House of Commons Hansard #102 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was trade.

Topics

Canada-Panama Economic Growth and Prosperity Act
Government Orders

11:20 a.m.

NDP

Matthew Dubé Chambly—Borduas, QC

Madam Speaker, I would like to thank my colleague for his question. I find it hard to see why I would abandon my principles, regardless of the situation. We are talking about trade, here. I will reiterate: we are not against trade, but that always has to be qualified. We will always be prepared, in whatever case it may be, to work to ensure that the measures for implementing a bill are appropriate and meet Canadians’ expectations.

We do this not for ourselves. As I said, the people also share our concerns. We have to meet people’s expectations in our transactions. Trade is essentially a matter of making deals. When we make deals with someone, we have to make sure that both parties to the deal understand its principles and terms. I am certainly not afraid to qualify every deal we make. We are entirely prepared to examine any issue and assess it case by case. We will not abandon our principles. We do an assessment and we come back with the comments that arise on an issue. That is what we are trying to say in this debate.

Canada-Panama Economic Growth and Prosperity Act
Government Orders

11:20 a.m.

Liberal

Massimo Pacetti Saint-Léonard—Saint-Michel, QC

Madam Speaker, I am pleased to rise in the House today to debate Bill C-24 to implement the free trade agreement signed between Canada and the Republic of Panama on May 14, 2010.

Although I am in favour of free trade and I support this bill, I refuse to do so at any cost, because I think we need to take a step back and reflect on the relevance and the impact of this agreement. Unlike the NDP, which systematically opposes free trade, the Liberal Party of Canada has always believed that trade agreements can have a positive effect on our economy. As we all know, our economy is based on exports, so eliminating trade barriers is highly desirable. Personally, I do not think the agreement with Panama, per se, is problematic; rather I think the problem lies with abandoning our traditional markets.

Our current economic situation is proof of how negligent the Conservatives have been. Although we had a positive trade balance for a very long time, we now have a trade deficit, and I highly doubt that a free trade agreement with Panama will change that fact. In 2009, Canada's exports to Panama totalled only about $90 million, while our trade with the U.S. exceeds $1.4 billion every day. Approximately 75% of the goods we export go to the United States.

Even so, our trade balance with our neighbour is in deficit. Protectionist measures in the U.S. are contributing to this unfair situation, despite NAFTA. I therefore have to wonder why a new free trade agreement with another country is so urgent, when our largest trading partner refuses to honour its commitments when difficult economic times come along.

Perhaps the Canadian government should do more to defend our economic interests in Washington, rather than in Panama. We are seeing this government making more and more concessions to the Americans rather than defending Canadian interests, and our economy is paying the price.

I firmly believe that it would be in our best interest to focus our efforts on revitalizing our trade relationship with our neighbours to the south and our other major trading partners rather than spreading our resources out. Instead of doing whatever the Americans want, which is what the government did on the copyright issue, the Conservatives should work harder to protect Canadian interests.

The Conservatives have been too nonchalant. For example, even though President Obama mentioned the buy American policy several times in his speech, the Conservatives were taken completely by surprise when they found out that the U.S. government intended to go ahead with a measure that violates our free trade agreement.

Why bother signing so many other free trade agreements when the most important one is not even enforced? I think that we should find ways to make the United States respect our agreements before we sign new ones that will likely have very little impact. It is an inescapable fact that, because of our geography, our economy is heavily dependent on the United States. The government should focus its efforts on that market rather than divide its resources among less critical files.

We also have a number of other major trading partners, including South Korea, China and the United Kingdom. The government should make it a priority to recapture those markets. Despite its strong economic growth, Panama will never be more than a relatively small market for us. The impact of this agreement will therefore be small, as I have said several times already.

Of course, diversifying our trading partners is a good thing and makes us less vulnerable to the ups and downs of certain markets. Despite its relatively small economy, Panama is important. It has been experiencing significant economic growth and is one of Canada's major trading partners in Latin America.

The country has also been making significant progress in matters of governance and democracy. In a way, a free trade agreement would recognize that progress. It is also worth noting that the new Panama Canal will be of critical importance to global trade. The region will probably continue to experience strong economic growth and will become an even larger commercial hub once the new canal opens. Strengthening our relationship with Panama is no doubt a good move.

However, we cannot ignore the issues of tax evasion and money laundering. Canada loses millions of dollars every year because of such illegal activities. With a free trade agreement in place, we will be entitled to ask for greater fiscal transparency to combat tax fraud.

In addition, certain environmental and humanitarian issues need to be raised with the Panamanian government. The working conditions in Panama do not even come close to those of our workers. Salaries are extremely low and working conditions are far from good for everyone. This free trade agreement will open our market to Panamanian companies. We are within our rights to ask Panama to improve its working conditions. Clearly, a company that underpays its employees and makes them work 12 or even 16 hours a day does not deserve to be able to sell its products in Canada and compete with equivalent products that, of course, cost more to produce here.

The government must also require certain environmental guarantees. But, of course, I am not holding my breath in that regard. This government is not doing anything for Canada's environment and so I doubt it will do anything for Panama's. Coming from this government, such demands would have no credibility.

In closing, I would like to reiterate my support for free trade with Panama. However, I believe that we should sign a tax information exchange agreement with this country. This would help us to increase transparency and would give us more tools to combat tax evasion and money laundering in Panama.

Nevertheless, we should first put all our energy into recapturing our core markets. Canada must speak up. Canadians expect this government to protect their economic interests on the international stage. The Conservatives should focus more on our economic relationship with the United States and try to make it honour the free trade agreement because, as I mentioned in my speech, our economy depends heavily on the United States. Panama has only a very small influence on our economic health.

I am therefore asking the Conservatives to focus all their energy on the relationships with our largest trading partners. Given the fragility of the current economic situation, we simply do not have the luxury of ignoring our core markets, nor do we have the flexibility to do so.

Canada-Panama Economic Growth and Prosperity Act
Government Orders

11:30 a.m.

NDP

Paulina Ayala Honoré-Mercier, QC

Madam Speaker, I believe that negotiating free trade agreements country by country shows a lack of ambition because there is no broad, regional vision. I have a question for my colleague about that.

If we examine European agreements, we see that the discourse in the European Union is such that free trade agreements establish winning conditions for long-term co-operation in order to achieve respectful and successful trade relations.

Do you believe that Canada relies simply on an economic criterion when developing its free trade agreements and that we do not have a regional vision for the Americas?

Canada-Panama Economic Growth and Prosperity Act
Government Orders

11:30 a.m.

NDP

The Deputy Speaker Denise Savoie

The hon. member for Saint-Léonard—Saint-Michel has the floor, but I would once again remind all members to address their questions to the Speaker.

Canada-Panama Economic Growth and Prosperity Act
Government Orders

11:30 a.m.

Liberal

Massimo Pacetti Saint-Léonard—Saint-Michel, QC

Madam Speaker, I would like to thank the new member for the question. Her riding is next to mine.

If I have understood her question, free trade agreements should be bilateral and multilateral at the regional level. I believe she mentioned Europe. Trade agreements with just the United Kingdom or a single country are no longer acceptable today. We must sign free trade agreements with all of Europe.

In principle, we should do the same thing with South America. I believe that this government is trying to sign agreements with Asia. However, Asia is not just one country. Some countries have problems with democracy. I believe we should move slowly and ensure that Canadian interests are protected in any free trade agreement that we sign.

Canada-Panama Economic Growth and Prosperity Act
Government Orders

11:35 a.m.

Liberal

Kevin Lamoureux Winnipeg North, MB

Madam Speaker, in reference to the U.S., my colleague made a valid point. Hundreds of thousands of jobs across Canada are very dependent on what is happening in the United States. There is an agreement between Canada and the United States. It is important for the government to put more of a priority on that agreement and try to protect Canadian jobs by ensuring that we have access to the American market. That should be the priority. It is not necessarily to take away from other free trade agreements. Rather, the government should recognize an important priority to all Canadians is to ensure that we have that secure market with our neighbour to the south, the United States.

I would ask my colleague to comment on the importance to Canadians across the country that the Government of Canada advocate for those healthy jobs that are here today because we export so much to the United States.

Canada-Panama Economic Growth and Prosperity Act
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11:35 a.m.

Liberal

Massimo Pacetti Saint-Léonard—Saint-Michel, QC

Madam Speaker, the Liberals always ask the toughest questions. I will try to answer that one.

I did not focus on the U.S. aspect in the sense of the problems we have had in the past. Since the Conservative government has come to power, it has been able to mess up the free trade agreement by giving up on the softwood lumber issue and paying all kinds of money. The lumber and pulp and paper industries in the U.S. have become much stronger by using our money. The Conservative government failed to negotiate with the Americans' on their buy American policy. We could not contribute there.

With any free trade agreement there is good faith and both countries expect to benefit from it. Both countries should benefit from it because there is economic activity that was not there before. The way to benefit is through trade, the exchange of goods and services. The services would include labour, which means that people in both countries would work. If we are unable to have the Americans uphold our free trade agreement with the U.S., I am not sure how successful we would be with respect to other trade opportunities.

Canada-Panama Economic Growth and Prosperity Act
Government Orders

11:35 a.m.

Green

Elizabeth May Saanich—Gulf Islands, BC

Madam Speaker, I am pleased to rise today to speak to Bill C-24, the Canada–Panama economic growth and prosperity act.

Others in this House might not have been thinking throughout this debate of the famous palindrome: a man, a plan, a canal -- Panama. As members know, a palindrome is something that reads the same forward and backward. Unfortunately, I cannot read this trade deal as anything but backward. When the man is the Prime Minister and the plan is this free trade agreement, we do not get anything very progressive. We do not get a canal; we get a ditch.

We have a very small level of trade with Panama. While we see the Conservatives trying their best to gather up as many small trade agreements as possible, such as the one we passed with Jordan and this one with Panama, it is worth bearing in mind the level of trade that is currently at stake.

In 2010, there was just under $214 million in trade in goods between Canada and Panama. We do not expect this to go up very much even with a free trade agreement. If we look at previous free trade agreements with countries like Costa Rica and other small bilateral free trade agreements, we find that in a number of cases our trade has declined after signing the agreements.

We have a global trading framework already which includes the general agreement on tariffs and trade, and under the Uruguay round the creation of the World Trade Organization. We are not labouring any longer as a global society of nations under high tariffs and protectionist measures. They have been mostly slashed.

What would one want in trading and approving a trade agreement with Panama?

We have heard much in this House of the need to improve labour rights within Panama. We have heard that Panama continues to be a nation that traffics heavily in narcotics and drugs, and the rest of the world would like to stem their flow. We also know that Panama is a country that has extensive money laundering problems. This agreement does nothing to address these issues.

When we look at the ways in which Panama has operated as a tax haven, according to the Organisation for Economic Co-operation and Development, Panama is one of 26 jurisdictions in the world that have not yet fulfilled their promise as of 2002 to provide tax sharing information. That would provide a greater understanding of when a country is operating unfairly and illegally to harbour revenue and wealth so that the country of origin cannot tax it properly.

The trade agreement with Panama unfortunately does not deal with any of these issues. It does not deal with narcotics trading. It does not deal with the tax haven problem. It does not deal with money laundering. It does have a side agreement to deal with labour, but we can already measure from previous efforts with such side agreements that they have no real effect on improving labour conditions in a country.

Through the 1990s there was a great increase in trade agreements and a great wave of globalization. Its triumphalism was the creation of the World Trade Organization, but things have slightly stalled since Doha and there is a little less triumphalism. Some people feel that trade, trade liberalization and greater economic activity, particularly greater strength and power to corporations, will raise all boats. Gus Speth, the former head of the United Nations Development Programme, famously said, “This kind of trade raises all yachts”, but it does not do much for the poor. It certainly does nothing to improve labour conditions. If we negotiate a trade agreement while turning a blind eye to the things about our trading partner that worry us, things like drug trafficking, money laundering, human rights abuses, tax havens and places to shelter income that should be taxed under public revenue elsewhere, it is unlikely we would be able to fix them later.

Turning to the text of the agreement, in article 106 there are some carve outs so that the agreement would not unfairly target multilateral environmental agreements. I wish the trade negotiators for Canada had listed all the agreements that are important. They certainly have carved out the ones that were listed in NAFTA, such as, CITES, the Convention on International Trade in Endangered Species, the Montreal protocol on the ozone layer, the Basel convention on the transport of hazardous materials, the Rotterdam convention on trade in hazardous goods, and the Stockholm convention on persistent organic pollutants.

A startling omission, since both Panama and Canada are parties to the framework convention on climate change, is that the framework convention on climate change is not listed as an agreement that would be protected against any incidental accidental implications from this trade agreement to climate policies. As we speak, both Canada and Panama remain parties to the Kyoto protocol, although we know that Canada has signalled its intention, quite shamefully I may add, to withdraw from its legal commitments there. I would not expect to see the Kyoto protocol in this agreement, but I certainly expected to see the United Nations framework convention on climate change, to which both countries are currently committed.

More concerning are the sections that appear in chapter 9 of the Canada-Panama free trade agreement. Chapter 9 deals with the quite devastating investor state provisions.

It sounds like the most boring of topics, an investor state provision. What could it be and why do we care? I want all Canadians to care. This provision is our innovation. We were the first anywhere on the planet to create this provision. It was done in NAFTA. In NAFTA, it is chapter 11. In the Canada-Panama agreement it is chapter 9, but it has the same effect.

There was an effort to make this kind of provision global. Some may remember the efforts were negotiated within the Organisation for Economic Co-operation and Development. It started within the World Trade Organization, but it stalled there. At the WTO they were called multilateral investor agreements. They regrouped and went to the OECD and called them the multilateral agreement on investment, the MAI instead of the MIA. It stalled and failed there. Thank goodness. It was the result of widespread grassroots opposition.

It is the first truly global campaign I have ever seen where grassroots groups using the Internet reached out to each other. I remember one parliamentarian saying to me at the time, “I can't imagine that any Canadian citizen is really worried about something called the multilateral agreement on investment”. He came back to me a few days later, after he had been on an MPs' study tour and said that while he was paying for gas at a station in Corner Brook, Newfoundland, he saw on a clipboard a petition to stop the MAI. It contained several pages of signatures.

Why do Canadians at the grassroots and people globally not want more investor state provisions? I should say that once it failed at the OECD, largely thanks to France, but other countries ran to catch up, once it failed there, they abandoned it. By they I am referring to the corporate entities that are pursuing the notion that corporations should have powers superior to those of elected legislatures. The essence of an investor state provision is that multilateral corporations should be able to trump decisions made by democratically elected parliaments and legislatures around the world and they should be able to sue a country if that country passes legislation that a corporation does not like. That is the essence of it. It is not in any traditional way an expropriation.

They have taken it from global to doing it BIT by BIT, literally the acronym BIT, bilateral investment treaty, such as this one. They are collecting up by BITs to replace what they could not do directly, a global agreement that allows corporations to sue governments when governments take action, even when that action is not in any way designed to inhibit trade. It is as such when Canada banned a toxic gasoline additive, or when Canada took steps to ban the export of PCB contaminated waste pursuant to the Basel convention I mentioned earlier, or in the very sad and tragic case of Metalclad, a U.S. corporation. Metalclad wanted to put a toxic waste site next to a little community in Mexico called San Luis Potosi. The people of San Luis Potosi said no, that it was too close to their water source and they would not let that giant U.S. corporation, Metalclad, put its toxic waste disposal facility there. Under chapter 11 of NAFTA, Metalclad sued the federal state of Mexico.

This agreement means that any corporation with a mailbox in Panama can claim to be an investor and sue Canada at the municipal, provincial or federal levels for any decision it does not like, that it feels impedes its expectation of profits.

In the case of poor little San Luis Potosi, Mexico ended up owing Metalclad just under $17 million.

I fear that my time to speak to this agreement may be coming to a close. I want to conclude by saying firmly and clearly that we must learn from what has gone wrong with chapter 11 of NAFTA and stop including investor-state provisions as an automatic, unthinking addition to every single trade agreement we negotiate.

Canada-Panama Economic Growth and Prosperity Act
Government Orders

11:45 a.m.

NDP

The Deputy Speaker Denise Savoie

The hon. member for Okanagan—Shuswap.

Canada-Panama Economic Growth and Prosperity Act
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March 29th, 2012 / 11:45 a.m.

Conservative

Colin Mayes Okanagan—Shuswap, BC

Madam Speaker, I appreciate the comments from my colleague.

One of the issues I have is that history has proven that as countries become more prosperous, average family income goes up, life expectancy goes up, as does the amount of freedom in a country. If my colleague went online to a YouTube video called “200 Countries, 200 Years”, she would find those facts recorded there.

Why would the member be against a free trade agreement with Panama that is going to increase not only those people's place in life as far their family income is concerned, but also their life expectancy and freedoms in their country? Would the member not support the agreement just on those grounds?

Canada-Panama Economic Growth and Prosperity Act
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11:45 a.m.

Green

Elizabeth May Saanich—Gulf Islands, BC

Madam Speaker, I tried to be very specific in my response to this proposed treaty, specifically the investor-state provisions.

It is true that when a country is not prevented from selling its goods by tariff barriers, there is a trend toward improved incomes. I will not deny that for one minute, but the member should to ask the people of San Luis Potosi whether they feel that the NAFTA agreement advantaged them.

There are consequences to these trade deals that we should now be able to examine forensically. We should now be able to ask where our good intentions went wrong and how can we improve on the model. Trade agreements in other regions have not included investor-state provisions, and I mentioned the European Union as one example, and the trade bloc in Latin America is another. Investor-state provisions are not a necessary ingredient to improving one's trade relationships. In fact, they are a poison pill.

Canada-Panama Economic Growth and Prosperity Act
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11:50 a.m.

NDP

Bruce Hyer Thunder Bay—Superior North, ON

Madam Speaker, as is often the case, the hon. member for Saanich—Gulf Islands has done her homework exhaustively and remembers most of it without a note. She has provided us with quite the shopping list of incredible reasons why this is flawed legislation and a bad idea.

My question for the hon. member is whether or not she believes this bill is hopeless given the huge list of flaws she has identified. Is there some hope that with amendments she could actually be in favour of this bill? If so, what are the key elements that would cause her to consider changing her mind?

Canada-Panama Economic Growth and Prosperity Act
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11:50 a.m.

Green

Elizabeth May Saanich—Gulf Islands, BC

Madam Speaker, I do not think any piece of legislation before this House is hopeless. With sufficient amendments, even the worst bill can be remedied. Sometimes that may mean deleting most of it and starting over.

However, in this case, I think there are some very specific areas. As I mentioned, if we included the United Nations Framework Convention on Climate Change in chapter 1 of the trade deal at annex 1.06, it would certainly improve the bill.

I would strip out all of chapter 9. I do not think there is anything that could be saved in chapter 9. The whole notion of investor-state provisions is unworkable.

For the rest of it, if we were to replace chapter 9, we could replace it with firm commitments from Panama to provide full banking information so that its banks could no longer function as tax havens, and further firm commitments to work with Canada and other countries to eliminate its narcotics traffic.

There are other elements to protect labour and environmental rights that could be inserted, but I imagine my time to answer this question has expired.

Canada-Panama Economic Growth and Prosperity Act
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11:50 a.m.

NDP

The Deputy Speaker Denise Savoie

The hon. member for Brossard—La Prairie for a very quick question.

Canada-Panama Economic Growth and Prosperity Act
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11:50 a.m.

NDP

Hoang Mai Brossard—La Prairie, QC

Madam Speaker, I thank my colleague for her presentation.

With respect to this bill, does my colleague have any recommendations concerning the environment?