Mr. Speaker, it is an honour and a pleasure to speak to Bill , a bill dealing with trade liberalization and market access.
Bill is just another step that our government is taking to help Canadians compete and succeed in the global economy. Our global commerce strategy includes a re-energized agenda of trade liberalization with our partners around the world.
As a trading nation, Canadian companies, Canadian producers and Canadian investors need access to international markets to stay competitive. We have entered an age of fierce global competition as emerging economies continue climbing the value chain and establishing themselves in an ever-widening range of sectors.
In this time of economic uncertainty. where a slowdown in the U.S. economy, our top commercial partner by far, and ongoing turbulence in international financial markets will continue to affect Canadian exporters and investors, we have done a good job of riding out the storm. thanks largely to Canada's strengths, strengths like low unemployment, the strongest fiscal situation in the G7, a sound borrowing system and our endowment of natural resources that continue to be in demand the world over.
We could add to that fiscal attribute by recognizing the fact that Canada's banking system is the most stable and best banking system in the world today.
We should also recognize the fact that our public pension plans have sound fiscal footing, unlike many public pension plans around the world.
It is clear, however, that we must remain vigilant. Canada must continue to fight protectionist pressures around the world and continue taking steps to ensure Canadian companies remain competitive, maintain their markets, and have access to new opportunities.
We have done something about that. Our government understands the challenge. Canada has committed to playing an active role in the Americas and in building strategic relationships with key partners in our neighbourhood. Our neighbourhood certainly is the Americas. The government's policy of re-engagement with the Americas has made a lot of economic sense. It is only reasonable, practical and intelligent foreign policy and trade policy on Canada's behalf that we have become more active in the Americas at our very own doorstep.
In Latin America, Peru is a leader, a lynchpin in the political and economic stability of the region. It has been an economic engine with a gross domestic product growth rate of 9.1% in 2008, near the top of the Latin American countries. Peru also has a solid outward orientation. A leader in trade liberalization, Peru is currently pursuing trade negotiations with a number of countries. We need partners like Peru, especially as we move forward on engaging with like-minded countries throughout the Americas. Canadians will benefit. Peru is already an established and growing market for our businesses. Exports like wheat, pulses and mining equipment are just part of that picture.
Canadians also offer services in the financial and engineering fields and this activity is driving strong, two-way commerce between our businesses. In 2008. two-way merchandise trade between our countries totalled $2.8 billion. Canadian exports. like cereals, pulses, paper, technical instruments and machinery, were all a part of this success.
Peru is an important supplier to Canada of gold, zinc, copper and petroleum,
Canadian investors, too, have a significant presence in the Peruvian market. In fact, Canada is one of Peru's largest overall foreign investors with an estimated $1.8 billion worth of investment stock in Peru in 2007 led by the mining and financial services sectors. It is no wonder that Canadian businesses in a number of sectors have been strong advocates of this agreement. Their support has been crucial throughout the negotiating process which began in June 2007.
The result is something we can all be proud of. With this new agreement, our nations are taking a critical step to intensify our commercial relationship in the years ahead and to create new opportunities for citizens in both countries who will be able to prosper.
We have negotiated a high quality and comprehensive free trade agreement covering everything from market access for goods to cross-border trade and services to investment and government procurement. Canadian exporters will certainly benefit. The agreement would create new opportunities for Canadian businesses and producers in the Peruvian market. Under the agreement, Peru will immediately eliminate its tariffs on nearly all current Canadian imports with remaining tariffs to be gradually eliminated over the next five to ten years.
Canadian producers will enjoy immediate duty-free access to Peru products like wheat, barely, lentils and peas. A variety of paper products, machinery and equipment will also enjoy the same benefit.
However, an effective free trade agreement should do more than eliminate tariffs. It should also tackle the non-tariff barriers that keep a trade relationship from reaching its full potential. We have done that by including new measures to ensure greater transparency, including better predictability for incoming regulations and the right by industry to be consulted at an early stage in the development of regulations, promoting the use of international standards and creating a mechanism to promptly address problems.
We are taking action on a number of fronts to unlock the trade potential inherent in the Canada-Peru relationship.
However, this agreement is significant for other reasons. It also includes important side agreements that demonstrate our joint commitment to corporate social responsibility, the rights of workers and preserving the natural environment. Our nations recognize that prosperity must not come at the expense of the environment and workers' rights.
This agreement paves the way for significant dialogue on other areas of mutual interest, including poverty reduction and trade related cooperation. In fact, this approach builds on our successful experience with free trade partners such as the U.S., Mexico, Chile and Costa Rica. The agreement will provide an opportunity to grow business and investment between Canada and Peru. We anticipate that freer trade will promote economic growth and employment and help Peruvians reduce high levels of poverty.
CIDA has contributed significantly to developing and enabling environment for trade and investment in Peru by improving the economic governance through the development of Peru's natural gas and mining regulatory frameworks, building its capacity to protect the environment, managing social conflicts by promoting corporate social responsibility in Peru, supporting work on improved labour administration, promoting democratic governance, meeting developmental targets and supporting the FTA negotiations on trade related cooperation between Canada and Peru.
The Canada-Peru free trade agreement builds on our work by including a number of development friendly provisions. It improves market access for Peru to Canada and allows Peru to adjust to freer trade with Canada. For the first time in a Canadian free trade agreement, Canada has agreed to the incorporation of a chapter on trade related cooperation that will help Peru maximize its opportunities under the free trade agreement. Through these measures, as well as the parallel agreements on labour and the environment that my colleagues have previously outlined, the Canada-Peru free trade agreement stands as a comprehensive and wide-ranging agreement.
It is also another example of Canada's re-engagement in the Americas. Our government is committed to working closely with our partners throughout the hemisphere to deepen our economic and security ties and promote stability, security and prosperity. The Canada-Peru free trade agreement is an important part of these efforts. It will also help us expand upon the friendship and cooperation our countries enjoy and create new economic opportunities for Canadians and Peruvians alike.
We share a belief that open markets and international trade are the best hopes for fostering development and our common security in the hemisphere.
We recognize that prosperity cannot take hold without security or, in the absence of freedom and the rule of law brought about through the pursuit of democratic governance, a good, healthy democracy cannot function without a sound underpinning of personal security and the chance to improve living standards through increased trade and investment. That is why we are committed to working closely with partners like Peru to influence positive change throughout the region and promote the principles of sound governance, security and prosperity.
Taken together, these agreements mark a new chapter in the Canada-Peru relationship, one that will forge an even stronger bond between our nations in the years ahead. They also mark yet another milestone in Canada's trade policy. In this day of fierce global competition and overall economic uncertainty, I am proud to say that we are taking the measures necessary to continue creating a resilient and competitive Canadian economy in the years ahead.
I ask for the support of all hon. members as we continue these efforts and create new opportunities for all Canadians to thrive and prosper in the global economy.
Madam Speaker, it is a pleasure to rise today to speak to Bill , the free trade agreement between Canada and Peru.
The Liberal Party recognizes the importance of free trade and the opportunity to create jobs and prosperity not only for Canadians but for our trade partners. Particularly, during this global economic downturn, it is important that we not only work to expand our free trade relationships but we fight protectionist tendencies, whether it is from U.S. congressmen or senators or from Europeans.
Around the world there is a tremendous fear of protectionism. We saw what happened in the 1930s, going back to the Smoot-Hawley tariff act in the United States, which turned a recession into a full-fledged depression, as we saw responses from around the world and retaliatory actions against U.S. protectionism. Thankfully, the international community and the G20 have been quite consistent in acting and speaking against protectionist measures. We hope that wisdom will last but we have to be vigilant and vigorous in our opposition of protectionist measures.
We are a trade-dependent nation. We have a small, open economy. It is troubling that under the Conservative government we have the first trade deficit that Canada has seen in over 30 years. It is ominous that as a small, open economy that depends on external trade for our prosperity and jobs, in fact, today we are buying more as a country than we are selling. We are facing a weakened global economy and we must broaden our trading relationships. We must seek out new trading opportunities.
Canada's reliance on trade with the U.S., particularly with the United States having been hit the hardest during this economic downturn, demonstrates to us that we need to diversify our trading relationships during not just these difficult times but on an ongoing basis so that we are not as vulnerable or reliant on one market for the future. The U.S. is an important market to us, we all recognize that, and we need to continue to deepen and strengthen our trading relationship with the U.S., but we need to diversify dramatically our trading relationships so that we are not as dependent.
Countries like China, India and Brazil are critically important. My colleague, the , just mentioned that China has become Canada's second largest trading partner. He asked who could have imagined that just a few years ago. In fact, the Liberal government and Prime Ministers Chrétien and Martin saw this coming.
The Liberal government worked very hard to deepen our trading relationship and friendship with China, a friendship that goes back to Dr. Bethune and Pierre Trudeau. Pierre Trudeau and Richard Nixon agreed on almost nothing but the one thing they did agree on was the importance of opening up China. They were right then. The opening up of China in terms of economic trade and relationships has increased our capacity to influence the Chinese on issues of human rights and freedom, and market liberalization.
In fact, economic engagement can strengthen our capacity to influence other countries and our trading partners on issues of rights, labour and the environment. We have seen that occur around the world where we choose to use our economic relationship to actually enhance our capacity to influence other issues.
I will be speaking about the Chinese relationship a little more in my remarks, but on the issue at hand, Canada's free trade agreement with Peru, we in the Liberal Party believe very strongly that there are opportunities for Canada in deepening our trade relationship with Peru. We believe we also have a responsibility as a Parliament to evaluate these trade agreements on an individual basis at the committee level and to study them thoroughly in a multi-partisan and, to as much of an extent as possible, a non-partisan basis to ensure that the benefits exist for Canada.
With this in mind, the Liberal Party will vote in favour of Bill at second reading so that the Canada-Peru free trade agreement can receive a careful examination in committee. We want to hear from Canadian stakeholders. We will support this free trade agreement beyond committee stage if we believe that it is, on balance, a good deal for Canadians.
We recognize and believe in the principles behind free trade in terms of providing enhanced prosperity for our citizens and for economies like Peru, but we recognize as well that there is a significant economic risk to Canada if we do not pursue free trade agreements with countries like Peru.
Peru has been aggressive in pursuing bilateral free trade agreements with a number of countries. Since 2005, Peru has concluded free trade agreements with the U.S., Chile, Thailand, the Mercosur nations, that is Argentina, Brazil Paraguay and Uruguay, and Singapore.
Peru's FTA with the United States, Canada's largest trading partner, has been approved by the U.S. Congress and came into force on February 1 of this year. Now that the U.S. FTA with Peru is in place, some American exporters enjoy a comparative advantage over Canadian exporters in the Peruvian market. For example, U.S. wheat exports now receive duty-free treatment in Peru. Canadian wheat exports on the other hand continue to face a 17% tariff.
Clearly, Canadian wheat producers are now at a disadvantage in this market compared to American competitors and wheat comprises 38% of Canada's total exports to Peru. Therefore, we could say, tongue in cheek, that not having a free trade agreement with Peru goes against the grain for Canadian interests. We need to work to close this gap with the U.S., not just for our wheat producers but in other sectors as well.
In terms of the Canada-Peru FTA, the merchandise trade between Canada and Peru was about $2.8 billion in 2008. Canadian merchandise imports from Peru were about $2.5 billion last year. Our exports to Peru totalled about $400 million in 2008. This is an 18% increase over 2007.
There is a significant growth opportunity for Canadian exporters in Peru, particularly in the supply of mining and hydroelectric transmission equipment, particularly good areas for Canadian expertise.
Peru currently maintains tariffs of 4% to 12% on Canadian exports of machinery and equipment, paper, oil, plastics and rubber. Eliminating these tariffs will help enhance Canadian competitiveness and protect and expand Canadian jobs.
There are also opportunities for Canada's financial sector in Peru. The Bank of Nova Scotia is, in fact, the third largest bank in Peru. It sees great market potential in expanding its presence in the Peruvian market.
By increasing Canada's access to foreign markets, we can help Canadian companies grow and create jobs, both here in Canada and in developing economies like Peru.
In terms of our financial sector, particularly given the relative strength of our Canadian banks and financial institutions relative to their international competitors, that stripe that is accentuated and amplified today during this global financial crisis, there is tremendous opportunity to focus on our financial sector as an area of comparative advantage where we can deepen our relationships, expand our financial sector in some of these emerging economies and capitalize on the comparative advantage that has been the strength of our Canadian financial sector.
Examining the FTA agreement that Canada signed with Peru on May 29, we see that it does protect supply management. We need to support and defend supply management for what it is. It is simply a system that ensures Canadian farmers are paid a reasonable price for what they produce, a market-based system that ensures Canadian farmers are paid fairly for their products. It is not a trade subsidy from the government. We need to counter the arguments against supply management that define it for what it is not. Often the critics of supply management define is as some sort of government subsidy. It is not. It is simply a sound pricing mechanism to ensure Canadian farmers are paid a reasonable price.
The Peru FTA also includes side agreements on labour cooperation and the environment. The agreement also contains provisions on corporate social responsibility. Both the labour cooperation agreement and the agreement on the environment include a complaints and dispute resolution process. This allows any member of the general public in Canada or Peru to request an investigation if they believe that either Canada or Peru is not living up to its commitments in this agreement.
The labour cooperation agreement also enables an independent review panel to fine the offending country up to $15 million annually if the agreement's provisions are violated.
We will work with Canadian stakeholders and experts at the committee stage to determine whether these side agreements and provisions are robust enough. We will act to make sure this FTA is good on balance for Canada. We will continue to believe that diversifying our trade relations is an important way for Canada to move forward as part of a global economic recovery.
I believe very strongly that Canada's multiculturalism can actually help us diversify our trade relationships, that our multicultural communities represent natural bridges to some of the fastest growing economies in the world. We should be capitalizing on the strength of our multicultural communities and not only consider multiculturalism as a successful social policy here in Canada, but view it for what it is today.
At a time of global economic change, multiculturalism is in fact not just a social policy today. It is an economic driver, if we harness it and if we work with the entrepreneurial leaders. Some of the most successful entrepreneurs in Canada are leaders in Canada's multicultural communities. We need to harness that multicultural entrepreneurialism and build natural bridges to these fast-growing economies.
With the Canada-Peru FTA, the Liberal Party will ensure that this is a good deal for Canada. We will continue to emphasize the need for Canada to diversify its trading relationships and we will continue to highlight training opportunities around the world.
Let me return to the issue of Canada-China trade. There are immense opportunities for Canada in the important emerging market of China. Despite concerns over the global economic downturn, China's real GDP is still expected to grow at 6% in 2009 and 7% in 2010. The Chinese government is targeting even higher figures. Regardless, these are impressive numbers compared to either Canada's or other industrialized economies where we see a shrinkage of GDP during this time of economic downturn.
The Chinese government has announced a stimulus package worth $725 billion, investments in infrastructure, transportation, environmental and energy infrastructure, a need for the commodities that Canada produces and a need for the technologies that Canada has developed and can continue to develop. For instance, in clean energy, China has a remarkable need for clean energy and for clean energy technologies. We should be deepening our relationships with China, India and Brazil to help these countries get the energy solutions they need, the technologies they need and the energy they need and at the same time protect the planet against climate change.
As the Chinese government moves forward in its commitment to improve air, soil and water quality and produce cleaner energy, China will demand and need more clean energy and green technologies. Canada can become China's clean energy and green technologies partner, as a global leader in this field. However, in China the state has a strong influence on economic activity, so Canadian businesses cannot realize these opportunities absent of a strong relationship between the Canadian and Chinese governments.
After three years of damaging Canada's relationships with China, it appears that the Conservative government is finally recognizing that the Chinese economy and the Chinese economic opportunity is important to Canada, and that relationships matter.
On Saturday in The Globe and Mail, Jeffrey Simpson said in his column:
|| Finally, if belatedly, the Conservatives are coming to terms with the reality of China, not the rather one-dimensional view they developed in opposition and brought with them into government. They are arriving at the elementary conclusion that had long ago dawned on all sentient observers in the world: China is hugely important.
Mr. Simpson goes on to say “the puerile partisanship of Conservative politics and their stunning ignorance of the world” has damaged the relationship between Canada and China.
The fact is it is absolutely essential that we have a strong relationship between Canada and China, both in terms of the economic opportunities that trade between Canada and China represents for both our countries and in terms of our capacity to influence Chinese human rights.
We should ask ourselves this. Did Canada have more influence over Chinese human rights three years ago, when we had a strong relationship between the Government of Canada and the government of China, or today when that relationship is in tatters?
The fact is it is self-evidence to anybody who is paying attention, including the stakeholders, the labour organizations and the business leaders, who are telling us we have lost ground over the last three years in China due to a very ideological and narrow perspective of the to China. We need to reverse that.
In the recent weeks the government has demonstrated a change in tone, but the has still not visited China. He has still not, at the top, demonstrated an absolute commitment to deepening and strengthening that relationship, to undoing some of the damage he has wrought on the Canadian-Chinese relationship over the last three years.
Our exports over the last two years barely kept pace with China's import growth. The U.S., on the other hand, has grown its export trade with China by 60% in the last two years, far outpacing China's import growth. Australia exports five times as much to China as we do. The Australian prime minister, Kevin Rudd, understands the importance of the Chinese economy. Prime Minister Rudd actually speaks Mandarin. We cannot even get our to go to China, yet the prime minister of Australia has learned Mandarin to help deepen the relationship.
The has recently been to China to re-announce some trade offices that were planned by the previous Liberal government. That is not enough. The government, any Canadian government, should be aggressively pursuing and deepening our trade relationship and expanding our opportunities with China. Canada should be aggressively pursuing a consistent agenda of trade liberalization around the world. As a trade-dependent nation, free trade is ultimately in Canada's best interests.
Canadians can compete and succeed globally given the opportunity. We do not need protectionism to defend Canadian jobs or to develop and protect Canadian prosperity. We need opportunities. The Canadian business community and Canadian entrepreneurs have every capacity to compete and succeed. We need to work with them, as partners in progress, to diversify Canada's trading relationships, to focus on Canada's comparative advantages in energy, in financial services and in commodities where we can deepen our trade relationships with some of these countries that need clean energy technologies, that need stronger financial services and strong financial institutions, that need our commodities to build their infrastructure.
We have every capacity as a nation to be a global leader in these sectors and to turn this economic crisis into a time of opportunity for Canada as we move forward. However, it requires consistency, which means that when we treat human rights and trade in one part of the world one way, we have to apply the same principles elsewhere.
The government has said, in terms of Colombia, Peru and other emerging economies, that economic engagement strengthens our capacity to influence their human rights. I agree with that. However, I wish and I want, as a Canadian citizen, for my government to apply that same principle to countries like China, particularly China, which represents such a tremendous opportunity for Canadians and for the Chinese people as we move forward in progress and building a stronger global economy.
Madam Speaker, Bill . As I said earlier in a question to the Conservative member, the relative importance of trade with Peru is rather low and negligible. It would not necessarily be my choice for the cornerstone of my speech to you this afternoon. I will address other aspects of equal—if not, in the end, greater—importance than just the absolute figures of the transactions between Canada and Peru.
As I said earlier, given the figures considered, our trade deficit with Peru is fairly substantial. Involved are exports of some $300 million and imports of $2.4 billion. Proportionally, the deficit is quite substantial.
There are a number of issues with the free trade agreement with Peru, and I would like to raise a few. First, the agreement on investment protection in this agreement with Peru is almost a copy of chapter 11 of NAFTA. We know how that works and that it leads the multinationals increasingly to initiate proceedings against governments. Chapter 11 also contains the dispute resolution mechanism, which poses problems and has significant weaknesses.
The Bloc Québécois supports investment protection, as long as it is done well. Furthermore, there is the government's almost unhealthy predilection for signing bilateral agreements by the handful and as quickly as possible, ignoring of course the multilateral aspect. In recent times, the WTO is somewhat out of the picture, the Doha round is rather ineffectual and there is little progress. We all know that international trade—globalization—must be governed by rules that are the same for everyone and equal for all.
If I have time, I would also like to talk about mining companies. There are a lot of them in Peru, nearly 80. It is common knowledge that a vast number of them have their head offices in Canada, but in the end, they are foreign. Knowing that, in Canada, regulations governing mining companies abroad are very weak, they take advantage of the situation.
Earlier, a member spoke of fair trade and the various components of it, which include the environment, workers' rights and human rights. They are of prime importance in business and increasingly so. They have also been ignored by the multinationals, which have tried to globalize pretty well everywhere on the planet. We know the aim is to make money. Often, it is to the detriment of the people in the country where they have chosen to set up, because they could take advantage of various weaknesses. These are the things that must be considered increasingly to be regrettable, passé. We must look to the future and to development on a much fairer level.
As I was saying earlier, the relative importance of trade with Peru is rather small. With 0.079% of Canadian exports, Peru ranks 48th, and 19 th when it comes to Canadian imports. This puts Peru in 25th place among Canada's trading partners, but it is important to stress its minor role when it comes to our exports.
In this regard, Peru accounts for less than 1% of Canadian international trade, 0.31% to be more exact. Both Canada and Quebec have a negative trade balance with Peru. However, it should be noted that Canada imports primarily raw materials from Peru, including copper, while exporting mostly wheat and manufactured products.
As I mentioned earlier, the balance of trade for all exports is $382 million, while total imports amount to $2.458 billion, for a deficit of $2 billion. This shows the ratio of exports and imports, and the numbers speak for themselves.
In Quebec, exports amount to $50 million, while imports total $223 million, for a deficit of $173 million.
As regards agriculture, this is a typical agreement. Fortunately, supply management is not affected. Indeed, over-quota tariffs on regulated products and supplies such as dairy products, poultry, eggs and refined sugar, are exempt from tariff reductions.
The environment and labour laws are also affected by the agreement. The Canada-Peru free trade agreement is accompanied by two side agreements on labour law and on the environment. When it comes to human rights and labour law, Peru is not a problem country like Columbia. However, the standard of living is low, and we can legitimately question the ability of the Peruvian state to implement both environmental and labour law standards on its territory.
The main danger is with Canadian mining companies operating in that country. Indeed, Peru's mining potential is significant and over 80 Canadian mining companies are present in that country. Canada is the number one investor in Peru's mining sector. Given the poor track record of Canadian mining companies and a total lack of will on the part of the Canadian government to regulate their operations, protecting the additional investments of these companies through a new chapter 11 is highly questionable.
The Bloc Québécois is opposed to the Conservative government's strategy, which consists in making piecemeal agreements. Instead, we support a multilateral approach. The current economic crisis clearly shows that a market economy can work properly only if it is regulated and stabilized through an institutional, political and ethical framework. Rather than signing piecemeal agreements, Canada should work within the WTO to ensure that the rules governing international trade are the same for everyone.
The Bloc Québécois believes that trade can contribute to the prosperity of nations and, in that sense, that it can be a major social and economic development tool. However, this can only be the case if trade agreements include measures that will ensure sustainable development and that will promote the development of the populations involved.
The Canada-Peru free trade agreement includes a clause to protect investments that is patterned on NAFTA's chapter 11 and that will allow businesses to sue governments. To include a chapter protecting investments could impede Peru's social and economic development. That country is a minor trading partner for Quebec.
As I said, Quebec’s exports to Peru represent 0.14% of total exports from Quebec, and Quebec has a $174 million negative trade balance.
Canada’s main business activity in Peru is in the mining sector, and Peru’s track record on worker protection in that sector is hardly a glowing one.
In the absence of any real policy to hold Canadian mining companies accountable, ratifying this agreement will allow those companies to expand their activities without being subject to any rules or consequences when they pollute or when they flout human rights. The Bloc Québécois is therefore opposed to this bill.
Chapter 11 of NAFTA, relating to investments, allows investors from member states in the North American Free Trade Zone to claim compensation from governments of another party to NAFTA when they believe they have incurred a loss as a result of the adoption of regulatory measures that modify existing business operating conditions. The regulatory or legislative changes must, however, be such that they can be considered to be direct or indirect expropriation or a measure tantamount to an expropriation.
NAFTA is the only major free trade agreement to which Canada is a party that contains such broad provisions regarding the treatment to be granted to investors from other parties. Because the free trade agreement with Peru contains a similar clause, the Bloc Québécois believes that it is not in Quebec’s interests to adhere to the agreement and is opposed to ratifying it.
In fact, the free circulation of goods can hardly not go hand in hand with the free circulation of capital. Where specific provisions are not incorporated into free trade agreements, bilateral agreements generally provide for the protection of investments coming from the other party, and all such agreements contain substantially similar provisions, that is, a neutral arbitration procedure in the event of disputes between the foreign investor and the host state of the investment. There are currently over 1,800 bilateral agreements of this type in the world.
The provisions of chapter 11 of NAFTA governing investments have been called into question. They are the source of numerous proceedings that have been brought against various governments in Mexico, the United States and Canada. They sometimes result in several million dollars in compensation being awarded. In a nutshell, chapter 11 defines a complete scheme to govern investments. In addition, the definition of investments is very broad. Some of the provisions of that chapter, including the concept of expropriation, have generated numerous proceedings. In addition, the current trend is toward extending that concept to encompass lost profits.
There are lots of examples of lawsuits I could mention under chapter 11. They often revolve around the concept of expropriation and lost profits. The expropriation of real estate directly affects a company’s assets and operations, but something else is at stake when multinationals sue for lost profits.
So a host of lawsuits are underway. For example, there is a suit over regulations that were adopted on PCBs. The Canadian government is being sued by S.D. Myers as a result of the issuing of an interim order on the exportation of wastes containing PCBs, which was in force between November 20, 1995 and February 4, 1997. The American company alleges that this order prevented it from doing business in Canada and it wants $20 million US in compensation. According to the decision that was handed down, Canada’s temporary ban on the export of wastes containing PCBs violated two provisions of NAFTA.
Canada is still appealing this decision, of course, but we are talking here about defending the public interest and protecting the public. This decision means that foreign multinationals have legal authority over matters like this that are essential to the public and to national sovereignty.
There is another lawsuit that will show how bad the chapter 11 provisions on investment can be. Another suit stemmed from the prohibition of a toxic waste burial site. On February 19, the British Columbia Court of Appeal heard the appeal of a NAFTA panel decision awarding the American company Metalclad Corporation $16.7 million US in damages. The panel reached its decision last August after a Mexican municipality refused Metalclad a permit to operate a toxic waste burial site. Surprisingly enough, Canada will intervene in this case on Mexico’s behalf to argue that all interpretations of NAFTA must take a government’s ability to protect the public interest into account.
What I find surprising is that the government is practically copying chapter 11 in this free trade agreement. It is all the more likely and obvious, therefore, that governments will be sued by multinational companies. For example, if there is ever a major development in environmental policy in Peru, multinational mining companies from Canada that might not be used to any regulations could sue the Peruvian government in the same way.
There is also dispute settlement, as I was saying earlier. Many questions have arisen regarding the dispute resolution mechanism in this chapter. The mechanism provides that a company considering that a government has violated the investment provisions can take direct action against the government before an arbitration tribunal. The tribunals hearing the disputes are set up to hear a specific dispute. The deliberations of the arbitrators and their decisions are secret, unless both parties to the dispute decide otherwise.
While the free trade agreement with Peru has a number of improvements in terms of transparency, the Bloc Québécois feels that the resolution of disputes should be done multilaterally and in a centralized manner, rather than on a piecemeal basis between the various countries signing bilateral agreements.
In fact, the NAFTA provisions on investment are similar to those in the proposed free trade agreement with Peru. They give very broad powers to businesses and give us concern as to the ultimate sovereignty of governments and their ability to take measures to protect the health of people and the quality of the environment.
I might not have the time to conclude everything I had to say today, but I will now move to multilateralism.
The course of globalization, a phenomenon bearing both great hopes and great injustice, must be redirected. The disparity between rich and poor, the failure to respect rights and freedoms and the lack of regulations on the environment and labour give rise to despair more than anything else. Openness to trade and the establishment of international regulations to counter protectionism and protect investment are good things, which the Bloc supports. That does not mean that trade rules should have precedence over the common good and the ability of governments to redistribute wealth, to protect the environment and their culture and to offer their citizens basic public services such as health care and education.
Quebec is a trading nation. Our businesses, especially the high tech firms, could not survive in the domestic market. For the Bloc Québécois, for Quebec, international business is of almost capital importance, and we also support free trade agreements, but within a specific context. In this case, fundamental aspects of the free trade agreement with Peru prevent us from supporting it.
Madam Speaker, generally speaking, we oppose NAFTA style agreements that put big business interests before workers and the environment and that have increased inequality and decreased the quality of life for the majority of working people.
In the case of Canada-Peru, our concern is that a much larger and more developed economy will take advantage of a developing one and that large corporate interests will end up shaping the so-called free trade architecture to serve their needs and not the public interests of the two trading nations.
The most egregious aspects of the free trade agreement are similar to those found in the Canada-Colombia agreement that will be coming forward shortly.
I will begin first with labour rights. The Canada-Peru free trade agreement does not include tough labour standards. The labour provisions are in a side agreement outside of the main text and without any vigorous enforcement mechanism. Trade unions in Peru have expressed concern as Peruvian labour law is deficient in several areas.
The hon. member for earlier was talking about enhancing labour rights and that free trade agreements can do that. I would like to use as a reference some comments made by the Council on Hemispheric Affairs with regard to the U.S.-Peru free trade agreement. It stated:
|| Despite the FTA's condition that labor standards in Peru must not be lowered, a number of President García’s recent decrees have put the country’s Public Service workers in jeopardy. [Last year, in 2008], the Inter-sectional confederation of State Workers...organized a strike in protest of legislative decrees 1025, 1026, and 1057, which, according to the union, compromise the labor rights of public employees. The new laws are designed to “modernize” the public sector through “punitive evaluations” of current employees’ work performance, as well as through a reorganization of positions and salaries. The power to implement these changes is granted to the National Civil Service Authority, omitting any possibility of collective bargaining. This leaves labor organizations with little leverage to protect the jobs of their members.
|| While these concerns raised by organized labor in Peru are significant, much larger problems plague a majority of the country’s population. Because unionized sectors in fact make up only a small portion of the nation’s labor force, few have the ability to collectively protest when labor laws are changed. Worse still, even the limited labor standards presently on the books are largely unable to extend their reach to a majority of working Peruvians. According to a 2007 Human Rights Report, only 9 per cent of Peru's labor force is represented by unions, and more than 70 per cent of it works in the informal sector. Thus, regulations affecting minimum wage and working conditions do not protect most Peruvians, making concern over labor laws almost a moot point.
|| While the national minimum wage was raised to $176 per month in October of 2007, many workers in the informal sector earn merely between $20 and $30 per month, according to the U.S. Bureau of Democracy, Human Rights, and Labor. The Bureau also reported that the Peruvian government “often lacked the resources, capacity, or authority to enforce compliance with labor laws.” Hence, most Peruvian workers are not protected against the potentially damaging effects of the FTA, which could leave them even more vulnerable to the self-serving demands of foreign multinationals.
I will now talk briefly about the environment. By addressing the environment in the side agreement there is no effective enforcement mechanism to force Canada or Peru to respect environmental rights. The Canada-Peru agreement on the environment commits both countries to pursing environmental cooperation and to work to improve their environmental laws and policies but it can only ask both parties to enforce their domestic laws. If they do not, there is no consequence.
Let me speak briefly about investors. Copied from NAFTA's chapter 11 investor rights, the Canada-Peru free trade agreement provides powerful rights to private companies to sue governments over their public policy, enforceable through investor-state arbitration panels. We have seen through our NAFTA experience how this type of corporate rights regime undermines the legitimate role of government in protecting and improving the lives of its citizens and the environment.
The Canada-Peru agreement is a somewhat improved copy of the outdated George Bush style approach to trade, but it still puts big business before people. There is no effective enforcement of human rights and it pays lip service to environmental protection, without any real measures or dispute resolution mechanisms.
These types of NAFTA copycat agreements are meant for trade between highly industrialized and developed countries, but Peru is a developing nation. This trade deal will not help Peru grow sustainably and increase the standards of living for its citizens. Instead, it will open the country up to exploitation by multinational corporations. Canadian corporations are very active and large investors in the natural resources sector in Peru. This kind of neo-liberal trade regime is strongly opposed by civil society groups, trade unions, environmental groups and citizens from both Canada and Peru.
As the hon. member from the Bloc pointed out, Peru is not a major trading partner with Canada. Two-way merchandise trade between the two countries reached only $2.8 billion in 2008. Over $2 billion of that money was Canadian imports, of which over 50% was from Canadian gold companies operating in Peru, taking advantage in 2008 of rising gold prices.
The trade deal was negotiated in record time, which should be a cause of concern for everyone in the House, and was negotiated without any consultation with trade unions, environmental groups, civil society and citizens.
By far, the trade deal does not provide investors and labour with a level playing field. While under chapter 11 investors have the right to seek binding arbitration that they can pursue independently, a trade union in Peru does not get to pursue a case to arbitration. It can file a complaint that would lead to an investigation and report, but it is up to the government to seek remedies and damages. Our experience with the NAFTA template shows that government is unwilling to do this. Empirical evidence strongly suggests that the minister of the day will not pursue the matter.
Market access is a concern. Let me reference this by talking about, in some cases, the technical aspects of the Canada-Peru free trade agreement in relation to the U.S.-Peru free trade agreement.
Before I talk about market access, I will provide a little primer.
It eliminates the vast majority of tariffs immediately upon entry into force. For Canada, most tariffs that will not be eliminated immediately will be phased out over a three-year period, which includes things like certain types of gloves, boots, textiles and imitation leather; and over a seven-year period for boats and other floating structures.
For Peru, most tariffs that are not eliminated immediately will be gradually phased out over a 5- to 17-year period. This includes foods such as rice, and certain cuts of meat.
Canada did not make any commitments to reduce over-quota tariffs on supply-managed goods, and that is a concern. We have in Canada a supply management system, province to province and territory, that protects farmers, producers and consumers. Canada did not make any commitments to reduce over-quota tariffs on supply-managed goods such as dairy, poultry, meat and eggs. Eggs are a product that we always think of in Ontario. It did, however, commit to gradually eliminating the within-quota tariff on these products. Canada will also allow partial access to the domestic sugar market, and Peru is placing the same restriction on imports of Canadian sugar.
Canada pursued market access under the same terms as those granted to the U.S. Canada received the same tariff concessions as the U.S. for wheat, barley and pulse foods. Canada did not, however, receive the same concessions for pork and beef.
Regarding investment protection provisions, the agreement with Peru was negotiated using the 2003 template based on chapter 11 of NAFTA. In spite of the so-called improvement to chapter 11 from lessons learned, chapter 11 is built on the principle of a corporate charter of rights that overrides the democratic will of a nation and puts labour at a disadvantage.
Under the terms of the agreement, Canada and Peru commit that their labour laws respect the 1998 Declaration on Fundamental Principles and Rights at Work. It also includes a dispute settlement process and a financial penalty should a country fail to respect ILO principles or fail to enforce domestic labour laws. The penalty for non-compliance is determined by a review panel that has the power to require the offending country to pay up to $15 million annually into a co-operation fund. Our labour allies have made the case that, although it is a step in the right direction, those side agreements are just side agreements, with no effective and vigorous enforcement mechanisms, where the last word belongs to a bureaucrat.
In the U.S.-Peru deal, the labour and environmental sections are not side agreements but chapters in the main text, chapters 17 and 18 respectively. In the U.S. agreement, the first articles of chapter 17 explicitly restate the standards and declaration. The Canadian agreement mentions the side agreements in the preamble and then makes reference to them throughout the rest of the agreement.
NAFTA just focused on the enforcement of labour standards while each partner retained full regulatory control to establish or modify its labour and employment standards. The Canada-Peru agreement is more substantive and seeks to prohibit violating core labour standards when they have an impact on trade and investment. There is, however, no empirical evidence that this kind of enforcement mechanism actually works at all.
Let me speak briefly on the environment.
The application of domestic law trumps all other considerations. The agreement on the environment does not contain a dispute settlement mechanism or specific penalties set out for non-compliance. Basically the side agreement says that the parties agree to abide by the commitment they have agreed to.
Unlike the Canada-Peru free trade agreement, the U.S. incorporates the environment and the labour side agreements right into the accord. The U.S. accord provides for a consultation process, after which the parties have access to a dispute settlement mechanism.
In fact, even though the environmental provisions appear stronger in the Peru-U.S. free trade agreement, the Council on Hemispheric Affairs has reported that the Peru-U.S. free trade agreement has provided the president with an excuse to lower environmental and labour protection standards by anticipation, through a flurry of decrees aimed at facilitating foreign ownership and the acquisition of land. About 40% of these presidential decrees were deemed unconstitutional by the Peruvian congress constitutional commission.
We in the NDP have great difficulty with this agreement, and not just the chapter 11 portions of it that are much like the chapter 11 portions in our NAFTA agreement with the United States that are causing so much trouble these days. There are a whole host of problems.
I would like to end there and I look forward to any questions that hon. members might have.
Mr. Speaker, I am pleased to speak this afternoon to Bill .
A free trade agreement is important for economic development. It allows us to see how two countries can do business with one another.
Before becoming a federal member of Parliament, I was into economic development support and trade financing for businesses. When it comes to economic development, it is often said that diversifying one's economy is the key. Even we, as federal members of Parliament, say so. Economic diversification is important because it allows a region to vary the sectors on which it relies, which is important in times of economic slowdown like the one we are going through. Economic diversification might have helped to a certain extent to mitigate the crisis we are dealing with.
It is the same thing with market diversification. When 75% to 80% of an economy depends on only one market we call that putting all one's eggs in one basket. In my own province of New Brunswick, about 80% of exports go to the U.S. When the American market has difficulties, our own businesses also have difficulties and our jobs are threatened.
When I worked in economic development and business support, I often repeated one thing to my clients: it is great to diversify one's economy, but the company must also try to achieve market diversification. That will allow it to react when one sector is in trouble. When one country is in trouble, the company can turn to other countries to help it get by. Today we are faced with a global crisis, one that is not limited to just one country. However, the reality is that the diversification of our market through various countries at least gives us the opportunity to identify potential markets, or a potential client or region. If it does not have the tools to identify various markets, it is difficult for an entrepreneur or a company to save jobs.
However, we have done exactly what I was talking about: we put all our eggs in one basket. In many respects, that is exactly what we did here in Canada, because we thought that was the easy route. The Americans are our closest neighbours. However, when they are in trouble, we see what happens, in other words, the current crisis. But that was an easy way. They were closest. It often represented large volumes.
Some members have said here today that that agreement gives us access to a small amount, a small market. Perhaps that is true; however, when we look at the distinctiveness of many of the provinces and many regions, we see that some of our businesses need those small markets to make a difference.
Let us look at the agreement with Peru. There was a company in my riding for which I fought a long time to ensure its survival. I am referring to Atlantic Yarns, in Atholville. That factory needed, among other things, an agreement between Canada and Peru to facilitate the export of goods to that country, and also to manufacture other goods. Earlier, I was surprised to hear some members, primarily NDP members, say that this is not a good thing. I was surprised to hear that, because when I was working with the union members of that company, they were hoping that the government would sign a free trade agreement with Peru, and they would consistently ask when such an accord would be concluded. That was urgently needed to protect their jobs.
This is now April 20, 2009. It is too late, because the government erred, and we are not seeing any concrete measures to move forward quickly.
Unions and the NDP often get close together. However, I can understand why organized labour in my riding is beginning to distance itself from the NDP, because they are finding out that New Democrats are not always there to support union workers.
I said that the government erred regarding this issue. It all began in 2006. Taking action back then may not have completely saved one of our companies, but it might have helped to some degree. From the beginning of the process, in 2006, until now, April 20, 2009, over three years have gone before we were able to move forward on this issue.
While I did speak favourably of the agreement, one must understand that, at some point, a government cannot take all the time in the world to act. Sometimes, it must move forward a little more quickly and take the initiative. If the government would stop proroguing Parliament, perhaps we would move forward more quickly on this issue. Moreover, if the government had not called an election not that long ago—when elections were supposed to be held at fixed dates in this country—perhaps we would already have made progress on this issue.
I remember hearing people say, precisely on this issue, that they did not want an election or prorogation. Instead, they needed us to implement these measures for, among others, Atlantic Yarns, in Atholville, New Brunswick, to which I referred. These are realities that affect people in my riding and elsewhere, and these are things that they need.
That being said, we nevertheless need to examine other issues. When we do business with other countries, we have to protect certain things, such as our supply management system. With regard to the Canada-Peru Free Trade Agreement, I was relieved and truly reassured by the fact that everything to do with supply management—the security and future of supply management—will be protected. It is rather surprising, coming from the Conservative government, because it sometimes talks out of both sides of its mouth. At times we wonder if the Conservatives simply want to get rid of supply management. At least in this document it has not been forgotten.
We will have to continue reminding them of the importance of supply management for the survival of various industries: the dairy industry and the egg and poultry industry, both chicken and turkey. These are important files. The Conservative government has at least listened to us this time and understood the importance of supply management, as clearly indicated in this bill.
We must ensure, when concluding similar agreements, that there is respect for human rights. I would like to name a few of them, five to be precise: the right to freedom of association, the right to collective bargaining, the abolition of child labour, the abolition of forced or compulsory labour and the elimination of discrimination. These are important issues for Canadian society and citizens. Citizens want these rights to be respected. When doing business with other countries and when making free trade agreements with other countries, our citizens also want those countries to respect the values of the Canadian government and people.
Our Canadian values cannot be taken away from us. The essence of being a Canadian citizen can be taken away by few people. We live in a democracy and we worked hard to achieve that. When I say we, I am including those who came before us in this House and elsewhere, those who built this country. They fought to ensure that we could keep the freedom and democracy that we enjoy today.
Let us go back to what I mentioned earlier. If we want to move forward and prosper, we must not be content to follow. We must sometimes take the initiative. When I raised the issue of the agreement between Canada and Peru a few years ago in this House, I was motivated by our neighbours to the South, the Americans, who had previously started the process of negotiating a free trade agreement with Peru.
Now, let us look at the reality. Our population is only one tenth the population of the United States, and it is certain that our economy is much smaller in volume than the American economy. The Americans, for their part, decided that it was important to do business with that country, even though it is a small market.
When I look at this situation, I wonder why the members of this House say that it is such a small market and that it is not worth spending any time on it, although countries with markets much larger than ours and with a larger population consider it is in their interest to have a free trade agreement with Peru. As Canadians and as a government, we must not always be followers. It is sometimes important to act as leaders. To be leaders, we ought to have started the process earlier and accelerated it. Then, perhaps,we would not be among the last to act in signing such agreements.
As I have mentioned before, while the American industry was enjoying its benefits, our Canadian companies had to suffer from the inaction of the government. There were delays in moving forward with the implementation of the free trade agreement. It must be hoped that there will not be any more job losses such as the ones in my riding at Atlantic Yarns. We must look to the future. There is no choice. If the government had moved more quickly, there would have been a choice, perhaps, but today, we have no choice.
Seeing the benefits is a responsibility shared by all parliamentarians. Whatever the agreement, there can be comments more negative than others. I am repeating myself because this is important. We have been told by the workers from these plants in our area that we had to act quickly. This might therefore be some kind of lesson, or certainly a comment that some members, particularly those from the NDP, should take into account.
Textile was mentioned earlier. Things are taking a bit longer than they would like, but the fact is that things have to be put in place so that progress can be made. Going against this will mean that nothing will ever get done. Some steps can take a bit longer than others, but that is already better than doing nothing and never being able to help the workers in our communities.
Now is the time to think about market diversification so that, once out of the crisis, we can rebuild our economy and diversify our markets. This will allow us to become even stronger and do business pretty much anywhere around the world. It will allow our companies to operate around the world, which, in turn, will ensure that long-term rather than short-term jobs are created. The next time there is a crisis, we will be able to get through it, without people experiencing the dramatic situations they are currently experiencing in all Canadian industries.
We know that the Conservative government has failed to take action on several fronts with respect to plans to stimulate the economy and the forestry industry, which is a huge part of the economy where I come from. It has failed, in general, to take action. During the last federal election in September and October, the himself said that there was no crisis. Well, I am sorry, but the crisis in started a few months—maybe even a year—before that. The Conservative government probably figured that even if that region was in crisis, it would not touch the rest of the country. That is a shame, because if it had listened to us in the first place, it would have found out about the crisis in my part of the country and we might not be going through the crisis we are going through now.
Trying to explain that to a government that refuses to see or to listen is not necessarily easy. It is even harder when that same government buries its head in the sand, convincing itself that nothing is wrong and everything is great. As a member of Parliament and a citizen, when people all around me, including my neighbours, are losing their jobs, that is no fun for anyone. When a person loses a job, it is bad for the economy because less money will flow to our regions.
Inaction hurt us all. It is still hurting us, but there comes a time when we have to take action to ensure a better future for our people.
Some companies want such measures, and the people working for those companies want such measures, so as parliamentarians, maybe we should open our eyes and our ears, pull our heads out of the sand and ask ourselves if this will make things better for our fellow citizens and workers in the near future.
Personally, I think that it will. It might be a small step, a drop in the bucket. It is a small country, but that does not mean that some of our companies and manufacturers will not benefit.
So, let us ensure the well-being of our people. Let us ensure that they have work. Let us also listen to our workers and business leaders. We have to hear from them how important free trade agreements like this one are to them.
Perhaps then, within a short time, we will be able to create what we need: wealth. Our people will be able to go back to work and start spending again, which in turn will make the economy run even better so that more people can work. Efforts will have to be made not to repeat the errors of the past, by overlooking the time frame for going forward with such a plan or implementation plan or, worse yet, failing to listen to people, parliamentarians, our fellow citizens, our workers, labour as well as management of Canadian businesses. They might have been able to move things forward faster and prevent the crises faced today.
In closing, let me just reiterate what I said earlier. We are seeking to diversify our economies. That is what we are here for and what we are preaching to anyone who will listen. In our respective regions, we are telling people that the economy has to be diversified if we want risks to be eliminated. Should one falter, the others are there for support. Let us use the same logic.
I am not saying that we should necessarily take after all countries, of course. There are surely countries around the world which are having a much harder time with what we might think are good things. But in this instance, let us make a point of working toward being able to provide what is known as market diversification. Let us allow our companies to have access to additional markets and diversify their markets. That would make it much easier to go through tough times like these.
Mr. Speaker, I am happy to speak today to Bill .
A few weeks ago, I took part in a parliamentary mission to Peru as part of the activities of the Inter-Parliamentary Forum of the Americas. I had the opportunity to meet Peruvian parliamentarians, government representatives, representatives of the Canadian mining industry and people involved in international cooperation. I found that there were many potential affinities between the two countries and that it would be useful to develop ties with Peru.
But a red light went on in my head when the Peruvian parliamentarians invited us to take a close look at the contents of the agreement. It is a good thing to want to engage in trade and create wealth in both countries, but the Canadian government has decided to incorporate the equivalent of chapter 11 of NAFTA into this agreement. This chapter allows a company to sue a government if it is not satisfied with an application or a new law.
In this case, it is said that these regulatory or legislative amendments must be comparable to direct or indirect expropriation or a measure equivalent to expropriation.
We understand the Conservative government's rationale even better. I am somewhat surprised at the Liberals' position on this. The Conservative government wants to allow Canadian mining companies to operate in Peru with virtually no restrictions. They have financial power, and they are faced with a democratic country that wants to carve a place for itself, but does not have our abilities.
There is another argument. For example, if the Peruvian government were to decide to reorganize how the lands of the indigenous Quechua people are distributed and wanted to improve ownership for the indigenous people who have lived in Peru for centuries and were there even before the Spanish came, the agreement as written would allow a company to say that the government cannot do that without compensating it. That is a fact. I am not making anything up. NAFTA already has such a provision. The Canadian government itself, under the Liberals, was taken to court over its ban on MMT.
MMT is a gasoline additive, a known nerve toxin. The Canadian government had banned that additive. The American company went before the courts and won its case, and the Canadian government had to pay compensation to that company. That is the tail wagging the dog. Including a provision in an agreement like this one will simply ensure that republics like Peru stop putting forward protectionist measures because it could never compete with companies like we have in this country.
This visit was also an opportunity to realize how important it would be for such free trade agreements to follow consultations among parliamentarians from each country.
Had the parliamentarians in the House of Commons and their Peruvian counterparts had the chance to discuss before the drafting of the agreement between their two countries started, I think there would have been lessons to be learned and the agreement eventually signed would not have included such a provision.
It does not make much sense and does not reflect well on Canada's reputation. Canada signed an agreement with northern European countries. We supported that agreement which did not include a provision like chapter 11. These being developed countries, it was agreed that our countries would deal with one another as equals and that no increased powers would be given to companies. When signing bilateral agreements with developing countries, we take the liberty of creating a framework that is not in line with the will and development of each country.
During my visit to Peru I saw that that there was a will to change things. People also hoped that the agreement, which had been negotiated during economic good times, could survive the economic slowdown. Experts who made presentations warned us against the impacts of the agreement on agriculture in Peru and also in Quebec and Canada. The supply management system has been protected. It is not included in the agreement per se, which is a good thing, but the agriculture sector will continue to be treated as any other market sector. That is not good for the future of our agriculture and of the Peruvian agriculture.
I also had the opportunity to visit the beautiful village of Chincha Baja, which has suffered greatly from natural disasters, including an earthquake. CIDA has a house building project there. The village is on the fringe of Lima, the huge capital city with 8 million inhabitants, where we can see all levels of poverty and wealth. In the village's rural setting I could witness the importance of giving the agriculture sector in a country like Peru the opportunity to organize itself well enough to be able to access our market, but on a level playing field.
I was reminded of the situation in Africa. Some African countries produce cotton that is more expensive than the cotton they could import from the United States because of the subsidies the U.S.A. gives to its producers. Agricultural producers in Peru could find themselves in the same situation because we have a well structured agricultural sector and unions. Over the years, we have developed some tools that they do not necessarily have in Peru.
For this agreement to become acceptable, we would have to remove the clauses that are similar to NAFTA's chapter 11. Those clauses give excessive power to companies, which can sue governments if their operations are adversely affected. In this case, this is a serious matter, because we are talking about the mining sector. In Peru, Canadian companies are the main stakeholders in that sector. This agreement is going to give them more power, and that is dangerous. This comes at a time when the government itself refused to follow up on the round tables asking to adequately regulate the operations of extractive mining companies. We reached the point where a member of Parliament had to table a bill saying that the government's position was inadequate, and that we want something that reflects more closely what was proposed by the round tables. The Bloc Québécois also drafted a bill along those lines. Today, the Conservative government is going in the exact opposite direction. It is opening up the floodgates, so that mining companies can really do as they please.
Earlier, a Conservative member talked about the reputation of Canadian companies abroad. The vast majority of Canadian companies have a good reputation, but a number of them have really engaged in excessive things, and we should be able to discipline and control them. One way to do that would be to follow up on the recommendations made by the round tables. Another would be to at least ensure, in agreements such as the one before us, that we do not give them increased power, such as what the chapter similar to NAFTA's chapter 11 is going to give them.
Let us not forget that we are talking about a country that is a democracy and that is trying to move forward, but that is also experiencing difficult circumstances.The Sendero Luminoso organization, or Shining Path, is a terrorist group that is still active and that did things just last week. We must be very careful before going ahead with agreements that will exacerbate existing problems. We must provide more opportunities for these problems to subside and disappear, so that we have a much more rational and concrete reality that will achieve the desired results.
Why is the Bloc Québécois opposed to this agreement, not to mention the issue of investment protection?
Bilateral agreements often lead to agreements that put richer countries at an advantage over poorer countries. That is what is happening at this time. We would much rather see the development of multilateralism, in other words, a group of countries around the world that agree on conditions so that negotiations are more balanced. A group of developing countries could get together, thereby strengthening their bargaining power. There may be common interests shared by one developed country and one developing country that are not shared by other countries. Ultimately, this would allow for a much more balanced agreement.
A bilateral agreement like the one with Peru is not the most problematic; the one with Colombia is much more so. There are problems in Colombia related to a failure to recognize workers' rights and environmental rights. That is a part of daily life in Colombia, although it is not the case in Peru. But we hope to see that situation improve, rather than deteriorate.
The agreement signed by the Canadian government almost seems to suggest that the government is a corporation. It is looking solely at the economic advantages for Canadians in the short and medium term, but is not considering the impact it will have on the other country and is acting like an invader, which is not Canada's tradition. As members of the Bloc Québécois, we have a responsibility to hope these things will be corrected.
The problem is that a free trade agreement such as this cannot be changed. We must decide whether or not we will support it. It is an important issue. Naturally, we will debate it and show that we find it lacking. In the past, ancillary agreements have sometimes mitigated negative effects, but they do not have the same force. In this case, the agreement in its present form is unacceptable for the reasons I gave, especially on the issue of investments.
It is unfortunate because Peru is a country with abundant resources and a great deal of potential. It may not previously have developed the structures for distributing wealth such as we have in Quebec and Canada. During my stay, I was very surprised to see that it does not have any type of employment insurance or social welfare. The informal economy is very pervasive and there is no declaration of income or payment of taxes. There is barter, which does not contribute to collective wealth. Other practices should be developed in this regard.
If, in the future, we wish to sign agreements that foster globalization with a human face, they should contain provisions ensuring that both countries will agree, for example, that the developed country will help the developing country establish a better support system for the distribution of wealth and that it will provide the developing country with the expertise required to accumulate this wealth.
Peru's economic growth is presently in the order of 7% to 9%. This is a very good rate of growth that is closely tied to the mining sector. When the economy slows down, as it has in recent months, the situation becomes much more difficult. We are facing a very paradoxical situation. We are signing an agreement at a time of increased economic growth. Canadian firms and the Canadian market needed these resources, but now there is a slowdown and we find ourselves facing a new reality.
Peru, which depends heavily on exports, has signed numerous agreements of this kind. It has agreements with various countries. When I went there a few weeks ago, it was negotiating an agreement in principle with China, which wants to get natural resources by the same method. Obviously this aspect, the fact that the rules of the marketplace alone govern the situation, places an additional responsibility on the Canadian mining industry, which has a major presence there, to ensure that our corporations conduct themselves ethically and serve as a model.
This is the case for some corporations, but not for all corporations. For example, it is the case for junior mining companies that are most often involved in mining exploration. Often, the corporations do the mining themselves, but small companies that do not comply with the basic requirements are also tolerated by the system.
We would have liked to see Canada impose standards, in signing this kind of free trade agreement, that could then become a model. We hear that argument when we are being sold the free trade agreement, and we are told that with this kind of agreement we will have to fix the situation here at home. In fact, however, the provisions that govern investments and the right of corporations to bring suit will have the exact opposite effect. It will give corporations more power in relation to governments, which certainly need to be on firmer footing and be in more control.
We have seen this in Quebec. There is nothing new under the sun. Fifty or 60 years ago, as the members from Lac-Saint-Jean and the North Shore know, we frequently made very major concessions to attract businesses. It took years to try to fix that situation, and even today we can see that when companies are sold, these kinds of concessions are still being made.
They did it when Alcan was sold to Rio Tinto under secret agreements, under a Canadian law that lacked the teeth to impose conditions regarding employment. In any case, the Conservative government did not want to.
As regards Peru, a country I visited very briefly, I tell myself it should be given an opportunity to avoid this type of situation, rather than increase the risk of the same thing happening.
It was the same for trade with Costa Rica. In the present matter, even if trade between Quebec and Peru and Canada and Peru were possible and substantial, there are businesses on location there, and also some international cooperation. However, following my meetings with various international cooperation NGOs, I note that they are very careful to ensure a clear distinction between purely capitalist market-oriented companies—such as the mining sector—and aid to communities, so that no link between the two can take away their independence of action.
The Canadian government is no example. We saw it remove some countries in Africa from its aid list, in order to do business with Peru and Colombia.
Does that mean that Peru and Colombia do not need aid? No. We agree, and, in any case, the Canadian government could have done more in the area of international aid. What is unacceptable is taking aid away from Africa, which is desperate for it, in order to turn a policy of international cooperation into a policy of support for economic development rather than a true policy on international aid. The Canadian government is acting as if it managed a private company rather than a government. I do not think Canadians and Quebeckers expect this type of behaviour from their government.
I will conclude my remarks on this point. Peru is a country that deserves solid cooperation. This free trade agreement will not do it. And because the agreement as such cannot be amended during negotiations, the Bloc prefers to vote against the bill for a free trade agreement with Peru, even if it means calling on the government to redo its work to ensure that the rules of the game are clear and will benefit both countries involved—both Peru, a developing country, and Canada and Quebec.