I call to order this meeting of the Standing Committee on International Trade. Welcome to meeting number five.
Today's meeting is taking place in the hybrid format, pursuant to the House order of September 23, 2020. The proceedings are available via the House of Commons website.
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Pursuant to Standing Order 108(2), the committee will now proceed with the study of trade between Canada and the United Kingdom on a potential transitional trade agreement.
We welcome as our witnesses today, for the full two hours, from the Business Council of Canada, Trevor Kennedy, director of policy; and from the Canadian Chamber of Commerce, Mark Agnew, senior director, international policy. From the Canadian Labour Congress, we have Hassan Yussuff, president; and Chris Roberts, director of social and economic policy. From the Trade Justice Network, we have Larry Brown, who is president of the National Union of Public and General Employees.
Mr. Kennedy, the floor is yours, for 10 minutes, please.
Thank you, Madam Chair and committee members, for the invitation to take part in your meeting on trade between Canada and the United Kingdom, a potential transitional trade agreement.
The Business Council of Canada is composed of 150 chief executives and enterprises of Canada's leading enterprises. Our members, directly and indirectly, support more than six million jobs across the country and hundreds of thousands of small businesses. For our members, trade is very important.
Canada is a trading nation with 65% of our GDP tied to trade and millions of well-paying jobs across the country connected to the flow of goods and services around the world. We cannot take this for granted. In recent years some of our most important trade relationships have been undermined by rising protectionism and uncertainty. At the same time the multilateral rules-based global trading system, the foundation for post-war prosperity, which has led to increased living standards for Canadians, is at risk.
Given this backdrop, not to mention the economic hardship caused by COVID-19, Canada needs stable and secure bilateral trade agreements, particularly with key partners in the Indo-Pacific and Europe, to both safeguard and diversify our trade. The Comprehensive Economic and Trade Agreement, CETA, has been particularly important in achieving both objectives. At a time when growth in global trade is slowing, our exports to the European Union have grown at a fast rate, 7.7% in 2019, and bilateral trade flows have stabilized.
There is still much work to do to ensure that small and medium-sized enterprises can take full advantage of this agreement and to address some industry-specific concerns, but in the big picture, CETA is working for Canadian exporters.
The U.K., as a part of the EU, has been a critical component of this fast-growing trade relationship under CETA. As of 2019 it accounted for 40% of Canada's merchandise exports and 36% of services exports to the European Union.
Merchandise exports to the U.K. have grown by nearly 12% since provisional application. Canadian exporters have momentum in the U.K., and it is important that this continues.
The last few years have clearly demonstrated how important the U.K. market is for Canadian business. Early in the Brexit process many expected that Canadian firms would move operations from the U.K., largely based on the assumption that it was being primarily used as the launchpad for business into the European Union.
While we've seen some staff move from or to continental operations and have seen the establishment of new satellite offices elsewhere in the EU, for the most part Canadian firms have remain committed to the U.K. This is because it is valued as a market for goods and services providers and London continues to be an important financial capital.
Among Business Council members, at least one third have a meaningful presence in the market, and for some, the U.K. is their only market in Europe.
For these reasons it is critical that we maintain our access beyond the end of the Brexit transition period. The transitional trade deal approach taken by negotiators is wise, given the circumstances. We do not know what the future U.K.-EU trade relationship will look like and a transitional approach gives us the opportunity to take that future relationship into account when we negotiate a trade deal. We also have faced a rapidly changing environment and we have been pressed for time.
As with Canada's existing free trade agreements, we want to ensure we reach a conclusive deal in the future with the appropriate consultation and assessment of market opportunities for Canadian firms. The transitional approach will allow us to do this while we maintain our position in the market.
Japan and South Korea have already finalized agreements to roll over most of their existing EU trade deals. At the same time, Australia, New Zealand and the U.S. are negotiating deals not based on existing frameworks with the European Union. Some of these talks appear to be advanced and if they are in place without a transitional deal for Canada, they could result in Canadian firms losing their market share and first mover advantage that we secured under CETA.
A transitional deal would preserve this important relationship, and we encourage both sides to move quickly to limit disruption at the end of the year. Canada's transitional deal should be designed to be temporary by including reasonable review clauses or expiry dates. We support this approach as an incentive to drive continued bilateral talks toward a long-term agreement.
Business leaders support the inclusion and swift ratification of a transitional deal to keep Canada-U.K. trade tariff-free, to make the economy more vibrant and competitive, and to drive investment support for the creation of high-value jobs.
Looking forward on the Canada -U.K. trade relationship, we believe there is an opportunity to rethink and enhance bilateral trade and investment ties with a comprehensive and ambitious free trade agreement.
We hope both parties can start working on this with stakeholders as soon as possible.
Thank you for this opportunity to address the committee, and I look forward to answering any questions.
Thank you, Madam Chair and honourable members, for the invitation to speak as part of the committee's U.K. study. It's a pleasure to be back here and to see you all again virtually.
As the committee's members will appreciate, the U.K. is a significant trading partner for Canada. It's our third-largest goods export market and second-largest destination for foreign direct investment abroad. As Trevor alluded to a moment ago, it's quite important, particularly in the EU-28 context, with 40% of our merchandise exports and 36% of our service exports from the EU-28 going to the U.K.
Despite the impressive overall rankings, it still is an overall small proportion of our global trade share, behind the United States. The relationship, we feel, has the potential to grow, and certainly Britain is an ideal market for Canadian companies seeking to diversify, given our shared language and ways of doing business.
With the EU separation question firmly decided in the U.K., we need to look ahead to dealing with the world as it is. The reality means that, once the U.K.'s transition period with the EU ends on December 31, the U.K. will no longer be treated as if it were a party to CETA by the Government of Canada. Given how important the U.K. is as part of the EU-28's export basket, the short answer is that Brexit matters for Canadian businesses.
The Canadian Chamber of Commerce has not completed our own in-house modelling, but some external work serves as a rough guide for what the potentials are. Canadian economist Dan Ciuriak conducted an analysis in 2018 as part of the British government's CETA impact assessment. The study found that by 2030 the value of the U.K.'s participation in CETA would be worth about £1.1 billion, or approximately $1.9 billion Canadian in terms of Canadian exports to the U.K.
Although this is definitely not a precise measurement, given that we don't know the final architecture of the U.K.'s trade arrangements with the EU and Canada and that we don't know what the U.K.'s final picture will be in 2030, given that the study was done with a 10-year time horizon, and that we also have divergences in the U.K. and EU's MFN tariff rates, it nonetheless provides at least a decent rough signpost on the potential for what a U.K.-Canada trade deal means to the Canadian economy.
I'd like to just be a bit more specific now on some of the immediate implications of not having a transition agreement in place by December 31.
The first is tariffs. Canadian businesses will lose preferential access to the U.K. market, making our products less competitive. Some examples of where we would face tariffs under the U.K.'s global tariff regime include lobster products, with tariffs of up to 10%; plastics under HS 3908, with tariffs of up to 6%; vehicles under HS 8703, with tariffs of up to 10%; and beef products under HS 0201 with an ad valorem tariff of up to 12%, plus specific tariff units per kilogram.
I should add here a note that Canadian beef products have a TRQ under CETA and certainly any TRQs that are transposed into a U.K.-Canada context need to be commercially viable for Canadian companies to take advantage of them.
The second, which we will not have without a transition agreement in place, are the discussions around regulatory co-operation. CETA provides a framework for critical regulatory dialogue to occur on agriculture non-tariff barriers and through the conformity assessment protocol. Regulatory co-operation is not glamorous; it's the nuts and bolts of trade and absolutely critical. Our trade agreements have an important role in shining a spotlight on the work that regulators do to make sure that issues are advancing in a timely manner for businesses. Certainly agriculture non-tariff barriers have been quite problematic in the EU context, and we hope that the U.K. will eventually take a different approach.
The last is service exports. CETA's temporary entry chapter provides provisions on intra-company transferees, and this means that Canadian companies can bring in specialized talent to work in Canadian operations. CETA's contractual service suppliers' provisions mean that specialized skills can be brought in to fill supply chain gaps for Canadian businesses. CETA provisions on these entry categories reduce business burdens and, without them in a U.K. context, companies will need to use other routes that are more cumbersome.
Simply put, if CETA matters, then transitioning it into a bilateral agreement also matters. We have been working closely with our U.K. counterparts at the Confederation of British Industry to advance this and will continue to do so until the deal is done.
Certainly we hope this committee will be able to facilitate an expeditious passage of the implementing legislation once the agreement is finalized.
As members of the committee will appreciate, everything you do in trade builds on what came before it. CETA was the gold standard when it was negotiated, but the Canada-U.K. transitioning agreement should be seen as a starting point for going further.
I'd like to quickly highlight five areas where we think we can do this.
Number one is digital trade. Since CETA's negotiation, global trade discussions on digital trade rules have taken on a much bigger focus. This includes the WTO as well as our digital trade chapters in CPTPP and CUSMA. Discussions with the U.K. on digital trade should support better data flows by Canadian companies.
Number two is regulatory co-operation. The future gains on merchandise trade will ultimately be determined by reducing non-tariff barriers given how low tariff rates are for most products. This is particularly important for Canadian agriculture exporters, as I alluded to a moment ago, where it's been a tough slog in the EU. There's also forward-looking work that we can do in areas like health sciences procurement as well as cybersecurity.
Number three is critical minerals. The global supply of rare earth minerals that enable the production of many high-tech products remains dangerously concentrated. Future discussions between the U.K. and Canada should facilitate greater private sector production and movement of these rare earth extractive products.
Number four is trade facilitation. The pandemic has emphasized the value of the efficient movement of goods globally. Canada and the U.K. should explore ways to introduce additional measures that would modernize customs processing in CETA, and build on the free trade agreement from the WTO.
Number five is labour mobility. Enhancing the ability of companies to attract talent and access service contracts abroad is critical to diversifying what you're exporting, not just to where. Activities like after-sales servicing can actually be more lucrative for companies than the original export itself, so we should try to be ambitious in how we approach this business activity.
Without a bilateral agreement in place, certainly these five areas, and work on other areas like sustainability, will be difficult to go further on.
Thank you for your consideration, and we look forward to the discussion.
Good morning, Madam Chair and committee members. Thank you for having us. My colleague Chris Roberts will join me if there are any questions.
Thank you for the opportunity to appear before you today. It's a pleasure for us to be here.
The Canadian Labour Congress is Canada's largest central labour body. The CLC brings together some 50 national and international unions across Canada. As well, it gathers together 12 provincial and territorial federations of labour and 100 labour councils across the country. The CLC speaks on issues of national importance for three million unionized men and women. These individuals work in the public and private sectors, and in both trade-exposed and trade-sheltered industries.
The CLC perspective on international trade is that Canada has always been a trading nation. It is a small, open economy relying on exports. The CLC has always advocated for fair trade as opposed to free trade. In our view, international trade and investment rules should foster inclusive, equitable and sustainable economic growth. Trade rules should boost employment and real incomes, not destroy jobs and raise the cost of living. They should, of course, lift incomes and improve working conditions, not drive them down.
They should reduce inequality, not worsen it. They should encourage and reinforce the capacity of governments to pursue full employment and regulate in the public interest, not erode or curtail these powers. They should be designed transparently and with public involvement and debate, and not behind closed doors with multinational investors calling the shots.
In other words, international trade agreements should first and foremost serve the interests of working people and ordinary residents of Canada. Trade agreements should be an opportunity to strengthen labour and environment protections, toughen safeguards for women and migrant workers, and lift food safety and public health standards.
For far too long, trade agreements have been negotiated hidden from civil society and responding mainly to corporations and investors. The terms of the trade agreements have been about shackling the ability of governments to regulate, invest and spend in the public interest.
I will speak to a trade agreement with the United Kingdom. The Government of Canada has signalled its commitment to negotiate progressive trade agreements with trading partners. In our view, the Comprehensive Economic and Trade Agreement with the European Union, CETA, should not be the standard for negotiating a bilateral trade agreement with the United Kingdom.
In several important respects CETA has been surpassed by the provisions of the Canada-United States-Mexico Agreement, CUSMA. On the investor-state dispute settlement, ISDS, the CUSMA eliminated this dispute settlement mechanism in chapter 11 of NAFTA. In our view, ISDS provisions must be omitted from Canada's future trade agreements. There is no reason that our principle trading partners, particularly rich, industrialized countries with well-developed domestic court systems, need these mechanisms. These arrangements are nothing more than a means for large corporations and investors to curtail and dissuade government regulation for private gain.
Under NAFTA, Canada was sued some 40 times and forced to pay over $300 million in penalties and fees. The majority of these trade disputes involved Canada's environmental laws. This is simply unacceptable.
In our view, there is no need for a CETA-style investment court system allowing foreign transnationals to sue governments outside of the U.K. or Canadian court systems.
On labour rights, from the CLC's perspective, any new agreement with the United Kingdom must include robust and fully enforceable provisions for labour rights. CETA's provisions are not fully enforceable. Instead, they are subject to a non-binding compliance mechanism relying on co-operation and dialogue through a process of consultations and advice from an expert panel.
CUSMA brings labour provisions into the main agreement as a stand-alone labour chapter. As a result, labour rights in CUSMA are fully subjected to the state-to-state dispute settlement process in the agreement. It also commits each country to implement policies that protect workers against sexual harassment and wage and employment discrimination on the basis of sex. This includes discrimination on the basis of pregnancy, sexual orientation, gender identity and caregiving responsibilities. CUSMA includes new provisions committing signatories to take steps to prohibit the importation of goods produced by forced labour, address violence against workers exercising their labour rights, and ensure that migrant workers are protected under the labour laws.
CUSMA also includes a new facility-specific rapid-response mechanism. This mechanism provides for enhanced provisions to ensure effective implementation of labour obligations at covered facilities.
In our view, these labour provisions in CUSMA should be a starting point for Canada's future trade agreements. Future trade agreements should also require signatories to uphold fundamental labour rights in the International Labour Organization's core conventions. These commitments should be fully enforceable.
On pharmaceutical drugs, Canada's spending on pharmaceutical and patent drug prices is among the highest in the world. Canadians already pay far more for prescription drugs and face higher drug prices than their counterparts in most OECD countries. Both agreements, CETA and CUSMA, will contribute further to driving up drug costs by delaying the entry of generic medicines. Any future trade agreements with the United Kingdom cannot aggravate the problem. Pharmaceutical companies must not receive protection at the expense of Canadians.
On climate change, CETA's chapters on “Trade and Sustainable Development” and “Trade and Environment” contain positive commitments on the environment. However, the commitments are not binding, and there are no effective enforcement mechanisms for CETA environmental commitments. For its part, CUSMA is silent on environmental change. Future trade and investment commitments must contain binding commitments to combat climate change. They must avoid ISDS clauses that will directly undermine the ability of governments to live up to their climate change commitments.
On public services, in 2016, European opposition to perceived threats to public services in CETA nearly upended the signing of the agreement. In order to get the deal done, the parties had to craft a joint interpretive instrument containing assurances about the autonomy of governments to provide, regulate, create and expand public services. However, the text of CETA itself does not fully and effectively exclude public services. To correct this, any new trade and investment agreement should include a clear and fully effective exclusion for public service. Such a provision should ensure that all levels of government can create new public services, expand existing ones and reverse privatization, without risking sanctions or compensation claims under trade and investment agreements.
On regulatory co-operation, CETA's “Regulatory Cooperation” chapter and its Regulatory Cooperation Forum aim at limiting regulatory differences between Canada and the EU. These initiatives will target regulations pertaining to food safety and biotechnology, chemicals and consumer and environmental protections.
These regulations are often characterized as impending market access and hindering trade; however, these regulations are often the result of popular and consumer demands for food safety and health and environmental protections.
CETA's regulatory reform discussions also occur in forums that lack transparency and democratic accountability and tend to be dominated by industry and commercial interests. This sort of approach to regulatory co-operation will not inspire public confidence. Canada can and should ensure far greater transparency and democratic accountability in the regulatory chapters of future trade agreements.
In conclusion, our trade relationship with United Kingdom is vitally important. In order to achieve a truly progressive trade agreement governing Canada-U.K. trade, we must have rules that benefit the many, rather than the few. Trade rules must instill confidence in governments' ability to regulate on behalf of working people, and the interests and voices of working people must be included in the development of any agreement.
Recent experience in North America and western Europe has made one lesson perfectly clear. Trade and investment agreements that bring benefits to a small elite, and job losses and declining prospects for working people, will stoke popular resentment and opposition.
Thank you so much. I look forward to any questions the committee members may have.
Thank you, Madam Chair.
Thank you very much, and thank you for this opportunity to speak to you this morning.
Let me start with what I think is a very important point that hasn't been covered yet, which is that when we get into looking at any potential new trade deals labelling is really important.
I remember when the trans-Pacific partnership was a terrible deal and wasn't worth signing on to but when we relabelled it the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, all of a sudden it got to be a good deal.
I think the most important thing is not the content but the label. Perhaps that's a little bit tongue-in-cheek, but it was quite an interesting process to watch. The transformation of the TTP into a good deal by a relabelling of the agreement still puzzles me to this day.
We're facing two crises in Canada and around the world. One is COVID and the other is climate change.
From our point of view, it strikes us that rethinking the whole notion of trade agreements under the wing of these two crises is a very important process, because under COVID, remember, in the early days, we had all kinds of problems because we didn't have enough manufacturing capacity in Canada. We were having to get our personal protective equipment from other countries; the N95 masks had to be manufactured outside of Canada.
The Premier of Ontario, Doug Ford, said we're never going to let that happen again, we're going to develop Canadian manufacturing capacity. Although Mr. Ford and I aren't on the same page on many things, that seems to me to be a very important point. Why would we be relying on other countries for so much of what we need in Canada instead of developing our own capacity? To develop our own capacity, even for protective equipment, it may mean violating some of the terms of the existing trade deal, and we have to accept that. Those trade deals prevent countries from looking after their own economy.
The second is the climate crisis. Does it really still make sense for us to be exporting our resources to other countries so that they can make it into product and sell it back to us, all the while having transportation costs and the cost to the environment of all that trade back and forth? Surely we should be at least revisiting the notion. For us to continue to manufacture a limited number of things and sell them and then import everything else is dangerous to the climate, and surely we should be thinking about that.
While I'm talking about COVID, Mr. Yussuff just mentioned that we need to make sure that we don't have ISDS clauses. I'm sure the committee knows that, as a result of ISDS in the Trans-Pacific Partnership and CETA, we have bucketfuls of cases ready to go. Somebody's shaking their head but that happens to be a fact. I've read from several different law firms about the fact that they have a whole bunch of ISDS cases ready to go against countries that dared to close down their economy under COVID, and they label it. They say that if you had to close down your businesses because of COVID there may be an ISDS case there. If you had rent relief imposed by the government, there may be an ISDS case there. That's not coming from some left-wing radical lunatic, that's coming from the law firms that are poised to file those cases.
We not only need to make sure that we never sign on to another ISDS clause, we have to double back and make sure that we're protected under the ones that we've already signed on to.
There's an assumption so far this morning that trade deals are pretty good things and they're automatically good, and they're good because we say they're good, but I want to ask a question. What do trade deals do?
They weaken democracy for sure, because they're always negotiated in secret and they bind governments and say that there's a bunch of things that governments can no longer do. They increase income inequality. Every study that's ever been done about income inequality includes trade deals as one of the major features of it.
They endanger public services because every trade deal has a ratchet clause that you can privatize but once you've privatized you can't move backwards to bring it back into the public sector.
Whether we can develop new public services after signing onto CETA and the new improved Trans-Pacific Partnership is an open question.
They give corporations more rights to challenge governments than citizens of the country have.
They endanger our environment and they kill jobs.
Do they increase trade? If we have all those negative effects, is there anything positive that we can say?
Several studies have indicated that trade increases with countries that we don't have great deals with just as much as it does with countries we do. There's no empirical evidence anywhere that trade deals actually improve trade. There is a lot of evidence that trade increases with or without a trade deal. Sometimes we get more increases where we don't have a deal.
What's the evidence that a trade deal is good for the economy? We lived under NAFTA for however many years—far too long. Thousands of manufacturing jobs left. Hundreds of Canadian factories closed. Wages stagnated. Is that the good part?
There are a lot of ways in which NAFTA was a dangerous mistake for the Canadian economy. In what way was it a good deal? Where's the empirical study that says we got some benefits from signing on to the original NAFTA?
The Canada-U.S. one—or the United States Marine Corps one, as Trump would call it—is too new to have the empirical evidence. We went into it assuming that we absolutely needed to protect an agreement that had never been proven to be all that valid in the first place.
CETA has been studied. It hasn't been studied...well, remember when we were being told what a great deal CETA was? There were going to be thousands and thousands of jobs created and a gazillion increases in the gross domestic product. Mr. Trump would have been proud of the way that CETA was sold in the first place. They were specious claims that had no validity at all.
There have been real studies of what CETA is going to do. A UN researcher and a Delft University economist report that CETA will eliminate 227,000 jobs by 2023. A lot of those jobs are going to be in Canada, unfortunately. Several thousand of them are going to be Canadian jobs. They predict that as a result, CETA will drive down wages again even though wages have stagnated for so many years.
Competitive pressures will cause unemployment, inequality and welfare losses. They basically say that this factor has to be part of the informed assessment of any trade deal.
There might be one or two things I've said so far that may be slightly provocative. That's a possibility, so I want to make sure I leave time for people to throw darts at me.
Let me just say that I completely agree with Hassan's description of what needs to be in trade deals. We can't have any more ISDS. If we're going to be part of a trade deal, we have to have an obligation to fight climate change, not just to live up to a country's own rules. It can't be just be paying lip service to climate change. If we're going to make a trade deal that's going to make climate change worse by increasing trade, then at least we've got to factor in some compensating measures that countries have to take to bring climate change under control.
What about enforceable labour rights? I sat through so many meetings where we were told that CETA had the best labour rights that any agreement had ever had, which was true except for the little detail that they weren't enforceable. That's just not acceptable any longer.
We need to respect gender and indigenous rights. We need to make sure that regulatory co-operation doesn't mean making sure that we go down to the lowest common denominator, but that we go up to the highest common denominator.
We have to exempt public services from any trade deal going forward, including with the U.K. There should be no reason for public services in the U.K. or in Canada to be on the block as a result of a new trade deal.
Those are some of the things that need to be in it. Could we possibly reiterate—for the umpteenth time—that trade deals negotiated in secret are not a good idea? The whole process needs to be public, so that the public can tell what's being done in their name.
Thank you for your time.
There are two things. The core issue of ISDS has always been that international corporations have more rights that challenge domestic government than the citizens of the country do. That just strikes me as so absurd from the get-go that I'm not sure how we ever got those into a trade deal. I know that obviously they asked for them, but why a government would ever agree to give corporations more rights than its citizens strikes me as a very strange proposition.
Let me read from Norton Rose Fulbright, but not the national union of Norton Rose Fulbright. That's a big law firm.
What they say is some of the “steps taken by governments...to address the unprecedented economic impact of the virus on the world economy, such as...the payment of state aid to airlines”—that's from their letter—“and the restriction on the import and export of commodities..”. They then say right after that, “some of these measures will affect foreign investors and their investments in host states, triggering investor-state disputes.”
We're not imagining that the existence of ISDS...and that's in the Trans-Pacific Partnership and it's in CETA.
According to law firms, some of the things that our governments have had to do to cope with the pandemic are going to.... After the pandemic has passed, the law firms are going to wait. They will give us the grace period. They'll wait until the pandemic has passed and then they're going to pounce with a whole bunch of ISDS clauses.
My personal view is that we should be doing two things. First we should be making sure that we never sign another agreement with an ISDS clause in it, because they're just unfathomably off base. Second, we should double back and get rid of the ISDS clauses that we have in existing agreements. There's a whole movement internationally for ISDS amnesty, to say that any action by governments that they took during the pandemic to control the health of their citizens or the health of their economy would be exempt from ISDS clauses. We should be signing on to that and making sure that happens.
Thank you. That's a very intriguing question.
One of the things we've seen for probably 30 years now is that any type of planning for our economy has been signing another trade deal, which actually, every time we do that, further eliminates or limits our ability to actually plan our economy. It just becomes an ongoing contradiction.
One of the fascinating things about trade deals, though, is that if you look back at most, or not most but every successful developed economy, or whatever the current description is, basically they all used mechanisms that would now be invalid under a trade deal.
The way that we got to be rich and powerful we can no longer use, because we gave away those rights under trade deals. We're now saying to other countries that aren't yet rich and powerful, “Well, you can never get where we are, because we want to sign a trade deal with you that will take away your right to do the things that we did to get here.”
It seems to me that most of what we're talking about with trade deals—the Trans-Pacific Partnership, CUSMA, CETA and anything new with the U.K.—would be simply further limiting our ability to make independent economic decisions on behalf of our own people.
Trade deals are fundamentally, in a term that an academic from the University of Toronto came up with, international corporate constitutions. They say what governments can't do, not what governments can do. They're all limitations on the ability of governments to control the behaviour of international corporations, which is the exact opposite of an industrial strategy.
My question is to Mr. Yussuff and Mr. Brown.
We know very little about the government's objectives in the current negotiations with the U.K., other than that they want to reproduce the terms and conditions of CETA on some kind of non-permanent basis, I presume, although it is not exactly clear what a transitional agreement really means.
There are ISDS provisions in CETA, but they haven't come into effect yet because there are some European countries that haven't ratified that aspect of the agreement. Presumably, in a bilateral agreement, there wouldn't be cause to wait.
I know that the government, when it was passing CUSMA, made a lot out of the fact that the ISDS provisions were removed, the investor-state dispute settlement mechanism. Can you speak to signing a transitional agreement that effectively reproduces CETA between two parties that presumably have both agreed to the ISDS provisions of CETA, or would if they reappeared in a transitional agreement? Is that consistent with what the government has said around ISDS in CUSMA?
Do you think a transitional agreement between Canada and the U.K. should deliberately exclude the ISDS provisions of CETA?
I'll start with Mr. Yussuff and then go to Mr. Brown.
So it was two years ago, and we still don't have any real solid consultations, and we don't have a game plan for a final agreement.
The point I'm trying to bring up right now.... The was in the media last week, and I remember they brought up bandwidth and how the U.K. doesn't have bandwidth, which I think is relatively insulting to the U.K., because they do.
The other thing that's happened is the U.S. election. You have the U.S. sitting there close to a deal, and all of a sudden now the U.K. said they'll wait for the new administration. If we had done the consultations, and we had done all the work we should have done, we actually could have come in now and done an agreement where we could have been putting the final touches on something.
The reality, though, is that we looked at the tariff schedules when they first proposed them and said that was good enough. We never talked about digital trade, and we never talked about regulatory co-operation. We walked away, which is really dangerous. Now we're in crisis because we're in November, and by the end of December they want to get this through not just the House but the Senate. This government doesn't do anything unless it's a crisis, and it's frustrating.
When you come to timelines here, what is going to happen? I'm loading a ship today that's going to hit in January. How do I price those goods?
Maybe I'll go to you, Mark. How would you price it?
Look back to the most recent agreement with Canada, the U.S. and Mexico and the process leading up to it. We have made strides. The labour provisions are an integral part of the agreement. The enforceable mechanisms of the agreement are of course very clearly laid out, with obligations and penalties should the countries not live up to their responsibilities.
CUSMA has been for us, in terms of labour provisions, much more significant than any other agreement negotiated so far.
It is a new agreement. Its recognition and time will tell how effective it is and, more importantly, whether it is the new model. Clearly, I think it demonstrates that you can do better.
Of course, the pressure in the negotiation of CUSMA was there for everybody to see. We had an existing agreement with Mexico and the United States, and we know that it was a failure in regard to labour provisions. Clearly, this agreement demonstrates a significant accomplishment in some ways.
As to its effectiveness, time will tell. If you were looking for a model, this would be the model going forward, because it recognizes key and fair components. Equally, of course, it exacerbates...and more importantly shows that there's a way to go forward that can enhance the protection of workers in our respective countries.
At the same time, it allows for our countries to trade in a fair mechanism that ensures that workers are going to benefit from this agreement.
Thank you, Mrs. Gray. I'm sorry, we're short of time.
Mr. Sheehan, I'm sorry, you'll have to wait until our next meeting to get your questions answered.
Thank you very much to the witnesses for being here today and supplying us with some very valuable information.
I need to update and get a bit of direction from the committee as we move forward.
We will commit to continue this Canada-U.K. study this Friday and we will hear from the officials. Then next Monday, November 23, we're going to have two meetings and we'll hear from eight witnesses.
The analysts have indicated that if the committee wants to introduce and table in the House a short interim report, they can only include the witnesses up until November 20, so I am suggesting the following. If the committee approves, we adopt a short interim report summarizing the main points raised during the hearings we have heard. Then we would be able to review a draft report December 2 and table it in the House December 4. The analysts will work over the holidays to do a fuller report, Following our return at the end of January, we would then review that report and at that point we may have additional information we may want to add to that report or do something in addition to that.
Would that be all right with the committee if we take that route? We'll get in an interim report before Christmas and then we'll follow it up with a fuller report come the end of January. If the committee is okay with that, that's the process I am recommending via the conversation with the analysts.
Some hon. members: Agreed.
The Chair: Then we would move into the COVID-19—
Chair, this is just a question on process. If we do see legislation come forward, how are we going to deal with this? When I look at our schedules and timelines....
Ms. Bendayan, maybe you can give us some insight, because if something is coming forward that has to be ratified through the Senate before we break for Christmas, I'm looking at our timeline and at our report, and I'm sitting here saying that this doesn't make a lot of sense. We're going to finish a report after the December 31 deadline.
I understand that you have to do an interim report. I get that, and I'm okay with doing that, but what I'm concerned about as I look forward is how the heck we are going to get some priority to have Zoom meetings to do actual legislation. That needs to be brought up with the gods above to say okay, we have legislation coming when? And how is it going to get through the House? What's it going to look like? That needs to happen probably this week or next week, because after that it is not going to be physically possible to get through our House, unless we're going to hold the House up until December 19 and hold the Senate here through Christmas. If that's the game plan of the Liberal government, hey, we're on board and we can do that, but they need to give us a signal as to how serious they are about getting this done before December 31.
Right now, I don't see how it's physically possible to get it done. I don't see it, unless you totally neglect Parliament—which they've done in the past—and do it that way.