International Trade Committee on Dec. 6th, 2010

[The Chair, Conservative, Lee Richardson]

Welcome to the 38th meeting of the Standing Committee on International Trade, as we continue our order of reference regarding an act to implement a free trade agreement between Canada and the Republic of Panama.

We're pleased today to welcome as witnesses, from the Embassy of the Republic of Panama, His Excellency Francisco Carlo Escobar Pedreschi. Your Excellency, it's a pleasure to have you here. Thank you very much for coming.

Also with us today, from the Government of Panama, is His Excellency Francisco Alvarez de Soto, the chief trade negotiator and deputy minister of international trade negotiations with the ministry of trade and industry.

Also here today is Mr. Rudy Cedeño, who is an adviser to the deputy minister.

This will be very useful and informal. Our normal practice is to begin with an opening statement from our witnesses of up to 10 minutes to give a brief background of your involvement and thoughts on the issue. Then we will proceed with the committee members asking questions.

With that very brief introduction, again, we are delighted to have you here. Thank you for coming.

I take it His Excellency is going to begin. I'll leave it to you, Mr. Ambassador.

[H.E. Francisco Carlo Escobar Pedreschi, Ambassador Extraordinary and Plenipotentiary of Panama to Canada, Embassy of the Republic of Panama]

Yes. I will start with a short statement before I introduce our deputy minister of international trade, Alvarez de Soto.

Members of Parliament, Mr. Chair of the Standing Committee on International Trade, everybody, good afternoon.

It is a distinct honour to present before you information that will be useful in completing the approval process of the free trade agreement between Panama and Canada.

As some of you know, Canada and Panama will have 50 years of diplomatic relations. Just this year, Canada has taken advantage of Panama's geographical position to open important regional departments, such as regional security departments; regional logistics desks, to help the area during natural disasters; and an EDC regional office that will serve Central America and the Caribbean.

Our geographical position is important for these types of ventures, but Panama has more to offer, especially as a commercial partner, once the free trade agreement is finalized.

Panama has a population of about 3.4 million people and one of the largest GDPs per capita in the region, with $7,133 U.S. Our country, as well as Canada, took the necessary precautions to avoid getting hit by the world crisis that most countries encountered. As we speak, proof of this is that Panama had an economic growth of 7.1% in 2008, 7.4% in 2009, and an estimated 6.7% at the end of 2010.

Before I give the floor to our deputy minister, I would like to make a few remarks of a political nature.

Panama is Canada's main trade and economic partner in the Central American region, and most likely in the Caribbean region as well. As such, Panama has come to recognize Canada, in a positive way, to be an undisputed leader in matters of trade in this western hemisphere.

Canada, even in the most difficult recent international financial crisis, when even the most industrialized nations of the world allowed for protectionist ideas to influence their trade policy, pursued a dynamic and aggressive trade negotiation strategy throughout the continent.

The results are evident. Canada is partnering with most nations and thus allowing for preferential market access to be part of its economic reality in the continent. This is of great value.

In this regard, Panama believes that it is equally important that Canada does not forget the positive response it has received from each and every one of those countries that call themselves trade partners with Canada. This is the sort of leadership we refer to.

Our government has put emphasis on this FTA and has assigned our deputy minister, Alvarez de Soto, to present the benefits of this agreement to both nations. Please let me introduce to you, our deputy minister of international trade, His Excellency Francisco Alvarez de Soto.

[H.E. Francisco Alvarez de Soto, Ambassador Chief Trade Negotiator, Deputy Minister, International Trade Negotiations, Ministry of Trade and Industry, Government of Panama]

Thank you, Mr. Chairman and ladies and gentlemen, for this opportunity.

As Canada's main trade and economic partner in the Central American region, Panama considers this agreement as an important part of our trade integration strategy to strengthen commercial ties and deepen trade all over the world.

We already have trade agreements with Chile, Singapore, Taipei, China, and the Central American countries. We have concluded agreements with the United States and the European Union, and we are advancing trade negotiations with Colombia, Peru, and the 11 countries of the Latin American Pacific coastal area known as ARCO.

As a nation with over a century of independent history, born of unfair trade, our ambitions when it comes to trading with the world don't stop here. We will be working this coming year and in subsequent ones to partner with the EFTA countries, CARICOM, GCC Korea, and APEC countries. Why? Because Panama is the trade hub of the Americas and happens to be the main trade partner in Central America and the Caribbean region for most countries.

On the economic front, Panama has been posting relatively strong economic growth numbers. With a solid growth rate even in difficult times, all of the country's political and economic signs are favourable. The Panama Canal enlargement and ambitious infrastructure investment programs will support strong economic growth in coming years. In fact, Panama today continues to have one of the better performing economies in Latin America. It is not our government figures backing this statement but those of international economic and business organizations. Panama's economy is expected to grow at an average rate of 5% between 2010 and 2015, as opposed to an average of 8% between 2004 and 2009.

The four major sectors of our economy—logistics and transportation, financial services, tourism, and construction—continue to experience solid growth. Panama continues to be a major destination for foreign direct investment, attracting more FDI as a proportion to GDP than most countries in the hemisphere.

Panama's solid macroeconomic framework has served to gain it entrance into an exclusive Latin American club, with an investment-grade rating by three of the most important agencies: Fitch Ratings, Standard & Poor's, and Moody's. Therefore, Panama will continue to improve on its recognized reputation as a financial and logistical centre worldwide.

The macroeconomic and fiscal achievements of Panama to date are not those of a country with a politically weak system where basic labour, human, and individual rights are disrespected. Nor is Panama a country with a poor economic system, relying on unfair tax practices to deviate investment from industrialized economies.

Panama is a leader in cross-border trade. In a recent ranking of border trade from CEPAL, Panama occupied the second position among Latin America's most competitive countries. At the same time, the World Bank's logistics performance index, which measures the ability of countries to connect to global markets, rates Panama high in comparison with the generally poor logistics and infrastructure in the hemisphere.

On the trade front, the Panamanian government believes there is no more powerful tool to ensure the prosperity of our societies than encouraging free and open trade among countries large and small. Freedom, opportunity, prosperity, civil society, and democracy builds up the solid basis for the development of our countries.

In regard to this treaty, Panama believes it will benefit both countries, because of our complementary economies. When it comes into force, it will contribute to lower prices and improve product choices for consumers. It will enhance market access for both Canadian and Panamanian service providers in areas such as finance, construction services, energy, mining, and the environment. It will ensure non-discriminatory treatment in cross-border services, establishing specific provisions for trade services as well as trade service suppliers.

Panama believes that the FDA ensures that no non-agricultural products are excluded from tariff elimination and that up to 90% of the industrial goods imported from Canada will be entitled to access under duty free treatment. This represents important concessions for Canada. The agreement will also improve market access for Canadian business by immediately eliminating tariffs on key Canadian industrial exports, representing new opportunities for Canadian workers and manufacturers.

The free trade agreement will also improve market access opportunities for Canadian farmers and food processors by eliminating a range of tariffs on key agriculture exports.

Panama maintains an average most favoured nation applied tariff on agriculture products of 13.4%, with tariffs reaching peaks as high as 260% on some products. The agreement includes zero for zero immediate duty-free access for key Canada sectors, including agricultural and agrifood products. Please bear in mind that Panama has granted Canada up to 83% of immediate market access for Canada’s agricultural exports. This outcome reflects a better outcome if we compare these figures with those offered to the U.S.A., at 65%, in the TPA.

From the perspective of Panama, key Panamanian agricultural products--for example, all tropical products, such as bananas, fresh melons, watermelons, pineapples, papayas, coffee, edible fruits, and nuts--exported to Canada have been granted immediate access as well. Canada's total imports of these products amounted to $660 million U.S. For a small country such as Panama, this figure represents more than 50% of total exports.

The FTA would also grant duty-free status for 100% of Panama’s non-agricultural products, including fish and seafood products.

As we stated before, Panama has a stable economy based on maritime and service-related industries developed around the canal, which accounts for 14% of our GDP. Panama benefits from the largest and fastest growing traffic volume generated along the U.S. east coast to Asia trade route. An expanded canal will strengthen Panama’s role in the international trading system and could create new opportunities for Canadian businesses. Activities related to the Panama Canal expansion are expected to create further favourable openings for Canadian investors, particularly in the areas of infrastructure and construction.

Furthermore, the FTA with Canada has received no objection from civil society in Panama and has wide support from the business community. In Panama, the general perception of the public and business community about the FTA is highly positive. The service sector is quite enthusiastic about the trade pact. This agreement is not seen as a threat to the industrial and agricultural sector, and it is understood that both countries can mutually benefit because of our complementary economies.

All of the aforementioned reasons point to the opportunity to secure the quick implementation of the free trade agreement that Canada has negotiated with Panama and to approve this bill currently before this honourable Parliament. This instrument will allow the coming into force of this trade deal and two important side agreements, one that is intended to protect and enhance workers’ rights and labour-related matters, and a second that will strengthen bilateral cooperation on environmental matters.

The proposed Canada-Panama free trade agreement meets the highest global standards. Panama has maintained higher labour standards in comparison to those of the rest of the countries in Central America, reaffirming our obligations as a member of the International Labour Organization, with the reinforcement of labour regulations related to fundamental rights, plus acceptable working conditions in terms of minimum wages, hours of work, and occupational safety and health.

The labour agreement signed with Panama represents a comprehensive agreement. Canada, in fact, has achieved labour protection provisions that go beyond those included in the recent FTA between the European Union and Panama along with the rest of Central America. The dispute resolution mechanism embodied in the Canada-Panama labour side agreement will, in a very real sense, help to improve conditions for Panamanian workers.

This bill you have under your consideration will give Canada avenues of engagement that it has never had before to promote corporate social responsibility, enhanced environmental protection, and improved rights of workers. In addition to its very strong provisions of labour standards, the corporate social responsibility aspects of this agreement represent the first time Panama has included such commitments in a trade deal. These provisions are included in both the investment and environmental chapters.

Panama's National Assembly has already approved the treaty. Now it's time for Canada to do the same to deepen commercial relations with Panama and other promising markets.

Prompt passage of this bill would help Canadian workers and businesses on all sides in both stimulating economic recovery in the short term and building sustainable competitive advantage.

Implementing the free trade agreement would also benefit Panama's economy and society and would signal Canada's strong support for countries and governments committed to democracy, the rule of law, human rights, peace, security, and sustainable development.

This is a bill that is good for Canadians, good for Panamanians, and sets an example for the world on trade policy. We just need to get on with it.

We thank you very much for the opportunity given to the Panamanian government on this occasion.

[The Chair, Conservative, Lee Richardson]

Thank you.

I'm going to begin the questioning rounds with Monsieur Laforest. I'll let you take the first round of questions, and then we'll move on to Ms. Hall Findlay.

Go ahead for seven minutes.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chair.

Thank you for coming. I would first like to tell you that the Bloc Québécois expressed a number of reservations about the signing of this agreement, especially because—according to us, the OECD and a lot of others too—Panama is considered to be home for tax havens and, as a result, it allows for tax evasion.

To this end, we questioned the stakeholders who came to meet with us, the officials or those who negotiated the agreement. We were told that the Minister of International Trade sent a letter to his Panamanian counterpart in order to sign a tax information exchange agreement. The answer we got was that negotiations reached a dead end. There was no agreement signed because the two sides did not want the same thing. Panama wanted to sign one form of agreement and Canada another. So there was no answer.

Could you please share your thoughts on this?

[H.E. Francisco Alvarez de Soto]

Yes, thank you very much.

Allow me to make a reference to this issue of the pejorative classification of Panama as a tax haven. Panama has explained to the OECD and other trade partners and to economic partners around the world that the reality of our tax system--and there is ample evidence of this--does not correspond with a tax haven.

That's something my government has made very clear, and I think we have acted on it, particularly after His Excellency Ricardo Martinelli took office as President of the Republic back in July of 2009.

In light of that, in the last 18 months, the Government of Panama has advanced a tax policy that has no precedent and actually is far more aggressive than any other OECD policy or the policies of other countries that are participating in the OECD tax cooperation project. We have completed more than 14 negotiations of non-double taxation agreements following the OECD standards, which include the model clause 26 for the exchange of tax information. Again, that follows OECD standards.

These 14 non-double taxation agreements, which include cooperation on matters of the exchange of information, have been completed with OECD members just like Canada. Panama decided, as a national policy, to engage in cooperation on tax matters following one of the two alternatives that have been given to anyone by the OECD in this project.

The OECD has clearly stated to those countries that have been asked to cooperate on these matters that they can follow one of two ways. One is to follow a model of a tax information exchange agreement. The other is to engage in the negotiation of non-double taxation agreements with a clause to facilitate the exchange of information. It's not an obligation to follow just one. You have the alternative of taking either one or the other.

Panama decided, as a sovereign country, that it was in the best interests of its economy to engage in cooperation following the alternative of non-double taxation agreements. We are very pleased and very happy that we have actually gone beyond the request of the OECD, which was to have completed at least 12 of these instruments with OECD members. We are now in the 15th negotiation. We have already signed nine, and before our assembly, currently, there are four, if I'm not mistaken.

In the case of Canada, from the very first day of our administration, Panama offered to Canada to engage in the negotiation of a non-double taxation agreement, just as it would with any other OECD country, because that is, again, the policy our country has decided to follow. We still maintain that offer. We are very eager and very much committed to that offer, which has not changed one bit from the very first day.

In that sense, particularly having this free trade agreement and in the interests of the Canadian investments that are already in Panama, we strongly believe that a non-double taxation agreement is actually the best complement to our free trade agreement.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

I will turn the floor over to my colleague Ms. Deschamps, who would also like to ask you a few questions.

Thank you.

[Johanne Deschamps, Bloc, Laurentides—Labelle, QC]

Thank you, Mr. Chair.

Thank you and welcome to a committee that I am not familiar with. But I still think that I will be able to ask you a few questions.

Mr. de Soto, I would like to go back to your testimony. You said that the agreement sets out commitments under which the Canadian and Panamanian governments will respect workers and promote the social responsibility of foreign companies that set up shop in your country.

Yet I have not heard anything about what happens when there is a human rights violation or when a company is responsible for environmental disasters. Does the agreement include penalties?

[H.E. Francisco Alvarez de Soto]

Thank you very much.

Indeed, this agreement with Canada has actually become a model, particularly in the subsequent negotiations that we are advancing when it comes to labour standards and when it comes to the environment, for example, and of course the issue of corporate social responsibility.

In the matter of violations of human rights, where there are corporations that actually, for example, do not honour labour standards or actually breach environmental laws, the two side agreements have actually a dispute resolution system that would allow for these matters to be dealt with.

On top of that, I would also like to stress the fact that in Panama, if you have an opportunity to look at it, our environmental laws are very strict. Actually, they would definitely be applicable on any occasion of any Canadian investment taking place in the country. So, in a sense, talking about, for example, the environment, you would have the vehicle of the agreement to allow for, again, these potential violations being dealt with, and also the environmental laws. If there is a breach of those standards, there would be sanctions. You can rest assured there would be sanctions.

[The Vice-Chair, Bloc, Jean-Yves Laforest]

I will have to ask you to wrap up.

Unfortunately, your time is up. We have already gone over the limit. So thank you.

We will now go to Ms. Hall Findlay.

I am sorry, Ms. Deschamps. You understand. It is a colleague who has to do it, but we only have one hour.

Go ahead, Ms. Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Merci, monsieur le président.

Ambassador, gentlemen, thank you very much for being here today. As I said informally earlier, we know everyone's very busy, but we really appreciate your being here with us.

I just want to say that as the international trade critic for the official opposition, this is one of the rare occasions when we are in fact in full agreement with the government in pursuing trade with a number of different countries. We are very supportive of the negotiations and the fact that we're at this point in the discussions with Panama. As you well know, there are a number of concerns, and this is the opportunity for a number of those concerns to be raised.

I have to say, I was actually going to ask you a question about the concerns that have been raised about the so-called tax haven concern. I won't ask again, because, Mr. de Soto, you answered that extremely well.

[H.E. Francisco Alvarez de Soto]

Thank you.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I would appreciate it, if it's possible, if you can forward to the committee information of the other countries with which you have in fact.... You said you've signed nine, and four or five are being done. If you could just add that information and address it to the clerk, I think that would be very helpful to us as well.

I would like to shift the focus, then, to another question I wanted to ask, and that was on the opportunities for those Canadian enterprises engaged in financial services. We know that in terms of the expansion of the canal, there are infrastructure opportunities. We know that for the agricultural sector, there are some tremendous opportunities, and we very firmly believe in the mutual benefit of this agreement for both countries, and increased economic prosperity, all of which is why we're supportive of it.

In terms of financial services, Panama is exhibiting and showing real success, and growing success, as something of a financial services hub in Central America and for the Americas. Could anyone just elaborate on what you see are the opportunities, given a free trade agreement with Canada, and what that might mean for Canadians engaged in that sector?

[H.E. Francisco Alvarez de Soto]

Thank you for the question, Madam.

Let me address that directly.

Panama is already becoming, essentially, we believe, a very serious, committed financial centre for the region. We want to consider ourselves a financial centre for the Americas. This is why we are engaging not only in policies of cooperation, for example, within the framework of the OECD, as we have nothing to hide, but it's also why we are very much engaged in other multilateral initiatives in terms of ensuring that there's a real, solid, dynamic financial centre.

We need a financial centre, because we are attracting a significant amount of foreign direct investment because of the reality of Panama being a logistical hub for trade and a logistical hub for services in the hemisphere.

As a matter of fact, we have to point out that Scotiabank, for example, has grown tremendously in terms of the local banking business. Again, this is a market of 3.5 million people. When thinking of Panama as a trade partner, you have to think of Panama as a multiplier. And that's precisely what we think Scotiabank has right. The strategy of this Canadian bank is to position itself in Panama to finance a lot of the trade going on in the region from Panama, through Panama. That's precisely where the business is.

That would be an example for other Canadian banks. They would have the certainty that there is strong financial legislation that would guarantee transparency and proper management of international financial transactions. They would have the certainty that they would be positioning themselves as financial institutions in a location that is actually looking up to the highest standards of business in the world. There would be an opportunity for that.

In terms of your comment on how much we have advanced in terms of tax cooperation, I can quickly list the treaties. We have signed with Qatar, Barbados, Belgium, France, Italy, Spain, the Netherlands, Luxembourg, Mexico, Portugal, Singapore, and the Republic of Korea.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you very much.

I would like to focus a little bit on the end of your testimony. You spoke about the value of exchange and the opportunities for exchange. There are many of us who believe very strongly that trade is an opportunity to do trade, of course, in goods and services, but that these arrangements will give an opportunity for a much greater level of exchange of people and ideas. In terms of questions from other colleagues about labour, about tax issues, and about environmental issues, many of us believe that the more trade we have in both goods and services, the more exchange we will have of people and ideas. All of that will enhance labour conditions and environmental conditions.

I'm interested particularly in education, post-secondary education, as well. Can you speak, in the limited time we have left, on opportunities students and younger people in Panama and Canada may have for exchanges? Is that something on the radar for you or something you're interested in and see some opportunities for?

[H.E. Francisco Alvarez de Soto]

Thank you very much again.

Indeed, we firmly believe that a policy of trade, of course, is one that helps strengthen all other aspects of government and society. That's precisely why our administration is so committed to having Panama look at the world and at other trade partners around the world, like Canada.

In terms of education, of course it has an impact. This government is particularly interested in engaging with partners around the world to help us improve the level of education of our youth. Again, Panama, as a hub, has to look at things like technology, at things like logistical trade efficiency. We are not a country that would engage in trade by looking at cheap labour or by just wiping out our rainforest and the biodiversity that we have. We have the highest salaries in the region; we are actually an expensive country when it comes to that. So it is in our interest that other trade partners engage in faithful trade in this matter.

For this opportunity, Panama is investing in education, with projects like City of Knowledge. City of Knowledge is a very beautiful project, our international project. It is one of the largest former U.S. bases that has been turned into a large area where we have, to date, had very prominent universities from all over the world giving master's degrees, conducting research, and engaging with UN agencies—which have actually looked at Panama to locate their regional offices. So Panama is also becoming this little Geneva, if you wish, of Latin America, because of this concept of higher education and higher standards for cooperation. That's where we think there is great opportunity for Canadian universities and research institutes.

If you look at the trend, you would be surprised that there are a lot of young Panamanian professionals who are actually considering Canada, rather than the U.S., when it comes to looking at higher education, master's degrees, Ph.D.s, and so on. This is something that our ministry of education and our secretariat for technology and science are very much ready for and very interested in taking opportunities offered to approach these countries and promote that. We have done that with other countries as well, like Singapore, for example.

[The Vice-Chair, Bloc, Jean-Yves Laforest]

Thank you, Mr. de Soto.

Thank you very much, Ms. Hall Findlay. It is now Mr. Julian's turn, from the NDP.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Merci beaucoup, monsieur le président.

Thank you very much for being here today. We appreciate your coming forward for this testimony. I visited Panama with the trade committee a few years ago. It's a stunningly beautiful country. I was particularly impressed with the labour activists there. They understand that the way to bring balance to economic development is through having a proper balance between business and labour, and that's the first question I would like to ask you as follow-up. We had what has been described as a very mean-spirited reform brought forward by the government in the spring. I think it was a mistake. It certainly left a black eye for Panama and the world to see.

Fortunately, the government has moved back from that, but we had testimony from the Canadian Labour Congress last week at this committee about the labour component of the agreement, though they haven't yet come for questions. They gave testimony that indicated the Canada-Panama agreement doesn't include specific protection for the right to organize and the right to strike. They also raised concerns around the free trade zones, the fact that the free trade zones are essentially exempt from national labour laws and exempt from international labour provisions. Finally, they raised concerns about Panama offering political asylum to the former head of the secret service in Colombia, Maria del Pilar Hurtado. As you know, she has been accused of a number of things, including handing over lists of trade union activists in Colombia to the paramilitary, and we certainly know about the absence of trade union rights in Colombia.

So those concerns have been raised by the labour movement, and I'd like you to respond to each of those points, if you may.

Then my second set of questions deals with the issue that was raised by Mr. Laforest, the whole question of fiscal status in Panama. Canada has asked for a tax information exchange agreement. One was signed with the Obama administration. I'm just going to quote what Global Trade Watch says in response to the signing of that agreement:

The tax information exchange agreement (TIEA) that the Obama administration signed with Panama today does not require Panama to automatically exchange information with U.S. authorities about tax dodgers, money launderers and drug traffickers.Therefore, Panama is giving itself until the end of 2011 to make a series of domestic legal changes to facilitate the non-automatic information sharing envisioned by the new TIEA - which will be made only in response to specific, case-by-case requests after U.S. authorities have already obtained and provided to Panama a great deal of information about potential wrongdoers.

In short, they're criticizing the structure of the agreement because they're saying it's not an automatic information exchange. We've also raised concerns about Canada not having a robust tax information exchange agreement with Panama.

Why the delay on this, and why not have automatic information sharing? That is really the concern people have about tax shelters in Panama and the links to organized crime.

[H.E. Francisco Alvarez de Soto]

Thank you very much for the opportunity to clarify these issues and these biased opinions of international organizations once again.

Let me start with the labour aspects of your questions. I will start with the reference to these export processing zones. Respectfully, I do not agree with those who have stated that these special zones are not subject to the Panamanian labour code, and I would like to engage with any one of them about this matter. As a licensed lawyer, I can assure you that the Panamanian labour code applies throughout the republic, and also there are many references to labour rights in the Constitution. So it is impossible that the export processing zones would be excluded from application of the labour code.

That being said, there have been specific provisions regarding how differences that could arise in labour relations will be dealt with. When you do a comparative analysis of labour laws in countries that have export processing zones, let me remind you there are always provisions for specific matters in terms of how to deal with labour differences, for example. So Panama is not deviating from international standards in these matters.

Last week, the Council of Ministers passed an amendment to this particular law 25 on export processing zones, which strengthens the references to the labour code being applicable to the entire labour environment in extra processing zones.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Could you provide that to the committee, please?

[H.E. Francisco Alvarez de Soto]

With pleasure. No problem. I could provide the law that has been passed by the Council of Ministers. It would go to the National Assembly.

As a matter of fact, let me point out that it has actually been consulted on with everyone. In particular, the companies have actually said that they have no problem with strengthening the labour aspects of this particular law.

In terms of the references to Law 30, which is, I think, the one you're referring to, which was passed early in the spring and was subject to a national consultation, let me reassure you that all the amendments that have happened since then actually revoked Law 30 and implemented a series of laws to deal with all the provisions that were contemplated in this original law. It had to do with environment, labour, civil aviation, commercial aviation, and other provisions, such as national security and so on. They have been agreed to by the national consensus board that was created, which included many actors of civil society, including labour unions, environmental organizations, and other representatives of civil society. They actually agreed with every one of them before they were sent to the Council of Ministers and before they were sent to the National Assembly. That was part of the national agreement on how to correct Law 30.

That demonstrates that our government and our society believe in engagement and open discussion of any differences, including labour, the environment, and other aspects of life.

Your reference to the political asylum of the former Colombian official is something that has been dealt with by our foreign ministry in accordance with international law. The Panamanian government is very respectful of the internal affairs of Columbia. I will not engage in arguing about whatever accusations this lady is facing in Columbia. I will only say that in this particular case, Panama is very respectful of international law, as it is part of our Constitution. That was the only objective when acting in regard to this case.

With regard to the fiscal issue, let me be very clear. We have been extremely consistent with Canada--

[The Vice-Chair, Bloc, Jean-Yves Laforest]

Could you please go a little faster, Mr. de Soto?

[H.E. Francisco Alvarez de Soto]

Yes, I'm trying. It's just that there are a lot of questions, and I would like to address them, if I may.

Panama has been very consistent with Canada in actually engaging fully in cooperation. The strength or the robustness of any sort of cooperation can be perfectly dealt with in a non-double taxation agreement. Panama will not sign tax information exchange agreements because they do not serve the interests of the Panamanian economy. The non-double taxation agreements--again, I insist on this--following OECD standards and following OECD suggestions, are what Panama believes serve its economic interests as a sovereign nation. We believe they are very valid, very efficient instruments when it comes to assuring the exchange of information.

Now, as to the automaticity of this exchange of information, Mr. Julian, let me tell you that the automatic exchange of information is something that actually has not even been demanded specifically when you talk about the OECD discussions and the OECD global forum on taxation. What the forum is demanding from participants--OECD members and non-OECD members--is that they have a robust structure for assuring that when it is applicable, there are sufficient channels and there is sufficient legislation and information to address the requests that any party might need in pursuing the application of their tax legislation.

I don't understand why there is this insistence on talking about the TIEA with the United States not being robust, because there is not a specific element. In reality, when you look at many, many dozens of TIEAs around the world, the automatic exchange of information is actually not necessarily an element of any of these agreements.

To conclude, in the case of Canada, my government has reassured Minister Van Loan and your tax authorities that Panama is ready to engage in the negotiation of the non-double taxation agreement, with all the provisions for the exchange of information, immediately. That's the offer that was posted in July 2009, and that's the one that remains to date.

[The Vice-Chair, Bloc, Jean-Yves Laforest]

Thank you, Mr. Julian.

It is now the Conservative Party's turn. Mr. Allison, the floor is yours.

[Dean Allison, Conservative, Niagara West—Glanbrook, ON]

Thank you, Mr. Chair.

I actually have some trade questions for you.

We'll thank Mr. Julian, although his party represents only about 12% of the seats in the House of Commons, so he's certainly not in the majority in terms of his thinking.

Thank you for coming. I know it's a cold part of the world to be coming to at this point in the year.

I have only two questions, and then I'm going to pass it over to my colleague, the Parliamentary Secretary for Trade.

The first question revolves around potential future contracts for the canal. I realize that probably most contracts are out, so I just want to know what the thinking is in terms of contracts that may be available and may still be left for Canadian companies or those that may be participating. And then perhaps I could get your thoughts on why it's important that we ratify this deal before the U.S. does, and your perception of ongoing opportunities for Canadian companies to be ahead of the ratification for the U.S. Obviously, they're there. They're at the table. You guys have worked on an agreement. They haven't ratified it in Congress.

So perhaps I could get your thoughts on that, and then I'll turn it over to my colleague, Mr. Keddy.