Evidence of meeting #28 for International Trade in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was jordan.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Nancy A. Donaldson  Director, Washington Office, International Labor Organization
  • Patricia Chapdelaine  Executive Vice-President, Operations and Technical Designs, Nygård International
  • John Masswohl  Director, Government and International Relations, Canadian Cattlemen's Association
  • David I. Hudson  Representative, Chairman, Indo-British Garments, Nygård International
  • Sharon Clarke  Director, Communications and Public Relations, Nygård International

March 15th, 2012 / 11:05 a.m.

Conservative

The Chair Rob Merrifield

I'll call the meeting to order.

We want to thank the witnesses for coming forward today. We are discussing the piece of legislation that has cleared the House on the free trade agreement between Canada and the Kingdom of Jordan.

I do want to thank the witnesses for coming forward. We have John Masswohl with the Canadian Cattlemen's Association. Thank you for being here.

And we have the International Labor Organization, with Nancy Donaldson, the director, in Washington.

Can you hear us and see us all right?

11:05 a.m.

Nancy A. Donaldson Director, Washington Office, International Labor Organization

I can hear you and see you. Thank you.

11:05 a.m.

Conservative

The Chair Rob Merrifield

Very good.

And from Nygård International, we have Patricia Chapdelaine. Are we coming through there?

That's in Winnipeg, I believe.

11:05 a.m.

Patricia Chapdelaine Executive Vice-President, Operations and Technical Designs, Nygård International

Yes, we are.

11:05 a.m.

Conservative

The Chair Rob Merrifield

Okay, very good.

We also have, from Nygård International, David Hudson. He's in Dubai. I'm not sure he can hear us, and we don't have video. We're trying to connect that, and that will happen as we go through the meeting.

We will start with John Masswohl from the Cattlemen's Association.

Thank you for coming in. We'll yield you the floor now for your presentation.

11:05 a.m.

John Masswohl Director, Government and International Relations, Canadian Cattlemen's Association

Thank you, Mr. Chairman, and thank you for the opportunity to appear before the committee again.

I'd like to reconfirm the support of the Canadian Cattlemen's Association for the Canada-Jordan free trade agreement. Jordan has not traditionally been a significant market for Canadian beef, and it's not likely to become one in the near future, but this agreement will enable us to regain equivalent terms of access that the U.S. beef industry has enjoyed in Jordan since 2001. As Canadian beef exporters direct their primary efforts in the Middle East to markets like Saudi Arabia, it is beneficial to have access to the neighbouring Jordan and others.

We attach significant importance to all countries removing any lingering BSE restrictions on Canadian beef, and Jordan has done this. We hope other markets in the Middle East, especially Saudi Arabia, will follow Jordan's lead.

Under the terms of the Canada-Jordan free trade agreement, Jordan will eliminate immediately its current 5% tariff on beef cuts; 10% tariff on genetics; and 21% to 28% tariffs on prepared beef products, such as sausages and cured meats. There are no exclusions and no quota limits in this agreement.

I would like to conclude my comments on the Jordan FTA by saying that we unreservedly support implementation of this agreement. We would point to the results as an example of what we would like to see in all future negotiations.

Before I wrap up entirely, I would like to use my final minute to point out that today, March 15, 2012, is the day the free trade agreement between Korea and the United States comes in force. This is a serious concern to the Canadian beef sector. Today is the first day that Canadian beef will be at a tariff disadvantage to U.S. beef in Korea. We strongly encourage Canada to complete its negotiations with Korea as well and restore our tariff parity in that market as soon as possible.

With that, I'll conclude my brief comments.

Thank you, Mr. Chairman.

11:05 a.m.

Conservative

The Chair Rob Merrifield

Thank you very much.

We will now go to the International Labour Organization, Nancy Donaldson, in Washington.

Nancy, the floor is yours.

11:05 a.m.

Director, Washington Office, International Labor Organization

Nancy A. Donaldson

Thank you for inviting me to brief you and to answer questions today.

Social justice, decent jobs, and respect for fundamental rights have been at the heart of the Arab Spring movement going on in the Arab states. We have observed that freedom of association, employment, and decent work have featured prominently in the recent wave of unrest in Jordan specifically, with more than 550 labour-related protests and strikes since January 2011.

On the workforce situation there, despite 7% economic growth before the great recession, unemployment rates have remained between 12% and 13%. In addition, only 40% of the population above the age of 15 is even economically active. The country also faces one of the lowest female participation rates in the workforce, at only 14%.

Against this backdrop, large numbers of young people are entering the labour force, with over 70% of the population under 30 years of age. Young people between 15 and 24 years of age constitute 22% of the population, with most of them in school still, high school and university. But recent job creation in Jordan has been mainly in low-status, low-skill jobs, and that is not the expectation of Jordanian youth. They want high value-added jobs where pay is adequate. As a result, there are over 600,000 Jordanians already working abroad in mostly skills-intensive jobs. At home, unemployment stands for youth at 27%, more than double the overall rate.

The coming challenge will be to create sufficient jobs to absorb more than 60,000 new entrants, the majority of them youth, per year, and the government, which has been a traditional place of employment for about 30% of the population, can create only 10,000 of those 60,000 jobs.

The impact of investment policies on employment is uncertain. The trade liberalization has led to, as it often does, an increased dependence on migrant workers in export zones, in turn depressing real wages for unskilled labour. The net result is that jobs being created are mainly going to migrant workers, about 63% of the jobs created between 2005 and 2009. The foreign workers today constitute about half of private sector workers, which is about 27% of the general population of workers. Almost 90% of registered foreign workers, mostly in the QIZ, are illiterate. The majority are in the production, agriculture, and services sectors. In terms of nationality, they're about 70% Egyptian, followed by Indonesian, Sri Lankan, and Filipino.

What is the government response to their challenges, and what is the ILO response? The government has responded to the current wave of discontent by increasing/accelerating the reform process—constitutional law, legislative, social, and economic policy reform. They are pushing towards tightened restrictions on the employment of migrant workers, including through the imposition of quotas on certain jobs. Other jobs are giving explicit priority to Jordanians. The government has placed employment and decent work for Jordanians at the heart of its response strategy. They endorsed the national employment strategy in May 2011.

In direct response to that strategy, I'm excited to tell you that just last Sunday the ILO regional director, Nada Al-Nashif, the national chamber of industry in Jordan, and the General Federation of Jordanian Trade Unions, along with the labour ministry, formally signed a decent work country program, or a national framework strategy, for 2012 to 2015.

The goal is to support national initiatives to reduce decent work deficits and strengthen national capacity to mainstream decent work. There are three priorities.

The first is to expand decent work for young Jordanian men and women through the promotion of better work conditions, non-discrimination, and equal rights at work.

The second priority is to extend a minimum level of social security to the most vulnerable groups of society through the social protection floor.

The third priority is to enhance employment opportunities, particularly for youth.

There are many concrete measures that come with those priorities. I'd be very happy to speak to those. The crosscutting issues in each of those categories will include social dialogue, international labour standards, and gender equality. Each of these areas includes a number of micro and macro efforts in many technical cooperation projects. We're very grateful to say that they include some important projects supported by the Canadian government, CIDA, and the development organizations.

I imagine that I may be out of time, so let me just say that I'd be happy to discuss some of the concrete achievements so far and the specific initiatives going forward, and I would be happy to answer questions.

11:10 a.m.

Conservative

The Chair Rob Merrifield

Thank you very much.

We'll now move on to Nygård International. We have Patricia Chapdelaine. You are in Winnipeg. We're scooting all over the world today.

The floor is yours, Patricia. You have 10 minutes.

11:10 a.m.

Executive Vice-President, Operations and Technical Designs, Nygård International

Patricia Chapdelaine

Good morning, everyone.

I'll start by telling you that my position with Nygård is executive vice-president of operations and technical designs. A very large part of my responsibility is sourcing: sourcing accessories, fabric mills, fabric suppliers, and garment factories for our production. We are currently in nine countries and are using 32 garment factories.

My first foray into Jordan was in 2003. We started some production with a couple of factories at the time, but the quantities weren't very large at the time. However, we were able to start this with JC Penney in the U.S., and in order to take on their business we really had to come up with some competitive pricing, which meant working with countries that were duty-free to the U.S.

JC Penney, in addition to regular compliance, has some pretty tough rules to follow. One of the things they insist upon is that any factories where their production is being done are on what they call the “golden list”. Not every country has a golden list, but certainly Jordan does.

In 2006 we began work with IBG, which was then known as MF Textiles. I believe IBG bought it over in 2008. In starting to do business with them, Nygård does have a supplier compliance policy. We did send some documents, but unfortunately it was too late for them to be translated, so they aren't with the committee members.

Our compliance policy covers all the rules and regulations relating to labour standards, worker health and safety, and the environment. It calls for no discrimination in terms of hiring, employment practices, disabilities, sexual orientation, etc.

Suppliers cannot use forced or indentured labour and strictly no child labour, as defined by local law, but definitely and specifically not children under the age of 15.

Suppliers will treat all workers with respect and dignity and shall not use corporal punishment, threats, or any form of physical, sexual, psychological, or verbal harassment or abuse.

Suppliers shall permit their employees to enjoy all civil rights granted under the constitution and laws of the country in which they are employed.

It then speaks to workplace safety and health, and environmental laws. We do get our partners to sign these compliance policies in order to do business for us.

We don't take this lightly. We do monitor. We don't just get factories to sign these and then walk away. For the countries of Jordan and Egypt, I have in place a country manager who lives in Egypt but spends 10 to 11 weeks a year in Jordan. I have a regional manager who lives in Singapore and that is his region. He visits Jordan four to six times a year. I myself go twice a year, and I have three Nygård employees permanently stationed at the IBG factories.

In addition to that, we know that the ministry of labour, through their directorate of worker...I'm not quite sure what the title of that is. Anyway, they deal with the inspections and make sure that all of the laws and compliance towards the golden list are being kept.

There is one more. The exporters' association also get involved. As of the last couple of years, IBG has also been working with Better Business Jordan and has set up a committee. There is a certificate to that effect.

I find, working in Jordan, that all of the government and human rights agencies, Better Work Jordan and so on, are all very approachable; they are all very helpful. I met with four out of five of these organizations last year. They're all very open to speaking about labour issues and how they can contribute and give advice on how we can do things better.

I visit the sites and talk to the people. I visit the dormitories. I visit the canteens. I meet with some of the individual workers and talk to them. Here are some of the things that I have found. One thing is that workers migrate to Jordan. As we've already said, the vast majority of the workers specifically in our industry come from other countries.

One of the main reasons they do it is they can receive double to triple the wages they would earn in their own country. To that point, they also have the added advantage of having free room and board. I think most of us know they send most of their money home to support their families and overall have a better way of life.

Food and board is free. Even though that is not specifically in the contracts that these workers sign, there could be a deduction. As of May 1, 2010, IBG has waived that deduction. There are other benefits offered by IBG. There's a full-time doctor on staff between the two factories and there is a full-time nurse at each of the facilities.

Of the workers, 26% of the migrant workers are on their second or third term with the company. Certainly there are people who have their leave after their first contract is over and then sign another contract to come back. I think 26% is quite a high return.

I think one of the benefits of a free trade agreement is that it would employ more people in Jordan. Certainly we would increase our production. Right now, I only make goods that ship to the U.S.A., but I would add that all of my product that could be produced there...I would do so. For our company, it's to market to both Canada and the U.S., respectively.

I think other things may come up in question and answers.

I'll close with that. I don't know whether Mr. David Hudson has anything he might want to add.

11:20 a.m.

Conservative

The Chair Rob Merrifield

First of all, we'll ask if Mr. David Hudson is online.

He is.

11:20 a.m.

David I. Hudson Representative, Chairman, Indo-British Garments, Nygård International

Yes, I've just joined only this second. I apologize.

11:20 a.m.

Conservative

The Chair Rob Merrifield

That's fine.

11:20 a.m.

Representative, Chairman, Indo-British Garments, Nygård International

David I. Hudson

I don't know what's gone wrong here, but—

11:20 a.m.

Conservative

The Chair Rob Merrifield

It's technology.