SINT Committee Meeting

SUB-COMMITTEE ON INTERNATIONAL TRADE, TRADE DISPUTES AND INVESTMENT OF THE STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

SOUS-COMITÉ DU COMMERCE, DES DIFFÉRENDS COMMERCIAUX ET DES INVESTISSEMENTS INTERNATIONAUX DU COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 21, 1999

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[English]

The Chairman (Ms. Sarmite Bulte (Parkdale—High Park, Lib.)): Good afternoon, ladies and gentlemen. Welcome to the meeting of the Subcommittee on International Trade, Trade Disputes and Investments.

Pursuant to Standing Order 108(2), this committee has been given the mandate to examine Canada's priority interest in the free trade of the Americas area process. We have held public consultations out east and in Ontario, and next week the committee will be again dividing in two and looking at interests of both the WTO and the FTAA. Today we want our comments focused on the FTAA.

We welcome all of you here. I see there are also students here from Encounter Canada. Welcome. I hope you enjoy the meeting this afternoon.

I would ask our witnesses, if they could, to try to limit their remarks to ten minutes each so that we do have time for questions and comments. I have been advised that we are on notice for a possible vote anywhere up to 5.30, as well. So if the bells start ringing, we have half an hour before we have to leave.

I'd like to welcome each and every one of you. We'll ask Mr. Allmand to start.

It's a pleasure, Mr. Allmand, to have you here, from the International Centre for Human Rights and Democratic Development. Mr. Allmand, please.

Mr. Warren Allmand (President, International Centre for Human Rights and Democratic Development): Thank you very much for inviting us.

I'm here with Nancy Thede, who's the coordinator of our democratic development program, and Carole Samdup, who is the coordinator of our globalization program.

We're here and we're into this issue because our charter says that we are to defend and promote the rights in the International Bill of Rights, which includes the International Covenant on Economic, Social and Cultural Rights and which includes economic and social rights. So it's our responsibility, through an act of Parliament, which Parliament approved, to defend and promote economic and social rights wherever the defence is necessary.

We appeared before the full committee on March 24, 1999, on the WTO. We presented a very comprehensive brief entitled “Trading in Human Rights: The Need for Human Rights Sensitivity at the World Trade Organization”. Many of the principles we put forward on that occasion we will put forward again today, but in the context of the Americas.

The principal argument we make is that human rights treaties, including the Charter of the United Nations, should take primacy over all trade treaties. It's interesting to note that within Canada our trade laws, and all our laws, are subject to our Charter of Rights in the Constitution. No trade law, whether it's the Competition Act or the anti-dumping act or whatever you want, of any province or any federal government law overrides or is not subject to the Charter of Rights. What we're saying is that trade agreements must take recognition of our human rights legislation, our human rights treaties, ones that we've ratified, such as the International Covenant on Economic, Social and Cultural Rights, and that these treaties should take priority. We believe the two should be carried on together and they should be compatible with each other.

Now, an important matter with respect to the free trade of the Americas agreement is the question of consultation with civil society, with unions, with all those groups out there who would be affected by a free trade of the Americas agreement. I must say at the beginning that we appreciate the consultation that's being carried on by this committee and by the full committee on the WTO, but we weren't too pleased with the comments of one government witness, who described the NGO contributions at these hearings as, and I quote, “complaining, unfocused, and not trade-related”.

I must tell you that we, on the other hand, are frustrated that our input has very often not influenced government policy, and very often we're faced with consultation overload. As a matter of fact this is the third or fourth time that we, with very meagre resources, have to appear before committees, and often up against great business associations who have many, many times the resources we have. So I would ask the committee to consider the situation in which NGOs must appear with very meagre resources and prepare their briefs.

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I was in Santiago, Chile, last May, at the initial discussions. I took part in the NGO meeting with others from our centre and many, many NGOs and trade union leaders from across Canada and across the Americas. We had a very excellent meeting. Mr. Axworthy and Mr. Marchi agreed to meet the Canadians who were present there and we had an excellent meeting, which lasted beyond two hours. We expressed our views directly to the two ministers with their senior civil servants.

On that occasion Mr. Marchi said, and I quote, “We cannot go into the next century in a trade agreement without our workers in Canada behind us”. He said that Canada was committed—and Mr. Axworthy supported him on that—to a meaningful consultation process in the new FTAA, not just for Canada, but for the whole new organization to consult with the peoples of the Americas so they could have some say on what was being produced and they would be able to have a trade agreement that would respect the rights of ordinary people and workers as well as of business.

We confirmed, by the way, the things that were said in that meeting. I was one of the signatories who wrote a letter to Mr. Marchi on May 21, 1998, confirming what we had agreed to and what was said in the meeting in Santiago. That letter has never been answered, I'm sad to say. I don't know whether it's because there's too much mail on Sergio's desk or what, but that goes back almost a year now, and we haven't had an answer.

Among the things we thought were important for the consultation process were the following:

First, that civil society should select their own representatives. Governments should not select the representatives of trade unions or of groups they want to consult with. The civil society groups should select their own representatives.

Second, governments should respond to civil society proposals. What's the use of us coming and making proposals and suggestions and we never hear any answer, whether they're good or bad? If you don't like them, we should know why they're not good. We might learn something from that exchange as well.

Third, in many cases, not all, resources should be provided so that the consultations will be meaningful. You can't expect certain NGOs to compete with the National Council on Business Issues and come up with the same kind of research and briefs if they haven't got the resources to do that.

Lastly, we think that parliamentarians should always be involved.

We know that Canada took a certain leadership on trying to introduce a consultation process in the free trade in the Americas discussions, but so far they're not going anywhere. For whatever reasons, at the meeting in Santiago Mr. Marchi and Mr. Axworthy, in response to my question, said “No, it won't just be a mail box”. In other words, the consultation process won't be just a mail box where you can mail in your suggestions and so on; it will be a meaningful consultation process. But in fact so far it's ending up as a mail box. Maybe that's been beyond the control of the Canadian government; I don't know. But I must say that much more is needed if it's going to be meaningful.

We can say that many global trade agreements up to the present time have not resulted in the increased well-being of the mass of the peoples in the countries concerned. If we look at NAFTA, sure, certain businesses have benefited, but we have more people unemployed, more people on minimum wage, more people living on the streets, more people at soup kitchens. Canada was condemned for this as a result of the hearings before the economic and social rights committee of the United Nations in a report last year. In other words, there have been more poor people in our countries since these agreements than before, although a lot of people have got very wealthy out of them as well.

We believe that trade agreements and this trade agreement that's being proposed must make reference to core labour standards, must have provisions in the agreement that will deal with consultation with civil society, must have clauses that would give reference to the other treaties on human rights that we've signed.

I must point out that although Canada joined the OAS in 1990, unfortunately Canada has not yet ratified the inter-American human rights system or the convention on human rights in the Americas. We've been pressing with Mr. Axworthy that Canada ratify this important convention on human rights prior to the general assembly of the OAS, which is to take place in Canada in the year 2000.

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Canada has been a strong defender of human rights, generally, and if we're going to be a strong defender we should be a full player in the inter-American system, which is the inter-American human rights system with the Inter-American Commission on Human Rights and the Inter-American Court of Human Rights. That would be consistent with what we've done at the international level with the International Covenant on Economic, Social and Cultural Rights, and the International Covenant on Civil and Political Rights.

So we would ask you, as well, to press hard, not only for our ratification of the inter-American convention on human rights, but also the San Salvador protocol, which is specifically on economic, social, and cultural rights. I should point out that for this protocol to become active and enforced, it requires only one more ratification. So if Canada were to ratify the inter-American convention on human rights and the protocol, the protocol would come into operation.

I see my time is drifting by, so I'll close by simply referring to our—

The Chairman: You still have three minutes.

Mr. Warren Allmand: Oh, I do. I'll go back a page, although I'm just skimming through this.

If there were any thought of including investment in the new FTAA, we should look closely at the report that was made last year by the Sub-Commission on Prevention of Discrimination and Protection of Minorities at the United Nations. They analysed the impact of the MAI on human rights and workers' rights and said that the individuals dealing with the negotiation of these agreements should consider ways to ensure that future negotiations on the MAI or analogous agreements of measures take place within a human rights framework. In other words, as I said at the beginning, you cannot ratify treaties on human rights, forget about them, and then come over here and start ratifying treaties on trade, as if they were two separate worlds on two different planets. The two of them have to work together: human rights and trade.

I also want to refer to the report I just mentioned, the UN International Covenant on Economic, Social and Cultural Rights. In their report in June 1998 with respect to Canada, they put this question to the Canadian government: “What is the opinion of the federal, provincial, and municipal governments of Canada as to the effect of current or proposed trade and investment agreements, such as NAFTA, the Free Trade Area of the Americas Agreement, and the MAI, on the ability of those trade agreements to fulfil the obligations Canada has under the Covenant on Economic, Social and Cultural Rights, and what processes have been put in place to review these questions?” In other words, again, you can't do these separately.

I'll just go now to our six brief recommendations. The first is the primacy of human rights—

[Translation]

Mr. Benoît Sauvageau (Repentigny, BQ): Mr. Allmand, you were a Member of Parliament for quite a number of years, so you know that for the purposes of interpretation, you must speak more slowly.

Mr. Warren Allmand: Yes, of course. My apologies. Were the interpreters able to translate my remarks thus far?

Mr. Benoît Sauvageau: Yes, quickly.

Mr. Warren Allmand: I'll slow down.

Mr. Benoît Sauvageau: Thank you for your kindness and understanding.

[English]

Mr. Warren Allmand: It's because I have so little time and so much to say.

Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.): That's never stopped you before.

Mr. Warren Allmand: I try to obey your rules, Bob.

The Chairman: I'd like to hear your recommendations, and I'm sure other members would like to hear them too.

Mr. Warren Allmand: Okay. I'll just finish with this.

First, the primacy of human rights should be a guiding principle in the negotiation of trade agreements, including the FTAA.

Second, cabinet authority to proceed with these negotiations on the FTAA should be preconditioned upon the completion and evaluation of comprehensive studies on the impacts of trade and investment liberalization on economic, social and cultural rights. In other words, there should be impact studies done before you proceed with this particular agreement.

Third, there should be a transparent and accountable consultative process established with civil society with respect to this trade agreement you're considering.

Fourth, Canada should ratify the inter-American convention on human rights and the San Salvador protocol before negotiations on free trade in the Americas continues.

Fifth, the Government of Canada should not proceed with negotiations on an investment agreement in the Americas unless there are sufficient institutional safeguards to ensure the primacy of international human rights law.

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Finally, there should be a democracy clause in any such agreement, similar to the one that exists in the European Union. By the way, in the European Union no country can become a member or continue to be a member unless they prescribe to certain minimum human rights standards and the principles of democracy.

Thank you very much, Madam Chairman. We'd be glad to answer questions at the end.

The Chairman: Thank you, Mr. Allmand.

Next we have Martin Roy of the Canadian Foundation for the Americas.

Ms. Lucie Lafrance (Manager of Communications, Canadian Foundation for the Americas): My name is Lucie Lafrance and I am the manager of communications for the Canadian Foundation for the Americas. I'm actually replacing Denis Leclerc, the executive director of the foundation.

I will just give you a bit of background on what the Canadian Foundation for the Americas is. You will have received a list of our board of directors and also a one-page fax sheet about our organizations.

The Canadian Foundation for the Americas, or FOCAL, is Canada's premier policy centre on the Americas. We monitor developments in Latin America and the Caribbean, and organize conferences and workshops with experts on hemispheric affairs. We then provide analyses and recommendations to decision-makers on the issues we talked about at those conferences.

We had a major conference on the FTAA in October 1998. We also had a workshop with

[Translation]

Laval University's Institut québécois des hautes études internationales. Joël Monfils represents the Institute.

Without any further ado, I would like to introduce Martin Roy, a political analyst with FOCAL who has looked at issues surrounding the FTAA. Martin will also be able to answer your questions.

Mr. Martin Roy (Political Analyst, Canadian Foundation for the Americas): To begin with, I would like to mention that we try to address a number of issues in our presentation that may have been rather on the periphery of the debate in Canada on this issue, including the general linkage between Canada's trade and foreign policies, specifically in the Americas. We have also attempted to carry out a systematic review of Canada's goals in relation to the FTAA, goals that are not always evident at first glance.

To that end, we attempted to answer three major questions. What goals has Canada pursued thus far in relation to the FTAA? To what extent do Canada's positions and strategies in the negotiations support those goals? And to what extent are those goals valid or achievable?

In looking at those questions, we included in our analysis some non-traditional elements of the current debate. For example, what are the consequences of the stances Canada takes on its positioning in the region? We know that Canada wants to become an important player in the Americas. So, we tried to determine what the consequences of its policy positions might be. We also tried to review Canada's trade positions on the FTAA in relation to the regional context—in other words, the current reality in the Americas. As you know, particularly as far as trade is concerned, there are a number of economically integrated groups, various integration philosophies, as well as various degrees of economic development. So, we tried to see whether Canada's policy was rooted to any extent in the regional context.

So, what are Canada's goals? As I was saying, they are not always evident. It was only through systematic review of the statements and comments made by our representatives that we were able to more or less identify three major goals, which have been pretty well the same since 1994: diversifying trade relations and accessing new markets; promoting multilateralism through the establishment of high level discipline and trade standards; and increasing Canada's influence both regionally and internationally.

The first two considerations are what might be called traditional considerations. In the case of Canada, which is a neighbour of the United States, it is a matter of countering or perhaps mitigating the effects of its dependency on the United States, and perhaps even countering the United States' unilateralism in the context of trade agreements. As regards multilateralism, Canada has always been an ardent defender of multilateral institutions, as they are probably the vehicle which best serves its interests.

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As far as Canada's influence is concerned, we observed that at the end of the Cold War, Canada's influence began to wane on the international scene and that it tried to regain that influence in a number of regions, at both the political and trade levels. The examples that come to mind are Europe or Asia. Because of the favourable context, Canada saw the Americas as a platform for its international policy.

In terms of the positions Canada has developed to support those goals, as regards its diversification strategy, we know that very early in the process, before the discussions on the FTAA even began, Canada tried to broaden the NAFTA agreement to include other members, particularly Chile. Subsequently, given a certain reluctance on the part of Latin American countries to accept the NAFTA agreement as a model for the Americas as a whole, Canada proposed an FTAA that would include as many countries as possible.

As regards promoting multilateralism, Canada sees agreements such as NAFTA and possibly the FTAA agreement as a model or platform—a testing ground of sorts for the WTO trade negotiations. So, Canada sees this as essentially complementary.

As regards its market penetration strategy, we are all pretty familiar with Canadian initiatives in that area. The best known of those initiatives are probably the Team Canada trips in 1994 and 1998. As part of the current negotiations, Canada has focussed on multilateralism and tried to ensure that an FTAA is negotiated as quickly as possible.

One of Canada's first proposals to that end was to set the year 2003, rather than 2005, as the deadline for completing the negotiations. However, because a number of Latin American countries were reluctant to go along with that suggestion, Canada advocated interim agreements. The idea was that in certain areas, if there was sufficient progress, agreements could be concluded in those specific areas, such as investment or market access. That is something Canada has been pushing heavily in the current negotiations.

However, Canada's recent behaviour on the free trade front suggests two apparent shortcomings as regards trade policy formulation, namely a certain ambiguity in terms of the goals and interests to be priorized, and a still incomplete assessment of the consequences of Canada's stances on its positioning in the region.

A lack of consistency can be noted in terms of the strategies and actions intended to support those goals.

There is also the famous debate on bilateralism, as opposed to multilateralism. While on the one hand, Canada is taking on the role of defender of global multilateralism by promoting an FTAA based on high-level trade discipline, on the other hand, it is signing more and more bilateral agreements with a view to achieving preferential access to Latin American markets. Some authorities, such as the WTO trade policy review mechanism, through which Canada's trade policy was reviewed again this year, wonder about the scope of these bilateral agreements often felt to be discriminatory, their mutual compatibility, their effect on trade flows and, ultimately, the possibility of extending the provisions and benefits to as many countries as possible.

Indeed, there is reason to question the compatibility of Canada's goal of promoting multilateralism and those aimed at achieving closer ties with a number of Latin American countries, including Brazil. In that respect, it is important to consider that the regional integration model favoured by Canada in the current negotiations has meant that Canada has developed negotiating positions similar to those of the United States, which is probably normal, given the similarity and proximity of the two economies; however, it could be important to ask ourselves what the consequences for Canada's strategy of establishing closer ties with Latin American countries might be if it were to take a stance similar to that of the United States in the negotiations. In the case of Cuba, Canada makes use of a number of different instruments to try and set its foreign policy apart from that of the United States at various levels. As far as its trade policy is concerned, however, there seems to be no such concern.

One also notes a certain lack of realism as regards some of the goals advanced by the Canadian government, such as the one that states that the FTAA would allow Canada to more effectively mitigate the effects of our dependency on the United States and contain the latter's unilateralism. But that assumes, among other things, that the FTAA would allow Canada to make more substantial gains than those achieved through NAFTA. It remains to be seen whether the gains being referred to are of an institutional nature—in other words, whether provisions included in NAFTA, such as anti-dumping measures, would be renegotiated—or whether they have more to do with the number of players included in the agreement.

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On the institutional front, the anticipated gains would be minimal, given the divergence of opinion among the different countries of the Americas on the scope of the FTAA. I am referring in particular to the presentation made by a colleague, Jean Daudelin, who made exactly the same observation yesterday, that is that the positions of the main players at this time—the United States and Brazil—are still quite far apart and that progress is unlikely to be made in the short term in that area.

At the diplomatic level, it would be surprising if the countries of the Americas were able to contain the United States' unilateralism considering that the U.S. sees its own interests as vital.

That completes my comments with respect to the ambiguities and unrealistic nature of certain positions. We observed one thing before addressing Canada's goals and proposals: that there seems to be a certain ambivalence in the positions taken by Canada regarding its roles regionally and globally. Does Canada want to be one of the main players in the region of the Americas? Does it define itself first and foremost as a global trader or as a regional player? That clearly creates certain tensions.

In this case, should we be priorizing a high level of discipline and focussing on the WTO, or should we instead be adapting to the regional reality?

In my view, it is time that Canada priorized its goals and made more objective choices.

The first option for Canada would be to priorize multilateralism. In that case, if we use the FTAA as a vehicle for promoting multilateralism, Canada will have to maintain a relatively rigid position as far as the level of discipline is concerned, but it is important to realize at the same time that an approach based on closer ties with MERCOSUR countries, for example, could have some costs attached to it.

Given that the trade negotiations are moving rather slowly, that it is unlikely that any institutional gains could be made before 2005 and that this process will not move any faster than the WTO talks, Canada could priorize an approach emphasizing its regional integration that would be more sensitive to the concerns of some Latin American countries with which it is interested in developing long-term relations.

There would also be one final scenario or option, which would be to give priority to rapid market access. In that case, Canada could continue to try and sign bilateral agreements, in order to gain as much ground as possible before the Europeans arrive in the Americas. Because the Americans are not moving much in that area, Canada could take advantage of the markets, but in this case, it would run the risk of turning away from one of the fundamental goals of its trade policy, namely promoting multilateralism.

That concludes my presentation. I am now prepared to answer your questions. Thank you.

[English]

The Chairman: Thank you very much.

I know I have to keep the time tight, because there are six presentations we're going to hear, but please feel free, if you've not already done so, to file your papers with the clerk and they will be distributed. If you wish to go into more detail on any point, we would welcome that you do that. Thank you.

Next is the Alliance of Manufacturers and Exporters Canada, Mr. Myers.

Mr. Jayson Myers (Senior Vice-President and Chief Economist, Alliance of Manufacturers and Exporters Canada): Thank you very much, Madam Chair.

[Translation]

My name is Jayson Myers, and I am First Vice-President of the Alliance of Manufacturers and Exporters Canada. I would like to introduce Pamela Fehr, an International Trade Policy Analyst with the Alliance.

We very much appreciate this opportunity to present our views with respect to the significance that should be attached to negotiating a Free Trade Area of the Americas [FTAA], to Canada's current role as chair of those negotiations, as well as to some of the key issues upon which we believe Canada's negotiating priorities should be based.

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[English]

Our views represent those of our 3,500 members, among whom we've consulted extensively in ongoing consultations, not only with regard to the importance of the FTAA, but also, of course, with regard to upcoming negotiations in the WTO. As you know, our membership consists not only of manufacturing companies, but services exporters, as well as Canada's largest exporters of natural resources.

The majority of our members are small and mid-sized companies, although we also represent many of the largest multinationals operating in the country. Our members are drawn from every province. Together they represent 75% of Canada's industrial output, 95% of our exports, and 90% of the country's R and D effort.

Our members attach considerable importance to Canadian participation in FTAA negotiations, and to the successful conclusion of the free trade agreement encompassing all of the Americas by 2005. There's broad support for such an initiative, in fact broader support than ever before, first of all because of the growing trade, the growing investment on the part of Canadian companies in both Latin American and the Caribbean, and secondly because of the market opportunities companies see in Latin America. It's a market that is expected to grow to 500 million people, with GDP exceeding $2 trillion U.S. by 2000. There are also the benefits and opportunities many of our companies have seen as a result of NAFTA and Canada's free trade agreement with Chile.

According to the alliance's latest survey of its members conducted last summer—we're in the process of surveying our members again this year—542 companies responded, 64% viewed NAFTA as an opportunity, and 5% considered NAFTA a threat to their business. That is very different from what it was five years ago, when a majority frankly considered North American free trade as more of a threat or challenge to their businesses than an opportunity.

Their views have changed dramatically over the past five years. Of our members today, 46% regard Canada's free trade agreement with Chile more as an opportunity, and only 3% see it as a potential threat to their businesses or markets.

There's another extremely important reason why our members are looking at the negotiation of a free trade agreement with the Americas more than ever before, and that's because of the increasing penetration from competitors from Asia, Europe, and the United States into the Latin American market, and the extensive negotiations that are being conducted within Latin America itself. Countries like Mexico, Brazil, Argentina and Chile are negotiating other free trade agreements on a bilateral basis. This is a concern of our members, who are looking at accessing the Latin American market and don't want to be left out of preferential free trade agreements.

According to our survey, 79% of our members favour negotiation of a free trade agreement for the Americas, and I don't think that's simply a reflection of passive support for negotiations. There is certainly a consensus that if the United States and Latin American countries are going to be negotiating a free trade agreement, then Canada also has to be a part of that. We've heard that argument before in other contexts.

More and more today there is widespread support for a more proactive role on the part of Canada in negotiations, in pursuit of three objectives. First is to open market access in Latin America for Canadian goods and services. Second is to assure non-discriminatory treatment of Canadian investment in businesses operating throughout Latin America. Third is to make sure a transparent and effective system of rules is established governing regional commerce and investment, and there is a way of resolving trade disputes that avoids arbitrary application of trade remedy actions in the region.

The alliance itself has been actively engaged in FTAA issues since the Miami summit in 1994. We've been active participants in business forums held at the same time trade ministers have met. We're a member of the Business Network for Hemispheric Integration and we continue to work very closely with our counterpart business associations across the Americas, to further the joint interests of the private sector leading into FTAA negotiations.

We're working particularly closely with our counterpart industry associations in Mexico, Chile, and Argentina, promoting business linkages, trade and investment opportunities, development assistance, but also the development of common positions that can feed into the FTAA negotiating process. It's our work with those counterpart organizations that has allowed the alliance to play a direct role in our negotiations in both the NAFTA as well as in the Canada-Chile free trade agreement.

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This year, of course, Canada chairs the FTAA negotiations. The trade ministers meeting is slated for Toronto in November. This is an important and unique opportunity for Canada to set the stage for not only the scope of the negotiations, but also the content and defining the process of negotiations and the consultations every country will have to undertake in the development of an agreement affecting trade and investment across the Americas.

I think it's important, though, to outline the framework in which we see the FTAA and negotiations taking place, specifically in relation to what we see as the two pillars of our trade policy: the WTO on one hand and the NAFTA on the other. We believe the FTAA agreement certainly has to be consistent with the rules of the WTO, but we think the FTAA negotiations can at the same time take the WTO farther and faster, in line with Canada's multilateral trade and investment priorities.

Members of the WTO, including Canada and most of our negotiating partners in the Americas, are also preparing to launch a new “millennium round” of multilateral trade negotiations.

The alliance believes Canada should use the FTAA negotiations to further our multilateral trade objectives in three areas. The first one is to ensure that all countries participating in the FTAA are also party to WTO codes, particularly those related to market access issues, and that they all have open, fair, and effective legislative and regulatory regimes in place to implement WTO codes.

Secondly, I think it's important to build on and improve WTO regimes through the further reduction and elimination of unnecessary barriers to trade, recognition of the principle of non-discriminatory treatment of investment, and the establishment of common rules and processes for managing trade disputes.

Thirdly, I think the FTAA can facilitate WTO negotiations or push them further by helping to facilitate regional commerce through agreements and actions to streamline customs procedures, to harmonize technical standards, and above all to build effective and transparent regulatory regimes across the Americas.

FTAA negotiations should not be viewed then as setting a standard for what Canada is aiming to achieve in WTO. I think they promise an opportunity to allow us to achieve more in terms of a greater degree of liberalization across the Americas, greater security of market access, the elimination of trade and investment subsidies, and greater non-discriminatory treatment of investment than we're likely to achieve under the WTO itself.

The second pillar of our trade policy of course is the NAFTA, and that reflects the critical importance of our economic and business relationships with the United States. We think Canada's negotiating objectives within the FTAA then should be pursued in line with what we're also trying to achieve on a bilateral basis with the United States, our largest trading partner, and also within the NAFTA.

Along those lines, we think it's very important that the FTAA avoid any dilution of the advantages of market access or non-discriminatory treatment of Canadian companies that we already enjoy under the NAFTA. Here also, we don't want to erode the flexibility that we enjoy under the NAFTA as a sovereign country to negotiate free trade agreements with other jurisdictions outside of the Americas.

We also want to ensure that the relatively efficient and objective process of dispute settlement currently in operation under the NAFTA is not eroded.

I think it's important to ensure that NAFTA, as much as possible, is the model for FTAA. It's not in Canada's interest to see a patchwork of free trade agreements emerge across the Americas that some of our partners in NAFTA may be party to and some may not be party to. So the uniformity of rules and common access to an FTAA for NAFTA members is very important. It's not in Canada's interest either to keep on reopening issues we've dealt with under the NAFTA. I think we'd like to see not only FTAA consistent with our NAFTA obligations, but as comprehensive as possible in terms of participating states.

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Finally, it's not in our interest either to have the terms of the FTAA defined by any single economy, any large economy in the Americas. So it's extremely important to use the FTAA to build a regional counterbalance, particularly in the settlement of disputes.

I think it's also important to build on and improve the scope and security of Canada's access to markets and its NAFTA partners. I think we can achieve that as well through the FTAA. Of specific concern to our members are issues such as extending the NAFTA or extending free trade within the NAFTA region to cover financial, telecommunications, and shipping services, and freer entry of professionals, and sub-national procurement issues. The issue of “buy-America” is a particularly daunting problem for many of our members, but also, of course, the application of trade remedy laws, and some of the clarification of rules governing the treatment of investment.

Trade ministers have identified some key areas for FTAA negotiations. We think some short-term objectives can be achieved through market facilitation, the streamlining of customs procedures. This is important.

Trade remedy laws are also very important. We've distributed to you a more technical brief on some of the issues in relation to countervailing anti-dumping matters where we think the WTO regime can be extended further.

Let me conclude by saying I think FTAA poses many of the same challenges as we have talked about before with WTO. It poses challenges in dealing with the number of economies at different stages of economic development, and more importantly, at different stages of political development, which is perhaps the biggest challenge of all.

We feel it's extremely important to make sure that the FTAA negotiations, as the WTO negotiations, are not free trade agreements that are negotiated solely by trade officials among these countries, but do encompass as broadly as possible other members, including business and other members of civil society, to make sure those issues are on the table.

Again, let me say that I think FTAA can take us further than what we're trying to achieve in the WTO, and can also bring us, I think and I hope, under a leadership role Canada could exercise, to a means of improving our market access into our largest market as well, which is the NAFTA market.

Thank you.

The Chairman: Thank you, Mr. Myers.

Next is Mr. Joël Monfils.

[Translation]

Mr. Joël Monfils (Institut québécois des hautes études internationales, Université Laval; as individual): I'm sorry, but we did not make a joint presentation.

[English]

The Chairman: Then we'll hear from the International Development Research Centre.

[Translation]

Ms. Caroline Pestieau (Vice-Chair, Program Branch, International Development Research Centre): Thank you, Madam Chair. We are very pleased to have been invited to present our brief to the Committee. I will turn it over to my colleague, Rohinton Medhora, who prepared our brief. Following that, we will both be available to answer your questions. Thank you.

[English]

Mr. Rohinton Medhora (Senior Program Officer, International Development Research Centre): Thank you for having me as well.

IDRC is a public corporation created by Parliament in 1970. Our mandate is capacity-building in developing countries, and our operations are in several fields, including environmental management, social sciences, economics, health, and information policy.

The brief we have given you contains some outputs we would be happy to send to you on work we've supported on economic and trade reform.

My presentation is divided into four portions. I'd like to spend a bit of time on the sort of “aid, trade, and Canada” nexus of issues. Next I'll talk a bit about about the WTO and FTAA process and what some of the issues that need signalling there are. Third, I'll situate this debate in the larger context of international economic relations, and finally, I will conclude.

I should also add that we're not necessarily an advocacy institution. We don't have firm positions on issues. What we do is support research and capacity-building efforts elsewhere. So what I'm doing is synthesizing the results of our research partners, in many senses.

• 1620

On the aid-and-trade side, developing countries as a whole account for about one-third of the total world trade, and the southern countries that comprise the FTAA account for about one-third of that. Developing countries as a whole have seen their trade grow one and a half times that of developed countries, and the FTAA performance is more dynamic than that. It has grown by about twice as much. The point I'm trying to make is that as a proportion of the big picture, this is a small window within it, but it's a very active and dynamic window.

The second point I would make is that although what we're talking about may be a relatively small amount, trade, as we know, matters a lot more to developing countries simply because the institutions and capacities to manage change tend to be weaker. So a lot of our effort is aimed at changing the environment in which decisions are taken and policies are implemented.

There are two issues that come from this that are relevant to our discussion today. The first is that when we recommend to developing countries liberalization of any sort, be it trade or financial, this has to be tempered somewhat by the fact that these policies or recommendations have implications for poverty and development in the short and medium run. So we need to think of the long-term benefits of trade and liberalization. But the consensus of the literature and elsewhere, which we support, is that the link between liberalization and development is not a very simple one. In fact, a lot depends on the initial conditions in the countries where the liberalization takes place and also the quality of the social, economic, and political institutions that are managing this change.

The reason I mention this is because developing countries as a whole, including those in Latin America, find themselves receiving advice from a number of quarters, not just from the WTO and its range of institutions but also from bilateral donors, the IMF, and the World Bank, where Canada plays a role. So I think there's something to be said for consistent advice being provided to these countries, which isn't always the case.

The second point—and here I simply underline the types of issues the North-South Institute mentioned to the full committee about a month ago—is that there is a range of liberalizing measures developed countries as a whole, especially Canada, could take to increase the intake of Latin American and developing country goods and services. This is really a logical extension of what many of us believe in, which is trade and not aid.

The challenge, then, for Canada would be to use the influence it has in fora such as the G-7, the IMF, the World Bank, the WTO, and the FTAA negotiations to temper some of the more unabashedly liberalizing advice that is given to these countries and at the same time use its goodwill within the south to make sure that the right policies are implemented through its own bilateral and multilateral aid programs.

Next I'd like to talk a bit about the FTAA and WTO agenda. The point I'd like to make here is that the WTO process is a lot more advanced, of course, than the FTAA process is and that lessons can be learned from the advanced WTO as well as from the NAFTA process.

There are a number of challenges, and in our brief we mention three, developing countries will face in an FTAA-WTO world. The first is that when you choose to sign on to an agreement—and sometimes this is not a choice—a range of changes have to be made to trade and industrial policies in order for the country to have policies that are compatible with membership. The second is that many developing countries now face a choice as to how to deal with the WTO as opposed to a regional trade grouping. The third is that membership, as they say, has its privileges, but it also has its obligations.

The second point, on whether, how, or when a country should join a regional or multilateral trade agreement, is not something on which Canada perhaps has a lot of influence. But we can influence the first and third points, so let me spend a few minutes talking about those.

When we talk about countries making adjustments to join the WTO or perhaps in future signing on to the FTAA, there are likely to be a lot of changes, particularly on the fiscal policy side, such as tax harmonization and doing away with export subsidies while at the same time maintaining policies that promote competitiveness, on which Canada has a lot of expertise. There's a lot of expertise that needs to be nurtured but not necessarily in an old-fashioned fly-in, fly-out mode. So there's a lot of room for very solid capacity-building of the sort I think we're doing in these countries, and I'll briefly describe that.

• 1625

The next point I should make here draws from an analogy the first presenter made between something that exists at the national level but not at the international level, which is that laws should be subservient to the charter of rights. I think your point was that this isn't necessarily the case at the international level. Here's another example, and there are several of them. We also find that everyone should have equal access to the legal system. That's a principle we accept at the national level. It is not a principle that exists in any meaningful way at the international level.

What I have in mind is the dispute resolution process of the WTO. A number of proposals have been floated to provide poor small countries with the legal, financial, and technical expertise they need to bring disputes to the dispute resolution process. It seems to me that when we're designing an FTAA, we should think about that and build that in at the very start, which is to say that not everyone is going to have equal access to dispute resolution. This is something we ourselves, as a small and open economy, value very much, to live in a system with rules that are enforced. So this is a very practical agenda item that in this case Canada can support.

IDRC itself has a number of projects in Latin America that are moving toward building the capacity to manage change and economic reform in the area of trade. We're working with the MERCOSUR countries to analyse the impacts of different aspects of MERCOSUR on each other. We also have a large multi-country network of researchers and policy-makers that is looking at the future WTO agenda for Latin America as a whole. We have similar projects in Asia and Africa.

The third section of my presentation has to do with situating some of these items in the larger context. In one sense I've already dealt with the larger context in this case, which is that trade issues compete with a lot of developmental and financial concerns in many of these countries. The other side of that is that countries have different modalities with which to face or deal with trade issues.

What we saw during the Uruguay Round is that although there was a framework called the Uruguay Round, the Cairns Group relatively spontaneously emerged, which was a very flexible, single-issue coalition of countries that probably didn't have anything else in common save for agriculture. Although the Cairns Group was not fully successful, it is in many senses the harbinger of the type of trade negotiations we're likely to see in future. By that I mean single-issue coalitions that are fluid and flexible and that come together to deal with particularly vexing issues, whether the framework is FTAA, WTO, NAFTA, or anything else. These are the types of coalitions for which you need policy analysis capacity in the first place to decide what your position is going to be and whether or not you join.

To conclude, let me suggest to you the following. If in fact poor small countries are going to play in the larger FTAA and WTO process, there are going to be three prerequisites. One is a civil society where issues are debated openly and critically. The second is indigenous analytical capacities to assess policy change. The third is the financial, technical, and human resources countries will need to adapt to this change. The role of Canada, then, and of institutions such as IDRC is to enable these countries to do just that.

Thank you.

The Chairman: Thank you very much.

I'll now call upon Peter Bleyer, the executive director of the Council of Canadians. Welcome.

Mr. Peter Bleyer (Executive Director, Council of Canadians): Thank you, Madam Chair, and thank you to the committee for hearing us.

With me was Anna Dashtgard, our trade campaigner. I'm sure she's doing well campaigning up and down the hallways of the House of Commons. She didn't want to waste the time while we were here.

Most of you are aware of who and what the Council of Canadians is.

I thought maybe it was Anna who just came in the door, but it was Jayson Myers, supporting the council's work in the hallways of the House of Commons.

• 1630

We're a national, non-profit, public interest group. We currently have approximately 100,000 members. I'd like to say that we believe our growth in membership is at least partly due to the fact that whereas certain sectors within Canadian society may appreciate the gains they've had under NAFTA, the vast majority of Canadians are very concerned about trade and investment liberalization.

Trade and investment liberalization has been a concern of the council since its formation in 1985. We were very engaged in the debate and work around the MAI, as most of you know, being veterans of that debate in one way or another. That campaign we believe is moving into the next phase, which includes a process we call the MAI inquiry. We hope to present the report of that to you within a very few weeks.

Later this week the trade ministers of Canada, Mexico, and the U.S. will be meeting in Ottawa discussing issues related to NAFTA. We think this is very much an appropriate time for you and all Canadians to consider the FTAA and Canadian participation in the FTAA. It's now five years since NAFTA came into force as probably the trailblazing agreement for the particular model of trade and investment globalization that has been sweeping for a while all before it, at least until very recently. And the FTAA is very much intended to follow through on the pattern of existing agreements like NAFTA. As has been pointed out, it's very much viewed by the Canadian government, it would appear, as the model to be extended throughout the hemisphere.

For over a year now we've heard voices of people around the world, corporate leaders and statesmen, who have been at the forefront of promoting this model. Obviously that's probably more statesmen than otherwise, but that's a problem that will no doubt be corrected. And these people themselves, some of them at least, are openly questioning the benefits of proceeding further down the course that they had until now proposed. I don't want to suggest that all of the leadership of the corporate sector has changed its mind. Clearly, we've been told that's not the case. But there are cracks appearing.

Nevertheless, Canadians fear that their current government is intent on really escalating our involvement in trade and investment liberalization, the same course that was plotted on the MAI.

Canadians are fearful of this because they and their communities have really suffered the consequences of the model first imposed in the Canada-U.S. Free Trade Agreement and then NAFTA, which has really become the weapon of choice for corporations, particularly American corporations, who are seeking to get around and overturn Canadian laws and guarantee their own economic benefit. In the past year alone there have been four lawsuits launched against Canada by U.S. corporations. One of the better-known examples you have heard about and dealt with is the Ethyl Corporation case, where Ethyl successfully pushed our government to reverse a ban on the MMT gasoline additive, which is suspected of being particularly harmful to young children. And adding insult to injury, of course the Canadian government, on our behalf as citizens, paid out a settlement to Ethyl as well as a rather stark letter of apology.

An issue we're currently dealing with in more detail is the issue of water. The U.S.-based Sun Belt Water Inc. was the third U.S. company in less than a year to launch a NAFTA lawsuit against Canada. In this case, Sun Belt is suing Canada because of an earlier B.C. government decision preventing the company from exporting billions of litres of fresh water from British Columbia to California.

Over the past year alone, NAFTA chapter 11 challenges and rulings at the WTO.... It really is a package we're facing, as has been referred to, of various agreements and different fora around trade and investment liberalization. So decisions of the WTO, challenges at NAFTA, and a variety of other situations have challenged the fundamental sovereign ability of Canadians to promote our own culture, to protect our environment and our health, and to support productive investments and job creation in this country. You are as aware as I am of the various instances in which this has occurred.

Frankly, for people around the world beyond our national borders, trade and investment liberalization has had far harsher consequences. Far be it from the Council of Canadians to plead that Canada and Canadians are the greatest victims of liberalization. That's far from the case. But that's no reason for us to support the model.

• 1635

As a model, trade and investment liberalization strives to bring social and environmental standards to the lowest common denominator and then reach for new depths. As a result, poverty is booming in most of the world, and all over the planet the flora and fauna and our air and our water are increasingly directly at risk.

It's a model that promotes a growing export dependency for developing countries where the focus on risky cash crops for export to the north has led to growing poverty, hunger, and environmental degradation. Again, you can choose your continent. The examples are legion.

It creates export processing zones where workers live in terrible and often terrifying conditions. Obviously, within NAFTA we're most concerned about what's happened in the maquiladoras, but this is spreading around the world.

It opens up capital flows, allowing speculators to make huge profits at the expense of the real wages of the majority of people.

It leads governments in the north—and our government is a good example—as it does in the south to slash spending on the legitimate social needs of their citizens.

So against this backdrop it is rather difficult for us to understand why our government continues to pursue these trade deals, including the FTAA, and particularly why we would seek to extend these agreements to cover investment, and in the FTAA case the so-called “early harvest priority”.

Basically our recommendations are I think very straightforward. We believe that the Canadian government should stop talks to further trade and investment liberalization, including the FTAA, and instead engage in a real dialogue with Canadians about the social, economic, and ecological consequences of this model for globalization.

To have that real debate, there's another prerequisite. Rather than expanding the model through the FTAA.... And the WTO is equally concerning, as well as the multiplicity of bilaterals we're engaging in, in fact too many for me to know about, let alone to name; it's going on every day. Canadian bureaucrats and sometimes elected officials are out there making these deals. We need to insist on wide-ranging assessments of the impacts of these existing agreements in terms of what they've done so far to Canadians and what they've done to other peoples around the world, as well as what we feel the prospective impacts of extending these agreements might be in terms of economic, social, and environmental factors, democracy, and the transparency of the political decision-making process. Frankly, these agreements have placed growing power in the hands of transnational corporations. Not only have they excluded civil society, they've excluded you.

One of my favourite Canadian economists, and some of you might share my taste, is Mel Watkins. Back in 1988, when those of us who at the time opposed Canada-U.S. free trade were asked what was the alternative, Mel put it very succinctly, I think. My recollection of what he said is that when you're about to jump off a cliff, not jumping is a pretty good alternative.

Today I think that is only the first step, the first but critically important first step. If you don't take that first step, obviously you've foreclosed any alternative routes. Jumping off the cliff limits your options thereafter. The first thing you need to do after deciding not to jump off the cliff is to reconsider objectives. Objectives were spoken to by other presenters here today.

Fundamentally, trade and investment need to be instruments for achieving just and sustainable development, not ends in themselves. We've heard far too much from from our political leaders, our government, about the inherent good of increased exports, the inherent good of trade agreements and liberalization, and not enough about how we're going to achieve just and sustainable development through these agreements.

The policies should aim to promote economic sovereignty, social welfare, and reduce inequality. They should allow governments to ensure that economic activity is environmentally sustainable. They shouldn't undermine the ability of nation-states to meet their citizens' needs, social and economic, or to protect their health or the viability of their communities. And finally, they should protect human rights for all.

Thanks for your time.

• 1640

The Chairman: Thank you very much.

Colleagues, we have 50 minutes left for questions. I would ask both colleagues as well as witnesses who will be answering.... I'd like to give each colleague a maximum of ten minutes so we can all get through by 5.30. Perhaps you can also keep your questions and answers short so we can get in a number of questions.

Mr. Penson, please.

Mr. Charlie Penson (Peace River, Ref.): Thank you, Madam Chairman.

I thank the panel members for coming today. I thought it was a very informative presentation and it certainly provides grounds for thought in various areas.

I was intrigued when, in the presentation from the Alliance of Manufacturers and Exporters, Mr. Myers said that a number of their firms, when polled, had suggested that acceptance of the free trade agreement had gone up fairly dramatically over the years. I would suggest that assessment has also been done by Canadians in general. My understanding is that polling for the Canadian public shows similar numbers. The number of people who believe it's good for Canada is up from five years ago into the 80% range. So in terms of assessment, which was talked about by Mr. Bleyer, I think that assessment has largely been done already by Canadians seeing the benefits of these trade deals.

In terms of poverty and opportunity, I think the experience with the Canada-Chile free trade agreement, and also prior to that, when they went to a market economy.... I was there about three years ago, and they told me that poverty levels in Chile were about 20%. That's still fairly high, but six years earlier it was 30%. So there are different methods of getting people out of the poverty situation, and in their experience it's been a good opportunity. I think “opportunity” might be the key word here. Developing countries are looking for an opportunity to export their products and to have access to some of the big markets.

I want to ask some questions regarding the civil society aspect of this FTAA. It's something I think developing countries especially are struggling with. How do you have a civil society input in some of the developing countries versus having the democratically elected members suggesting that they're speaking for the public?

Mr. Allmand, considering that you represent the International Centre for Human Rights and Democratic Development.... It seems to me that the contradiction is here. I've heard it at a recent summit in Miami, where leaders of developing countries in South and Central America are saying they speak for the public and are democratically elected on these issues. Yet I hear you telling us that's not good enough; they're going to have to come back and tell us they've got civil society's support. Could you square that?

Mr. Warren Allmand: Yes. I must point out that we work very closely with civil society groups in all the countries in which we operate—Peru, Guatemala, Mexico, Pakistan—around the world. The groups we work with on these issues in Latin America strongly favour a civil society consultation with their governments and with the to-be-created FTAA, some sort of representative group.

Now, as you know, in Canada you are all representatives of the people, but you would never think for a moment of passing legislation in Canada without consulting with the public through committee hearings, royal commissions.... Or I hope you wouldn't; you didn't when I was here, and it looks like you still aren't. Even yesterday, my colleague Carole Samdup was involved in consultations on trade matters with civil servants. In other words, the Canadian government thinks that despite the fact that we have elected parliaments at the provincial and federal levels, we don't know, as representatives of the people, everything about everything. Consequently, there's a need on specific issues to consult with the business community, with NGOs, with research groups, and so on. So there's no incompatibility with this. As a matter of fact, probably you've done the same.

I visit countries in Europe very often, and they have very strong consultative processes on different types of legislation. What we're asking for is that there should be similar processes, even though they're not as accustomed to it in many countries in Latin America. I'll tell you very frankly that the people at the grassroots level, through their associations—whether they're professional associations, churches, trade unions, NGOs—believe that if something is going to affect their lives, there should be consultation with them. Simply electing representatives to a congress or a parliament is not enough.

• 1645

Mr. Charlie Penson: Mr. Allmand, some of these countries in South and Central America are pretty fragile democracies. They haven't always been there. Wouldn't we want to try to encourage that they continue to develop, rather than throw roadblocks in their way? They are making the case that they are finding it very difficult and they may not be part of these negotiations if that is a requirement we impose on them. Sure, that's what happens in Canada, although it hasn't always been the case. This idea of civil society consultation is a rather recent development in Canada, and some might even say that it's orchestrated to a large degree.

I guess I'm asking you whether this is your prerequisite to a trade deal, that these countries have to have that kind of input. I would invite Mr. Myers to comment as well.

Mr. Warren Allmand: In quick answer to that I would say that it assists in the development of democracy rather than hinders for countries to do things with the support of their people. It's more likely that we'll end up with a trade agreement that's acceptable to the grassroots in Brazil, Argentina, Chile, and Peru if you consult with those people rather than simply pass one without any consultation whatsoever.

Mr. Charlie Penson: Mr. Alland, are you suggesting they're not consulting with their people now? The democratically elected people—

Mr. Warren Allmand: I have to tell you, yes. We're in close contact. I was at the people's summit in Santiago, which ran just prior to the government summit. We had people from nearly all the countries in the area of the to-be-developed FTAA, and they felt that in many of those countries there wasn't that kind of consultation. In many of those countries there isn't the kind of consultation that you're doing now. As a matter of fact, on one occasion we brought people from the indigenous community in Peru to meet the ministers. That was the first time that had ever happened. We helped to try to establish that type of consultation as a democratic process.

By the way, this isn't our idea, Mr. Penson. We're simply putting forward the ideas that people we work with in Latin America are asking for. We're supporting their proposals. We would hesitate to suggest something for any country in Latin America that the people there did not want themselves. It's the people in those countries that are trying to develop their democracies who are trying to do that.

The Chairman: Mr. Myers, Mr. Penson wanted you to comment.

Mr. Jayson Myers: I think, very generally, that of course you want to build as strong a consultative process as possible, as strong a public backing as possible for what any government is trying to achieve. That may be more important today than it was perhaps even five years ago when we were negotiating NAFTA.

I have a number of concerns, though, about issues in which we're engaging civil society. I think one of the concerns is that we make sure the input that is coming in is actually reflective of the economic circumstances these societies face and also reflective of the reality. We're not entering into a system of free trade negotiations and creating this out of the dark. There are many countries, especially the largest countries in Latin America, that have already entered into free trade agreements, that are working within MERCOSUR. The Chilean government has entered into a number of free trade agreements. The Mexican government is negotiating free trade with the European Union. This process is going ahead anyway.

From a business standpoint, of course we would like to see effective free trade agreements put in place. This is a process in which governments are negotiating right now and in which they need the support of various public groups where it's in their interest to do it. But I don't think it's in our interest to impose upon these governments a standard in environmental or social issues about which they are unwilling to talk and begin negotiations.

The Chairman: You may ask a quick question.

Mr. Charlie Penson: I have a short question for Mr. Medhora from the IDRC. It seems to me the approach your organization is taking is very beneficial to the process. I wonder if you'd comment on the negotiation taking place, given the different scale of size of economies, and whether small countries with small economies will be able to dovetail here on the same timeframe, or if you'd like to see a special consideration for circumstances that would have to be met at a later date in the FTAA for those kinds of economies.

• 1650

Mr. Rohinton Medhora: I think you've hit the nail on the head.

There are two points I would make here. The first is that the FTAA has the potential to be far more of an unequal arrangement than the millennium round ever will be, just because of the diversity in the power and the size of the economies. The way that's been dealt with in the GATT and then the WTO has been exactly what you suggested, which is preferential rules for adjustment for the poorer economies. I would think, although I have no way of being certain, that this type of arrangement should be negotiated in the case of FTAA.

The second point I would make is that there is some kind of safety, if you will, in numbers or economies of scale in research. For the smaller Caribbean economies or some of the Central American economies, there is no alternative but to do a lot of their negotiations together. That's where capacity-building comes in. This is not just a statement on the power of Canadians or Americans. There's Mexico, there are Brazil and Argentina, which are regional powers in their own right.

So you're quite right in suggesting that it's a much more nuanced situation than simply saying let's everyone negotiate at the same time.

The Chairman: Thank you very much.

[Translation]

Mr. Sauvageau, do you have any questions?

Mr. Benoît Sauvageau: I want to thank all our witnesses for their very useful comments, which will certainly be of assistance in drafting a more comprehensive report.

My first question is for the representatives of FOCAL—for Mr. Roy and the other representatives. Your comments are indeed similar to the ones made yesterday by Mr. Daudelin, but I would like a couple of clarifications.

You referred to three possible choices for Canada: multilateralism, regional insertion and giving priority to rapid market access. Is that right?

Mr. Martin Roy: Yes, exactly.

Mr. Benoît Sauvageau: Which of these three choices do you advocate? As the saying goes: Grasp all, lose all. If we don't focus the negotiations on the FTAA, do you think we should instead focus on a group such as MERCOSUR, the Andean Pact or CARICOM? Mr. Daudelin told us yesterday not to be so keen. Should we simply withdraw? That's my first comment.

My second question is addressed to Mr. Myers et Ms. Fehr. It is also inspired by the comments made by Mr. Daudelin. In your brief, you say that one of the reasons prompting us to negotiate is increased exports and investments by Canadian companies in Latin American and Caribbean countries. Do you have any figures on that? Is there really growth in that area? You know, there may have been a 100% rate of growth, but that really means nothing. If our exports were worth $1 million before and are now worth $2 million, we have indeed increased them by 100%, but it's 100% of nothing. Do you have any figures on that?

You say a little further on that the Free Trade Agreement with Chile has opened doors and that 46% of your members see this as something positive. Have exports to Chile increased and, if so, by how much? Those are my two questions. I may have others if I have any time left.

Mr. Martin Roy: I will let my colleague answer. We're on the same wavelength.

Mr. Joël Monfils: If I can answer the second part of your question, we are certainly not suggesting that Canada withdraw from the FTAA negotiations, if only because of the costs associated with that defection. First of all, it would be harmful to the efforts we have already made in the region, through the OAS and other forums, to enhance our regional integration.

As for our preferred option, we deliberately presented three different scenarios. Our position is that Canada must make a choice, but we deliberately avoided making that choice for Canada.

Mr. Benoît Sauvageau: But you're saying we shouldn't be so enthusiastic.

Mr. Joël Monfils: Less enthusiastic involvement is one of the choices it has. Canada could decide to pursue the goal of better market access. In that case, it could do the sort of thing you were talking about earlier—in other words, try to find ways of reaching agreements with regional groups or concluding bilateral agreements, which would take less time than the FTAA process. On the other hand, it could continue to try and achieve a high level of standards or discipline. We are saying that Canada has to make a choice and that it must continue to give due consideration to the consequences. If it wants a high level of discipline, that will necessarily slow down the market access process.

• 1655

Mr. Benoît Sauvageau: Thank you very much.

[English]

Mr. Jayson Myers: As far as the evidence of increasing business activity on the part of Canadian companies in Latin America, I don't have the statistics with me today, but I would be very happy to provide you with that evidence.

The Chairman: Please. I think that would be very important, because evidence we heard yesterday was that it's very limited. So it would be very important if you could file that with us.

Mr. Jayson Myers: That's right. It is relatively small in terms of current levels of both investment and exports, but it is growing rapidly. You can see that not only from.... I have to caution the committee in using Statistics Canada information in terms of our exports, because those numbers reflect the port of embarkation, the first country exports travel through; it's not necessarily the end destination. So any of our exports that are trucked through the United States to Mexico appear as an export to the United States, and not to the Mexican market. Certainly if you look at those numbers themselves, you see an increase in both exports and investment into Latin America.

If there's anything that has detracted from the enthusiasm of Canadian companies—and particularly I think this is true with respect to Mexico—it's some of the problems they've met in terms of getting their product through Mexican customs, dealing with some of the rules and the regulations affecting investment. We have a free trade agreement, but in actual fact the implementation of rules is something to be desired and something that I think, when we're talking about building capacity, is a very important thing to be looking at.

Today Canada is the second-largest investor in Chile. The investments that are in Chile have led to a growth of not only exports into that market, but more investment following particularly the mining investments. We're seeing similar things in Argentina and Brazil.

Some of the overall statistics from EDC may be a little bit more reflective of the enthusiasm. And from the surveys we're conducting of our members, certainly not a majority of them are looking at Latin America as the favourite market or the market of most opportunity; they still see that as the United States, of course. But 15% to 20% are saying they're looking at expanding their business in Mexico or in Latin America. We'll be very pleased to provide you with those statistics as well.

[Translation]

Mr. Benoît Sauvageau: Unfortunately, we have to priorize our questions. I had some for all the groups. If I'm allowed a second turn, I will have other questions.

You say in your brief on page 5 that we have to ensure that NAFTA serves as a model for the Free Trade Area of the Americas. It seems to me we said earlier that it was not a good model to follow. Do you think that NAFTA should be used as a model to negotiate the Free Trade Area of the Americas or is there another model we should be considering?

[English]

Mr. Jayson Myers: I think we have to be very careful about using NAFTA as a model, particularly when we are dealing with the issue of smaller economies. I know when we were looking at negotiating free trade with Chile and the issue of rules of origin arose, whether we use NAFTA rules or whether we use bilateral rule of origin, it made a big difference to both Canada and Chile that we used a bilateral rule of origin there.

I'm not saying that NAFTA has to be the absolute model that is imposed in FTAA. I think the point is that the FTAA should be working toward an agreement that is consistent with what we already have under the NAFTA, and that we don't want to negotiate something in the FTAA that would not be as favourable as the terms we now have with our NAFTA partners.

• 1700

We may, as we did in Chile, negotiate the end of an anti-dumping regime and an agreement to deal with trade disputes and anti-dumping matters through negotiation. I think that would be a very favourable outcome of FTAA. It would be different from the NAFTA. That is a change in NAFTA we would like to see, in our relationship with the United States in particular.

The Chairman: Thank you.

Mr. Assadourian.

Mr. Sarkis Assadourian (Brampton Centre, Lib.): Thank you very much.

A few weeks ago we heard testimony from the Council of Canadians similar to the presentation that Peter Bleyer made earlier. I didn't have a chance to ask the person this question then. Of course this has to do with free trade. In the parliamentary system, opposition MPs never ask good questions; they always try to make us look bad. So I'm going to take their part and make you look bad.

If you make a comparison from 1988 to now, in the States and here in Canada, with free trade, unemployment was 11.5% in Canada, and now it's 7.8%. The interest rate was about 14% or 15%, and now it's 6% or 7%. The deficit was $42 billion, and now there's a surplus of $10 billion. Exports are up. Inflation is down from 10% to 1%. And you're telling me free trade doesn't work. Now, tell me why it doesn't work. If free trade is so bad, give us the figures for investment in and out of Canada for the last five years, if you have any.

Mr. Benoît Sauvageau: Then you can know why the government was against it before.

A voice: It must be working; the liberals are for it now.

The Chairman: Mr. Bleyer, please take the microphone.

Mr. Peter Bleyer: It's good to have so much support.

I guess I want to invoke the Maude Barlow clause. I can't be expected to provide as concise and appropriate answers as our chair would, who was speaking to you then. I would also invoke the Jayson Myers clause, which is that I don't have figures with me, but we would be happy to provide you with them—although I'm not sure I would ever find the figures you want me to provide you with, given that you're implying—

Mr. Sarkis Assadourian: Do you disagree with the figures I gave you?

Mr. Peter Bleyer: Not with the unemployment figures and not with the figures on the interest rate, although we could quibble. I think speaking of real interest rates is more than quibbling, because there are fundamental issues around what is an interest and what is a real interest rate. In any case, what you have pointed out is important.

In terms of employment, one of the issues is what kind of economy are we developing under this model trade investment liberalization. We have the American miracle to the south of us in terms of employment, which we compare with less than favourably. I'm not arguing in favour of the American miracle. I'm pointing out that the kinds of social norms, the levels of employment, the types of employment and so forth that get generated in this new liberalized economy are what are sometimes referred to as “McJobs”.

Mr. Sarkis Assadourian: What does that have to do with free trade?

Mr. Peter Bleyer: It's not just to do with free trade, but free trade in NAFTA is one of the core pieces of this model of trade investment liberalization, which is part of a broader liberalization model. I wouldn't argue that the only reason the Canadian government, be it your government or your predecessors', led by the Progressive Conservatives—I guess they just don't have members to show up at committee hearings—

Mr. Sarkis Assadourian: They're not interested.

Mr. Peter Bleyer: They may not be interested.

What we would argue is that unfortunately the damage that has been done to social and economic infrastructure in this country was simply as a result of NAFTA. For example, if you look at the level of coverage of unemployment insurance, the fact that the unemployment rate today is not dramatically higher than it was when we first signed the free trade agreement does not compensate for the fact that among the people who are unemployed, far fewer of them can rely on any sort of payment from the state, any sort of insurance program and so forth.

We're not arguing that NAFTA is the cause of that, but we're arguing that there's a model here that NAFTA and subsequent agreements, should they come to pass, like the FTAA—

Mr. Sarkis Assadourian: What's the alternative, to break up NAFTA?

Mr. Peter Bleyer: I'm glad you asked what the alternative is, because I actually had a document here with me that I was hoping.... I'm sure that others who have spoken to you or who will speak to you will present this document.

• 1705

When I referred to Mel Watkins' point about not jumping off the cliff, I wasn't implying that saying no is enough. In fact Canadians in civil society and others who have been engaged in this debate around free trade since 1988 have come to the conclusion that saying that doing a bad thing is not the way to go is not enough, and have been doing the work with partners around the hemisphere and around the world to develop a whole range of alternatives that are available, for example, in this book entitled *iAlternatives for the Americas: Building a Peoples' Hemispheric Agreement*or, which is published jointly by Quebec, Canadian, Mexican, Chilean and American organizations.

So there are alternatives out there. We have made a choice. Our governments have made a choice. Our corporate sector has made a choice. And our corporate sector, frankly, has had plenty of voice in determining what our governments have done.

The Chairman: Mr. Bleyer, we actually do have these. They were given to us yesterday by Mr. Bruce Campbell. We have copies for all the committee members.

Mr. Peter Bleyer: Excellent.

The Chairman: Mr. Myers, you want to comment as well.

Mr. Warren Allmand: Could several of us comment on that same question from my good friend Sarkis?

The Chairman: Yes, absolutely. You just have to stick up your hand.

Mr. Warren Allmand: I'd love to do that.

Mr. Sarkis Assadourian: I know where you stand.

The Chairman: If you want to comment, just signal and I'll notice you.

Mr. Myers, and then Mr. Allmand.

Mr. Jayson Myers: I want to point out that during the late 1980s, leading up to the free trade agreement with the United States and then with NAFTA, there were of lot of critics of the agreement who said that Canadian manufacturing, the forefront in terms of competition here, would be out of business, that many sectors of manufacturing would be wiped out. The reality is that manufacturing production is $150 billion higher today than it was in 1989. There are 100,000 more people employed in manufacturing than in 1989. The unemployment rate in manufacturing is 5%, as opposed to 8% or 7.5% for the economy as a whole.

The sectors that we thought were going to be wiped out, like furniture and wine, are actually the fastest-growing sectors in percentage terms in Canadian industry. I'm not saying that didn't happen without a lot of hard choices and a lot of restructuring—that's perfectly true—but it has been restructuring to go into higher-value products, and that's what is giving manufacturing the boost today.

The real problem in this economy is not the trading sector; it's not the sector that's linked into the global economy of investment and trade. The real weakness is the sectors that are selling into the domestic economy, that don't have the economies of growth, where we're not seeing the productivity improvements. Those tend to be the smaller sectors, largely services sectors and the public sector, which are being cut back because of fiscal problems that the governments, both federal and provincial, were facing far before free trade.

If you want to look at the economic statistics there, I think they're quite favourable. But that is also a reflection of the restructuring that is taking place, and it's not business as usual in Canadian industry.

The Chairman: Mr. Allmand, a quick response.

Mr. Warren Allmand: As Mr. Assadourian points out, yes, unemployment has declined this year in comparison with the early 1990s and the late 1980s. But so has poverty. Poverty has increased as unemployment has gone down, and that's because most of the new jobs as a result of NAFTA are service-type jobs, a lot of them minimum-wage, without benefits, and non-unionized. We have a situation where the pie, the productivity in Canada, is getting greater, probably resulting from trade, but the distribution of that wealth is becoming more and more inequitable.

If you want to compare, while the rate of unemployment is down compared to 1988, when free trade was agreed to, it's not as low as it was in the 1970s, the 1960s, and the 1950s, before we had free trade and when the purchasing power of the ordinary Canadian in relative terms was much higher.

I'll have to remind the committee that when they had slavery in the United States, they had full employment in the south.

The Chairman: Did you have another short question, Mr. Assadourian?

Mr. Sarkis Assadourian: Overall, on what Mr. Allmand and Mr. Bleyer said, they would fail to take into consideration that the economy has changed since the 1950s. We can't go back to the 1950s, the good old days. Now things have changed, and we have to adjust ourselves to the new change that we have here.

If you don't have free trade, what's the alternative? You didn't give me the answer.

I reread this book, but I think everybody is going to bloc trading—Europe, South Asia, South America. We have to be coming together to make a bloc. That's what I'm saying. If you don't do it, you'll be left out.

Mr. Peter Bleyer: May I make a quick response?

The Chairman: Yes.

• 1710

Mr. Peter Bleyer: Our position is not that we don't need rules, and our position is not that we should close in on ourselves. That was never the position of the Council of Canadians, even in 1988.

Our position is that our objectives have to be clear in terms of what we seek to achieve through trade and now investment. Do we seek to achieve the most rapid possible growth for certain corporate sectors and the highest profit rates in those sectors? Or do we seek to achieve, as I said before, just and sustainable development, which has implications for the rights and the benefits of all citizens in the society? Those can be achieved through rules and agreements at various levels. They may be hemispheric and otherwise. In fact, this is the beginning of an alternative way of dealing with the issue. This is not just about Canadians sitting down and talking about alternatives; it's about people across the hemisphere talking about alternatives. I think it's a valuable document and a valuable process to be looked at.

The Chairman: I'll come back if we have time. Thank you, Mr. Assadourian.

Before I move on to Mr. Calder, Mr. Allmand, do you have a reference for some of those statistics that you quoted? If you could provide copies of those to the committee, we would really appreciate it.

Mr. Warren Allmand: Do you mean about the rates of unemployment in the 1970s, the 1960s, and the 1950s?

The Chairman: Yes.

Mr. Charlie Penson: Also include the Canadian debt program.

The Chairman: No, just a reference for that.

Mr. Warren Allmand: Sure, the Canadian debt in the 1950s and 1960s was much lower.

The Chairman: No, I just want—

Mr. Bob Speller: [Inaudible—Editor].

Mr. Warren Allmand: Yes, that stuff would be very useful to the committee, actually.

Mr. Bob Speller: Okay.

The Chairman: It would be very useful.

Mr. Calder.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Madam Chair.

Warren, when you went through your presentation, there were three points that I picked out here, and actually two of them are interrelated: human rights, and the fact that there's a possibility of helping smaller countries through WTO negotiations and FTAA.

On the human rights aspect of it, about three weeks ago I was over in Taiwan, and they're very interested right now in becoming members of the WTO. Mainland China is interested also. In Taiwan's opinion right now, if the People's Republic of China in fact becomes part of the WTO, they're immediately going to have some problems within their own communist government because you'll have a communist government trying to work with a market economy.

I would like your comment on that—as more and more countries want to become involved in the global community, in particular the WTO, whether or not these human rights problems that we do see in these countries are in fact going to diminish as the populations become more and more aware of how the western countries operate themselves. Taiwan right now, quite frankly, thinks it's in the position to absorb the PROC.

Mr. Warren Allmand: I want to make clear from the beginning that we're not opposed to trade agreements. What we were saying was that trade agreements should respect other human rights, other treaties that we've signed. In other words, trade treaties should take into account human rights standards in other treaties, not just those we've signed, but many of the countries in the free trade of Americas zone. I know China has not yet ratified the international covenant either.

We're asking people to live up to the obligations they have committed themselves to, and not high standards, but minimum standards. What happens if you don't do that is that you can end up eventually, as you did in Indonesia and other countries, with horrible situations of unrest, of upheaval, of even revolution.

From what I understand, Taiwan has advanced considerably economically and even democratically. We don't work in Taiwan, but I can say with respect to China that it could cause a serious problem in China. China has not yet lived up to many of the international obligations. I'm not talking about Canadian standards; I'm talking about international standards.

Mr. Murray Calder: But these are all interconnected.

Mr. Warren Allmand: Yes, and I think, Murray, what we would like to see is that clauses be put into trade agreements similar to the clauses that are in the European trade agreement, which have democracy clauses.

• 1715

None of us are perfect democracies, but at least you're moving toward democracy at a reasonable rate and trying to achieve those standards. But when you take steps, as China did a few months ago, by putting people in jail for simply expressing political views, or as Cuba did as well, that's not good for trade and it's not good for advancing toward minimum democratic standards.

Mr. Murray Calder: Which obviously puts them into a position where they have to look at change.

Mr. Warren Allmand: Not only that, but there's a tendency for businesses, and this is with all due respect to business, to go where they're going to make the biggest profit. So they have a tendency to go to countries that sometimes make their workers work twelve hours a day in sweatshop conditions at very minimum wages. There were boycotts against Nike, Levi Strauss, Shell Oil in Nigeria, and others for doing that. Since then these companies have all to a certain extent straightened out their act and have tried to improve things.

[Translation]

The Chairman: Mr. Roy, would you like to respond?

Mr. Martin Roy: I would like to make a comment with respect to the question Mr. Calder put to Mr. Allmand.

I don't think anyone will oppose the idea of including clauses in trade agreements providing that human rights will be taken into account, but in debating these issues, we often neglect to talk about the way the standards are used to engage in disguised protectionism, for example. We have seen this with sanitary and phytosanitary standards as well as with environmental measures in the United States. The technical standards imposed are so high that no developing country can possibly meet them. They are told that since they do not meet those standards, they are going to be hit with countervailing measures or things like that. It would be interesting to extend the debate to the way in which human rights can be made an integral part of trade agreements. Is the proper vehicle for that a clause? Or a side agreement? That is a debate that is currently underway.

[English]

Mr. Murray Calder: I have one other question, Warren. I think this is a position where Canada can get in and really make a difference here. In the Uruguay Round we saw that some of the smaller countries, when they were involved in the negotiations at that time, might have one individual and that individual had to be an expert in agriculture, industry, and culture just because of the fact that they didn't have a lot of finances to send a lot of people there to do the negotiations. I think we see the same thing probably is going to happen again, because you have 134 countries that are involved in it now, and basically 97 of those are major countries. What would you say would be Canada's position to maybe help some of these countries in their negotiating position, or do we have any position we could take that way?

Mr. Warren Allmand: Was that question to me?

Mr. Murray Calder: Yes, that was to you.

Mr. Warren Allmand: I apologize; I didn't realize. I was preoccupied with the answer that FOCAL gave to the last question. I'm sorry.

Mr. Murray Calder: I'll give you a very quick synopsis. There are a lot of countries, small countries, that don't have the finances to send a lot of negotiators to the next round. Is there a possibility for Canada to help these countries in their negotiating position, or is that not a possibility?

Mr. Warren Allmand: I don't speak for CIDA, but I know that CIDA does help countries with their economic development. This possibly could be part of their economic development. I know that when we were in Santiago at the meetings last year, unfortunately, as you point out, some of the smaller countries of the Caribbean and Central America were not present, nor were their civil societies. But the civil societies representatives and governments from Brazil and Argentina were present. A lot of small countries weren't there.

Mr. Rohinton Medhora: I want to say that this is exactly what IDRC's trade program does. It is to empower not necessarily just negotiators but also the information base on which they rely. In Latin America, as I mentioned in my presentation, we're focusing both on the WTO as well as MERCOSUR. In Africa we're developing an esprit de corps among trade economists, who then go on to advise their governments. That is, I should think, the principal focus of our programming.

Mr. Murray Calder: From the point that was my reason for asking the question, if in fact we are helping these countries with their negotiating position, obviously we could help them to negotiate what would be a position favourable to where we see the trade negotiations should be going.

• 1720

Mr. Rohinton Medhora: Knowledge in general is empowering, and we're not trying to control what the negotiation stance is. We are the IDRC. Our job is to help develop the technical and analytical skills. Sometimes these may well be used against us in future.

Mr. Murray Calder: Yes.

Mr. Rohinton Medhora: But on balance, small countries have an interest in full information and a system that is equal to all, and that includes Canada.

Mr. Murray Calder: Mr. Medhora, I have one short question for you. You had mentioned within your presentation subsidy harmonization. For instance, with the NAFTA, the United States right now has tariffs set in place for sugar and sugar beet production, whereas in Canada there is a zero tariff on sugar. The same would probably be true for peanuts. How would you visualize us harmonizing with the United States when in fact we have zero tariffs on those? How do you get the United States to go to zero on one of their major industries?

Mr. Rohinton Medhora: That's where dispute resolution comes in. Unless you have a system of laws where both sides have access to the same process equally and the decisions of the dispute resolution process are implemented, there is no way for small countries to convince large countries to change their policies.

The Chairman: We will have time for a quick break, but I have a couple of questions before we move into the second round.

Mr. Bleyer, I'd like to go back to something you stated. I wrote down something I believe you stated: “trade and investment need to be instruments for achieving just and sustainable development, not ends in themselves”. I don't think there's anybody around this table who would argue that.

We're looking at NAFTA. We had Mr. Campbell say we should be re-examining where NAFTA was. Mr. Myers was talking about following the NAFTA lead. I'll take a different approach. Instead of following NAFTA, if there had been problems with NAFTA, with what NAFTA or that agreement did, whereby we didn't achieve sustainable development, what can we use from the lessons learned to make things better?

I don't think anybody can argue with the statement you made. I don't think it was ever the intention of those agreements that trade should be a means in itself. So if we look at it now and accept your thesis that it is for achieving sustainable development, why not use that from the lessons learned from NAFTA and incorporate it into the FTAA, especially now as we're coming to NAFTA's five-year review?

Mr. Peter Bleyer: That's a very good question. I would ask the same question. If the question you're asking is why don't we take those objectives and make them the objectives we pursue through all current and future trade and investment agreements, then that's a question I would, with respect, ask you to ask your own government. This is because the reality is that NAFTA was not structured to seek just and sustainable development. It has not furthered those objectives.

We've heard talk about market access. Market access is a very different concept from just and sustainable development. Market access is about saying we have these products, we have this sector, and we want to make sure they can sell there. This is the kind of dynamic that leads to landless peasants in Mexico producing cash crops and so forth. That is trade. Maybe it's not trade for its own sake. It's trade to further certain corporate or sectoral interests. That was at the heart of NAFTA.

In fact the best proof is the investment chapter of NAFTA. Clearly, when you look at the investment chapter of NAFTA and what it's done, just take the MMT case alone, or sustainable development. If you wanted me to place the notion of the Canadian government being unable to legislate to protect environment and health of children or anyone else versus market access for an American corporation, what is it that NAFTA provides? It provides a tool for them to have market access or to punish any government that wishes to deny them that access.

The Chairman: But are you saying that our trade agreements cannot be used as a means to achieve this sustainable development? Certainly you're not saying that.

Mr. Peter Bleyer: No.

The Chairman: From what I'm hearing from you, would it be fair to say your recommendation would be saying to our negotiators that when we go to the table at the FTAA, to make sure not to see trade as an end to itself, but also use trade to obtain sustainable development?

• 1725

Mr. Peter Bleyer: In a sense that's what we're saying. We're saying the proof so far is that the agreements we've signed aren't going in that direction. So rather than giving a mandate to negotiators to go down there and wait to see what they come up with when it's strike one and strike two and let them have strike three and we're out of the game, let's sit back and do the impact studies that have been referred to and have the kind of societal debate where we don't make the assumption that a week or two from now or next fall we have people ready to go who already understand those objectives. We don't have the kinds of impact studies we need, not just of the impacts here, but also of the impacts across the hemisphere and globally.

Some of the assumptions we make about the way Canada is viewed internationally at the WTO table I think are open to challenge. At the WTO a lot of small countries may be happy to get support from IDRC, but when they come face to face with Canadian officials, they see Canadians working hand in hand with the Americans and often with the EU and Japan to enforce liberalization at the level of the WTO.

I'm sorry, I went a bit afield of your question. I don't disagree with the premise that trade agreements should be able to take us toward just and sustainable development. But the agreements we've signed so far haven't done that, they just simply haven't, so we can't just keep going in that direction.

The Chairman: I have just a very quick question for Mr. Allmand. You talked about civil societies and that other countries are not engaged. This follows up on what Mr. Penson asked you at the beginning. Do you have any concrete recommendations on how Canada can engage them? You said it couldn't be sort of a TV monitor. I know that one of the things Canadians have taken a lead in is to actually put up a Web site and to have e-mails go there. What else can the Canadian government do to encourage other countries to participate?

Mr. Warren Allmand: Our centre is helping civil society in several countries to develop their capacity so that they can bargain and fight for their own rights. But also CIDA, as an arm of the Canadian government, is doing the same thing.

Now, Mr. Marchi and Mr. Axworthy told us in Santiago that their goal was to have within the new FTAA agreement some kind of consultation with civil society in all of the countries. The problem is that the governments in some of these Latin American countries don't want to have anything to do with it. So what we're asking Mr. Axworthy to do—and we're trying to build up support politically in these various countries—is to try to convince governments in countries A, B, and C to support a wider range of consultation.

I want to point out that when we're talking about standards, we're not saying that the wages and benefits in a Latin American country should be what they are in Canada or the United States. We're talking about standards such as the right to organize and the right to collective bargaining. The workers in Canada and the United States would accept much lower wages in those countries if they were negotiated between the workers in those countries and their employers. If that's what they agreed to, then that would be fine. But they don't agree to a situation where you can't have real collective bargaining. That's the kind of minimum standard we want to see recognized in these trade agreements. It's not that they should have our standards of wages, pensions, and all that, but they should have the right politically and through collective bargaining to negotiate what is reasonable for them.

The Chairman: Thank you, Mr. Allmand.

We have about two more minutes, and I have two more questioners. How about 30-second questions?

Mr. Charlie Penson: Can I add one?

The Chairman: Okay. Mr. Penson, Mr. Sauvageau, and Mr. Speller, quickly.

Mr. Charlie Penson: I just need a clarification from Mr. Medhora. I'm certainly familiar with the Cairns Group from the Uruguay Round, in terms of agriculture at least. But with regard to the Cairns Group idea, what exactly was your point? Help me understand. Was it to help small economies get together and have the resources to negotiate, or was it to help them understand the agreement better? Could you give us a short explanation?

Mr. Rohinton Medhora: My point was that in any future trade negotiation, be it WTO, FTAA, or anything else, you're not going to find developing countries forming a group and negotiating against, if you will, developed countries. It's not going to be big versus small or any other such thing. It's going to be a coalition of large and small countries that come together on a similar issue, in which, incidentally, middle powers such as Canada and Australia have a very leading role to play. That was the point I was trying to make.

[Translation]

Mr. Benoît Sauvageau: Mr. Bleyer, I want to be sure I understand so that we can mention this in our report. I would not want to say something that seems redundant. You are not suggesting that we withdraw from the negotiations on a Free Trade Area of the Americas, are you?

• 1730

Mr. Peter Bleyer: At this time, we are suggesting that Canada not sign any documents or treaties that would advance the liberalization process with respect to trade or investments. We can be at the table, but we must not sign any agreements.

Mr. Benoît Sauvageau: Yes, but considering that the process will be completed in the year 2005, we are certainly not ready to sit down and sign any agreements now.

Mr. Peter Bleyer: Does that reflect Mel Watkins' idea? Whether it is in 2005 or 2010...

Mr. Benoît Sauvageau: Yes, but in order to sign something, you have to be at the table.

Mr. Peter Bleyer: Yes, we can be at the table, but we don't want Canada to sit down at the table before impact studies can be carried out, or without knowing what the government of Canada is prepared not to sign.

Mr. Benoît Sauvageau: Would it be simplistic to say that the major issue was the fact that Canada had prohibited the importation of MMT, not domestic production of MMT?

Mr. Peter Bleyer: That is the kind of question Bill C-55 raises. We have abandoned so many of the tools that could be used to protect ourselves or legislate that we always find ourselves in situations where we realize that we used the wrong process to get where we wanted to go. They talk about it in the reviews. Should the government have used this process, this tool or something else? In the final analysis, we have abandoned so many things through these agreements that we cannot just blame it on not picking the right option. It would be more appropriate to blame it on the fact that we have abandoned all these tools.

Mr. Benoît Sauvageau: Mr. Myers, you said it was easier to trade with other countries than within Canada itself, that trade is easier between sovereign countries. Did I understand you correctly? I very much appreciate your comments and I thank you for them.

[English]

Mr. Jayson Myers: Yes.

The Chairman: Mr. Speller.

Mr. Bob Speller: Thank you, Madam Chair.

I want to thank all of the presenters for their presentations. Of course it's nice to see Mr. Allmand back here again in these halls. Mr. Myers we're seeing for the second time.

The Chairman: Third time.

Mr. Bob Speller: Of course we also have the Council of Canadians. I have a question for the Council of Canadians, because I've started to look through this book, Alternatives for the Americas, you are passing out. I have a question on agriculture.

First, I'm reading through the acknowledgements and wondering, is it the position of the Council of Canadians, which I thought was a very Canadian nationalist organization, that we have four countries in North America? I see here we have Quebec, United States, Mexico, and Canada. I didn't know that was their position—just as an aside.

Voices: Oh, oh.

Mr. Bob Speller: Mr. Sauvageau might like that question.

On agriculture, you say hemispheric measures should also support upward harmonization of financial assistance for agriculture, as a percentage of GDP. Is that domestic support? Is that export support? What do you mean by that?

Mr. Peter Bleyer: I'll deal with your second question first, for obvious reasons.

First of all, to give credit, as you noted, there is no acknowledgment specifically to the Council of Canadians in this book. We are part of Common Frontiers, one of the groups that participated in it. We're not the authors—nothing to do with the first question, all to do with the second. I'm not an expert in the detail, particularly in terms of agricultural policy, so I'd have to refer you to the authors of the report on that.

To deal with your slightly more interesting question—at 5.30 questions like that become more interesting—first of all, we also have Chile included here. I think they were involved. We don't define North America as.... They're not in the acknowledgements, right? But we have Central America in the acknowledgements.

The question is, how do communities protect themselves? However you define communities, we had the reference to interprovincial trade, and we can get into a big debate about it. But how do communities—whether they define themselves as national units, sub-national units, or units that may some day be national units—protect the interests of their citizens, of their communities?

• 1735

Frankly, we're happy to sit down with any group, throughout the Americas and North America, concerned about having elected levels of government, whatever level they may be, having the tools they need for it to actually mean something when they're elected into power—that they actually retain the tools to work on behalf of their citizens. That's my comment on your point.

Mr. Bob Speller: Thank you. I just wasn't aware of that.

The Chairman: Thank you, Mr. Speller.

Mr. Benoît Sauvageau: Thank you, Mr. Speller.

The Chairman: Ladies and gentlemen, thank you again for your very informative presentations. The two hours went very quickly. I know we always run out of time. We've learned a lot again today.

For those of you coming here for the first time—not Mr. Myers or the Council of Canadians—I'd just like to point out that this is the beginning of our consultations. This is the beginning of the process. If there are other issues you feel you should raise with the committee, feel free to submit them to the clerk. You see the members. Contact us individually. This is not the end; this is just the beginning. We encourage you to bring your views forward to us. It will put us in a better position to be able to deal with the agreement.

I adjourn the meeting to Vancouver on Monday, for some of us. Thank you very much.