International Trade Committee on May 1st, 2014

[Rosemary Joyce]

I'm not certain what professional biography you found, but I'm an anthropologist. I study the long-term history of Honduras through the practice of archeology, but I'm also a recognized expert in the modern politics of Honduras, particularly with respect to participation in cultural heritage policy in the country. My publications since the coup include ones about the political, social, and economic context of the coup.

[Erin O'Toole, Conservative, Durham, ON]

You talked about your early time in the country. The bio we used was from Berkeley actually.

But at the start of your testimony you talked about your early years in the country and you said that external trade was critical to improvement in the country at that time, but then with intervening coup and other governance issues, trade became less important for the country or was not helpful to the average Honduran.

You ended with a quote that I thought was rather unusual. You urged us to hold back this agreement because doing so would allow Canada to apply pressure on Honduras. Given the fact that Honduras has trade agreements with the United States and European Union—so Canada's not really a trailblazer here in trade with Honduras—how exactly would Canada apply pressure in your opinion?

[Rosemary Joyce]

Every trade agreement that Honduras negotiates with international parties under current conditions tends to make it seem as if those current conditions are acceptable.

I wanted to correct one thing that you said. I didn't say that trade became less important; I said that the profits of trade went increasingly to a small, wealthy elite, as evidenced by the erosion in the standard of living since 2009 and in the increasing measure of inequality.

External trade has been important over the last 30 years in Honduras, but over the last five years it has been captured by a small segment of society. So what Canada and other governments could and need to do is to put pressure on Honduras to create incentives for the implementation of laws that increase the minimum wage, that protect unionization rights, and protect people from exploitation. What we're seeing is quite the opposite.

[Erin O'Toole, Conservative, Durham, ON]

Are you aware that Canada has been among the top five or six donors of foreign aid to Honduras prior to this FTA?

[Rosemary Joyce]

I'm actually quite well aware that Canada has a very strong international aid profile in Honduras. Canada has been very visible in Honduras, including in the 1970s and 1980s when I first began working in the country. But providing international aid, as both my own country and Canada have done, doesn't actually justify the kind of agreements that will allow continued exploitation of the workforce of Honduras. One good doesn't outweigh one bad.

[Erin O'Toole, Conservative, Durham, ON]

Are you suggesting that the two are mutually exclusive, that you cannot engage in capacity-building or institution-building and trade at the same time? I was shocked that you glossed over the narco-trafficking challenges the country has. We've heard a few witnesses say that the average Honduran would be much better served by a job with, as our first witness mentioned, Gildan than by a job within narco-trafficking.

Would you not agree with that?

[Rosemary Joyce]

I think that's a false choice, and I'm not going to be forced into answering a false choice.

There are two things to say. One is that jobs that Honduras has put in place that do not pay the minimum wage, which Honduras itself has estimated barely covers people's basic need for food and necessities, that come at the expense of the protection of workers in the long run and of the right to unionize, are not good jobs, even if people who are living in such dire poverty feel they are forced to take those jobs for their own good.

[Erin O'Toole, Conservative, Durham, ON]

I'll try to quickly get a question to Mr. Grinspun.

[Rosemary Joyce]

The aspect of the drug cartels that I chose to emphasize is the Honduran government's use of them as an excuse for inaction of various kinds and for oppression of its people.

[Erin O'Toole, Conservative, Durham, ON]

Mr. Grinspun, in your testimony you talked about how you feel that the FTA is not the best way to advance human rights, and labour, and environmental standards in the country.

It's the same sort of issue I asked of Dr. Joyce. I'm assuming that as a Canadian academic, you're aware of Canada making Honduras as a priority country for our foreign aid.

Can we not engage and build capacity, as we've been trying to do with the justice system in Honduras to help with their high crime rate, most of which is due to narco-trafficking...? Can we not do both at the same time, engage and help drive economic benefit for the population alongside advancing and engaging on human rights, justice, and those sorts of things?

[Ricardo Grinspun]

Thank you for the question.

There's a premise in your question that I do not accept, which is that the way to engage at the level of trade and investment is through the particular FTA that is being proposed. I disagree with that.

Brazil rejected the idea of a free trade area of the Americas, the kind of agreement that is being proposed here with Honduras, because of structural problems in the agreement, some of which I mentioned in my talk, such as investor-state loss mechanisms that are highly detrimental for development. Brazil is doing fantastically in terms of trade engagement, and Canada and Brazil have a very strong relationship that is not embodied in an agreement.

I think trade and investment engagement are very important. This specific agreement in front of us has very problematic features if our intention is to help the poorest of the poor in Honduras.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Pacetti, the floor is yours.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you Mr. Chair.

Thank you to the witnesses for the very interesting points that were brought up.

I have a quick question for you, Ms. Joyce.

I understand there is a free trade agreement between the U.S. and Honduras. Being an American, what's your opinion of that free trade agreement?

[Rosemary Joyce]

I have the same opinion about the U.S. free trade agreement with Honduras, for the same reasons your other witness has eloquently and with great authority exposed. Honduras at this point in its political history does not have in place the structures that would allow a free trade agreement to work in a way that doesn't disadvantage the majority of the population. There are other ways to engage in trade. There are other ways to encourage those governmental institutions—[Technical difficulty--Editor]

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

I think we lost you.

Are there any indicators to see whether the free trade agreement between Honduras and the United States has been beneficial? Were there any indicators? Were there any goals achieved to alleviate poverty or to increase jobs? Was any of that achieved in the free trade agreement with the U.S.?

[Rosemary Joyce]

I'm not certain if you're familiar with the Millennium Challenge Corporation, which is a U.S. government initiative. Honduras was a participant in it up through part of the Porfirio Lobo Sosa administration. The Millennium Challenge Corporation produced a number of reports. If you would like to see those reports, they establish quite clearly that Honduras was making great progress under the administration of José Manuel Zelaya Rosales, and that since that administration was removed, progress has been reversed.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you.

Mr. Grinspun, I have a quick question. Have you written any papers on these free trade agreements between Honduras or any other free trade agreements?

[Ricardo Grinspun]

Yes I have.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Can you send us a link or something? Some of your comments were actually quite interesting. I'd like to read a little bit more.

[Ricardo Grinspun]

Yes, I will be very glad to do so.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you.

My question is, where do we start? I think you referred to it when you were answering somebody else's question. I'm a bit conflicted in how we start engaging with countries like Honduras. Do we just leave it to the Americans, or do we just leave it to the other South American or Central American partners? There doesn't seem to be any progress from what I see. Ms. Joyce perhaps corrected me a little bit, but where do we start?

Canada is a respectable country. We have to start somewhere, and I think trade is one of the areas along with some of the other areas we're involved in. The problem is that we have limited resources, so we need corporate Canada to pick up the slack somewhere. I don't think we can rely on them, but they have to have some responsibility in the countries they do business in.

[Ricardo Grinspun]

If we had in front of us a trade and development agreement that placed the same priority on advancing the rights of indigenous peoples in Honduras, community rights, environmental rights, and the right to clean water, that would create mechanisms for aggrieved communities to address their grievances. They would then have the same thing that the agreement does for investors with grievances.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So you would start that on the development side. What about the business or economic side?

[Ricardo Grinspun]

I think it's a question of....

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

What do you tell Canadian companies that are already there, or Canadian companies that want to invest there?