr. Alexandroff.

Mr. Alan Alexandroff: I'm not going to comment on UPS, because UPS has not been heard by a tribunal, of course. I'm not sure what a tribunal would say with respect to the allegations and the responses of the Government of Canada. I'm not sure what I can add, and I'm not about to.

With respect to the bigger question, though, in my view, those who signed NAFTA and who may sign the free trade agreement of the Americas are concerned about providing certainty, economic security, and a framework that allows companies to trade and invest, in the case of the FTAA, throughout the hemisphere. You want to encourage that. In part, a chapter 11-like protection affords that level of security. It meets at least the preamble in the NAFTA in part, broadening economic opportunity. That's the broad objective of such an activity. I don't think it does limit you, as a legislator, from determining what the policy of Canada should be with respect to all the issues that are pertinent to your role as a parliamentarian.

Mr. Pat Martin: We wanted to ban the bulk sale of fresh water, but that's being challenged by a California company that's suing us for lost opportunity because we won't let them have access to our fresh water. We want some say over those things as legislators.

Mr. Alan Alexandroff: But again, that's not a determined matter.

Mr. Pat Martin: It happened.

Mr. Alan Alexandroff: No, the action hasn't even commenced, if you're talking about Sun Belt. I think we need to wait and see what a tribunal would say vis-à-vis the obligations that Canada has entered. It's not everything; it's the obligations as understood in the NAFTA. I might say those obligations are general obligations that we have been involved in, in extending the multilateral and global trading regimes. They include most favoured nation, national treatment, transparency, and rules against expropriation. It hardly seems to me that those are the basic foundation of the international economy that somehow detracts from your role as a legislator in a national environment. These are what we have decided collectively since 1947, and they have been part of the structure of the international economy. I'd be surprised to believe that detracts from your role.

• 1135

The Chair: Dr. Tussie.

Dr. Diana Tussie: Again, I would like to stress the fact that a negotiation is a trade-off. Everyone is losing sovereignty, not just one party. There's a pooled sovereignty, if one wants to think of a better picture of what's going on.

There are trade-offs here. It's like the trade-off between having a leasehold or a freehold on your land or living in a condominium, a high-rise flat, or a house of your own. There's security in numbers. You lose room to manoeuvre, but you gain room to manoeuvre in another instance. These are the trade-offs that we are living with, whether we like it or not. It's a world that's changing.

The Chair: Thank you.

Mr. O'Brien.

Mr. Pat O'Brien: Thank you, Mr. Chairman. I have three questions, one for each presenter, beginning with Dr. Tussie.

I'm not sure if you came down on the side of publishing the text or not, from your comments. I'd like to have that, but I would just like to indicate that the Prime Minister himself said in the House of Commons that he would be quite happy to release the text, but he's not about to do that unilaterally and against the understanding of the leaders of the Americas that they be confidential. The minister has also repeatedly said he's pushing for a greater transparency, and he will certainly be doing that in the near future once again, in Buenos Aires.

So I thought you gave one possible, pretty good rationale for not publishing the text with your comments, but I wasn't sure how you ended up.

Dr. Diana Tussie: I gave a rationale, but I am for publication. As Ann said, I think secrecy breeds suspicion. More than that, I think there's a paranoid feeling around. We feel that, because it's not being released, it must be so important that we need to know about it. If we knew about it, maybe it would not be so important.

Mr. Pat O'Brien: Thank you.

I would just note that one of our previous expert witnesses said he didn't think it would be very helpful to have the 900-page wish list of 34 countries published, but that was his opinion.

The Chair: I think it was his position for this time. He feels that, maybe after—

Mr. Pat O'Brien: At this time, yes, that's right.

Dr. Diana Tussie: I would release it now.

Mr. Pat O'Brien: Thank you for your answer.

To Dr. Weston, the question has been put back and forth across the parliamentary parties here, and you're the first person I've heard who has held out that the WTO was more transparent than the FTAA. Indeed, I don't think that's the feeling on Parliament Hill.

If I heard you correctly, you cited an example of where the WTO was actually more transparent. I think the common belief, at least amongst most parties on Parliament Hill, is that the consultation in the current process has been wider than ever before. The Canadian position on five of nine positions is on the website, which has been visited often. There have been extensive and wide consultations, and I guess our feeling is that this has been the most transparent. Maybe it's not as transparent as it should be, but it's certainly the most transparent trade deal Canada has participated in to date. What's your view on that? And if your view is that the WTO was somehow more transparent, if I heard you correctly, could you then elaborate on how it was more transparent?

Ms. Ann Weston: Just for the record, could I clarify that I'm not a doctor? I don't want people to think I'm passing myself off as one.

The Chair: Sorry, we're just going by the list.

Ms. Ann Weston: No, I know. I'm just telling you, so that there are no false pretenses on my part.

An hon. member: We'll make you an honorary doctor for the day.

Ms. Ann Weston: I'm not even a PhD. Anyway....

It may well be true that the Government of Canada, for the processes of the FTAA, has been more transparent than it was in the context of the launching of the Uruguay Round, in terms of tabling its position on a number of issues. That might be the case, but my point was actually a more general point about the FTAA and the unit that's managing it.

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I haven't actually been to the new unit's website—I recently heard the OAS-SICE website has been redesigned—but even though I haven't visited it, I'm pretty sure I'm right in saying that if you visited it, you wouldn't find the same degree of information about all of the different countries' positions and a whole lot of other things that you do find today if you visit the WTO website.

I appreciate your efforts and those of the Government of Canada to consult, but I really do find it a bit insulting and a bit difficult to really contribute meaningfully—other than talking in general principles—when we aren't able to share the information that some people have access to. For me, it's better than nothing, but it really is nowhere near adequate for intelligent people to sit down and to discuss these things. It's like shadow boxing, perhaps.

Mr. Pat O'Brien: That's fair enough. Thank you for that.

The Chair: Before your third question, you might want to look at the OAS website. A previous witness told us, in fact, that he was extraordinarily surprised that the OAS centre has done a much better job than the OAS has done to date. I don't know about that. It might be moving from a very low barrier, but—

Ms. Ann Weston: That's good.

The Chair: —you can understand that the evidence we got was that it's not bad.

An hon. member: It's gone from zero to one.

The Chair: Yes.

Mr. Pat O'Brien: Again, that's fair enough, and thank you for that.

I just again repeat what the Prime Minister said, though—I'm paraphrasing him—and that was that he'd be prepared to release the text, but not unilaterally. Indeed, I put that question to my colleague, Mr. Paquette, in the House of Commons during the all-night debate. He also said he would not want to see unilateral publication of the text. I say that just so you have the Canadian government's view, which is shared by at least some of the opposition parties.

My third question is firstly to Mr. Alexandroff, and the others may wish to comment if there's time. It's on labour agreements being in trade texts.

I recently attended a ministerial meeting of EU ministers—I was the one non-EU rep there—in London. It was chaired by Minister Clare Short, and the ministers—and these are development ministers, now—expressed their very grave concern that incorporating labour standards into such texts would be nothing more than a back-door attempt at protectionism by developed countries to the detriment of less developed countries. Mr. Alexandroff, what's your view? And if there's time, maybe the others could comment.

The Chair: If you could, be quite quick.

Mr. Alan Alexandroff: Yes, I'll be quick in two senses. One, with respect to the broad question, I think we start from what Canada can do. It seems to me Ann Weston has already indicated something, but it puts you on the hot seat. It seems to me that if we could accelerate the reduction on tariffs with respect to apparel and textiles, it would go a long way toward assisting developing countries and encouraging employment in those countries. We don't have to wait for anybody to do this, but we do have to deal with our own domestic interests—and that's for you to face with regard to this question.

I think the real problem on the labour side is...if it's simply an issue of trade sanctioning, then I totally agree with the view that was expressed. If what liberalizing the trade regime ends up doing is sanctioning countries for their labour policies, then I would not support it. If we can build in some incentive schemes, that's a different matter. And if we want businesses to act in a certain way, whatever country they're in, that's important. But if the real chain here is trade sanctions, then I wouldn't support that.

The Chair: Dr. Tussie, did you want to...? No? Fine.

Ms. Weston, did you want to just add anything quickly on that?

Ms. Ann Weston: I agree that it's a very difficult issue for developing countries, but I don't think we should shirk it. There has been a lot of movement within the context of the ILO to come up with agreement on core labour rights, so I think the argument that we should somehow recognize the commitments to core labour rights within the WTO, within other trade agreements, is very important. Exactly how you then deal with countries that violate those labour rights is the real question. Within the NAFTA, we have a certain process, but it's not as expansive and doesn't cover all of the labour rights that are actually part of the ILO core. Maybe we could build on the NAFTA labour side agreement in that respect.

The Chair: Thank you.

The most troubling thing we're hearing here is the sanction problem. The enforcement problem is the one we always come to difficulty with.

Madame Lalonde, and then Mr. Harvard.

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[Translation]

Ms. Francine Lalonde: Thank you.

I want to make it clear that this time, I want to put my question to Mr. Oswaldo Molestina Zavala because I was hoping he would respond to the question that you answered.

I want to ask him now, after coming from so far away, to tell Quebeckers and Canadians what the people involved in COPA—because he is here to speak on behalf of COPA—expect from the negotiation process.

[English]

Mr. Oswaldo Molestina Zavala: Thank you very much for the question.

In the first place, I would like to make some reflections, one being that free trade is contrary to protectionism. Then free trade may be the first step toward economic integration.

That was done precisely by the European Union. At the same time they established free trade and also protectionism in relation to third countries.

It's very important to note, especially in commercial relationships with underdeveloped countries, what has been done in connection with the European Union up to this point. It's really a union between those countries, but they have some measures that are of benefit to African countries. As you remember, the LOMÉ treaties benefit African countries but discriminate against Latin American countries.

Dr. Tussie mentioned bananas. We are involved in the commercialization of bananas, and because of this discrimination against bananas from Equador and other central American countries, we went to the World Trade Organization and put a panel against the European Union. About three years later, we won the first panel, and then we had to put another panel against the European Union. What happened was that for seven years we didn't have a resolution in favour of our countries or our economies. We talked about compensation and reprisals, and everything, but how can we, a small, underdeveloped country, try to get some benefits from this relationship? So I don't think this commercial relationship between developed countries and underdeveloped countries takes into consideration that the European Union is the second largest economic power in the world.

Have we any opportunity in this new relationship that we are looking at implementing? I think it's very difficult.

I agree that it is a very complex negotiation. I'm not talking about protectionism for Latin American countries, but the developed countries might consider the possibility of trying to give them some benefits in the context of the free trade organization; otherwise our countries may not survive in the future, and that is precisely the problem we are facing.

If this is a play of the countries, a game of the powerful countries in the Americas, we have nothing to do with that. But if we may need some preferences in this context from the powerful countries in the zone, we think there is a possibility of finding some common positions. We know also that we are going to win something, but perhaps lose something also. If we try to work this out in a fair way for everybody, from my point of view, obviously the developed countries are those who have to lose something more.

The Chair: Thank you very much.

Mr. Harvard.

Mr. John Harvard: I have one question, and perhaps it goes to Mr. Alexandroff, or any other member of the panel.

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I don't share Mr. Martin's paranoia, let's call it, respecting free trade agreements, either current or in the future. However, I think a lot of Canadians do worry about the inability of our country to recover from possible past mistakes, or future mistakes, made in these very binding treaties.

Mr. Martin mentioned the fresh water issue. I would think most Canadians would believe that we have not traded away our right to control our fresh water supplies. Canadians are very proud of what we have in the way of fresh water, and I think most Canadians want to hold onto that fresh water as much as possible.

But I think there's a worry that there will be some tribunal, secret or otherwise, that will make some pronouncement some time in the future saying you have made an obligation under this agreement or that agreement and you are powerless to do anything about it.

I understand the business of losing sovereignty and trade-offs, but I think you do have to understand that there are a lot of Canadians who worry about what's in the details. You know, the devil is in the details. What's in the writing? These are complex, profound legal documents.

So while I believe in freer trade, this is the thing that I think all of us who are legislators have to come to grips with, this worry that there's going to be something there, and that something, that obligation that perhaps we didn't know about, will be decided upon by a court, by a tribunal, that is beyond our democratic reach.

Maybe you can address that, or perhaps others can.

Mr. Alan Alexandroff: Yes. I'm sure everyone has comments on that. I'll try to be quite brief.

On the specific, it seems to me you need to look to the provincial and the federal governments. There is nothing that obligates us in Canada if, for public policy purposes, we do not want to sell water in bulk. The question that becomes a difficult issue is if some government grants a right to do that, then you've crossed the Rubicon, and in that regard, those obligations then do cut in. But at first instance, it's perfectly open to governments not to be in the sale of, in this case, water.

More generally—

Mr. John Harvard: Does that mean that Newfoundland could set the precedent for the entire country?

Mr. Alan Alexandroff: It has that prospect, but don't focus on the international obligation. Focus on where it's most important, and that's with respect to the government of the people of Newfoundland and Labrador. If they've decided to go down that road, then that's something you need to discuss with them. You as parliamentarians need to do that.

There are certainly many experts out in the field who are perfectly prepared to comment and give rise to what are our obligations. You can discuss it in this committee and you can discuss it elsewhere. I think it's perfectly reasonable to do that, and you should. I hope I was helpful in discussing some of these international obligations back when there was a review of the patent legislation.

So I think you have the resources that you can call on in our broad community to give you interpretation. I'm not going to tell you that if certain decisions aren't made, Canada may find itself up against it with respect to the obligations it has signed on to. That's something you should keep in your mind every time you go into an agreement.

The Chair: That's why we're now calling it the judicialization of these agreements. In the past, trade agreements were specifically loosey-goosey because governments didn't want to get caught in traps, and so they entered into agreements that they knew they didn't have to live up to. But now that you have courts that can enforce them in the way they do with chapter 11 and otherwise, which a lot of people wanted, they're finding that you're getting decisions you don't like. But they were just enforcing the obligations that people signed into. That is what I understand you as saying.

Mr. Alan Alexandroff: That's certainly my position.

The Chair: Yes.

Ms. Weston.

Ms. Ann Weston: I want to make two points.

One, I think the issue of whether or not the Government of Newfoundland grants a right or not is somewhat beside the point. What we're talking about today is whether or not we're going to sign on to international agreements, which means that if the Government of Newfoundland were to do that, we're actually going to be under other obligations to private companies from other countries.

• 1155

I think one of the clear recommendations this committee should be making is that we probably made a mistake in the NAFTA. Whether or not we can resolve that, let's deal with that.

But what we're talking about today is the free trade area of the Americas. What we're all agreeing, I think, is that this issue in the NAFTA has been problematic and it isn't something we would recommend be expanded in the FTAA or the WTO. Sure we want guarantees for our foreign investors in the Americas—that means Canadian foreign investors—but we don't have to go as far as chapter 11 in order to enhance the security of investment, because it has been at tremendous national cost, I would argue.

The Chair: Since we have Mr. Alexandroff here and since we hear so much about chapter 11, let me try this on the panel. I'm sorry Mr. Martin left. There's a misunderstanding about how chapter 11 is working and what the obligations are.

Go back to the MMT case, which is cited over and over again, or the water case. It seems to me that in MMT the obligation we entered into was that we would not discriminate. We didn't say we wouldn't legislate in respect of the environment. We're entitled to do that, but we're not allowed to discriminate against the other treaty members when we legislate. In MMT it was a discrimination issue because the Provinces of Alberta and British Columbia allowed Canadians to put the additive in, but we weren't going to allow the Americans to do so. So it became a discrimination issue. We're not tying our hands to legislate. We're tying our hands from discriminating. That seems to me to be a totally different perspective.

But the problem Ms. Weston brings up, which we as a committee have to recognize, is that if under our Constitution we don't have the power to control the constituent elements in it from discriminating, to wit the provinces, then we're damn fools to go into agreements like that because we're just setting ourselves up for an international obligation that will come up to bite us. That's what happened in MMT. We obliged ourselves, and a province went ahead and allowed it to happen. And the same could happen with water.

Mr. Alan Alexandroff: I don't think Newfoundland is beside the point. It's part of the Dominion. If it chooses to undertake it in the face of the knowledge that doing so could well mean it opens up all of Canada to that, that's something for the broad community to discuss.

The Chair: That's right.

Mr. Alan Alexandroff: But the notion that we just don't enter into these agreements because we think some projection might occur in the future strikes me as saying we don't get any benefits from these agreements, and there I would part company with you. Given where we are in our economic development and in our trade and investment relationships, we get lots from the activity. Are there things we need to review and to be aware of? Absolutely. It has come up not just in water but with regard to private medical care, and there are a host of different things. But this is largely, it seems to me, an internal discussion among the various elements of the Dominion.

[Translation]

The Chair: All right. The final word goes to Ms. Lalonde.

Ms. Francine Lalonde: I would like to add to that we heard witnesses who also told us that those who had written chapter 11, to take the expropriation clause as an example, had never thought it would be interpreted so broadly. However, one of the problems we have with chapter 11 and its application is that nothing is public and that it is even impossible to develop any real case law. So there is a real problem there. It is as if the countries had signed an agreement, and that suddenly, the agreement they signed in good faith turned into something quite different and they had no way of doing anything about it. That is why a number of people said that things ought not to be based on chapter 11 as it is currently, because there have been too many bad experiences.

[English]

Mr. Alan Alexandroff: I'm not quite sure what you mean by a bad experience. Since chapter 11 has been in—

The Chair: We lost the case and had to pay money. That's a bad experience.

Mr. Alan Alexandroff: Okay. For parliamentarians, that's a bad experience.

The Chair: For the treasury of Canada.

Mr. Alan Alexandroff: I accept your point that's viewed as a bad experience. Was that not contemplated? It may be true that Canadian decision-makers believe the real focus of this protection was with regard to Mexico. Well, I'm sorry, these are reciprocal rights, and what Canadians have woken up to is that the obligations we impose on others are also the obligations we impose on ourselves. If we have to deal with that, we are dealing with it.

The notion of a too-broad interpretation is not how I would read the decisions in those cases that have been decided, namely, the S.D. Myers case or the Metalclad case, or any of those. I don't think these are wild-eyed internationalists. I think those cases are relatively narrowly drawn.

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The Chair: Thank you very much.

[Translation]

Ms. Francine Lalonde: But they are impossible to read. That's the problem.

[English]

Mr. Alan Alexandroff: Yes, you can.

Ms. Francine Lalonde: The decisions for the United States, not Canada.

Mr. Alan Alexandroff: The decisions are on the websites. You can read the decisions on Metalclad and S.D. Meyers. All of those decisions are available.

The things that are not, though—

Ms. Francine Lalonde: On the USTR site.

The Chair: It doesn't matter. You can get the decisions.

Mr. Alan Alexandroff: But these are not in the—

[Translation]

Ms. Francine Lalonde: But not in Canada.

[English]

Mr. Alan Alexandroff: Indeed, the only country that retains confidentiality on decisions is Mexico. Canada and the United States have agreed that when the decisions of the tribunal are arrived at, they will be posted publicly. Only Mexico has retained the right not to make those public. So the answer is the decisions, the pleadings, and the claims are all publicly available.

The Chair: We were using some in the course I was teaching in January at the law school. So there you are.

Colleagues, I will call this meeting to an end.

You'll be relieved to hear we do not have a meeting this afternoon.

We're adjourned until Tuesday morning at 9.