Mr. Speaker, today we are debating the new NAFTA, the Canada-United States-Mexico agreement, known as CUSMA in this country.
The original NAFTA was signed in 1994 by the Liberals. It was negotiated by the Conservatives. It promised more jobs and secure access to the largest markets in the world. Supporters of that agreement will point out that Canada's GDP and cross-border trade have grown since that agreement was signed, but those benefits have bypassed many Canadian workers.
In that time, Canada lost 400,000 manufacturing jobs. Its textile industry was devastated, because that agreement allowed those jobs to migrate to areas such as Mexico and the southern U.S. where there were lower labour costs. Canada just lost out.
Wealth inequality in Canada grew because the GDP benefits the trade agreement engendered went largely to shareholders and corporations instead of to workers. If we look at any graph comparing GDP with the real wages of Canadians, the wages flatline while the GDP goes up.
The NDP has always supported fair trade, but in many of our free trade agreements there are provisions and clauses that are anything but fair. One of them in the original NAFTA was the proportionality clause, which gave the United States the right to demand a constant proportion of our oil and gas shipments.
If we produced oil and gas and the Americans were getting 60% of it, we had to make sure they got 60%. Whether we doubled our output or it came down by half, the United States could keep that proportion, even if we felt it was in Canada's interests to keep it to ourselves.
Another flaw in many of our trade agreements, not just NAFTA but also the trans-Pacific partnership and with China, is the investor-state dispute settlement mechanism, or ISDS, which in NAFTA was chapter 11. As many people know, that allowed corporations to sue the government in Canada if they felt it had made changes to regulations that affected their profitability. Even if Canada was doing that as a way of protecting our environment and the health of Canadians, American corporations could sue the Canadian government to reverse those changes.
One of the most egregious examples of this was mentioned by the members for Saanich—Gulf Islands and Elmwood—Transcona in their speeches. I would like to say it again.
In 1997, shortly after NAFTA was signed, the American company Ethyl Corporation was making a gasoline additive called MMT. Canada was concerned because MMT was a suspected neurotoxin, and Canada worried about the effects it had on people. Car manufacturers did not like MMT because it gummed up the onboard diagnostics in cars, so Canada banned it.
Ethyl Corporation sued Canada and won, in one of the secret NAFTA tribunals associated with chapter 11 disputes. Canada was forced not only to pay Ethyl Corporation $19.5 million in damages but also to reverse those regulatory changes and allow the use of MMT in Canada. We then had to get on our knees and apologize to Ethyl Corporation for doing that. Here we were, trying to assert our sovereignty with respect to the health of our people and our environment.
Canada has been faced with many of these challenges through NAFTA, far more than the United States or Mexico. When countries go into these so-called free trade agreements, they often give up their sovereignty.
This new agreement is better in two ways. One is that chapter 11 is gone, thank goodness. The NDP is very happy about that. We wish we could have gotten rid of it in the agreements that we have in the CPTPP and our agreements with China. It is a little better in CETA, thanks to the actions of Germany, which softened those provisions, but the NDP is very happy that chapter 11 is gone and that the proportionality clause is gone.
Those are two good things that New Democrats like about this new agreement.
I will move on to the things that maybe are not so good. For one thing, it extends drug patent protection in Canada from eight years to 10 years. That adds two years on to the time that Canadians have to pay drug companies full price for the drugs they develop.
Canadian drug companies were doing fine with the eight years, and we were benefiting. After eight years, we could use generic substitutes for those drugs, and it brought our drug prices down quite a bit. We are still paying some of the highest drug prices in the world, but now we are going to have to pay those very high prices for another two years. The Parliamentary Budget Officer said it will cost Canadians $169 million for every year that Canada has to pay drug companies because of that provision.
This agreement also gives away more of our dairy market to foreign suppliers, and that is exacerbated by the fact that we have already done that in our agreements with the European Union and the trans-Pacific partnership countries. We have now opened up our dairy market by 10%. This agreement is for 3.6%.
Regarding the dairy products we are getting from the U.S., I hear concerns from my constituents that those dairy producers are allowed to use bovine growth hormone, something that boosts milk production in cows, but has unknown effects on humans and some serious effects on the health of the cows themselves. Therefore, people are very concerned that we are degrading the products that we are now forced to use.
I recently talked with a dairy producer in British Columbia. His company produces milk protein products, and this is another example of giving away our sovereignty. The United States now has the ability not only to control how much of our products such as those go to the United States, but also to control how much we export anywhere in the world. The United States has a say over that.
I want to cover a couple of points on trade that are very concerning in my riding but are not covered in this deal. One is the softwood lumber dispute, which is not covered at all. I am very happy to hear that the U.S. commerce department has decided to lower the illegal tariffs that we have been suffering through recently. We are anxiously awaiting the end to that almost unending dispute.
Another is with the wine producers in my riding, in the Okanagan Valley, which produces the finest wine in Canada. Other countries, the United States and Australia, are concerned because our wine producers do not have to pay an excise tax to the federal government if they produce wine from Canadian grapes.
That has really driven the growth in our wine industry. It has been a huge benefit. Now we are being battled on the international trade market, especially because of the automatic escalator in that excise tax. The finance minister tells me they are not really willing to negotiate.
The NDP looks forward to debating this in committee. We want to see if this agreement is a better deal than the old NAFTA. That is the big question.