Bill C-9 (Historical)

Settlement of International Investment Disputes Act

An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention)

This enactment implements the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, opened for signature in Washington on March 18, 1965.

Settlement of International Investment Disputes Act

[Vivian Barbot, Bloc, Papineau, QC]

Mr. Speaker, I thank my colleague for her question. In fact, there are certain limitations in this type of treaty.

What I was trying to highlight in speaking about the context in which these matters are dealt with—and I did point this out—is that, on the one hand, civil society has no input and, on the other hand, even we as parliamentarians who represent civil society, do not have the opportunity to debate these treaties. This occurs in a context where it is the government that decides. Obviously, when the mechanism itself is included in these treaties, there may be some elements that are problematic. However, we believe that these treaties are much better than the current situation. It still represents a step forward in the resolution of conflicts that may arise from international treaties.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, I congratulate the member for her excellent address to the haggis last night.

At the beginning of the member's speech, she mentioned consultation with the provinces and territories in advance of such treaties. My understanding is that she was suggesting there was no consultation with the provinces and territories. If she asked federal employees in the Department of Foreign Affairs, they would tell her that they do consult with the provinces and territories about treaties affecting them.

Does the member believe no consultations are held with the provinces and territories when treaties are being negotiated?

[Vivian Barbot, Bloc, Papineau, QC]

Mr. Speaker, my understanding is that these consultations are just informal. The government has no official, legal obligation to consult the provinces and take their opinions into account. The provinces are not bound at all by these treaties when their areas of jurisdiction are involved. The government can make any decisions it wants because it has no obligations.

The provinces, in turn, are not bound unless they decide to ratify the treaties. In Quebec, if the government is asked for its opinion, it is obliged to check things out and bring all the necessary documents before the Assembly chamber. The chamber makes a decision and, at that point, Quebec is bound. It is the province that ratifies. This is what I meant when I said that there were no consultations.

Public officials talk to each other, of course, to learn what the effects will be, but regardless of what the provinces say, the central or federal government can sign the treaties it wants. However, it is the provinces that implement them, and the provinces can decide not to do so. This does not limit in any way the federal government’s power to sign these treaties.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, first I would like to congratulate my colleague on her speech. I wanted quickly to remind her that in question period yesterday in the House, a Conservative asked a question of the foreign affairs minister about international treaties, claiming that the Conservative Party was more open and transparent. He said: “—we committed to bringing international treaties before the House of Commons to give Parliament a role in reviewing them”. Note the use of the word “review”.

The foreign affairs minister, boasting about fulfilling another election promise, said: “Effective immediately, any international treaty we sign will be tabled in the House of Commons”.

I want to ask my colleague, therefore, where she sees any transparency in this and any ability of the House to really discuss treaties that have been signed by the government but are not brought before the House to be ratified but just to be presented and reviewed. We are still very far from parliamentary democracy.

[Vivian Barbot, Bloc, Papineau, QC]

Mr. Speaker, I thank my hon. colleague for this question. Naturally, what the member said yesterday caught my attention. This is another example of the current Conservative government's clever ways of saying one thing and then the very opposite. The government says it will honour its promise and that it will allow “reviewing”. Yet, given this choice of vocabulary, one can clearly see that this leaves no room for real discussion before the treaty is signed or ratified.

We are facing exactly the same situation as their promise concerning UNESCO. These are half-measures that do not resolve anything. Yet, the government uses them to say that it is delivering on something it had promised. Each time, we are disappointed, since the reality is at odds with the terms used. This is a perfect example of what I would call a lack of democracy.

To some extent, actually, it makes no difference if we are told that, from now on, Parliament will have its say, because, if we take a closer look at the situation, the government is facing a fait accompli. It is just more of the same.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, this is also the second time I have spoken on this bill. As we already know, from what my colleague from Papineau has said, the Bloc Québécois supports Bill C-9 in principle.

Passing this bill will mean that Canada can ratify the Convention on the Settlement of Investment Disputes between States and Nationals of Other States and join the International Centre for Settlement of Investment Disputes.

Because I will be making frequent reference to the International Centre for Settlement of Investment Disputes and the name is a little long, I will call it simply the centre in my speech.

Bill C-9 incorporates the requirements of the convention into domestic law, two reasons being to ensure compliance with arbitral awards and grant the immunities that the centre and its staff need. The centre was created by the World Bank in 1965 under the Treaty of Washington. At present there are 156 member countries. The centre is responsible for arbitrating disputes between a state and a foreign investor.

There are two potential kinds of conflicts: first, there are disputes relating to compliance with bilateral foreign investment protection agreements, and second, there are disputes relating to agreements between governments and foreign investors. These are agreements of the kind that the Government of Quebec and other governments regularly enter into to encourage foreign investment, with the promise, for example, to supply electricity at an agreed price.

Canada’s membership will have no impact on the provinces and Quebec, other than that they will also be able to allow for recourse to the centre when they enter into agreements with investors. The bilateral treaties signed by the federal government already provide for recourse to arbitration by the centre, but by way of the supplementary arbitration mechanism rather than a regular mechanism, which is available only to countries that have ratified the convention.

In fact, the only thing that Canada's joining the centre will change is that it will be able to participate in negotiations to amend the centre's convention or by-laws and will have the assurance that it may participate in appointing arbitration tribunals. There will therefore be direct participation in the centre. Ultimately, the centre is merely a tribunal, and the problem is not the tribunal, but the bad investment protection treaties that Canada signs.

The Bloc Québécois supports signing investment protection agreements as long as they are good agreements, obviously. It is entirely reasonable for an investor to try to ensure, before making an investment, that he or she will not end up losing his or her property, and will not be discriminated against. That is the situation that foreign investment protection agreements are intended to govern. This is not a new phenomenon. The first known agreement containing provisions relating to the protection of foreign investments was the agreement between France and the United States signed in 1788, over two centuries ago.

In May 2007 there were over 2,400 bilateral investment protection agreements in the world. If we add the tax conventions dealing with the tax treatment of foreign investments and income, there are about 5,000 bilateral treaties relating to foreign investments. The Bloc is in favour of signing agreements like this and recognizes that they promote investment and growth. These agreements are all based on more or less the same principles.

The first principle that could be mentioned is respect for property rights regardless of the owner's nationality. Second, there can be no nationalization without fair and prompt financial compensation. Third, there is a prohibition against treating property located within a country's territory differently depending on the owner's origin. Finally, there is free movement of capital resulting from the operation and the disposal of investment.

In every case, when these rights are violated, states may submit disputes over compliance with an agreement to an international arbitration tribunal. In the majority of cases, investors themselves may submit the dispute to an international tribunal, but only with the consent of the state. In many cases, the international arbitration provided in the agreement takes place before the ICSID. By belonging to it, as Bill C-9 provides, we are also agreeing to an international order in the field of investment.

In the investment protection agreements that they sign, only two countries, Canada and the United States, systematically grant investors the right to appeal directly to international tribunals. This is a deviation from the norm. By allowing a company to operate outside government control, it is being given the status of a subject of international law, a status that ordinarily belongs only to governments.

The agreements that Canada signs contain a number of similar deviations, giving multinationals rights they should not have and limiting the power of the state to legislate and take action for the common good. Take, for instance, the now infamous chapter 11 of NAFTA, which provides that a dispute can go to ICSID. There are, however, three things wrong in that chapter: the definition of expropriation, the definition of investor, and the definition of investment.

The definition of expropriation is so vague that any government measure, except for a general tax measure, can be challenged by foreign investors if it diminishes the profits generated by their investments. Indeed, a Kyoto implementation plan which would have large polluters such as oil companies pay dearly could be challenged under chapter 11 and result in government compensation.

American companies have majority interests in Alberta oil companies. Chapter 11 opens the door to the worst kind of abuse of process. The definition of investor is so broad that it includes any shareholder. Anyone could therefore take the state to court and seek compensation for a government measure that allegedly cut into a company's profits.

As for the definition of investment, it is so broad that it even includes the profits that investors hope to derive from their assets in the future. In the case of expropriation, not only does the state find itself forced to pay fair market value, but it also has to include future revenues that investors expected to draw. This would make nationalizing electricity, as Quebec did in the 1960s, impossible.

Take the example of SunBelt, a corporation with one Canadian shareholder and one Californian shareholder. This corporation closed its doors when the Government of British Columbia removed the right to export water in bulk that it had been granted. Under Canadian law, the Canadian shareholder received compensation equivalent to the value of his investment: $300,000. Under chapter 11 of NAFTA, the American shareholder included in his claim all potential future revenue from the sale of water, for a total of $100 million. For better or for worse, the case was settled out of court for an undisclosed amount that is not likely to ever be disclosed.

Given the amounts of money at issue, chapter 11 acts as a deterrent to any government action, particularly with respect to the environment, whose effect would be to reduce the profits of a foreign-owned corporation. The dispute settlement mechanism allows corporations to apply directly to the international tribunals to seek compensation, without even having to obtain the consent of the state.

Is it conceivable that a multinational corporation would be able, on its own initiative, to instigate a trade dispute between two countries? And yet that is the absurd situation that the chapter of NAFTA on investments allows. Given these flaws, chapter 11 of NAFTA reduces a state’s ability to take action for the common good and to enact environmental legislation, and amounts to a sword of Damocles that can come down at any moment on any legislation or regulations that might have the effect of cutting into corporate profits.

In 2005, the United States changed some of the provisions of their standard investment protection agreement. In 2006, Canada did the same. Because the two countries have now recognized the harmful and extreme nature of chapter 11 of NAFTA, the time is right for the government to act quickly to initiate talks with its American and Mexican partners to amend chapter 11 of NAFTA. We have to say no to bad investment protection agreements.

In addition to chapter 11 of NAFTA, and despite universal criticism of how extreme it is, the government has signed 16 other bilateral foreign investment protection agreements that are carbon copies of it. All of those foreign investment protection agreements are bad and should be renegotiated.

In 2006, the government gave some indication that it recognized that these agreements were bad. The Conservative government copied the changes made by the Bush administration the previous year, and in fact made changes to Canada’s FIPA program to fix some of the most glaring problems. It clarified the concept of expropriation by specifying that a non-discriminatory government measure designed to protect health and the environment and to promote a legitimate government objective should not be considered to be expropriation and should not automatically result in compensation.

It is too soon to assess the actual impact of that clarification, but at first blush it seems to be an improvement. It has narrowed the concept of investment by specifying that the value of property is equal to its fair market value. This puts an end to the madness of adding in all of the potential profits the investor hoped to earn from his or her investment. For the rest, the standard investment protection agreement continues to be modelled on chapter 11 of NAFTA.

The government must continue to improve this standard agreement, particularly as it relates to the dispute resolution mechanism. Multinational corporations must be brought back under public authority, as any individual is.

As well, the government should submit international treaties and agreements to the House before ratifying them. That is what we are being promised and it is what I referred to earlier, but is the purpose really to have a substantive discussion? Is it really a discussion to learn the benefits, the opportunities, perhaps, or the harm that might be caused to certain industries in Canada and Quebec?

Yesterday, the government seemed to be saying that the question of ratification was up for discussion and study, but is it going to ratify without the House having really come down for or against a specific agreement?

Early last year, the government issued a press release announcing that it had just ratified a new foreign investment protection agreement with Peru. Parliamentarians and the public learned about the agreement when they read the release. Parliament was never informed about it. It never approved it. That is completely anti-democratic.

In the last election, however, the Conservative election platform was clear: the Conservatives committed to submitting all international treaties and agreements for approval before ratifying them. That is not what we heard yesterday in this House: what was said was that they would be presented to the House and the House would be made aware of them, but the Conservative members, including the minister, never said that the House was to ratify them.

Since the Conservatives came to power, Canada has ratified about 26 or 27 international treaties. Except for the amendment to the NORAD treaty, which was the subject of a brief last-minute mini-debate and a vote, none of these international treaties were brought before the House.

These days, international agreements can have as great an impact on our lives as laws. Nothing can possibly justify the secretive, unilateral ratification of these agreements by this government without the participation of the representatives of the people.

In the past, the Bloc Québécois introduced bills to restore democracy and ensure respect for the jurisdiction of Quebec and the provinces in the ratification of international treaties. Given that this is something the government promised to do, we did not bring it up again. However, today we see that a Conservative promise is not worth much.

So the Bloc Québécois will once again take this matter up and will make proposals to bring democracy back into the ratification of international treaties. The government must have an obligation to submit to the House all international treaties and agreements it has signed before ratifying them. The government must be required to publish all international agreements in which it is involved. The government must also allow the House to vote on and approve all major treaties, following study by a special committee responsible for reviewing international agreements, before ratifying them. The government must also respect the jurisdiction of Quebec and the provinces throughout the treaty-making process at the negotiation, signature and ratification stages.

In conclusion, the International Centre for the Settlement of Investment Disputes is needed to ensure that States are treated fairly in their dealings with multinational corporations. We must also ensure that the agreements Canada signs are good ones that respect all stakeholders.

[Larry Bagnell, Liberal, Yukon, YT]

Mr. Speaker, this particular law would protect employees in Canada and in many countries from arbitrary actions by governments that are not as predictable and do not have the formal procedures that Canada has. I think the member's party agrees with that.

In relation to his question about chapter 11 not allowing environmental regulation, does he have any specific examples of that occurring that he could give to the House?

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, regarding environmental regulations, indeed, all countries, all responsible governments, whether Liberal or Conservative, should enforce them. Governments must establish environmental regulations that produce results.

In the current context where environmental legislation and regulations will have serious consequences for businesses that do not or did not comply with them, chapter 11 will do just that; it will ensure that certain businesses comply with the regulations, forcing them to implement various procedures or measures to protect our environment. However, this comes at a price.

Chapter 11, which we are discussing here today, would allow foreign companies—including American companies, of course—to sue any government that enforces these regulations. This is why chapter 11 of NAFTA really must be modified. Generally speaking, with regard to the ICSID, it ultimately comes down to relationships between the governments and the multinationals.

Canada must sign agreements and accords to ensure the development and maintenance of economic relationships with other countries, of course, and also must protect them. Basically, that is the goal of bilateral agreements reached by the government. They must be good agreements. Based on current regulations, for example, concerning the environment, the government must not allow multinationals the possibility of suing it on a daily basis. Thus, our treaties ultimately need to be good treaties that not only protect our investments and our investors but also the environment and our working conditions.

The reverse must also be true. For instance, some countries—and even Canada—invest money in other countries without respecting the rights of individuals or the environment. Yet if those countries suddenly were to implement policies to protect the working conditions of these people or the environment, would our own Canadian and Quebec businesses operating internationally demand compensation?

To sum up, agreements between countries must aim for fairness and justice, for us as well as for other people.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I am pleased to speak in the House today at third reading on Bill C-9, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). The NDP is opposed to the bill and I will outline some of the reasons that we are opposed to it.

This is a bill that, on the face of it, looks fairly innocuous. It deals with a dispute mechanism. It involves the World Bank. It involves the status of multinational corporations when they are dealing with investment in foreign countries and ensuring there is a dispute resolution process.

On the face of it, it looks fairly reasonable, but when we dig a little bit deeper we find that this just skims the top in terms of what the bill represents in terms of a global regime that has seen over the last 20 years a massive transfer of power from governments to multinational corporations under the World Trade Organization under these trade agreements.

I would note that the Deputy Speaker, the member for Elmwood—Transcona himself, as a member of the House, has played a very active role. Mr. Speaker, I know you have been very involved with the NDP over the years when we fought the multilateral agreement on investment and the Free Trade Agreement of the Americas in Quebec City. Now we are dealing with the so-called security and prosperity partnership agreement that involves Canada, the United States and Mexico.

Mr. Speaker, I know you are very familiar and have a lot of credibility and a long record on dealing with these massive trade agreements that impact and undermine the democratic rights of Parliament and other states, and creates an enormous gulf in terms of the ability of citizens to organize themselves to have an impact on how these agreements come about and how they are dealt with in terms of disputes and the decisions that flow from them.

When we looked at Bill C-9 and had discussions in our caucus, we came to the conclusion that we could not support the bill.

The ICSID, as it is called, is part of an international trade and investment regime that has come under very harsh criticism from civil society because it does confer unprecedented powers to multinational corporations through bilateral investment treaties.

One of the concerns that I raised earlier today is that through this agreement there is no place for third party testimony. There is no accountability, no transparency and no openness or disclosure that would allow local organizations in an affected community or a labour union to come to the table and be part of the dispute resolution mechanism that is contemplated in this agreement unless there is consent by both parties involved in the arbitration, which is probably very unlikely. It makes it very inaccessible to local communities and third party stakeholders who would be impacted by the decisions being made. We believe that is a problem with the bill but that is just the tip of the iceberg.

A question was asked in the House yesterday by a Conservative backbencher who was congratulating the Minister of International Trade on his announcement that Canada has now concluded a free trade agreement with Peru. The Conservative member for Kelowna—Lake Country was asking the Minister of Labour whether the agreement with Peru would now provide labour rights protection in Peru. Not surprisingly, the Minister of Labour stood in the House and crowed that the trade agreement with Peru would deal with an improvement in labour rights, that everything would fine and that we should not worry about it. The Conservatives were patting themselves on the back.

I raise that issue because it is a very current example of the nature of these agreements and how they completely violate and undermine labour rights. They do nothing to be proactive in protecting very serious labour situations.

Yesterday the Minister of Labour claimed in the House that this international trade agreement with Peru will give protection to labour rights. On January 18 information came from the Peruvian workers' union denouncing the fact that over 3,000 workers have been dismissed in that country for organizing trade unions. Labour rights are virtually non-existent. Something is not right with this picture.

Ministers are trying to assure the public that people's basic human rights around labour, child labour, the environment and social standards are being protected and yet we have very concrete examples to tell us that in places such as Peru, which is just one example, there are very serious situations. Workers in that country are being undermined and their rights are being violated all the time.

In October 2007 the International Trade Union Confederation prepared a report for its general council and reviewed trade policies in Peru. This is a very current report. It is quite clear about the fact that there are very serious problems in that country. The recommendations in the report made it very clear that the government of Peru should amend its legislation to conform with the International Labour Organization's conventions 87 and 98. Convention 87 has to do with the freedom of association. Convention 98 has to do with the right to organize and the right to collective bargaining.

I find it contradictory that on the one hand a minister of the Conservative government is trying to assure us that everything is okay and that he has negotiated something that is going to protect those workers and yet the representatives of workers in that country are portraying a completely different reality. That is something of concern to the NDP.

We in the NDP believe that as parliamentarians we have a responsibility to not only uphold these international conventions that protect labour, human rights and the environment in our own country, but we also have a responsibility to speak out in the international community to make sure that those rights are upheld. We expect the Government of Canada to do the same. We expect the Government of Canada to show leadership on those questions.

To come back to the bill that is before us today, that is the very reason we find it to be very contentious. It is the very reason we find this bill to be completely missing the point about what is taking place on a global scale.

The members in our caucus have participated in many forums, discussions and educational workshops. It is quite incredible, given this global situation of opening up the floodgates to the transfer of capital with virtually no rules, that citizens have taken it upon themselves to become informed and educated as to what it is that is going on. These are not easy matters to get a handle on. These are very complicated agreements set up under the WTO. We learned that from the MAI. We are learning that now from the security and prosperity partnership.

We know that agreements are put together in secret. They are done at places like Montebello where leaders meet behind closed doors. The connection to the public, the ability of civil society to have any input or to be able to say anything is limited. In fact, security forces go to great lengths to ensure that kind of dialogue does not take place.

Our caucus has a lot of experience in dealing with these agreements. We understand the implications they have for a democratic society. Fundamentally, we express our concern in the House as well as in the community that we see it as a shift from making decisions in a democratic process in Parliament to a secretive process where we have no access. We do not even have access to that as members of Parliament.

If Canadians were asked what is the purpose of government, what are we here for, our constituents and members in our community would say that the purpose of government is to protect them. The purpose of government is to ensure that they have health care, education, income security and that the country is safe.

Over the years under these neo-liberal and neo-conservative policies, we have seen a massive shift in the role of government. That power has been transferred from government into the hands of undemocratic, unelected, unaccountable, non-transparent multinational corporations. These trade agreements have facilitated that process.

We should be standing up very strongly against these kinds of agreements. What we are most concerned about right now is the security and prosperity partnership that is taking place between the countries on the American continent: Canada, United States and Mexico.

We have been very outspoken. The member for Burnaby—New Westminster, our trade critic, has done an amazing job. He has travelled across this country. He has already gone to 12 communities. He is travelling to another 12 communities where we are holding public hearings on the SPP.

There is so much deep concern in the community about what that agreement will do and the fact that the government, as the previous government did, is signing on to this agreement with virtually no public disclosure. It will impact every aspect of domestic life in Canada. It will impact on the ability of Parliament to do its job. It will impact on the delivery of services. It will exacerbate the privatization of services. It will exacerbate the deregulation that is taking place in our society. At the end of the day these are things that begin to affect the quality of life. It becomes a race to the bottom.

We recognize the connection that this bill has in dealing with the dispute mechanism and its attachment to the World Bank, how it is completely complicit and tied into this move to globalization that is shutting down the democratic process. We strongly object to that. We intend to do everything we can not only in Parliament but in the broader civil society to see that these agreements are opened up, changed, that they are refuted.

We understand that trade is obviously going to happen. Trade is an important part of our economic activity in life, but we want to see fair trade. We want to see trade that is based on agreed to and implemented around core standards that set out labour rights, that set out environmental rights, that set out a social contract and social conditions so that the workers in the south are not being exploited and that Canadian workers are not losing their jobs as a result of these trade agreements.

We have seen a loss of over 300,000 manufacturing jobs. The Canada-South Korea trade agreement is under development. All of these things are taking place with virtually no debate or understanding. All this takes place behind closed doors.

The bill before us today is at third reading, but we believe it is not a good bill. It does not deal with realities that are before us in terms of what is happening with these trade agreements. We have to be incredibly skeptical about what the Conservative government is doing and what its agenda is.

I will use another example. Yesterday in the House we heard a minister of the government say that international treaties will be brought before the House which will be tabled, discussed and debated. On the face of it, it sounds reasonable, but if we go back a couple of years to September 2004, the then leader of the official opposition, who is now the Prime Minister, actually made a commitment with the other opposition leaders, including the leader of the Bloc and the leader of the NDP, that international treaties should be voted on in this House.

That was an actual commitment. It was part of a package that was brought forward in that first minority Parliament. We agreed that there should be a vote in the House of Commons on international treaties. Already we have seen the Conservative government break its promise just by its announcement yesterday that there will not be a vote, that there may be some debate or notice. That is a clear violation of the commitment made in September 2004.

I will close by saying that members of our caucus have reviewed the bill very thoroughly. We have debated and discussed it with our partners in the labour movement, in the Canadian Labour Congress and other places with members of civil society. There is no question that the approval of the bill would reinforce a regime of trade and international practice that gives massive powers to multinational corporations at the expense of the democratic process in places like the House of Commons.

On that basis we cannot support the bill. We urge other members of the House to also show the strength of representing the public interest, because that is what we are here to do, to represent the public interest, and to vote down the bill.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, I listened very intently to my colleague's comments. She gave a fine dissertation on socialism. I would like to compare two countries, India and Zimbabwe.

India is a country that had very high levels of poverty. That country liberalized its markets, reduced restrictions, enabled the private sector to expand and improved trade among and between its neighbours. The outcome has been a dramatic decline in the poor in that country, with a burgeoning middle class.

While blanket free trade is not the answer and checks and balances have to occur and it must be fair trade, I would like to ask my hon. colleague for her comments. Hernando de Soto and Mohammed Unis and other people have spent their lives reducing poverty and they have spoken about the merits of free and fair trade. Does she not think that free trade agreements with countries enables those countries to raise their standards to the standards that our workers enjoy? In that way we are able to improve the lot in those countries, instead of erecting barriers to development, barriers to trade. Such barriers actually enable countries to maintain the restrictive covenants within their countries and hamstring the private sector and ultimately lead to a greater number of people living in poverty.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, for us the question is not whether there is trade but what the rules are that govern trade. I gave the example today of Peru and what is happening in that country. We could look at other countries, such as Colombia, or any situation and see decades of terribly exploitative practices.

It is unprincipled for us in the north to advance these trade agreements on the basis that somehow we are lifting people out of poverty, when in actual fact we have created a regime that reinforces the divide between the north and the south and reinforces the exploitation that takes place. In fact, it makes it even more systemic. We need to acknowledge that and develop trade practices that have at their foundation labour codes, rules and the right to organize. Implementing the International Labour Organization conventions would be a start. Even Canada is not a signatory to all of those conventions.

If we cannot begin at that place and recognize that we must protect people's rights in terms of their labour, then I would say these trade rules are not worth the paper they are written on. They are simply a regime for greater and greater profit margins for multinational corporations. That is why they want them. They want to go into those developing countries. They want to see minimal rules because they want to find greater markets. They want to find more cheap labour. We should recognize the impact that has in our own country.

Yesterday in question period there were questions on the manufacturing sector and the loss of jobs in the forestry sector, the auto sector, the resource sector. Everybody was talking about it. It is related to these trade agreements. There is an impact here at home. The member needs to understand that for us it is not about trade. It is about the regime and the rules that we create. We believe that this particular bill will reinforce a regime that is fundamentally anti-democratic.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Intriguingly enough, Mr. Speaker, in many ways the goals of the member and the goals of most of us are the same: the improvement of working conditions and the alleviation of poverty for workers. I have a question for the member. Does she not think that engaging other countries, by removing the barriers and creating norms and standards so that workers in our country and in other countries can actually enjoy the same standards, is a fair, equitable and reasonable goal? Does she not think that the way to do that is through these free trade agreements?

In fact, the biggest culprits, the two biggest problems, and the reasons why in many ways poverty remains in developing countries, are corruption and the lack of capacity. These are the two biggest cancers. The lack of capacity in developing countries and the corruption within those countries are the two greatest obstacles to sustainable development within those countries.

International organizations such as the World Bank and the IMF continually give large tomes to developing countries, with all manner of plans and objectives, but unfortunately those countries have no hope whatsoever of operationalizing them, because they do not have the people to take on those ideas and implement them. It is a fool's game and we continue to play that game.

Does the member not think we can achieve the objective of better working standards for workers, higher pay for workers and better environmental standards in the countries in which we are working by engaging those countries and establishing those rules through free trade agreements for the mutual benefit of both countries?

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, the member says there are two main barriers to the progress of prosperity for developing countries and he names capacity and corruption. I would add a third: exploitation under this regime of multinational corporations marching in, using natural resources, using cheap labour with no standards whatsoever, and exploiting the environment and local workers.

I would agree with him that of course we have to work for agreements that protect those social standards, but the reality is that over the last two or three decades of this incredible advancement of a globalized agenda through organizations such as the World Bank and the WTO, the primary focus has been on trade and lifting those barriers based on the needs and capacity of the multinational corporations, not based on whatever the domestic conditions are in the receiving country.

The whole premise that he advances is something that actually has not happened under this process of globalization. I think it is something that needs to be changed. Why would we not begin first with labour standards? Why would we not begin first with environmental standards and social standards? Why would we not begin from a place of social equity and social justice and advance trade on that basis?

As governments, we can do that if we have the political will. That is what we stand for in this party.

[Keith Martin, Liberal, Esquimalt—Juan de Fuca, BC]

Mr. Speaker, again I ask the member to look at countries such as India. I ask her to look at them before trade liberalization occurred and afterward.

Before trade liberalization, many industries were state-owned and inefficient, with high levels of poverty and worse working conditions. After trade liberalization occurred, there was competition. Standards were set. There was an improvement in wages. Poverty was reduced. Wages increased. Grinding poverty for the poorest of the poor, those living on less than a dollar a day, has been reduced dramatically. Let us compare those before and after situations in India. It is an intriguing example of what trade liberalization can do and should be doing.

I agree with my colleague in that we ought to be ensuring that these elements of worker security and environmental protection are built into the agreements we have. Indeed, that is what we attempt to do. The alternative is not to do that at all. Hernando De Soto and Muhammad Yunus have spoken eloquently about how we can make free trade agreements work and how we can tap into the private sector to enable it to be the generator of improved worker conditions and wages. We know that the private sector is the major generator of jobs in countries. We know that small and medium-sized businesses are the major generators of wealth.

Does the member not see that there are ways to make this happen through effective free trade agreements and that Canada can take a leadership role in this given the fine standards we have in our own country?

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, clearly when an agreement is signed and goes into effect there are people who benefit. The member gives some examples of what has happened in India, but I could also use Mexico as an example. I point out that after the free trade agreement with Mexico the average wage of workers there actually went down. We saw the factory zones. We saw the massive exploitation that took place and is still taking place.

In fact, in India, yes, there is a developing middle class that is well educated, but again I think we have to look at the whole balance sheet. If we do that, there is absolutely overwhelming evidence to show that overall the inequities not only have remained but have actually been reinforced through these agreements. They actually are producing some kind of collision course, with a divide in terms of wealth and power between the north and the south and the divide within our countries between wealth and growing poverty.

We see this in our own country. We just have to look at the massive loss of jobs in our own country. There are a lot of families who are simply being left behind. We are talking about the prosperity gap and the people who have been left behind by the government.

I think we have to look at the total picture, and when we do that there is only one conclusion that we come to, which is that these trade agreements as they are now are very bad. They are bad for the quality of life for average people. They reinforce the power of huge corporations that really could not care less about the workers who are working in their factories. It is our job to stand up for that and to challenge this.