moved that Bill , be read the second time and referred to a committee.
He said: Mr. Speaker, it is very timely that our colleagues on all sides of the House are giving consideration to this important legislation. With regard to the actual work that has been done, people on all sides need to be congratulated for the extensive amount of work that was done to conclude the negotiations. That has taken place. The process now is it comes to Parliament for ratification.
The timing of this is really fortuitous because we are engaged right now, whether we like it or not, in a synchronized global downturn of economies and the world is gripped by this. We are looking for ways in which trade and commerce can move and sending signals that the opportunities for workers, producers and manufacturers are there. It is an important that we are seen to be pursuing this, and we are.
We understand that if we really want to protect industries within our country, if we really want to protect our workers, then what we do is we open up the doors and the opportunities for them to sell their products and services and manufacture those things which are wanted in other parts of the world.
As Canadians, as a country, we are as prosperous as we are because we are free traders. We believe in the importance and the power of doing that. As a nation, we cannot in and of ourselves consume everything we can produce. We must have ways to sell and to market not only our products but our services if we are to continue to be prosperous.
The backdrop to our discussion today is the fact that there are clouds on the horizon related to the whole issue of protectionism. Some countries possibly are reflecting that the best thing they can do is build protectionist trade walls. We know this would be a negative thing to see happen. We know history is very clear. When we look at the conglomeration of nations and how nations encourage and move along in terms of prosperity, we only have to look back to the horrific economic ramifications of the Great Depression.
In 1930, when that global economic downturn took place, some economic specialists speculated that they were facing probably a one or two year recession at the time. The United States came out famously with the Smoot-Hawley legislation that started to build a protectionist barrier. Other countries responded in kind and pretty soon around the world we had situations where countries could not sell or export the very things that were needed and that would have led to prosperity. In fact, the recession was deepened, leading to the Great Depression.
That is a 60 second summary of what took place. Therefore, it really is a backdrop of what we are talking about today and it shows the importance of moving on with this type of legislation.
Our competitors are many and are friendly allies, whether it is the United States, or Australia, or the U.K. or the EU. We are friendly nations, but we compete and do have things that we can sell back and forth and encourage our mutual prosperity.
We should be aware that in the pursuit of free trade agreements our competitors have been very busy and active. The United States just over the last short period of time has concluded some 17 free trade agreements. It is in the process of pursuing another eight. Mexico, our other partner in NAFTA, has concluded 12 free trade agreements. If we go further south in the Americas, Chile has concluded 13 free trade agreements with other countries. In fact, its 13 agreements cover 43 separate countries.
Therefore, if we look at a situation where we want to deal with a country that has a free trade agreement with somebody else, its goods and services will get into those countries tariff and barrier free. That puts our manufacturers at a serious disadvantage. We need to look at reducing those obstacles and increasing and expanding our doors of opportunity.
At what is now referred to as the Washington conference last fall, the G20 leaders made a declaration that countries should not fall back into or delve into areas of protectionism. It is called a stand still on any protectionist activity. I would suggest that a stand still is necessary, and that was endorsed by trade ministers around the world at the following discussions that took place in Peru at the Asia Pacific economic meetings. From our perspective, we are going even further than that. We are not saying stand still, we are saying move ahead and overcome the inertia that is gripping the world in terms of trade right now.
Therefore, we have before us the European free trade area agreement. When we talk about what those letters stand for, some people might think this is a deal that engages all the European community. In fact, it does not. We are talking about four very sophisticated entities: Iceland, Norway, Switzerland and tied in with that, Liechtenstein. These are modern, sophisticated entities. They say that they want to engage with us and we want to engage with them to reduce and eliminate trade barriers.
The numbers coming in at the end of 2007 for two-way trade and investment with Norway were $4.7 billion. In the summer of 2008, Norway added to that investment another $3 billion just in the areas of oil, gas and agriculture.
There is a broader platform and picture that needs to be taken into account, because we are talking about engaging these four entities. However, for us, this is an entry and lever into the broader EU community for an eventual and much hoped for Canada-EU free trade agreement. This is something we are zeroing in on, something we have been discussing for some time. The Czech Republic has the presidency of the EU for the next six months. I was in Prague last month and I talked to officials there. I made it clear that we were ambitious on that score. We made that point with the European Commission as well. On another free trade area, being the EU area, we are very ambitious and are working toward the conclusion of discussions to get a formal framework in place to start that process.
In and of itself, the so-called EFTA agreement before us today is important for the prosperity of our citizens and the four entities named. However, there is the broader context which is important to keep in mind. Clearly, consultation between us and the provinces is very important when we look at these types of agreements. The consultation process involved in the EFTA agreement was extensive, and will continue to be. We want provinces to come forward with their areas of concern and sensitivity. That has been done in this process and those have been thoroughly fleshed out and addressed to the point where we could sign the agreement.
As an example, we had concerns from the shipbuilding industry in Canada. What happens when we take away the tariffs related to shipbuilding, we open ourselves up to global competition. We believe we can rise to that competition and meet any of the challenges the world has to offer, but we looked at those sensitivities, particularly those in Quebec and other provinces with shipbuilding industries. In a spirit of co-operation and understanding, as we discussed this with our four partners on the other side of the EFTA agreement, we agreed we to look at the removal of those tariff barriers, but do it over an extended period of time, 15 years in this case related to the shipbuilding industry. Therefore, the sensitivities we hear from around our country and from various industries are taken into account as we move along this road.
It also fits with our government's global commerce strategy, as we have talked about in our comprehensive action plan in which $60 million has been committed just to the area of doing what we can in terms of our global strategy to assist manufacturers, exporters, entrepreneurs and innovators to get not just the message but the products out there in a way that gets worldwide attention and shows that Canada has something to offer, which then increases our ability to manufacture, export and to be prosperous.
We are not stopping with this agreement. We have been very clear that we have agreements now concluded with Peru and Colombia. These will eventually come to the House. We had an earlier agreement with Jordan, and there are others in process. Our officials are in discussion with South Korea, Panama, the Dominican Republic, the CARICOM nations in the Caribbean, Singapore and the group of nations called the Central American Four, being Guatemala, Honduras, Nicaragua and El Salvador. We are actively engaged to ensure we do everything globally in our commerce strategy to keep the doors open and the opportunities very much alive for Canadians.
It is not strictly on a trade side. There are other areas that have to be pursued, and we do that in concert with the trade discussions. For instance, if we are going to invest in another country, our investors and business people have to be assured that there is a platform, a framework, that offers the benefits of rule of law, respect for contract law and other similar areas. We call these our foreign investment protection agreements. It is necessary to strike these with other countries. We will never guarantee that somebody's product will sell, but we can work with another country to ensure that the investment itself is subject to certain standardized rules and certain rules of contract law and investment law, banking law and credit, so at least our investors and business people know they have a level playing field and a platform when they go into those countries.
Along with that are science and technology agreements. We have put in place these very important initiatives with a number of countries, and I signed one not long ago with Brazil, where industry and the academic communities will know we have science and technology agreements, where both governments would pool an agreed upon amount of funds and then send out a message inviting the universities or scientific communities to bid for procurement of those funds to mutually pursue areas of science and technology.
Along with those, we look at a variety of other agreements that affect our economies. Air service agreements are very important when we are talking about giving choice to consumers, but also keeping costs down in terms of transporting and shipping product.
I might add we have in our budget considerable funds, into the billions of dollars, for our great gateways in our nation for shipping, such as the Asia-Pacific gateway. We have a gateway proposal and the funds to back it up for the Atlantic region.
We are doing everything we can, on a variety of levels, to build the platforms and construct the frameworks for Canadian entrepreneurs, innovators, manufacturers and exporters in virtually any area of endeavour who feel they have something worth selling. We will never guarantee they will be able to sell that, but we can guarantee we will smooth the way as evenly as possible within the context of the various trade agreements that are signed onto globally so their products can be established and Canada can continue to be prosperous.
I arrived in Switzerland for meetings on Friday and met with the vice-president. Literally moments before my arrival the upper house had in fact passed its portion of the agreement before us today. I am certainly not saying it was my arrival that moved that along. I would not even suggest that. However, it gave me great encouragement that the Switzerland legislators were dealing with it, that they saw this as positive and that they were moving it along. I assured them that we would be going through a similar process here and that, respectfully, with the input of colleagues here, we hoped for a successful conclusion of the discussions, the ratification of the agreement in our Parliament and the ongoing prosperity of Canadians, especially in this era of global concern.
Mr. Speaker, I thank the minister for introducing this legislation in the House this morning.
I just returned, as did the minister, from the world economic forum in Davos, Switzerland, which is notable because it was a year ago at the world economic forum in Davos that the then minister of international trade signed the EFTA agreement.
I was at the world economic forum last year and this year, and what a difference a year makes. A year ago, everyone was talking about their optimism about continued global economic growth. Former U.S. treasury secretary John Snow was chiding Larry Summers, another former U.S. secretary, for his lack of optimism and faith in the U.S. economy to recover and to continue to grow. John Thain last year was the new CEO of Merrill Lynch, and he was the centre of very positive attention at last year's world economic forum. This year, he recently was subpoenaed.
The fact is that things have changed dramatically in terms of the global economic situation, which is one of the reasons why we as parliamentarians have a responsibility, at the committee level, to ensure due diligence as we are evaluating these types of agreements in terms of making sense for Canada.
We believe very strongly that particularly during a time of economic downturn, we have to avoid protectionist sentiment, particularly if we look at the degree to which we as a country rely and depend upon, disproportionately, the U.S. economy. During a global economic downturn, which is largely caused by the downturn in the U.S., it makes the case for diversifying our trading relationship.
We understand that. The Liberal Party is a party that believes very strongly in freer trade relationships and building freer trade. We are very concerned about what we heard at the Davos conference over the weekend. Last year it was all optimism, growth, excitement and trade liberalization. This year we heard about pessimism, recession, depression from some people, fear and protectionism.
Some of the comments I heard from U.S. legislators concerned me. There was a session on Saturday called the fight against protectionism. At that session I heard U.S. congressman Brian Baird defend the recent protectionist measures in President Obama's new stimulus package that is being debated and amended by Congress as it moves forward. He was defending those protectionist measures as making sense for the U.S. and in fact being fair and legitimate.
That raises a real concern for us. Not only do we need to diversify our trading relationship but we also have to ensure that we are making every representation we possibly can to the trade people within the Obama administration, as well as bilaterally between Canadian parliamentarians and our counterparts in the U.S., both at the congressional and senatorial levels, to ensure that we are making the case as to why protectionist measures from the U.S. against other countries can target Canada and in fact create an unintentional consequence of taking a global downturn and making it far worse.
This was of course the case back in the 1930s with the Smoot-Hawley tariff act, which took a downturn and created a long-term depression because the Americans brought in protectionist measures and other countries retaliated. At a time when we have to encourage more trade between our countries in this global hypercompetitive economy, we actually put up barriers in the 1930s that created a major depression.
We understand the need to move forward, to diversify our trading relationships, to ensure that Canadians can compete and succeed globally and that we have access to markets where we can sell our goods produced here by Canadians. It is going to be critically important in the coming weeks to make effective representations to the Obama administration and to the U.S. Congress as to why Canadian goods and services have to be exempted from U.S. protectionist measures, and perhaps even more importantly and more broadly, why these protectionist measures have a pernicious effect on global trade and as such probably do not make sense in any case. However, if the Americans will not move on some of those measures, we have to seek Canadian exemptions.
I am starting off by talking about trade issues on a macro level and I am going to zero in on EFTA in a moment, but there is real concern that on some of these trade issues the government has not successfully diversified Canada's trade relationship.
Clearly one of the greatest opportunities for Canada in the 21st century lies in tapping into the tremendous market in China. China's economy will continue to grow this year by 6% to 7%. It represents one of Canada's most exciting and dynamic trade opportunities. It represents an economy that will grow even during this global downturn.
India's economy is growing by 6% to 7%. I note with interest that the was in India recently. He obviously recognizes the importance of that trade relationship.
However, on the China issue, the reason why the government has said it has not pursued deeper relations with China, and in fact has actually hurt the China relationship by taking every possible opportunity to poke its fingers in the eyes of the Chinese government, is based on trade. My point is that this has not stopped the government from pursuing a free trade relationship with Colombia. Over the weekend at the Davos conference, I spoke with Kenneth Roth, head of Human Rights Watch, who gave me substantive, important and irrefutable evidence as to continued human rights abuses in Colombia. We know this. It is well known.
The government has to be consistent. It cannot pick favourites in terms of trade policy. If we are not going to pursue deeper relations with China, and if we in fact are going to destroy what was a very strong relationship with China on the trade and economic engagement side, then we have to be consistent. Our relationship with China goes back to Pierre Trudeau and Richard Nixon, who agreed on only one thing, engaging China, and they were right back then.
We have to be consistent and the fact is that the government has not been consistent. It has pursued an ideologically rigid perspective relative to China that has made no sense economically or on the basis of human rights. I would argue that our capacity to influence China on human rights is less now than it was three years ago when the Martin and Chrétien governments built a strong bilateral relationship with China, one that not only could augment our capacity to influence Chinese human rights but could also build tremendous prosperity and opportunity on the energy side.
That relationship could have given Canada the opportunity to become a global leader in clean energy and be China's clean energy partner. Today, not only have we destroyed that trading relationship, but it is at the point where we have also reduced and diminished our capacity to engage China on human rights issues.
Those are some of the issues. Trade policy has to be consistent. We have to be consistent in defending our national interests, our national economic interests, and our capacity to influence the world in terms of the kinds of values that we believe in as Canadians. Protecting our capacity to play a meaningful role in shaping a more peaceful and stable world where human rights are respected is critically important. Creating markets for Canadian goods and services, thereby enabling Canadians to compete and succeed globally, has to be part of our mandate in terms of the government's policies to build wealth and to shape a world where human rights are respected.
However, the government cannot pick favourites along ideological lines and achieve anything, because consistency is critical. The government has been inconsistent in terms of its approach to China and its approach to Colombia, which is absolutely opposite in terms of the approach to human rights. That is going to be an important debate to have in the coming days and weeks.
As we enter a time of significant economic turmoil, and as we see Canadian jobs being lost, we are going to have to be absolutely focused on ensuring that our industrial, trade and foreign policies are consistent and tenable. When we lose influence in the world in a place such as China, it can often mean that we will lose jobs here in Canada.
When I talk to Canadian business people who are doing business in places such as China, they say that they are seeing jobs, opportunities and deals lost because of the government's approach to China. That is going to be an important trade policy for Canada in the coming months. It is one in which we intend to engage Canadians.
Multiculturalism is viewed as a social policy in Canada. In fact, multiculturalism can be an economic policy. If we can successfully harness the tremendous entrepreneurial capacity and leadership in our multicultural communities, we can build natural bridges to the fastest growing economies in the world, such as those of China and India.
We in the Liberal Party of Canada, the party of multiculturalism, the official opposition, intend to deepen our relationships with the Chinese Canadian and Indo Canadian business communities. We intend to work with them to restore the kinds of relationships that will protect and create Canadian jobs and opportunity and strengthen our capacity to address real human rights issues outside our borders.
At the same time, we will look at issues such as the free trade agreement in Colombia. We intend on holding the government to account and want it to be as assiduous in its focus on human rights in Colombia as it seems to have tried to be in China. We want consistency on that.
Times have changed. The tone in the World Economic Forum over the weekend could not have been more different from what it was last year.
If this bill gets to the committee stage, we intend, and I am certain the government agrees, to ensure that Canadian interests are protected and to evaluate this bill, legislation and trade agreement in terms of what makes sense for the Canadian economy today.
There are some real concerns that have been raised by the shipbuilding industry. We take those concerns very seriously. The fact is that the Norwegians have subsidized their shipping industry for 30 years. During that time, they used protectionist mechanisms to avoid foreign competition against their shipbuilding industry. Those subsidies went to upgrading the Norwegian shipyards, giving the Norwegian industry a tremendous advantage.
The Canadian industry has benefited from a tariff system that has at least levelled the playing field for a period. We have to make sure that Canadian shipbuilding industry is not put at risk or imperilled unnecessarily by this legislation, this trade agreement.
We need a comprehensive shipbuilding policy in this country, one that actually helps build a world-class shipbuilding industry that can compete and succeed. We can do a number of things in terms of our industrial strategy and policy to help make this happen. As the government deals with the EFTA, I think it also has to ensure that some of these industrial policy issues are addressed, and we as the official opposition will hold the government to account on that.
For instance, the Liberal government introduced a structured financing facility program. This program helps buyers to purchase ships built in Canada by buying down the interest rate of the loan used to finance the purchase. The cost of the program was about $50 million a year and made a huge difference in terms of the capacity of buyers to buy Canadian ships. We need to ensure that this policy is meeting the needs of the Canadian shipbuilding industry today and potentially go further.
We need to ensure that our government procurement policy in terms of defence, coast guard and what we buy as a government does invest in Canadian industries and protect and create Canadian jobs. I think that is extremely important in these areas when one is talking about procurement around strategic industries such as defence, as well as on the aerospace side.
We believe very strongly in free trade and in respecting the principles of our trade agreements. Our trading partners often believe in the principles of freer trade as well, but the difference between the way our trading partners deal with their trade agreements and the way we deal with our trade agreements is that with government procurement and other approaches our trading partners go right up to the line and do everything they can to protect their domestic industry, stopping short of violating the agreements. Canada sometimes behaves a little bit like a boy scout on the trade scene by failing to actually have a procurement policy for our own departments and agencies, such as coast guard and defence, that actually helps protect and create Canadian jobs and opportunities.
We have to be consistent in that we do not let protectionism disable Canadian companies from achieving contracts internationally and hurting the whole principle of national treatment upon which our trade agreements are based. At the same time, I think it is absolutely fair to say that Canadian governments, and this Canadian government, are not doing enough to create industrial benefits here in Canada. We have heard from the aerospace industry and the defence industry that other countries, other governments, do a lot more.
In fact, that is a validator. If they are shipbuilders, defence industry players or aerospace industry players, part of the credibility they need to sell their goods internationally is to validate their goods based on whether or not their own governments are buying them. We have to ensure that our procurement policy is organized in such a way that it does not go so far as to violate the principles of our trade agreements, the letter or the law of our trade agreements, but also ensures we are not being naive.
We can sit in the House of Commons and pontificate about Adam Smith, but that does not do much to protect jobs if somebody from another country with which we have a trade agreement is eating our lunch. We have to be pragmatic as well as principled. It is a fine line, but it takes judgment and it takes a focus on Canada being a trading nation that has its eye on the world. As a small export-driven nation we need to sign trade agreements, but at the same time we need to ensure that we do not expose our domestic companies to unfair foreign competition.
That is why, when this bill gets to committee, we in the Liberal Party, the official opposition, intend to take our responsibility seriously, and I would hope legislators in the Conservative Party will as well, and ensure that we review this trade agreement in terms of ensuring that it meets the litmus test of defending Canadian jobs and at the same time is in the Canadian national interest at this time.
There are some other areas aside from procurement and the structured financing facility. There is the capital cost allowance issue and ensuring that we have the kind of writeoff of the cost to purchase Canadian vessels which will ensure that we are competitive with other countries. We have heard, for instance, that in the U.S. there are some advantages in terms of capital cost allowance and the writeoff or depreciation of vessels built there. We have to ensure that we are competitive and take every possible measure.
Another area is a procurement policy that makes sense for the Canadian shipbuilding industry and for protecting and creating Canadian jobs in shipbuilding. Also, there is the structured financing facility to ensure that this is effective. Furthermore, there are the capital cost allowance and depreciation issues. Those are the kinds of things we need to see as part of an industrial strategy around shipbuilding and will make it easier for us to say that this agreement is in fact in the interests of Canada.
There are certainly opportunities for Canada in terms of the EFTA agreement. In fact, we have a lot in common with these trading partners. We have the capacity to deepen our trade relationships and at the same time diversify our trading relationships. As I mentioned earlier, it is important that we become less dependent on purely U.S. trade, whether it is with Iceland, Liechtenstein, Norway or Switzerland. These are countries with which we share a great deal in terms of our values and our economic and political systems. Clearly, there are opportunities for us.
We need to see some of the concerns addressed, particularly around shipbuilding and the offshore industry. I see the parliamentary secretary, who is a colleague of mine from Nova Scotia. He has worked in the offshore industry. He knows that jobs are created when the offshore industry progresses. We want to see those industries protected, whether they are in Halifax or other parts of Canada.
There are opportunities on the positive side in terms of this trade agreement. Clearly, the port of Halifax, as an example, is facing huge challenges now. Deepening our trading relationship with European countries can help create opportunities as we see more trade going through the port of Halifax and other Atlantic Canadian ports.
The Atlantic gateway is a project in which we believe in investing in the infrastructure and in the capacity for us to ship our goods and to receive goods from around the world. It is important for Atlantic Canada, for western Canada, for all the ports in Canada and also for intermodal ports. There are all kinds of opportunities. We need to see the concerns addressed.
Mr. Speaker, it is my pleasure today to address the House during this debate on Bill . For those who have not necessarily had the pleasure of learning about this bill in detail, I just want to say that it calls for the implementation of the Free Trade Agreement between Canada and the States of the European Free Trade Association. The association, EFTA, is made up of four European countries—Switzerland, Norway, Iceland and Liechtenstein—with a little over 12 million inhabitants, all told.
I should point out that the European Free Trade Association once included nine countries, but has lost members over the years. To compensate for those losses, the four members of the European Free Trade Association have undertaken to sign a series of free trade agreements, including this one with Canada. Earlier, the minister mentioned that he has been trying to speed up negotiations on all kinds of bilateral free trade agreements. Typically, multilateral agreements of the type with which we are all familiar are preferred. The WTO oversees all trade agreements.
Now, some 200 countries around the world are trying to negotiate bilateral free trade agreements at a more frenzied pace than ever. It also looks like the government is in a hurry to finalize the free trade agreement with Colombia. As we all know, committee debates have focused on human, workers', union and environmental rights. That is why the opposition will not accept this agreement. We also know that the new President of the United States does not support the free trade agreement with Colombia. I am not sure how the minister and the new government want to approach this debate. Many free trade agreements are currently being negotiated, but we still have to be careful about what we agree to in the end.
This is not an agreement that was hastily put together. On the contrary; negotiations began in May 1998, over 10 years ago. We know that in the fall of 2000, governments agreed on a first draft. Because it opened up the ship markets too quickly, it threatened our shipyards. Only the economic sector feels directly threatened by this agreement. As a result of new negotiations, implementation will be staggered over several years, up to 15 depending on the type of vessel. Although it is not thrilled, the association representing shipbuilders is resigned to accepting the agreement but is asking for an aggressive shipyard modernization program before the elimination of tariffs.
I asked the minister that question earlier, but he did not answer. I wanted to know what exactly he intends to do to make up for all the years and money invested in the shipbuilding industry in Norway, which was heavily subsidized in order to develop its competitiveness and expertise. The minister simply stated that he would ensure that it would not reoccur and that there would be no more subsidies. That is not what I wanted to know. I wanted to know what Canada will do to ensure that the shipbuilding industry can also benefit from certain programs that will result, by the time tariffs are removed, in a competitive situation. We were not given an answer.
The free trade agreement between Canada and EFTA is a traditional free trade agreement. Once implemented, it will liberalize trade of all non-agricultural goods.
It concerns only non-agricultural goods, not services, agriculture or investment. Of course, it provides for a dispute resolution mechanism that the parties, and only the parties, can use.
Another provision of this agreement has to do with anticipated economic impacts. In committee, opposition members have often asked the government to conduct an economic impact study in order to make projections and determine what will happen and what the impact will be on various sectors, such as agriculture, manufacturing and other specific areas. It has never carried out a single study, even though it has had 10 years to do so. Even the website for some countries in the European Free Trade Association is not up to date, because information is missing. How could the government have produced an economic impact study on this agreement? It must be condemned. It is always the same thing: the government never provides us with an economic impact study. We had to make do with drawing conclusions from a few general observations.
Needless to say, the goal of the Bloc Québécois is to work for the interests of Quebec, and we are going to keep on doing that as long as we are here. Logically, Quebec stands to benefit the most from this agreement. Canada's main exports to these three countries all come from Quebec. It follows that lifting the trade barrier should also benefit Quebec.
In addition, in high-tech sectors, Quebec's economy is strong in areas where these countries are also active, which should promote investment in Quebec. Take the example of Switzerland, which has a very vigorous pharmaceutical industry producing brand-name drugs. Prescription drugs account for 40% of Canadian exports to Switzerland and 50% of imports. To break into the American market, Swiss pharmaceutical companies might think about manufacturing drugs here, and the mecca of brand-name drugs, with its pool of skilled researchers and advantageous tax rules, is Quebec. A free trade agreement to facilitate trade between a corporation and its subsidiaries would likely bring new investments in the pharmaceutical industry in Quebec.
Nickel accounts for over 80% of our exports to Norway. The biggest mine in Canada and third largest in the world is in Quebec's Ungava region. It is owned by the Swiss company Xstrata. Our leading export to Iceland is aluminum. There again, production is concentrated in Quebec. Basically, subject to the implementation of an aggressive policy to support and modernize shipyards, Quebec should benefit from this agreement.
When we presented our supplementary opinion to the report from the Standing Committee on International Trade, there were two issues that directly affected us: protection of supply management and shipbuilding. Now I would like to talk about protecting supply management.
Obviously, Bill also touches on agriculture. It allows for the implementation of bilateral agricultural agreements, which would be added to the free trade agreement with the EFTA. These agreements are not far-reaching and will not have a significant impact on Quebec agriculture. Of the three agricultural agreements, the agreement with Switzerland in particular caught our attention because it abolished the 7% tariff on dairy products imported from Switzerland. Currently, 5% of the Canadian dairy product market is open to foreign competition. The 7% tariff was levied only on the imports that were part of this unprotected segment of the market to which our producers do not really have access.
Since the elimination of the within-quota tariff provided for in the agricultural agreement with Switzerland will affect only the market segment that is already covered by imports, the impact on our dairy producers will be negligible. However, this will make it all the more important to vigorously defend supply management at the WTO. A quota increase coupled with the elimination of the within-quota tariff would expose our dairy farmers to increased competition from countries that, unlike Canada, subsidize their dairy production.
The House of Commons unanimously adopted the Bloc Québécois motion calling on the government to reject any reduction in the over-quota tariff and any quota increase. Given the elimination of the 7% tariff in the current agreement, it is imperative that the government maintain a firm position at the WTO: supply management is absolutely not negotiable. In fact, in our opinion, a weakening of supply management would justify the renegotiation of the agricultural agreement with Switzerland.
I should also point out that modified milk proteins—which Switzerland produces—are transformed to such an extent that the courts have ruled that they are not agricultural products. That means that they are not covered by agricultural agreements. That being said, one of the appendixes in the bill to implement the agreement has been completely excluded. Milk proteins are excluded from the agreement, and the tariff quotas and over-quota tariffs remain unchanged. In other words, products that are under supply management are still protected. In fact, it is mainly the west that will benefit from the agricultural agreements because they provide for freer trade in certain grains, but the impact will not be significant because these countries are not heavily populated. The message is clear: supply management must be vigorously defended at the WTO.
The second aspect that directly affects us is shipyards. We have some concerns about the future of our shipyards. At present, imported vessels are subject to a 25% tariff. Under the agreement, these tariffs will start gradually decreasing in three years and will be completely eliminated in 15 years. However, our shipyards are far less modern and in much worse condition than Norwegian shipyards. Norway has made massive investments in modernizing its shipyards, whereas the federal government has completed abandoned ours. If our borders were opened wide tomorrow morning, our shipyards would likely disappear. But for economic, strategic and environmental reasons, we cannot let our shipyards disappear.
Imagine the risks to Quebec if no shipyard could repair vessels that ran aground or broke down in the St. Lawrence, the world's foremost waterway. For years, the Bloc Québécois has been calling for a real marine policy, and for years the government has been dragging its feet. Now that the agreement has been signed, time is of the essence. A policy to support our shipyards is urgently needed.
Moreover, this is the only recommendation in the report of the Standing Committee on International Trade on the free trade agreement between Canada and the European Free Trade Association. The committee agreed to insert the recommendation proposed by the Bloc Québécois international trade critic—incidentally, that was me, at the time—and of course the deputy critic, who is sitting behind me.
It reads as follows, “The Canadian government must without delay implement an aggressive maritime policy to support the industry, while ensuring that any such strategy is in conformity with Canada's commitments at the WTO”. That is the only recommendation made in the report, and the government must fully implement it.
The Conservative policy of leaving companies to fend for themselves could be disastrous for shipyards. We expect the government to give up its bad policy, and we call on it to table, as quickly as possible, a real policy to support and develop the shipbuilding industry.
When they appeared before the committee, shipyard representatives stated that two measures should be given priority: allowing accumulated depreciation to be transferred to buyers of Canadian ships and putting in place a structured financing mechanism. These simple measures—at the very least—could be adopted immediately. However, there are other measures that should be added.
In conclusion, I would like to say that it is, indeed, a free trade agreement. Bilateral free trade agreements are proliferating. We continue to be convinced that multilateral agreements should be signed as often as possible.
The agreement we are discussing involves four small countries. It is a very positive agreement but we must realize that it is also very limited. Together, these four countries represent approximately 12 million people and about 1% of Canada's exports. The real opportunity lies with the European Union. With a population of 495 million people, generating 31% of global GDP, the European Union is the global economic powerhouse. Canada is far too dependent on the United States, which has accounts for more than 85% of our exports.
The American economic slowdown, coupled with the surge in value of Canada's petrodollar against the U.S. dollar, reminds us that this dependence undermines our economy. Quebec has lost more than 150,000 manufacturing jobs in the past five years, including more than 80,000 since the Conservatives came to power, with their laissez-faire doctrine. To diversify as we must do, we should not look to China or India, countries from which we import, respectively, eight and six times more than we export to them. The European Union is an essential trading partner if we want to diversify our markets and reduce our dependence on the United States.
What is more, the fact that Canada has not signed a free trade agreement with the European Union considerably diminishes how competitive our companies are on the European market. With the recent rise in value of the petrodollar, European companies have tended to skip over Canada and open subsidiaries directly in the United States. Canada's share of direct European investments in North America went from 3% in 1992 to 1% in 2004. Add to that the fact that the European Union and Mexico have had a free trade agreement since 2000. Consequently, if a Canadian company is doing business in Mexico, it is in that company's best interest to relocate more of its production to Mexico because it can access both the European and U.S. markets, which it cannot do if it keeps its production in Quebec. Bombardier is a case in point.
Overall, this free trade agreement with the European Free Trade Association is good for Quebec. But as I have said and will keep on saying, it is better to promote multilateral agreements, where the rules apply to everyone. Important considerations such as human rights, union rights and environmental rights are sometimes left out of bilateral agreements. It is not true in this case, but it has happened in other agreements. I am more and more convinced that multilateral agreements should include social and environmental clauses. That is the direction we need to take.
Mr. Speaker, I am pleased to rise on Bill , which is the Canada-EFTA trade agreement but could also be entitled the “bamboozled by Liechtenstein act”, because here again we have a Conservative government that, as we saw with the softwood sellout and as we have seen in every single negotiation that it has undertaken, basically sat down at the table and was outplayed, outnegotiated and bamboozled, in this case by the Principality of Liechtenstein and the other members of EFTA.
What EFTA wanted access to our shipbuilding industry. As members know, Iceland and particularly Norway have an extremely strong industrial sector in shipbuilding. The Norwegian government has invested and protected its shipbuilding industry for many years and has built up an extremely strong shipbuilding industry.
They sat down at the table, and the Conservative government, which was outplayed and outnegotiated, basically handed over our shipbuilding industry without attaining much more than the ideological platitudes we heard from the just a few short minutes ago. The government simply handed it over in the same way that it did in the softwood sellout, when it handed over a softwood industry without being the tough negotiator that I think the vast majority of Canadians would have wanted it to be.
Essentially what we have seen from the government is a steady drumbeat of wanting to sign trade agreements at whatever cost. In this end of the House the NDP stretches right across the aisle, because after the last election and the increase in NDP MPs we now occupy the whole end of this House. We decided to look at what is actually in the agreement. Before we decided to support it or not, we wanted to see what the actual impact of EFTA would be.
I am going to read into the record what those who best know the shipbuilding industry in Canada have had to say about this agreement. I am going to start with Mr. Andrew McArthur, who, as a member of the board of directors of the Shipbuilding Association of Canada, appeared before the Standing Committee on International Trade on this agreement and on this bill. Here is what he said about the negotiations around this agreement:
From day one, we said the Norwegian industry has been totally supported by its government to build up a tremendous infrastructure. It is a good industry with a lot of government help, and now they're looking to see what else they can do.
So our position from day one has been that shipbuilding should be carved out from the trade agreement.
We know that did not happen.
We butted our heads against a brick wall for quite a number of years on that and we were told there is no carve-out.
We were bamboozled by Liechtenstein.
When asked how the Americans can carve out on the Jones act from NAFTA and other free trade agreements, as I believe the Americans are doing today or have done in carving out shipbuilding with Korea, and why Canada can not do the same, he continues:
...we feel we were sold down the river on NAFTA. We cannot build for American shipowners, but American shipbuilders can build for Canadian shipowners and import the ships into Canada duty-free. There has never been such a one-sided agreement, to my knowledge. It's totally ludicrous that they can build for Canadian owners, come in duty-free, and we cannot build for American owners. On the repair side, it is even worse. We used to be able to do some repairs for American Jones Act ships. Today it's very, very difficult. There are a lot of restrictions, and that work has basically disappeared.
Those were comments from Andrew McArthur of the Shipbuilding Association of Canada.
What did the marine workers say about this bill? We had Mr. Karl Risser, representing eastern marine workers, who said the following:
Other governments, Norway for one, have supported their shipbuilding industry for years and have built them into powers, while Canada has not. We have had little protection, and what little protection we have left is a 25% tariff on imported vessels into Canada, which is being washed away by government daily through agreements such as this and the exemptions being negotiated with companies.
I encourage all members of the House to read the testimony before the Standing Committee of International Trade. We cannot just have Conservatives simply approving government actions by rote when it means the elimination of Canadian jobs, many of which are actually in the ridings held by Conservative members. They will not read the agreement. They will not look at the impacts. There has been no economic impact analysis of this agreement. How any Conservative member could sell out their own constituents by voting for this agreement is beyond me.
Karl Risser continues:
With all these statements, you'd think the government's action would be to put into place national strategies to ensure a viable shipbuilding industry, but we have seen no sign of that. What we have seen is the EFTA agreement, which we feel will further devastate the shipbuilding industry.
But to get back to this agreement, the Norwegians have built their industry into a very powerful industry.
So this EFTA deal is a bad deal for Canada. I'd love to see someone answer the question, what is Canada going to get out of this agreement? I know we're going to destroy our shipbuilding industry, a multi-billion-dollar industry in Canada. It's on its last legs now and needs a real boost. We have that opportunity in front of us, but whether we take it or not is the question.
I am going to continue on this because I think it is important that these voices, people who understand the shipbuilding industry, who are raising these concerns, are heard in the House of Commons and the members vote accordingly. We have heard the Liberals and Bloc say they are going to vote for this agreement. Beyond my comprehension, the Bloc is voting despite the fact that Davie Shipyard has completely shut down. Over 1,000 workers out of work, and yet we are playing with fire in trying to push through an agreement that witness after witness said very clearly will devastate the industry.
Les Holloway, representing marine workers in eastern Canada and referring to the Standing Committee of International Trade, said, “How in good judgment and conscience can your committee recommend anything other than that this agreement should not go forward?”
The president of the Shipyard General Workers' Federation of British Columbia, Mr. George MacPherson, said:
The Canadian shipbuilding industry is already operating at about one-third of its capacity. Canadian demand for ships over the next 15 years is estimated to be worth $9 billion in Canadian jobs. Under the FTAs with Norway, Iceland, and now planned with Korea and then Japan, these Canadian shipbuilding jobs are in serious jeopardy. In these terms, this government's plan is sheer folly and an outrage.
How could any B.C. MP, especially after the softwood sell-out, vote to eliminate shipbuilding jobs in British Columbia? How could any Nova Scotian or Atlantic Canadian MP vote to eliminate jobs in Atlantic Canada? How could any Bloc Québécois MP vote to eliminate jobs in Quebec?
In The Chronicle-Herald, Mary Keith, the spokesperson for shipbuilding in New Brunswick, said that under the EFTA agreement: “The government of Canada is continuing its 12-year history of sacrificing Canadian shipbuilding and ship operators in the establishment of free trade agreements with other nations”.
Here we have case after case after case of those who know shipbuilding best saying that this is going to be disastrous. This is not some sort of ideological debate we are having because some of us in this House think that protectionism is bad and free trade is great so let us just sign an agreement and not worry about the consequences for Canadian jobs.
The Conservative government has finally admitted that we are in economic crisis, yet it adds this fuel to the fire and says we are going to slap our own shipbuilding industry. It is a strategic industry that every other government in the world, including Norwegian, Asian and Europeans governments, is actually supporting, yet three of the four parties in this House seemed prepared to sell it out and throw those jobs away.
We have by far the longest coastline in the world and to eliminate the last vestiges of our shipbuilding industry makes absolutely no sense. That is why the NDP caucus is saying no. It simply does not make sense to bring this agreement in when we have not provided the necessary supports to our shipbuilding industry. It makes absolutely no sense at all.
My colleague from will back me up on this. He will agree that our shipbuilding industry has to be of fundamental importance. We need a strategic plan in place. We should not be signing trade agreements that simply give our shipbuilding industry away. I know my colleague agrees with me and I appreciate that. That is why we are saying it makes no sense to put this forward. But there is more.
We also had testimony from the National Farmers Union before the Standing Committee on International Trade about the possible effect on supply management. Lip service has been paid to supply management. The Conservative government has said it is in favour of fighting hard for supply management. The infamous David Emerson, the former international trade minister, always said the government supports supply management and it will never walk away from the table. The Conservatives have said they support supply management. The National Farmers Union said in testimony that this essentially undermines our supply managed sector. That does not make a whole lot of sense either.
The arguments we have heard in favour seem to be ideological, so let us get back to the basic fundamental tenets of the economic policy, or the lack thereof, of the Conservative government.
Since the Conservatives came to power we have seen them progressively sell off our country in a whole range of areas. First there was the softwood lumber sellout. We had won that case in the U.S. Court of International Trade. David Emerson, with the support of the Conservatives and Liberals, supported the softwood sellout that literally blew up our softwood industry across the country. Tens of thousands of jobs were lost within days of implementation because of the self-imposed punitive tariffs. We gave away $1 billion that the American court said the American government had to pay back.
The Conservative government tried to say it was not a conclusive judgment, but it was. The Conservatives simply were not telling the truth by pretending that the court judgment was meaningless. That court judgment compelled the U.S. government to pay back every single cent it owed Canada and that court judgment also ensured tariff-free access in to the U.S. of our softwood products.
Politically, the Conservatives were in too deep. David Emerson decided to push the agreement through just the same, and the result was catastrophic. Many softwood communities in British Columbia, Alberta, Saskatchewan, Manitoba, northern Ontario, and northern Quebec have paid the price for what was sheer folly.
Warnings are now coming from many workers in the shipbuilding industry and many of the companies that are involved in shipbuilding saying, as I quoted George MacPherson, “--this government's plan is sheer folly and an outrage”.
We should have learned from the past mistakes. The softwood sellout was unparalleled folly. It was a sheer outrage and we should have learned from that. We cannot play with the jobs of Canadians simply on the basis of ideological direction. Essentially, the government has a strong ideological bent and come hell or high water, it will put that ideology into place no matter how many jobs are lost.
It is important to note that we are talking about the principles of maintaining Canadian jobs. It is important to look at the economic consequences of what the Conservative government has done, which has enacted exactly what the Liberals put into place over the last 20 years. It is important to ask the question: What has happened to average family incomes in Canada over the last 20 years?
We have had these free trade agreements when we have decided that we are opposed to protecting Canadian jobs, that is unless it involves the job of a corporate CEO or a banker and then of course the protectionist Conservative government is willing to weigh in with lots of money.
It will shovel money off the back of a truck to protect a corporate CEO's job and a corporate CEO's bonus, or a banker. It is willing to be fully protectionist. It is the most protectionist government in Canadian history. It is willing to do that for the big guys. It is willing to do that for extremely wealthy corporate CEOs. It is willing to be fully protectionist, but not willing to be protectionist for Canadian jobs even though every other government around the world puts into place protections around their strategic industries like shipbuilding. Every other government in the world puts into place protections over fundamental jobs. Every other government does that, but the current ideological government only wants to protect corporate CEOs and bankers. So what has the result been over the last 20 years?
For most Canadian families their real income has gone down. Canadians know that their real income has declined and it has been particularly striking for the lowest income categories. The Conservatives seem a little bit perplexed and I think it is important that they had a little dose of realism in the House of Commons, for most Canadian families over the last 20 years, real income has gone down. For those families who are in the bottom 20% in the Canadian population, their real incomes declined by over 10%. That is a lot.
It means on average that families have lost about six weeks of real income. For a month and a half of the year, compared to 20% years ago, they are working for free. They are working longer and longer hours, harder and harder, but under the Conservatives and the Liberals over the past over 20 years, their economic geniuses, has meant that for most of those poor Canadian families they have lost a month and a half of income.
What about the people in the middle class? They have lost about two weeks of income. It is like they are working 52 weeks but only getting paid for 50 weeks. For that middle income category, they lost about a week of real income a year over the past 20 years.
We put in place NAFTA. We put in place these free trade agreements and a whole bunch of economic measures such as a lot of corporate tax cuts and a whole range of economic measures designed to help those corporate CEOs and bankers because Conservatives want to make sure they get as much protection as possible from the federal government.
However, for most of those income categories the real income has gone down, not up. Now the wealthiest 20%, which is what the economic policies of the Conservatives and Liberals are oriented toward, such as EFTA, essentially now take half of all real income in Canada. This has not been seen since the 1930s. We went through the Great Depression. We had that type of income inequality. The foundation of the CCF, the NDP's precursor party, fighting in the House of Commons and fighting across the country, made a real difference. We had a much more balanced economy and much more balanced economic approaches. That worked for us very well until about 20 years ago when the Conservatives and Liberals moved to the right which has essentially meant for most Canadian families that their real income has gone down.
This is important to note because it shows that the strong ideological drive that we see from the right, that we see from Conservatives and Liberal parties, has not worked on the bottom line. It has not worked for communities. It has not worked for family income. It means that most people are worse off now than they were under the so-called protectionist agenda.
That is why other governments around the world are actually acting to protect jobs and their economies. Those examples are what we in the NDP side of the House believe that the government needs to look at, to be forthright and protect Canadians. The EFTA agreement does exactly the opposite. I have cited quotation after quotation of those in the shipbuilding industry who say that this will be a devastating agreement. This will eliminate jobs. How could any member of Parliament, representing their riding, representing their region, representing Canada, vote for an agreement that we know will devastate the shipbuilding industry? That is why we are voting no.
Mr. Speaker, it is a pleasure to rise in debate today on the European free trade agreement between Canada and the countries of Liechtenstein, Switzerland, Norway and Iceland.
I listened with great interest and respect to the opposition parties and certainly to the interventions by the Liberals and by Bloc.
The European Free Trade Association countries are significant economic partners for Canada, with Canadian merchandise exports totally $5.2 billion in 2007 and incoming investment to Canada totalling $18.2 billion in 2007.
Some members of the House would like to ignore that. Some in the House would like to twist the facts with their own rhetoric into something that does not resemble this free trade agreement at all. I caution these individuals that there is nothing secret. Anyone watching this debate throughout the country can go on line. Copies of the agreement are available. There will be continued debate. It will go back to committee.
This is a straightforward free trade agreement between Canada and our European countries, the first free trade agreement between Canada and any European country.
Those numbers on imports and exports, those dollars, will increase not decrease in the years ahead. To go further, under our Conservative government's free trade agenda, we will expand free trade. We will move forward, and never mind the critics.
Intelligent debate is fine. Reasonable, rational debate is positive, but we need to have that and we need to have a willingness to listen. We have to be able to sit down at the table and move forward in a positive way. We cannot get stuck in the rhetoric of the past, as some of the parties in the House are prone to do.
I congratulate the minister and the departmental officials on the important achievement of moving forward to sign this agreement and bringing it finally to the House of Commons. It will strengthen Canada's position in the global economy, it will strengthen jobs and opportunities in Canada and it will strengthen trade.
We are not an island. When I listen to some of the parties in this place talk about protectionism and building barriers, first, they would spend every dollar in our country. Second, when the dollars and the jobs were gone, then they would look for someone else to blame. Some of the economic rationale and the discussion is so far overboard and the hyperbole is so outrageous that it really takes away from the debate in this place.
As the indicated, current global economic uncertainty highlights the importance and the urgency of expanding international trade, investment relationships and improving market access for Canadian products. Canada is and always has been a trading nation.
The recent throne speech confirmed that trade and investment was a priority during these challenging economic times. Free trade allows Canadian business to compete in international markets.
As the member of Parliament for , a rural riding in Nova Scotia, I understand how heavily our producers and manufacturers rely on secure, predictable access to the global marketplace.
Consider also that half of what we manufacture in Canada is exported. It is absolutely essential to guarantee that this 50% of our manufactured items have a market in the world's economy. Consider that one-fifth of all Canadian jobs are in part linked to international trade.
In my riding of , I would say that it is even larger. I would say that 75% of the jobs in this riding in rural Nova Scotia are linked to international trade.
Our forestry sector is all value added. There is the AbitibiBowater paper mill. Louisiana-Pacific has a hardboard plant. It is all export oriented. Sure, some products are sold locally, but the majority of them are exported.
As for our fishery, the majority of it is exported. On our agriculture products, many are sold locally, but there are a lot of exports. All of the manufacturing, whether it is by Composite Atlantic or a furniture manufacturing company, is for export.
We are a coastal riding. We grew up in and go back to the days of the schooner in international trade.
Without trade, there would be no jobs in many parts of Canada.
Be it with this new agreement, our negotiations with Jordan, or, in accordance with our government's goal of renewed engagement in the Americas, the signing of free trade agreements with Peru and Colombia, the Conservative government has demonstrated its commitment to giving our producers and exporters the access they need to succeed around the world.
If we level the playing field--and it is our job as government to level the playing field--our manufacturers and producers will compete anywhere in the world and succeed every single time. If we put up artificial barriers, we will always be stuck where we are. We will never be able to compete internationally.
The Canada-EFTA free trade agreement places an emphasis on tariff elimination, specifically, the elimination of duties on all non-agricultural goods and the elimination of or reduction in tariffs on selected agricultural exports.
On the agriculture side, Canada's producers and exporters will benefit from the elimination or the reduction of tariffs on key agricultural exports, from durum wheat to canola oil, pet food, blueberries, and a wide range of processed foods.
On the non-agriculture side, the free trade agreement will eliminate all tariffs on Canadian exports to the EFTA countries, on everything from aluminum to cosmetics, clothing, prefabricated buildings, and coldwater shrimp.
Canadian manufacturers will also benefit from lower cost manufacturing inputs for their own products.
Canadian companies operating in EFTA countries will benefit from the new trade ties forged by this agreement, which will allow them to move goods more readily between their operations at home and in the treaty countries. As well, these companies will be better positioned to exploit the benefits of value chain business relations throughout Europe.
Recognizing the importance of the broader European market, the agreement will also provide a strategic platform that Canadian companies can use to tap into value chains all across Europe.
This free trade agreement proves that our Conservative government and the are serious about helping our businesses thrive in the global economy.
We are also serious about listening to the concerns of the provinces, territories and industry as we negotiate these agreements. The EFTA agreement is a perfect example. Negotiators consulted extensively with industry and provincial and territorial stakeholders to ensure that their concerns and interests were fully understood and considered during the negotiations. This kind of open, consultative approach will continue as Canada continues to fight for market access around the world, whether it is at the WTO or with our bilateral and regional trading partners.
Allow me to take two moments to remind members of what happened with Canada-EFTA in the previous Parliament. The Canada-EFTA free trade agreement was the first treaty to be tabled in the House of Commons under our government's new treaties and Parliament policy.
The Standing Committee on International Trade chose to study the agreement and issued a largely positive report. In terms of market access, the committee found that benefits of this agreement to Canada would be largely in the agriculture and agrifood sector. Some industrial sectors would benefit as well. The committee recognized that gains in trade could pave the way for an extended agreement that would include services and investment.
The committee also highlighted the testimony of several witnesses, indicating that the very presence of a free trade agreement could create interest within the business community in exploring economic opportunities in Canada and the EFTA. The committee's report recognized that the Canada-European free trade agreement, in addition to reducing tariffs, could act as a catalyst for increased trade, investment and economic cooperation between Canada and the EFTA countries.
While the report outlined concerns about shipbuilding, it also found that Canada was able to successfully obtain tariff phase-out periods of 10 years and 15 years on the most sensitive shipbuilding products. The 15 year phase-out period is the longest phase-out period ever of any free trade agreement signed in Canada's free trade history. Both the 10 year and 15 year tariff phase-out periods include an initial 3 year bridging period during which current tariff levels would be maintained.
Our government negotiated favourable product-specific rules of origin for ships, as well as special provisions for repairs and alterations.
Finally, the Canada-EFTA free trade agreement does not in any way alter the government's buy Canadian policy for ships. It does not alter in any way our buy Canada policy.
The Canada-EFTA free trade agreement implementing legislation was tabled in May and passed second reading by a vote of 200 to 21. While the bill was reported to the House of Commons Standing Committee on International Trade for further study, it ceased to exist when the 39th Parliament was dissolved. We are now reintroducing the implementing legislation.
These free trade agreement negotiations were initiated in 1998. They were put on hold for almost six years by the previous government. The conclusion of negotiations was finally announced in June 2007.
This is an important piece of legislation. It has a long history in this place. I certainly encourage my colleagues in the other parties to engage in the study of this bill. This is a good bill for Canada and I would say that it is a good bill for our four trading partners in the EFTA group.
There is a larger issue at stake here. This is all part of our government's global commerce strategy. It is all part of reaching out and seeking free trade agreements around the world.
Certainly if we look at the free trade agreements we signed with Peru and Colombia, our re-engagement with the Americas and our work with the CARICOM countries, the Central American four and Panama, and the technology agreement we just signed with Brazil, all of those agreements are important for Canada. There are hundreds of billions of dollars of Canadian foreign direct investment in the Americas, let alone the rest of the world, and we are certainly pursuing closer ties and more free trade agreements within the Americas as well as the rest of the world.
Since coming to office in 2006, we have signed with Peru, Colombia and the EFTA. We have a free trade agreement with Jordan that has been initialled. We are working on the CA4: Guatemala, El Salvador, Nicaragua and Honduras. There are also Panama, Korea, the CARICOM group and Singapore. The EU agreement is in the exploratory stages. We are also in exploratory talks with India.
These types of agreements will carry Canada's manufacturing sector and producers into the future, where we will have guaranteed access to foreign marketplaces. With these agreements, we have put in place a dispute mechanism system that will allow our producers and manufacturers to compete on an even threshold, so to speak, with manufacturers in other countries.
I listened with some interest to the interventions and discussion by the Liberal and Bloc members. One of the concerns about this piece of legislation, of course, is shipbuilding. I think our Canada first policy on procurement should easily lay those concerns and worries to rest. At present we are building 98 new coast guard vessels and refurbishing another 40. We are looking at a world class icebreaker. We are going to refurbish our frigates.
The shipbuilding sector of our economy is resilient. I feel that our shipbuilding sector can compete and that our workers are some of the best in the world. I fail to understand why one party in the House does not have any faith in the shipbuilding sector and is not willing to allow it to compete in the international marketplace. Somehow that party thinks this sector is going to fall by the wayside if we engage in these free trade agreements. Nothing anywhere that I have seen and no report that I have read proves any of that.
Once again, I encourage everyone in the House to have a free and open debate on this free trade agreement. It is a good free trade agreement and a progressive free trade agreement. It would lead Canada in the right direction and would provide jobs and opportunities well into the future.
Mr. Speaker, it is a pleasure to speak to this extremely important bill, the Canada-EFTA free trade agreement, an agreement that Canada would have with Iceland, Norway, Switzerland and Liechtenstein.
This is part of a trend, of which most of us in the House have been supportive, to increase bilateral trade, to reduce tariff and non-tariff barriers and to improve labour mobility. We have found historically that the removal of these barriers has a pronounced improvement in the productivity and health and welfare of our own people. More people have jobs in our country. The standard of living has risen. More money is in people's pockets as a result of removing these barriers.
Our country is a trading nation. The number of people in our country is simply not sufficient for us to produce at a reasonable cost the types of things that all our citizens want and need.
If we were to turn the tables on that and say why not increase protectionism, why not raise barriers around our nation, we have found historically that it would be worse for our country. Sometimes this might be a little counterintuitive. The erection of barriers actually increases the cost of products here at home and reduces the number of people who are employed. It increases unemployment.
What we all want to make sure, though, is that any trade agreement that we have with other countries enables us to have fair trade and that tariff and non-tariff barriers cannot be surreptitiously introduced under the table.
The Liberal Party will support sending this bill to committee so that we can work with our colleagues across party lines to ensure that this agreement that would enable us to improve trade with those four European countries will be fair for the Canadian consumer and for the Canadian worker. That is our end goal.
We have a remarkable opportunity to be the conduit between the two major largest trading blocs in the world, the European Union and North America. If Canada could be in that place, and this agreement enables us to do that, imagine what it would do for our country. It would increase employment, increase the amount of money in Canadians' pockets, reduce unemployment and ultimately improve the health and welfare of our citizens.
We also have an opportunity at this moment, in our unique place, to add different elements to the trade agreement that have sometimes been neglected. I refer to things such as workers' safety, workers' benefits, working conditions and environmental protection. All of those things can sometimes be fudged in these agreements. Some countries, as part of the agreements, can have an unfair trade advantage by not providing their workers with a safe working environment or a fair wage, or by not having the environmental protection that all of us know is needed.
In fact, the absence of that could not only hurt the workers but it could have transborder effects. Imagine the effects caused by some countries that engage in behaviours that damage the environment. Environmental damage crosses borders and other countries, including our own, can be affected. For example, in those countries that made up the former Soviet Union, there was production of nuclear materials. In Siberia, in Russia, those nuclear materials were simply dumped on the ground. The result is that those radioactive materials, which have long lives, have ended up in the food chain, which knows no borders. Those radioactive materials have actually ended up in the food chain in the Arctic and are actually being consumed by the Inuit in the north. As a result, people living in the north have very high concentrations of cancer-causing, long-acting toxic materials in their bodies.
In fact, with regard to some of the flora and fauna in those areas and in particular the large mammal species, a whale that washes up on shore would be considered a toxic material. The whales have been consuming animal products that have themselves consumed products further down the food chain, through which there is a bioaccumulation of toxic materials.
My point is that it behooves all of us to ensure that we have proper protection for workers and the environment in the trade agreements we sign. This is an opportunity for us to do so.
As an overview, trade has actually increased over the last 10 to 15 years by a factor of 6% per year. This is double the rate of the increase in global output, which is actually having quite a significant impact upon the global financial architecture of what we see here today. We also know that tariffs have come down. In the 1980s the rate was about 25%. Today tariff barriers are about 10%, and that is a good thing.
The World Trade Organization has had a role to play in that. However, one of the central points I want to make is that while we have come a long way, there is a significant failure in our ability to enforce the agreements that are already there. The rules that bind us in part are based on mutual trust. Countries mutually trust each other. There are rules.
Part of the problem, as is the case in most international agreements, is that there is not an adequate enforcement mechanism. In other words, there is protection without enforcement. In fact, the enforcement mechanism enables some countries to abuse their positions in a way that actually harms those of us who are playing by the rules.
I will give a few examples. Let us take a look at some of the urgent situations we have in the world today.
In terms of food insecurity, we see a rising cost of food products. For various reasons, huge swaths of our world actually have food insecurity. Some of those areas have chronic food insecurity, while some of the areas of insecurity occur from time to time.
The issue, though, is that we have the capabilities and technology to prevent a lot of that food insecurity. Part of this food insecurity exists simply because the trade agreements that we have right now enable things to occur that should not.
One example is biofuels. There has been a headlong rush to produce biofuels. That rush to biofuels has changed land that normally produces things like sour gum, wheat and other pulse products. Producers have taken away the products that people consume. What are they doing? They are growing corn, and it is not corn for consumption, but corn for the production of biofuels.
That change has not only raised the price of foodstuffs because there has been a diminishment of land available for food production, but it has also done something rather perverse: when corn is used for biofuel production, the actual energy output we get is smaller than the energy inputs. On the surface it may seem fine to want to produce biofuels because we are reducing our consumption of fossil fuels, but in fact it is actually environmentally hazardous, because the fossil fuel inputs--and we do require them to produce the corn--are greater than the energy savings that we get at the other end. Also, corn as a source of biofuels is not a very efficient organic product to use for energy.
As well, we are changing to biofuel production on land that would normally be used for food products, resulting in a decrease in food availability.
The situation becomes even worse. In one of the lungs of the planet, Amazonia, pristine rain forests are being destroyed as a result of land now being used for the production of corn to produce biofuels. As a result we have a carbon sink that is actually being damaged and destroyed. That carbon sink, which would normally take carbon dioxide out of the atmosphere, is reduced, which is making global warming worse.
Clearly many factors are involved, so one of the things we have to do in our trade agreements is make sure there are no perversions or distortions that can be used to make our environment and economy worse and our energy situation more insecure.
Along those lines, one of our great challenges is to link up trade with energy policy. No one has been able to do that. I believe that because we are a net exporter of fossil fuels, we have an extraordinary and very important opportunity to be able to link up energy policy with trade policy. If we are able to link energy policy with trade policy, we will be able to grapple with one of the central challenges of our time, global warming.
This is particularly important, now more than ever, because we are getting into a very dangerous period.
We have feedback loops in our planet. As carbon dioxide is produced, carbon sinks in nature--oceans, wetlands and forests--normally absorb the carbon dioxide. The challenge is that when we destroy the wetlands and forests, the absorptive capacity of that carbon dioxide decreases, and temperature goes up. When the temperature goes up, the absorptive capacity of the oceans, one of the major carbon sinks, diminishes, resulting in more carbon dioxide.
This has a huge impact for us in the north, where we have permafrost. A lot of methane is currently underground and is not doing too much, but when the permafrost melts, it releases the methane. The methane has a capacity 25 times greater than that of carbon dioxide to increase the temperature of our planet. Members can imagine what that means: the temperature increases, the permafrost melts, and methane is released in massive amounts into the environment. There is a geometric increase in greenhouse gas emissions, the products that cause global warming. Now we have this vicious feedback, as can be seen.
That absolutely has to be dealt with. One can see the connection between deforestation, rising temperatures and the destruction of wetlands.
Here is an idea our government may wish to pursue. We pay people to plant trees. It takes about 25 to 50 years for a tree to become sizable. The larger it is, the greater its capacity to absorb greenhouse gases.
Now let us imagine we actually paid people not to cut down trees. Why on earth are we paying people to grow little trees instead of enabling the preservation of our forests and wetlands? The current size of the forests and wetlands will have a larger absorptive capacity than these small saplings that will take 25 to 50 years to grow.
The Copenhagen conference is going to take place later on this year. We have an opportunity to think differently about dealing with global warming and to preserve our wetlands and our large forest tracts, which are major sinks for carbon dioxide. We cannot wait a generation to address this question. We have it within our hands now. I would implore our government to look at things differently at the Copenhagen conference and find ways that we can pay for preservation, particularly of critical habitats.
Cameroon made this proposal about a year ago. They have an important tract in west Africa between two contiguous areas of important reserves. The area in between is a pristine habitat and a major carbon sink. They came up with the idea of leasing this land for a dollar an acre. The Cameroonian government was willing to do that.
That kind of innovative thinking enables the world to invest money into areas that will benefit people. It also enables us to prevent these tracts of land from being cut and knocked down, which has a deleterious effect on our environment.
I also want to talk about the need for Bretton Woods 2.
As I mentioned before, one of the major reasons for today's financial crisis is a failure of the global financial architecture. While there are certain rules in the global financial architecture, those rules have not changed or modernized to deal with the rapidly changing international economies and the interdependence that we now have. In fact, that is the basis of the bill we are talking about today.
Because we are a country that stands on the cusp of the two greatest trading blocs in the entire world, we have an opportunity to present a proposal for a Bretton Woods 2 that would enable the International Monetary Fund, for example, to be able to have the teeth and the enforcement mechanism that are necessary for us to have a free and fair trading system.
I know our friends in the NDP rightly talk about the need for fair trade. Here is an opportunity for us to be able to do that and to deal, as I said before, with how workers are treated, with their health and working conditions, and to have the ability to factor environment into the agreements we sign. Those are the kinds of things we need to deal with. In fact those are the things that a Bretton Woods 2 institutional complex has to address.
One of the big challenges, of course, is an enforcement mechanism. Right now certain countries do various things that, to put a kind comment on it, are underhanded, and I could say other things.
Let me give an example. In China, the yuan is undervalued between 20% and 60%. The ability of China to be keep its currency at a level that is 20% to 60% below our currency gives China an unfair advantage in its ability to export. Our products become relatively non-competitive because of that huge advantage China has through artificially keeping its currency below what it ought to be.
What is needed is a mechanism to prevent countries from engaging in those non-tariff barriers that slide underneath the financial architecture but give a very clear advantage to their own producers. That cannot happen. Our producers, our workers, our companies and our economy suffer as a direct result of that kind of behaviour.
Right now there is no effective mechanism to do that. We also know that when complaints happen, they do not happen in a timely fashion. They can take two or three years or more. We have had that experience in our lumber disputes with the United States.
The government has a real opportunity here to work with the rest of us to have a concerted effort internationally to change and reframe the international architecture and make sure that the financial architecture of today reflects the integrated economies that we see today, economies that were not envisioned at the time Bretton Woods was actually put together after World War II. It is important to understand that after World War II, the financial architecture we have today had not been envisioned. It is very important for that to take place.
I also want to talk about an issue that is very much at the forefront of our newspapers today, the issue of Canada-U.S. trade and President Obama's protectionist inclinations.
We have to make it crystal clear that those kinds of behaviours and barriers contributed in part to the Great Depression in the 1930s. If we fail to do that, they are going to hurt their country and they are going to hurt our country. Everybody is going to get hurt. That kind of behaviour sets up a vicious cycle, and nobody wins.
The Liberal Party will support sending the bill to committee. We want to make it better. We have some great people on our side with great ideas. They will work in committee to ensure the bill will benefit Canadian workers, the Canadian economy and the Canadian environment to ensure Canada can be as competitive as we know our great workers can be in the changing international architecture of 2009.