International Trade Committee on April 16th, 2008

[The Chair, Conservative, Lee Richardson]

I'd like to welcome you to meeting 26 of this session of Parliament of the Standing Committee on International Trade.

We are continuing our discussion of matters relating to a study of the status of the free trade agreements and ongoing negotiations between Canada and Colombia, the focus being on how environmental impacts and human rights concerns are being addressed.

I did have one little bit of housekeeping that I don't think we need to get into today, although I'll ask the committee members if we could conclude the formal part of the meeting by about....

What time is the vote? Does anybody know?

[A voice]

The bells are at 5:30.

[The Chair, Conservative, Lee Richardson]

Okay, then I'm going to ask that we conclude at about 5:15 today and go in camera just to do some housekeeping business, if that's agreeable to everybody. Are there any problems? Okay.

We'll try to keep to our set speaking agenda again. Let me repeat and also mention to our witnesses that we have a format where we do a round of questioning after opening statements by the witnesses. Each of the questioners, each member of Parliament who speaks on behalf of his party, will get seven minutes for questions and answers in the opening round. So we hope to get through all four parties in the first round and continue to a second round, in which we'd have five minutes for questions and answers. In order to get through it today, I think we'll try to adhere pretty tightly to that timeframe.

With that introduction, let me introduce, from the Department of Foreign Affairs and International Trade, Carol Nelder-Corvari, who is the director of the international trade policy division; James Lambert, the director general of the Latin America and Caribbean bureau; Cameron MacKay, the director of the regional trade policy division for the Americas; and Betti-Jo Ruston, the deputy director of the regional trade policy division for the Americas.

We also have, from Environment Canada, Dean Knudson; and from the Department of Human Resources and Social Development, Pierre Bouchard, director of the Office for Inter-American Labour Cooperation.

That, I think, will be very helpful to the committee in answering a broad range of questions. I haven't had an opportunity to consult with the witnesses as to who makes the opening address. I take it you've spoken among yourselves.

Mr. Lambert, are you going to lead off?

[James Lambert, Director General, Latin America and Carribean Bureau, Department of Foreign Affairs and International Trade]

Yes, I would lead off, followed by Ms. Nelder-Corvari.

[The Chair, Conservative, Lee Richardson]

Great. Then we'll begin with you, Mr. Lambert.

[James Lambert]

Thank you very much, Mr. Chair and members of the committee, for this opportunity to come forward and speak to you today about Canada's FTA negotiations and human rights in Colombia. As I mentioned, my colleague Carol Nelder-Corvari, who is the chief negotiator from the Department of Finance on this negotiation, will speak, after my introductory remarks, about the negotiations themselves.

What I would like to do is describe Canada's political engagement with Colombia generally. The relationship is a broad and diverse one. It spans a range of issues from peace-building to commercial ties to security cooperation, but given the interest of the committee, I'll focus my comments particularly on the area of good governance and human rights.

I should add that the committee's upcoming visit to Colombia, from May 11 to 14, offers an excellent opportunity for you to validate our comments with your own insights, and our embassy is looking forward to receiving you in that regard.

Canada's engagement in Colombia aims not only to promote prosperity in both countries, but to strengthen peace-building efforts and respect for human rights. Canada is doing this in multiple ways, through our advocacy on human rights, our financial and political support to Canada's peace-building efforts, and long-term development assistance.

Our commitment to Colombia stems from the priority that the Government of Canada attaches to deepening its engagement in the Americas. Canada is committed to exercising leadership in the Americas and to promoting increasing prosperity, enhanced security, and our fundamental values of freedom, democracy, human rights and the rule of law.

Although Colombia has an established democracy, a growing economy and a stable, responsible government, it also suffers from the longest-running internal conflict in South America, which has created the conditions in which millions have been internally displaced, or suffered human rights abuses.

So we're encouraged by the Colombian government's commitment to improving Colombia's human rights situation, something that I know Ambassador Jaime Girón spoke to you about with regard to his government's achievements to date.

So what is Canada doing in this regard? We have a long-standing tradition of speaking up for human rights generally, both in multilateral fora like the UN General Assembly and in the UN Human Rights Council.

We monitor developments in Colombia's human rights situation closely, on the ground. The Canadian Ambassador in Bogota and his officials meet regularly with their counterparts from like-minded countries, as well as representatives from international organizations, Colombian state institutions, and a broad range of civil society groups to assess and discuss the human rights situation in Colombia.

The priority that Canada places on human rights is also expressed through our active participation in the G24, an international coordination mechanism for Colombia which encourages dialogue on peace and human rights.

During the first half of 2007, Canada held the presidency of the G24. Some of our presidency's key priorities relating to human rights were to encourage discussion and support for the development of Colombia's national action plan on human rights and its integration in the national development plan, to assess the role of the UN High Commissioner for Human Rights office in Colombia, and to support particularly children's rights and child protection in that country.

We don't just talk about human rights in Colombia. Since 2005, Canada has spent about $9.5 million through the Department of Foreign Affairs and International Trade's global peace and security fund.

We have financed initiatives and projects to protect and promote the rights of victims, strengthen transitional justice and the rule of law and enhance security and stability in partnership with international and regional organizations, Colombian state entities and civil society organizations.

These initiatives are an important support for Colombia's efforts to build peace. We are also supporting human rights initiatives through our development assistance. Canada's development assistance in Colombia focuses on democratic governance, and specifically on peace-building and human rights.

Canada is a lead donor in advocacy for children's rights and child protection. Through CIDA, Canada provided $17.6 million in 2006-07, the majority of which was used to respond to the needs of vulnerable populations. I mentioned children, adolescents, and of course internally displaced people, of whom there are more than three million in Colombia.

In conclusion, Canada is deeply engaged in promoting and protecting human rights in Colombia.

I would add that Colombia has been a mature multilateral partner for Canada, the United Nations, and the Organization of American States, and we have collaborated with Colombia as we go forward to planning the 2008 general assembly, which will be hosted in Medellín, Colombia, in June. Our foreign minister will participate there.

We also support the work of the OAS to address the Colombian conflict through its mission to support the peace process, which is particularly engaged in the demilitarization of the paramilitary phenomenon in that country.

Canada and Colombia have a very positive and multi-faceted relationship with flourishing commercial ties, free trade negotiations, and support for peace-building efforts.

On that note, I will turn it over to Carol Nelder-Corvari.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Lambert. I wanted to say I feel as though we're rushing you a bit, and I'm sorry for that. I'm grateful that we have the printed text. That's a very good summary. Thanks very much.

Ms. Nelder-Corvari.

[Carol Nelder-Corvari, Director, International Trade and Finance, International Trade Policy Division, Department of Finance]

Thank you, Mr. Chair and members of the committee.

I have with me the lead negotiators on environment and labour, as well as other experts. We look forward to responding to your questions on the Canada-Colombia free trade negotiations. I understand that the subject of today’s session is how human rights and the environment will be addressed in these negotiations.

As this committee is aware, FTAs are commercial instruments aimed at expanding trade and investment opportunities between nations. This economic expansion promotes growth and prosperity. Most evidence shows that open economies have higher growth rates and can achieve faster rates of poverty elimination.

As noted by the Prime Minister in Santiago, Canada is re-engaging in the Americas, and bolstering international trade is the best hope for fostering development and common security. This objective is being pursued through negotiations like the FTA with Colombia and Peru.

You heard Ambassador Jaime Girón Duarte on Monday. He clearly set out the importance of the FTA for Colombia, highlighting the fact that the FTA would provide secure market access for exports, thereby promoting alternatives to the illegal drug trade, which has been at the root of many problems in Colombia, including those respecting human rights and security. Providing new opportunities for its citizens is a key factor behind Colombia’s ambitious free trade agenda, which currently includes the United States, the European Union, EFTA, Mexico, and Chile.

The efforts in these negotiations are also consistent with the recommendations made by the committee in its recent report entitled “Ten Steps to a Better Trade Policy”, namely, to create new opportunities for Canadian business and prevent Canada from being shut out of markets where our trade competitors are negotiating FTAs.

The defensive objective is of particular importance in the case of Peru and Colombia, since Canada’s main competitor in these markets, the United States, has already completed FTA negotiations. Peru has already passed in the United States and the U.S.-Colombia Trade Promotion Agreement is currently before Congress for decision.

Colombia is an important export market and investment destination for a number of Canadian businesses. These businesses will be placed at a disadvantage once the U.S. deal is passed. For example, Canada could face a 15% disadvantage on $100 million in wheat exports currently shipped to Colombia.

Colombia represents a market of 45 million. Under its current leadership, sound economic policy and improved security have generated favourable economic conditions. Colombia has experienced strong and sustained GDP growth in recent years, averaging 6.5% in the last three years, with relatively low inflation.

Stronger demand has resulted in import growth, which has been beneficial to Canadian exporters. Total Canadian exports to that country are now valued at $660 million. This is more than double the value of five years ago. Colombia continues to be an important market for Canadian products of traditional export interest, such as wheat, barley, leguminous vegetables, fertilizers, and paper products. It is fast becoming an important market for more advanced manufactured products.

Canadian investment in Colombia’s extractive sector are estimated by our embassy to be more than $2 billion, and these investments have led the way to growing exports of Canadian-made machinery, such as mining equipment and heavy transportation equipment. For example, Colombia is now the first destination, ahead of the U.S., for Canadian exports of off-highway dump trucks.

Despite the great commercial opportunities, there remain important commercial barriers that continue to limit the engagement of Canadian exporters and investors. For example, Colombia maintains sizable tariffs on most Canadian exports—averaging 12% and ranging as high as 80% for some agricultural products. In comparison, the majority of Canadian imports from Colombia can enter duty-free. In 2007, 80% of Colombia exports to Canada actually entered duty-free. The Canada-Colombia FTA would establish a more equitable balance for Canadian exporters.

Let me now give you a quick update on the status of these negotiations. Although the Peru and Colombia negotiations were launched at the same time and most meetings were held jointly, the negotiations were intended from the start to lead to two distinct FTAs: a Canada-Peru FTA, and a Canada-Colombia FTA. In fact, as members of this committee know, the Peru negotiation is now completed. This was announced by Minister Emerson and Minister Araoz on January 26 in Davos.

The negotiations with Colombia are ongoing. So far, good progress has been made on most issues, but some areas require further discussion prior to our being able to bring the negotiations to a successful conclusion.

With Colombia we are seeking a comprehensive, high-quality free trade agreement. Coverage will include trade in goods, services, investment, government procurement, dispute settlement, and institutional provisions.

In keeping with Canada's past approach to FTA negotiations, environmental and labour aspects of economic integration will be addressed through the negotiation of side agreements that will be directly linked to the FTA.

As well, in these negotiations we are looking to establish new avenues for cooperation, including with respect to corporate social responsibility and capacity-building through cooperation commitments.

On the environment, Canada is seeking to ensure that increased economic activity generated through the FTA does not result in less environmental protection and that Canada's trade partners do not lower their standards of enforcement to attract investment. To achieve this we are negotiating a side agreement that promotes high levels of environmental protection. Such side agreements normally commit parties to effectively enforce their environmental laws and maintain appropriate procedures to conduct environmental impact assessments.

On labour, Canada's objectives are to assist Colombia in building a stronger and more stable economy by improving working conditions and respect for worker rights and by requiring that Colombia's laws reflect internationally recognized core labour principles and that these laws be effectively enforced.

Recognizing that Canada's corporate presence in Colombia is largely concentrated in the extractive sectors and that corporate practices can have an important impact on local communities, our FTA negotiations have included discussions on how governments and industry can work together in the area of corporate social responsibility. Our investors in these countries are very active on this front, and many have been recognized for their CSR efforts. These discussions will be reflected in commitments to promote recognized principles of reasonable business conduct in appropriate sections of the FTA.

I think that provides a quick overview on the issues. Thank you, Mr. Chair. My team and I are ready to answer any questions you may have.

[The Chair, Conservative, Lee Richardson]

Thank you, Ms. Nelder-Corvari. That was very helpful, and I am very pleased with who you brought with you today. These are the people who are working on Canada's behalf to structure this arrangement and the side agreements.

We have the lead negotiators, with Ms. Nelder-Corvari, as well as the lead negotiators on environment and labour. I think this is what this committee is looking for. Thank you all for your attendance today.

We're going to start questions again. I'm going to try to keep a pretty tight rein on the questions and answers, so if you would all keep that in mind as we proceed, I'd like to begin with the Liberal Party.

Mr. Bains.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Thank you, very much, Mr. Chair. And I'd like to thank the departmental officials as well.

As I mentioned to the Colombian ambassador in our last meeting, this issue is gaining a lot of attention at the grassroots level. I've received many e-mails; many people are concerned about it. Many people are watching this free trade agreement very closely, and many of my constituents have written to me. Their concern revolves around human rights, and I want to speak to that issue specifically.

I just want to share with you some of the key statistics that have been brought to my attention. I want your perspective on whether these statistics are in line with what you think is correct and pertinent in this particular free trade agreement. They are that fewer than 3% of the killings in Colombia have been solved, that 78 trade unionists were murdered in 2006, and that Colombia has one of the highest rates of killings of trade unionists in the world. These are specific facts that come to mind.

The concern that many people have raised--NGOs, human rights organizations--is with respect to dismantling the paramilitary mafias, prosecuting paramilitary, and ending the killing of trade unionists. That's how they genuinely view these issues, and they put them in those three categories.

My concern is with respect to what you outlined in your opening remarks with regard to the environment, human rights, and labour agreements being side agreements. I wanted to get your perspective on this, and I've asked the Colombian ambassador about this as well. Could we have, not in the side agreements but in the actual text, in the actual free trade agreement, enforceable provisions on labour and the environment to make them more meaningful, to make sure these concerns are addressed?

You alluded to some of the economic benefits of this free trade agreement, and there's no denying that there is tremendous potential in that area. But the concern that many people have raised is around the environment and human rights. They feel the side agreements won't necessarily address these issues, these key stats that I mentioned to you.

I wanted to get your thoughts on whether it's plausible. Is it possible? Is it something that we should be strategically doing, putting these into the major text as opposed to putting them in the side agreements, and having enforceable provisions on labour, environment, and human rights?

I wanted your thoughts on that.

[Carol Nelder-Corvari]

Thank you for the question.

With respect to labour and environment, we are actually taking a two-pronged approach in these negotiations. They will include the traditional side agreements, but those will be linked specifically to chapters in the FTA. I think Minister Emerson spoke to that the last time he was before the committee. In doing this, though, we must be respectful of provincial jurisdictions, so we are doing as much as we can to have a stronger link between the side agreements and the FTA.

With respect to specific aspects of the labour agreement that we're seeking with Colombia, I would like to ask Pierre to speak to that.

[Pierre Bouchard, Director, Office for Inter-American Labour Cooperation, Department of Human Resources and Social Development]

Thank you, Carol.

The side agreement that we're seeking with Colombia on labour, if successful, would be probably the most comprehensive labour agreement ever negotiated by Canada. We are raising the bar with regard to the core obligation in the agreement and also providing for an open and robust dispute resolution mechanism with financial penalties if obligations are not respected.

By far, this would be a very high-level agreement.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

In the main text or in the side agreement?

[Pierre Bouchard]

As Carol mentioned, because of a specific situation.... In Canada, as you know, labour jurisdictions are separated, if you wish. There's no federal law. There's a very separate jurisdiction, so in collaboration with the provinces with which we are in regular contact, we have decided to continue with the side agreement in order to respect provincial jurisdiction.

Our discussions, I would say even over the past few years, with experts, with unions, with stakeholders on this particular issue of a side agreement versus a chapter.... When explaining our position, I think most stakeholders are gradually coming to the understanding that what matters is the obligation in the agreement. Where they are located is more a matter of format and less important. I think more and more stakeholders are recognizing this fact.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I guess this speaks to the bigger concern with our trade policy with Colombia in our view of how we want to engage with them. There are two specific schools of thought with respect to a free trade agreement, and I want clarification from your perspective.

One is that we want Colombia to get its house in order on human rights and the environment, and then we will engage in a free trade agreement when we see substantive and substantial improvements. That is one school of thought.

The other school of thought is that we need to engage in a free trade agreement because that will help address the environmental and human rights aspects.

From your perspective, what is your view of Canada's position in terms of the free trade agreement, and which particular philosophy do we fall under?

[Pierre Bouchard]

Our approach to the Colombian labour situation and these free trade negotiations is two-pronged. We are seeking a high-level labour agreement with Colombia, and as assistance to Colombia, we are essentially saying to Colombia that if they accept the high level of obligation we will be there to help them meet those obligations. This is why we have announced over the past few months a package of technical cooperation of $1 million to deal specifically with labour issues in Colombia, and we're currently in discussion with Colombian officials, even as these negotiations are ongoing, to discuss the implementation of that package, which hopefully will start in the next few weeks.

So more cooperation and a stronger level of obligation.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

Yes, you may respond.

[Carol Nelder-Corvari]

Thank you.

I think our Prime Minister has been very clear on that issue. He said that when see a country like Colombia, which has decided that it has to correct its social, economic, and political problems in an integral manner and has decided to follow a model of economic freedom that wants political democracy and protection of human rights and social development, then we must say we are here to encourage that. We are not going to tell them to fix their entire social, political, and human rights problems and then we will want to become involved in economic relations with them.

I want to add in that regard that an FTA is a commercial relationship and we are forging deeper economic ties, but along with this we're creating many avenues, not only in labour but many areas for cooperation and discussion. Many committees will be set up.

I can tell you that leading these negotiations, with the exception of me, is a very young team. They are very keen and experienced. It is the same on the Colombian side, and they are forging the relationships that will take us into the future.

The Colombians are very optimistic about the possibilities. When you look at an FTA and all the committee structures that are set up, you are creating a number of paths of dialogue that would not exist without an FTA.

[Navdeep Bains, Liberal, Mississauga—Brampton South, ON]

I appreciate your mentioning the Prime Minister, and this will be my closing remark. It's not really a question.

The reason I asked what particular philosophy we are using to engage in this free trade agreement is that we see an inconsistency between, for example, free trade with Colombia and free trade with China. So the Prime Minister's remarks in Colombia seem to be in isolation, and they tend to be different when it comes to China and other countries as well. So that's what I wanted clarification on, and hopefully we'll get another chance to ask our questions.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Bains.

And thank you for those answers.

We're going to move quickly to Monsieur Cardin.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chair.

Ladies and gentlemen, good day and welcome.

We know, in fact, that trade is the priority of the free trade agreement. Can we say that the second priority is improving human rights, working conditions and social conditions? We can always ask that question.

Based on your experience within the framework of the agreement that you reached with Peru, on a scale of 1 to 10, where do your negotiations currently stand?

[Carol Nelder-Corvari]

I would say that the efforts are under way to conclude the negotiations in the next few months. That being said, it's quality that matters here. Canada wants a very strong and comprehensive agreement. Colombia shares that commitment, so we'll take as much time as necessary, but we did start with Peru and we got a fair ways trilaterally.

What happens is that often when you get to market access issues, of course you're dealing with a different bilateral trade relationship with each country, so at that point we broke off the negotiations into two separate streams.

Things are still progressing quite well. We have quite a lot of work to do, though, and we hope to do that over the coming months.

[Serge Cardin, Bloc, Sherbrooke, QC]

With regard to human rights and the situation in general, you seem rather optimistic and believe that there will be significant improvements. However, we know that President Uribe—who has been in power for nearly six years—could have caused this situation to change much more rapidly. I have here a report on the situation of lawyers and justice in Colombia published by Lawyers Without Borders. The report reads, and I quote:

Furthermore, the role of human rights lawyers is frequently stigmatized by government authorities. Persecution and the deliberate disregard for the right of defence are typical of a vast majority of justice system administrators and the police, who use administrative and legal actions to criminalize the exercise of the legal profession, particularly in the case of criminal lawyers, labour lawyers and human rights lawyers.

Government authorities are directly implicated. Reference is made to a number of actions, but if things are being done by legal and government authorities, how can you hope that the simple fact of doing business with Colombia will improve human rights, social and even labour conditions?

[James Lambert]

The chief negotiator may have more specific comments on the question of how an FTA might accelerate conditions that would permit a greater scope for rule of law and good governance in the country, but that's certainly a view we subscribe to.

I can address your most specific question about human rights, and particularly its impact on the judicial system that prevails in Colombia. I would step back and say this is an enormously complex situation the Colombian government is addressing. We're looking at the single longest-running civil conflict in the Americas, over 40 years in duration. The Uribe government has certainly taken important steps. Looking at it over the seven years of government to date, we see that the direction is very much one we support.

I agree with your point that there is a requirement here for Canada, engaging on commercial investment, to continue to insist with the government that best efforts be made on a range of issues. I think we also have to give credit where credit is due to the Colombian government for efforts that have been undertaken.

You mentioned some of the problems with the demobilization of paramilitaries, and others have been mentioned here. This is an issue created by a government that is taking steps to deal with an inherently difficult problem in Colombia. The Uribe government has taken important steps in the reform of the justice system at the constitutional level. It has moved to the introduction of an accusatory criminal regime. Oral judgments are used at the legal level. It has reinforced the budgets the judicial system has to operate on. Impunity and threats to lawyers, judges, and those who operate in the judicial system remain a very real problem and one that we want to help them address, because to do so deals very much with the climate of impunity that exists in the country. You're addressing a very important question.

As Carol cited the Prime Minister to say, it's not by any means an issue that's been put to bed, although the overall performance is much better than it has been. In this, there are still areas where we want to see them continue to advance, and Canada is playing a role. I can cite at a later time a number of programs we're involved with, including our refugee program.

I would note it interesting that over one-quarter of the refugees who come to Canada on a worldwide basis are coming from Colombia. Far from the Colombian government's viewing that as an insult, it's viewed as an important safety valve in that society, where individuals who are under threat from the left, the right, and different sectors have been able to find safe refuge here, as has been our tradition in Canada.

[Serge Cardin, Bloc, Sherbrooke, QC]

Immigration from Columbia is fairly significant. We can conclude that life is not much fun over there and that immigration numbers would probably be even higher if people were free to come here.

If the situation has really evolved and improved, why is the American Congress still waiting to ratify an agreement signed by the United States, which surely sees trade opportunities? Has Congress refused to endorse the agreement because it clearly does not see enough of an improvement with regard to human rights?