CIIT Committee Report

SUPPLEMENTARY OPINION

NEW DEMOCRATIC PARTY OF CANADA

INTRODUCTION

The NDP is appreciative to the Committee members, staff, analysts, and the witnesses who participated in this study of the potential Pacific Alliance free trade agreement.

The NDP supports fair and progressive trade relations with key partners on the continent to create new opportunities for Canadian exporters, which would generate job creation and economic growth for Canadian workers and communities. New Democrats have always been very clear that we believe all international trade must be fair, balanced and in the best interests of Canadian industries, our environment, inclusive of Indigenous Peoples and all workers and it must be in line with our fundamental beliefs of social justice, equality, universal dignity and our international obligations.

The NDP heard from many witnesses during this study that a trade deal with the Pacific Alliance nations is not a necessary endeavour and that the trade negotiators and officials at the department of Global Affairs should focus on more urgent trade negotiations and more global opportunities with stronger trading partners.

Claire Citeau, Executive Director of the Canadian Agri-Food Trade Alliance spent the majority of her testimony focusing on other higher priority trade agreements, and said that, “while CAFTA supports an agreement with Canada and the Pacific Alliance in principle, it is essential that negotiations with this alliance do not compromise Canada’s ability to complete other agreements such as NAFTA and our ability to ratify other agreements such as the TPP with our members since we view these as significantly higher priorities.”

And, Mr. Mathew Wilson, Senior Vice-President, Policy and Government Relations, from the Canadian Manufacturers & Exporters also expressed overall support of negotiating a new free trade agreement (FTA), but that the government must focus only on FTAs that increase Canada’s value-added exports, creating wealth and prosperity, not ones that dilute the market with lower-value, cheaper imports from countries that do not have the labour, environmental or quality standards Canada has. Mr. Wilson said, “too often in the past, FTAs have not led to these outcomes. Outside of NAFTA, Canada's export record with other countries has been mixed, including those in the Pacific Alliance with which we have existing bilateral FTAs. That does not stop CME from supporting the new proposed agreement, but it should provide us with a point of inflection for how to make this new agreement more successful for Canadian exporters.”

New Democrats understand the importance of our trading relationship with progressive partners all over the world and believe that progressive trade deals can improve the welfare of everyone.  To achieve this, a trade agreement must be transparent, inclusive and forward-looking. It must address important issues like income inequality, sovereignty, climate change and human rights. We must take all opportunities to change the way we negotiate and view key trade deals and make them about improving the lives of all Canadians. 

GOVERNMENT CONSULTATIONS AND TRANSPARENCY

The NDP believes that the Government of Canada can make no meaningful claims to transparency without providing Canadians with information about the subjects of negotiation.  The government must lift the veil of secrecy on trade negotiations.

To date, there remains no formal requirements set for the government to engage the public on trade agreements, and as with the previous government, the current government largely negotiates behind closed doors with very little public participation or transparency.

The work of the Standing Committee on International Trade cannot be considered as a government consultation, as the work of the committee is independent and multi-partisan, nor can it act as a substitution of a full and effective consultative process.

The government’s continued failure to uphold its commitments to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) when it comes to trade agreements is of deep concern.  Article 19 is very clear that Canada must obtain the free, prior and informed consent of Indigenous Peoples before adopting any measures that may affect them, and the Pacific Alliance FTA certainly falls within this classification.

The NDP also believes that for Canada to fulfill its obligations to Indigenous Peoples under the UN Declaration, they must have full representation at the negotiating table. 

There is also a need for Canada to perform impact assessments independently and comprehensively. The NDP believes that Canadians need to see full economic, jobs and gender-based analyses of all trade agreements and these analyses must be made public.

In future negotiations, the government should consult Members of Parliament from all Parties who represent the Canadian public, in a meaningful and comprehensive way that includes Canadians from all sectors, regions and backgrounds, and the results of these consultations should be made public. The NDP will continue to push for better as the government embarks on all future negotiations.

THE FUTURE OF TRADE AGREEMENTS

New Democrats believe that in many agreements, Canada has repeatedly opened market access to other countries, but instead of maximizing our exports to these partners, we’ve seen a decline. The most recent statistics from Statistics Canada show that during the first 9 months under the Comprehensive Economic Trade Agreement (CETA) with the European Union, Canada’s merchandise trade deficit with the EU jumped by 46 percent, compared to the same period a year earlier, before the trade deal came into effect provisionally. The opening of Canada’s market access to other countries is desirable, however it cannot be of lesser value than the cost of foreign imports flooding our domestic market. There must be a balance within trade not only in regard to products and services, but also around special privileges given to investors and locking us into regulatory freezes. There must be a balance between the rights of individuals and corporations and the regulatory powers of governments to enforce what is best for them domestically and for their people versus what increases a corporation’s profit margin.

Trade agreements going forward must no longer be negotiated to shift the balance of power in the economy from governments and workers to corporations. New Democrats are concerned that by continually giving rights to investors, trade agreements limit the powers of current and future governments and the citizens who elect them. This was the case in the original negotiation of NAFTA and the renegotiation of the USMCA. Any ratcheting of regulations and safety provisions over food, livestock and chemicals must be avoided.

The current government talks about creating progressive trade agreements, however there has been no real socially responsible action in any recently negotiated agreement. We must start with a fundamentally different approach from how we've approached trade deals in the past.

There is a growing social unrest and concern around the rights of working people, our environment, women, and Indigenous people and them not being given the same consideration as the rights of corporate profitability. The creation of more binding and enforceable socially-responsible provisions is the first step forward and a lot of the social conditions of trade must be met before any trade agreement is signed. As was stated by Mr. Alex Neve, Secretary General for Amnesty International Canada, at the committee, “there are serious human rights concerns in each of the four countries of the Pacific Alliance, and those violations very often occur in contexts related to economic and commercial activity associated with the business opportunities that stand to grow and expand with freer trade. There is danger for human rights defenders speaking out about the impact of business operations on the environment, and peril for indigenous leaders seeking to defend their land in the face of powerful economic interests. Labour leaders are threatened and killed. Contamination and pollution from mining and other activity are posing serious, even lethal, health risks, and there are acts of violence by company or government security forces when disputes and protests arise about a corporation's operations. That is why trade agreements and trade policy attracts Amnesty International's attention.”

Human rights protection domestically and internationally must be about more than just words on paper and the NDP supports the efforts of Amnesty International to “to commit to carrying out independent expert, transparent, and comprehensive human rights impact assessments of all bilateral and multilateral trade deals, both before a deal is finalized and at regular intervals thereafter, with any potential harms identified by such assessments addressed to ensure compliance with international human rights obligations. Our recommendation with respect to any potential deal with the Pacific Alliance is that it be subject to robust human rights impact assessments.”

LABOUR

The current priorities and objectives of any trade deal including a potential agreement with the Pacific Alliance nations must be redefined and must put the rights of working people first.

Currently, it was noted by Angella MacEwen, Senior Economist for the Canadian Labour Congress (CLC) that, “There has never been a successful labour complaint under a free trade agreement that has resulted in the other country having to do anything. It has never been the case that the free trade agreement labour chapter has resulted in concrete change for workers in that other country. We have other venues to do similar things that we're doing in Colombia right now, for example through the ILO, that might result in the same outcomes as this FTA, but the FTA has allowed Canadian companies there to exploit workers right now.”

Any new trade agreement must learn from and address the limitations of those that have come before it and change the way labour is considered. We must include full Labour Chapters into the main text of the agreement to ensure that labour regulations are binding and include penalties and standards for all three countries.

The NDP believes that in order to equally raise labour rights and standards in trade agreements, a fully enforceable and comprehensive Labour Chapter must include requirements from all member states to sign and ratify the International Labour Organization’s (ILO) eight core conventions, adhere to its Decent Work Agenda, sign and ratify the ILO’s convention 81, which is the labour inspection convention and the chapter must include the creation of an independent labour secretariat to oversee a dispute-settlement process for violations of labour rights as there is no current or adequate mechanism to combat the widespread violation of labour rights.

The NDP also agrees with the CLC that the Government of Canada must, “look at due diligence for Canadian companies and funding agencies… and create a framework for transnational bargaining to allow unions to represent workers in multiple countries.” The NDP believes that trade negotiations, including those with the Pacific Alliance countries should be guided by the principle that no one should be disadvantaged; working people cannot continue to be an afterthought in trade agreements.

MANUFACTURING SECTOR

The NDP believes that integration and trade liberalization has benefitted corporate stakeholders but has not been shared with workers or small and medium sized manufacturing businessses.

There is a pattern, when Canada signs trade agreements that give hundreds of millions of dollars of new incentives for car companies that do not produce any vehicles or manufacturing jobs domestically, that reduces the incentive for our manufacturers to keep producing here and keep employing here.

The Canadian government must defend auto and manufacturing jobs, address the unfair share of wealth and implement a National Auto and Manufacturing Strategy to ensure the strength of these sectors

DISPUTE SETTLEMENT MECHANISMS

The NDP believes investor-state dispute settlement (ISDS) provisions that privilege corporations in a way that conflicts with the public interest do not belong in trade agreements. These provisions allow foreign investors to bypass domestic court systems, thereby undermining our sovereignty. Arbitration tribunals, which lack accountability, can order governments to compensate investors who are allegedly harmed by public policies or regulations.

Regarding the Pacific Alliance, Dr. Erin Hannah, Senior Fellow at the Canadian International Council, and Associate Professor and Chair of the Department of Political Science at King’s College at the University of Western Ontario, stated that, “the way the Canadian government has been negotiating investor protections contradicts the spirit of a socially progressive trade agenda. In particular, inclusion of an ISDS in the Canada-Pacific FTA could be viewed as socially regressive because of the dangers associated with regulatory chill. If we do negotiate an ISDS in the FTA—and I think it's quite likely that we will—we need explicit carve-outs in the FTA that shield human and environmental rights from ISDS and give governments the policy space that is necessary to pursue positive discrimination in favour of those who are most vulnerable.”

Dr. Hannah continued to point out that, “ISDS is a controversial thing, partly because we have poor data. We have poor data on the impact of ISDS on attracting foreign investment. Conventional wisdom is that ISDS attracts foreign direct investment, but we have very inconsistent information about whether that happens in practice, so that's one issue. The other issue is its impact on regulations. The concept I used was regulatory chill. One form of regulatory chill is when a government rolls back some kind of regulation, because it lost a case. Canada knows about this. We've been the subject of 35 cases in ISDS disputes; we've lost only six. The other kind of regulatory chill, actually, which is more problematic is when governments fear a dispute. It's, again, harder to measure, because people are unwilling to tell us about circumstances where they choose not to introduce new legislation.”

ENVIRONMENTAL PROTECTIONS, ENERGY AND WATER

The NDP believe that for a trade agreement to be called progressive, it must, at a minimum, include strong, fully enforceable labour standards. It is also essential to include obligations to ensure that each country enforces high domestic environmental standards while abiding by commitments under multilateral environmental agreements. This can be difficult to achieve in the context of any FTA, including the Pacific Alliance.

The NDP believes any environmental chapter or provisions must be brought into the main text of an agreement to ensure they are binding and fully enforceable. All provisions must also be in line with Canada’s already set international environmental obligations such as those held by the Paris Agreement reached on December 12, 2015. The protection from the disastrous impacts of climate change and the continuing degradation of our environment must be of prime concern.

The NDP also reject any regressive energy proportionality provisions and any attempt to treat water as a tradeable or marketable good instead of as a human right.

GENDER RIGHTS

The NDP calls for a mainstreaming of gender rights throughout the entirety of any trade agreement.  It should not be solely limited to one chapter, and gender equality does not concern only issues that women entrepreneurs and business owners face. Labour rights must also address injustices to women like pay inequity, child labour and poor working conditions. The NDP believes that for an agreement to be truly progressive when it comes to gender rights, it must address the systemic inequalities for all women. The NDP believe that both a gender-analysis and a gender impact assessment must be applied to all trade agreements.

Dr. Hannah states that, “Overwhelmingly we've put attention on women entrepreneurs in the gender in global trade agenda. That's important. It's very important. But the lion's share of women in the developing world work in the informal economy. We don't have very good tools for assessing the impact of all sorts of things in the lives of women working in the informal economy, but particularly trade. The OECD has done a great report, on the status of women in the Pacific Alliance. However, they are unable to come up with good methodological tools to study the impact of proposed trade deals on women who are not in the formal economy. That raises much bigger questions, though, about whether the objective of these initiatives is to bring women into the formal economy, to transition women out of the informal economy into the formal economy. It raises a whole host of other issues. I think it's important to think about how that would change these women's lives. We have a data problem, but we also have an ideological problem.”

The NDP believe that like other socially progressive ideals that can be brought forward in trade agreements, words are not enough. For gender, labour, indigenous, environmental or human rights to be truly advanced, there must be the tools in place to achieve progress. As Dr. Hannah rightfully pointed out, “Canada has a lot to do itself on the gender agenda. We don't have pay equity. We don't have universal child care.” It is clear that to move forward globally and negotiate progressive trade agreements international, we must have domestic tools in place that work effectively.

INDIGENOUS RIGHTS

The NDP believes the government must abide by Article 19 of the UN Declaration and obtain the free, prior and informed consent of Indigenous Peoples before adopting any measures that may affect them. 

It must be noted that the committee heard from no indigenous witnesses during its study of the Pacific Alliance. However, in a previous study on a potential MERCOSUR FTA, it was noted by Pam Palmater, Associate Professor and Chair in Indigenous Governance at Ryerson University stated that Indigenous rights should be addressed throughout the entirety of a trade agreement, not only relegated to one chapter. She also noted that throughout the Pacific Alliance nations, there are large numbers of Indigenous people, who experience a great deal of violence from transnational corporations involved in trade.

Palmater also noted that Canada was founded on a strong trading relationship between Indigenous nations and colonial settlers, and even though the trade treaties have been recognized by the Supreme Court of Canada and are constitutionally protected, Indigenous people are not seen as equal partners over our shared jurisdiction. The failure to recognize this partnership is unacceptable.

The government’s continued failure to uphold its commitments to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) when it comes to trade agreements is also of deep concern.  The NDP also believes that for Canada to fulfill its obligations to Indigenous Peoples under the UN Declaration, they must have full representation at the negotiating table.

INTELLECTUAL PROPERTY, DIGITAL AND PRIVACY RIGHTS

There are growing concerns over the level of preparedness of the Canadian government to defend and advance Canada’s interest with respect to intellectual property (IP), digital and privacy rights. The Committee heard witnesses raise concerns over potential and extensive changes to IP rights related to copyright, patents and trademarks throughout other trade agreements, which may unfairly benefit big. corporations over Canadian consumers or innovators.

Canadian copyright policy must not be sacrificed at the altar of free trade. Maintaining balanced and sensible copyright policy is particularly critical considering the fundamental connection between copyright law and the ability to exercise free expression online—through sharing knowledge, research, and art; participating in public and political discourse; contributing to the cultural commons; and inspiring and building upon creativity. The NDP emphasizes the fact that notice-and-notice is an effective system that achieves objectives with respect to copyright infringement, while mitigating (albeit not completely) the harms that arise from notice-and-takedown.

The Canadian government, should reject any proposal to extend copyright terms beyond its current term of 50 years after the author’s death, knowing that current Canadian copyright terms are already largely in compliance with international copyright treaties.

With drug prices in Canada already the second-highest in the world, the government must resist further patent extensions that will cause drug prices to rise even further, ensuring Pacific Alliance or any trade deal will not impede the creation of a universal Pharmacare program in Canada.

The NDP believes that Canada must preserve its longstanding approach to exempting culture from trade agreements.  Cultural policy must be determined domestically by the Canadian government.  Trade agreements must not be able to limit our sovereignty and dictate our cultural policy.

SUPPLY MANAGEMENT

Supply management must be protected by the government against the recent US attempts to dismantle it. This will help ensure Canadians have access to high-quality, locally produced food, while supporting small family farms and rural communities. The supply managed sector is a major contributor to our economy contributing more than $26 billion to our economy and generating 310,000 jobs.

Supply management must not continue to be eroded in trade agreements as was the case CETA, the CPTPP and within the USMCA.  No further market access should be granted in a potential Pacific Alliance agreement.

NDP RECOMMENDATIONS

• That the Government of Canada ensure that safeguard measures are in place to protect our steel and aluminum sectors from international partners that dump large amounts of low-quality product into Canada.
• That the Government of Canada provide greater transparency during trade negotiations by directly engaging Canadians through consultations and providing regular briefings to Parliamentarians during all rounds of negotiations.
• That the Government of Canada protect future policy flexibility at all levels of government to expand public services or return privatized sectors to the public sector without the threat of litigation.
• That the Government of Canada commit to strong and enforceable currency disciplines within all trade agreements.
• That prior to the conclusion or signing of any future trade agreements, the Government of Canada commission an independent study of the agreement's expected costs and benefits, a jobs assessment, ensure that gender-based analysis is applied and that a gender impact assessment is undertaken.
• That the Government of Canada ensure all future trade agreements do not include investor-state arbitration provisions.
• That the Government of Canada promptly disclose all costing estimates relating to potential increases to prescription drug costs to all provinces, territories, individual Canadians and employers resulting from any proposed changes to patent laws in a negotiated trade agreement, as well as details of financial compensation that should be paid to Canadian provinces, territories, individuals and employers.
• That the Government of Canada defend intellectual property rights that benefit Canadian consumers and innovators in all future trade and investment agreement negotiations and commit to retaining Canada’s current copyright regime, specifically (a) commitment to balance through a “made in Canada” approach; (b) notice-and-notice; and (c) current copyright terms (i.e. reject all term extension proposals).
• Ensure that any provisions regarding data localization preserve Canada’s ability to make substantive domestic law protecting Canadians’ personal data and privacy rights.
• Retain Canada’s strong net neutrality regime and reject all attempts to weaken net neutrality in Canada.
• That the Government of Canada should negotiate environmental provisions that would strengthen the enforcement of environmental standards and targets specified through our international obligations, in particular those agreed to in the Paris Agreement reached in 2015.
• That the Government of Canada, avoid all provisions that make water vulnerable to exportation and privatization.
• That the Government of Canada pursue strong and enforceable labour standards within this and all future trade agreements. The government should pursue the inclusion of a labour chapter that would require ratification and enforcement of the International Labour Organization’s eight core conventions and adherence to its Decent Work Agenda. As well, the government should ensure the creation of an independent labour secretariat with the power to oversee a dispute-settlement process for violations of labour rights and enforce penalties upon the violators.
• That the Government of Canada work with all international partners to ensure that, consistent with the United Nations Declaration on the Rights of Indigenous Peoples, the rights of Indigenous peoples are respected. As well, before agreeing to any trade agreement provisions that could affect Indigenous peoples, the government should obtain their unqualified, free, prior and informed consent.
• That the Government of Canada safeguard food sovereignty, mechanisms of production and supply management, rural livelihoods and the right to know about what is in our food and how and where it is produced.
• That the Government of Canada strengthen the Investment Canada Act to protect Canadian jobs and ensure that foreign takeovers of domestic companies provide a net benefit to Canada.