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View Daniel Blaikie Profile
NDP (MB)
View Daniel Blaikie Profile
2020-01-30 11:42 [p.683]
Mr. Speaker, I am rising today to share some reflections on behalf of the NDP with respect to the final version of the Canada-United States-Mexico Agreement, as it is formally known, or as it is known by many, simply the new NAFTA. Before delving into the details of the agreement, I want to give some context to Canadians who may be listening at home.
Donald Trump was elected President of the United States in 2016, claiming that “NAFTA was the worst deal ever”. While no one in Canada would question the significance of our trading relationship with the United States to the Canadian economy, there are many Canadians who would rightly question who the big winners under NAFTA have been.
The original NAFTA was negotiated by Conservatives and signed by Liberals in 1994. People were promised jobs, rising productivity and secure access to the largest market in the world. However, during the years since NAFTA was signed, Canada lost over 400,000 manufacturing jobs and its textile industry was devastated. While automation has played a role in those job losses, there is no question that many of those jobs moved to Mexico because it was a low-wage economy that could sell finished products back into Canada and the U.S. without penalty.
We can ask auto workers from southern Ontario. Half of Canada's current manufacturing trade balance with Mexico is made up of cars and parts. The overall automotive trade deficit between Mexico and Canada has gone from $1.6 billion to $8.7 billion under NAFTA.
In addition, Canada has paid millions of dollars in court fees and penalties when sued by corporations under investor-state dispute resolution mechanisms. Perhaps most memorably, the Canadian government was successfully sued by a U.S. chemical company, Ethyl Corporation, in 1997 for having dared to try to ban the import and interprovincial trade of the gasoline additive known as MMT.
MMT is a suspected neurotoxin that automakers also claim interferes with automobile on-board diagnostic systems. Under NAFTA, Ethyl won a settlement with damages totalling $19.5 million, but that was not it. The Canadian government was also forced to overturn the regulatory ban and issue a formal apology to the corporation.
It was a stark example of how international trade agreements could override the authority of democratically elected governments to make rules in the public interest. In this case, rules meant to protect human health and the environment.
Canada has been challenged more than any other country under NAFTA chapter 11. Other cases against Canada include challenges to wildlife conservation measures, provincial water and timber protection policies, fracking in the St. Lawrence River basin and the sale and use of pesticides.
The proportionality clause in the original NAFTA also challenged Canada's energy sovereignty, allowing the United States to require a significant share of Canada's oil and gas production be sold to our southern neighbours, whether it was in Canada's national interest or not.
Over the decades under NAFTA, Canada's GDP and cross-border trade no doubt grew, but wealth inequality also grew. Today, Canadians are finding it harder to make ends meet. Each month, 48% of Canadians are within $200 of not being able to pay their bills or defaulting on their debt.
Liberals and Conservatives are far too quick to gloss over, far too often, that it has not been all sunshine and roses under NAFTA. While the rich were getting richer, far too many Canadians were left to fall behind.
Governments and trade tribunals were, and are, quick to defend corporate rights and to bail out big companies when the risks do not pay off. However, when things go wrong for workers, they are offered simple condolences. Maybe they are told they need to accept that this is how the market works, or that they are the victims of downsizing or global restructuring. It is as if these things were natural events, like earthquakes or snowstorms, and not the result of calculated human decisions designed to maximize shareholder profit at the expense of everything else.
In other words, Canadian workers have a lot to be upset about when it comes to trade deals and the global corporate agenda that drives them. That is also why there is a growing political backlash across the western world directed at these kinds of agreements.
Nevertheless, 25 years under NAFTA has led to an integrated North American supply chain for many businesses, and has created confidence for many entrepreneurs that they can invest in cross-border commerce without fear of the kind of arbitrary reprisal we have seen from time to time for certain industries, including softwood lumber, the cattle industry and most recently steel and aluminum.
The understandable desire to maintain that confidence, coupled with an economic interdependence that grew under NAFTA, explains why so many Canadians were concerned when Donald Trump moved to renegotiate the deal. The President's own personality compounded that concern. To say the least, he is a known bully who is quick to throw even his closest allies under the bus when it suits his short-term political needs.
Instead of leaning into the possibility of renegotiating and improving the deal, the Liberals' first instinct was to say that the original NAFTA was the best deal that Canada could get.
They were not the ones to propose the elimination of the chapter 11 investor-state dispute settlement mechanism that gave Ethyl Corporation its win over Canadians' health and the environment. In fact, they initially said they would fight to keep it.
It was only once the U.S. made it clear that it would insist on renegotiation that we really started to hear the government admit that the deal was not perfect and that it could in fact be improved. Suddenly, better was possible after all.
To hear that NAFTA had flaws was no surprise to New Democrats, but to hear that from the mouths of Liberals who had spent years mocking New Democrats for saying as much certainly was a bit of a shock.
As usual, just like Liberals and Conservatives before them, the present Liberal government engaged in a highly secretive negotiation process. While a broader range of stakeholders may have been consulted, there was no information made available to the public or to Parliament. In fact, we are still waiting for some basic economic analysis of the agreement from the Liberal government, something a number of our trading partners not only make available, but make available early on in the process, and I will have more to say on that later.
At the end of the first round of bargaining, the Liberals declared once again that we had the best deal that Canada could get. What New Democrats saw was an agreement that hammered the supply-managed dairy sector, increased the price of already high-cost prescription drugs, and continued to put the rights of corporations on a pedestal without offering real protection for the rights of workers and the planet.
Thankfully, even though the government was eager to pack it in, Democrats in the United States shared some of those concerns and signalled their intention to fight for a better deal. In spite of the promise of a better deal, Liberals in Canada were rushing to ratify it, and the only real criticism they were getting from Conservatives at that time, a short six or seven months ago, was that they were not ratifying it quickly enough.
When the NDP called on the government to delay ratification until the Democrats' campaign to improve the agreement had run its course and to seize the opportunity to push for something better, we were met with a combination of outrage and scorn.
For example, the Deputy Prime Minister told us in May 2019:
Mr. Speaker, what the NDP needs to understand is that reopening this agreement would be like opening Pandora's box. Why is the NDP prepared to risk our economic stability? It would be naive for the NDP to believe that Canadians would benefit from reopening this agreement. The NDP is playing a very dangerous game.
In June, the minister continued along the same vein, saying:
...we do not want and we do not need a new NAFTA negotiation. Canada has done its work. We have our deal. We are not going to create an opportunity to have this hard-won agreement...put in jeopardy.
There are more examples but I do not wish to belabour the point. I simply want to point out that happily the Liberals were not able to ratify the first version of CUSMA before last year's election. The Democrats continued their work and they made some meaningful improvements to the agreement.
It turns out the game the NDP was playing was the one that would allow for the elimination of measures that otherwise would have raised the cost of prescription drugs. It turns out we were playing the game that allowed for the establishment of first-of-their-kind provisions for binding, enforceable and internationally monitored labour standards in Mexico.
That may have been a dangerous game for pharmaceutical companies looking to maximize their profits on the backs of the sick. It may have been a dangerous game for companies looking to drive out competition by moving their manufacturing to a low-wage economy like Mexico. However, I do not think we can say it was a dangerous game for everyday Canadians trying to pay for prescription drugs or worried about their jobs moving south.
There are still real concerns for many Canadians, and I suspect big pharma and the big three will still find a way to make money, although maybe not quite as much.
The problems have not all been fixed, but Canadians will be a little better off than they otherwise would have been thanks to the hard work, not of this government that wanted to rush ratification, but of U.S. Democrats who were not willing to throw in the towel so easily.
Canadians should not have to depend on politicians in foreign countries to get a better deal at the bargaining table. They should be able to have confidence that their government is at the table fighting for them instead of acting at the behest of corporate lobbyists.
We can give Canadians that reassurance by making our trade process more open and transparent and by involving Parliament at the outset. We can build confidence in the process by formalizing the consultation process so that Canadians know when, where and how they will be able to express their hopes and concerns with respect to a prospective trade agreement, and by ensuring that all the right people, organizations and institutions are consulted.
We can build confidence by having the government clearly and formally state its objectives for the negotiation, by having a debate and vote in Parliament on those objectives before formal negotiations begin and by requiring the government to prepare and publish economic data and analysis on the likely impact of a deal. These are things that to many would seem to be simple common sense.
Why should Canadians not have a right to know how they will be consulted on trade issues instead of having a different process every time? Why should Canadians feel confident their government is fighting for them, if it will not be transparent about its goals?
How can Parliament play a truly meaningful role in setting Canada's trade policy if it can only debate and vote on the merit of trade with a country once a deal has already been signed? How can Canadians and their elected representatives be truly expected to judge the value of an agreement with no economic data or analysis? This is the very situation that we find ourselves in.
Before my colleagues and other parties begin dusting off their straw men to say things like, “You're talking about negotiating in public. You can't do that. You don't understand trade”, let us consider this, because we have heard that many times before in this place.
The executive in the United States is required to give at least 90 days' notice to Congress of its intent to enter trade discussions with another country. Congress is able to define trade policy priorities and specify negotiation objectives. The executive is expected to honour those objectives in its negotiations, and Congress can set out consultation and notification requirements so that it is satisfied the executive is actually following it through.
In other words, legislators in the United States have far more authority and involvement in the trade process, yet they were still able to conclude a deal. It did not mean they could not get a deal done. The sky did not fall. Americans had more information about what their government was trying to do at the bargaining table, but it did not impede them from getting a deal.
In the European Union, the very first step in the trade process is for its executive to prepare an assessment of the likely economic impact of a proposed deal. The EU publishes its negotiating directives online before negotiations even begin. The executive publishes online a report of each negotiating round and its initial negotiating proposals.
The commission also informs the European Parliament at every stage of the talks, about the latest developments. When the EU is close to finalizing the text of a deal, the commission tells Parliament and informally sends the final text to EU member states and the Parliament.
That is only a summary of some of the highlights of the EU trade process. It may be that some members found that tedious but, if so, they should reflect on the fact that despite all that consultation, all those steps and all that sharing of information, the EU has been quite capable of negotiating trade agreements, including the Comprehensive Economic and Trade Agreement it recently signed with Canada.
In Canada, we have no formal process at all. The government is free to go to any country in the world and negotiate and sign any deal it wants. It does not have to tell anyone. It does not need any parliamentary approval. In fact, the only reason Parliament is studying the deal at all is that the implementation requires changes to the law. However, by the time we get to that stage, the deal itself is already signed and negotiations are already concluded.
I want Canadians to know that we do not have to do it that way. Adopting some of the practices of our trading partners could make for a more open, democratic, transparent and accountable trade process in Canada. It could do that without jeopardizing our ability to get a deal. That is a false argument. We know, because we have deals with places that do those very things.
The time to set up that kind of process is right now. It is while we are talking about this deal. It is while we are concluding this deal. It is while it is in the media. It is while people are paying attention. If we wait, the issue may not draw public attention again, and I worry it may not draw the attention of the government either until the next negotiation, say between Canada and the United Kingdom, which may not be that far away. Once that process is already started and is in the news, it will be too late to do it right, which is why we should set it up now.
That is why the NDP has called on the government to move quickly on the institution of a proper trade process for Canada. We look forward to a substantive discussion about how best to move forward on that in this Parliament.
To conclude, I want to come back to the substance of the agreement. I mentioned already that the NDP looks favourably on the elimination of chapter 11 and the proportionality clause. We are, however, concerned about the so-called good regulatory practices chapter and whether it will continue to put downward pressure on public interest regulation, making it harder to create and maintain regulations for the public good.
We are concerned about the requirement that Canada consult the United States before entering into negotiations with any non-market economy. Unless we bring in a meaningful domestic trade process, this means that the U.S. government will have more right to know about Canada's trade intentions than our own Parliament will, which makes no sense to me at all.
We are encouraged by the new provisions enabling monitoring and enforcement of labour standards in Mexico, but we want to better understand how exactly those are meant to work. Study at committee will be a good opportunity to do that.
We have heard concerns about the chapter on e-commerce, and we would like to hear what the experts have to say about the implications for Canada's digital economy.
We also share the concerns of dairy farmers and aluminum workers, and we want the government to tell us what concrete measures it plans to take to help workers and farmers in those sectors after CUSMA is ratified.
These are the concerns we hope our study of the bill will address. That is why we voted to let the government table the bill yesterday. There is no such thing as a perfect agreement, but we will keep an open mind while asking certain questions.
Does this version of the agreement place Canadians in a better position than the existing agreement? We want an answer to that question.
Could the ratification process for this bill lead to a trade process that offers Canadians more transparency, more consultation and more accountability?
Those are our thoughts so far. We are anxious to delve deeper into these matters in the coming weeks.
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