Evidence of meeting #10 for Economic Relationship between Canada and the United States in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was steel.
A video is available from Parliament.
7 p.m.
Distinguished Professor of Law, Loyola Marymount University, As an Individual
That is correct. Right now we haven't had any tightening, just a lot of analysis. There may be different levels of tightening.
7 p.m.
Liberal
Anthony Housefather Liberal Mount Royal, QC
I understand.
I will now turn to Ms. Dufour.
Thank you for your testimony. I now have a better understanding of why granting a waiver to Canada would violate World Trade Organization rules.
As I understand it, a waiver could be obtained by negotiating a new chapter in the Canada-U.S.-Mexico Agreement. I believe that Canada and the United States have the right to enter into a bilateral agreement. So it would be possible to get a waiver by negotiating a new chapter.
Is that correct?
7 p.m.
Full Professor, Université de Sherbrooke, As an Individual
Yes, that's correct. That's one of the things I was saying at the end of my speech. But do we really want to reopen the tough negotiations on CUSMA? That remains to be seen, and it's a political issue.
However, yes, it would be entirely possible to have a companion agreement, a side agreement, or a chapter that would only apply between Canada and the United States, but Mexico would also have to agree to it.
7 p.m.
Liberal
Anthony Housefather Liberal Mount Royal, QC
I do understand that. It's just that we keep using the word “exception”. Exceptions were always permitted in the agreement between the two parties, at least. I understand it's more complicated, because I believe the U.S. Congress must approve any amendments to CUSMA. But yes, it was an agreement between the two countries, and it's still possible.
7:05 p.m.
Full Professor, Université de Sherbrooke, As an Individual
Yes, absolutely.
7:05 p.m.
Liberal
Anthony Housefather Liberal Mount Royal, QC
Ms. MacEwen, you mentioned something very interesting. Technically, under the WTO, you said that Canada “unusually relegated our right to retain domestic preference on local and provincial contracts where federal monies would go.” You can withdraw from the agreement. The agreement can be amended by a two-thirds majority, I believe.
Can Canada simply remove our own relinquishment of our rights in that area, or would it need to be an amendment to the agreement itself?
7:05 p.m.
Co-Chair, Trade Justice Network
I actually have no idea. I am not a lawyer, but Canada should engage with the United States on reforming the GPA. The Americans are interested in doing that, and we should be too.
7:05 p.m.
Liberal
Anthony Housefather Liberal Mount Royal, QC
I agree. That makes complete sense, particularly since our closest ally is now saying and indicating very clearly that's what it wants to do.
Professor Hughes or Professor Dufour, could you answer my question about how Canada could change the way it relinquished that under the WTO?
7:05 p.m.
Distinguished Professor of Law, Loyola Marymount University, As an Individual
Professor Dufour is welcome to answer, but my understanding of the WTO rules is that Canada can simply withdraw. It is a plurilateral agreement, not a multilateral agreement.
7:05 p.m.
Distinguished Professor of Law, Loyola Marymount University, As an Individual
Just from the GPA. It's a plurilateral agreement, meaning that you can leave it.
7:05 p.m.
Co-Chair, Trade Justice Network
But how can we amend what we've given up in terms of procurement in the schedule where we said that subnational governments are subject to it? Can we withdraw and take it back?
7:05 p.m.
Distinguished Professor of Law, Loyola Marymount University, As an Individual
Professor Dufour may have an opinion. My view would be that you should be brave and withdraw, and go back in.
7:05 p.m.
Voices
Oh, oh!
7:05 p.m.
Liberal
Anthony Housefather Liberal Mount Royal, QC
Ms. Dufour, do you have a simpler solution?
I believe that would be complicated.
7:05 p.m.
Full Professor, Université de Sherbrooke, As an Individual
It is always possible to renegotiate commitments made in a WTO agreement, whether it's plurilateral or multilateral. However, we must not forget that the member states consider it a privilege to be part of the WTO. Its members are in an exclusive club. When you withdraw privileges from a trading partner, the WTO expects you to negotiate with them and compensate them if the withdrawal or change in commitments costs them money. So it isn't easy.
7:05 p.m.
Liberal
7:05 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Thank you, Mr. Chair.
Good evening, everyone.
Good evening to my colleagues and the witnesses.
I will now turn to Ms. Dufour. My thanks for your presentation.
During your presentation, you mentioned the possibility of coming back to some things you didn't have time to elaborate on. I'd like to give you a chance to do that during the question period.
You said we cannot have any sectoral agreements and that we absolutely have to go through the free trade agreement. However, as you so rightly pointed out, renegotiating CUSMA could be politically difficult, after the years we have already spent on it.
That makes me wonder, what is a free trade agreement, if not a collection of sectoral agreements, at the end of the day?
7:05 p.m.
Full Professor, Université de Sherbrooke, As an Individual
That's a very good question. I knew you would be the one to ask it, given the last few committee meetings.
It's simple. A free trade agreement can be an exception to the general principles of international trade only if it meets certain conditions of form and substance. We can skip the form, since the substance is more important.
First and foremost, you have to reach a free trade agreement that covers and liberalizes the bulk of trade between states. In practical terms, the WTO has never really defined what “the bulk of trade” means exactly, but it is understood to be about 90% of the trade between different countries. That means you couldn't have a free trade agreement liberalizing aluminum, steel, sugar, or even bananas. We've seen examples of this in the past at the WTO.
We couldn't reach a sectoral agreement on government procurement alone. If we were to reopen negotiations on government procurement with the United States, it would absolutely have to be done within the framework of the agreement we have at the moment, which is CUSMA.
7:10 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
If sectors need to be added or renegotiated, they must always be part of the same framework.
I'm pleased to see that you're keeping up with our work. It makes us happy and shows us that we're doing it for the right reasons.
You spoke about different scenarios. Could the process of exchanging letters, for example, be an option?
7:10 p.m.
Full Professor, Université de Sherbrooke, As an Individual
Yes. It's perfectly possible to add to or amend an agreement by exchanging letters.
7:10 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
This could also be a way to address the issue of government contracts.
7:10 p.m.
Full Professor, Université de Sherbrooke, As an Individual
Exactly. These letters are attached to the agreements.
7:10 p.m.
Bloc
Simon-Pierre Savard-Tremblay Bloc Saint-Hyacinthe—Bagot, QC
Okay.
What approach would you suggest? You said earlier that you weren't at the table and that you probably wouldn't be at the table if these types of negotiations were held. However, I want to ask you what approach you would suggest. In your view, should we be trying to get a blanket exemption or an exemption on the greenest products, for example?
We have different products where we know from the start that we can succeed. For example, our aluminum is much cleaner than the aluminum from Asia. In your opinion, could this be an option to consider?
