International Trade Committee on May 28th, 2008

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair. I'll share my time with my honourable colleague Mr. Keddy.

Thanks to our witnesses.

I just want to start off with Mr. Hodgson. I appreciate your preamble and the fact that you're a strong proponent of free trade, moving tariffs, having a competitive marketplace, and levelling the playing field. I reference your most recent publication, Stuck in Neutral: Canada’s Engagement in Regional and Global Supply Chains.

In your introductory comments, you also mentioned that Canada has been left behind in establishing trade agreements. Maybe you can just elaborate a little bit on how far behind we are and what we need to do to get caught up.

[Glen Hodgson]

First of all, thank you very much for referencing our research. That's why we do it, to try to inform the debate in Canada.

On the issue of fitting into regional value chains, Canada is clearly on a plateau in the Canada-U.S. relationship; that's why we keep putting that forward as the single most important trading relationship. In fact, we'd like to see an FTA II, where we start talking about non-tariff barriers and other things that are becoming real barriers to north-south trade.

Sorry, what was your second point?

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I know we've signed EFTA; that's the last agreement--

[Glen Hodgson]

Well, just going from memory, I think we've only had four bilateral agreements up to EFTA in the last fourteen years. I think we have bilaterals with Chile, Costa Rica, Israel, and EFTA becomes the fourth. You can compare that to what countries like Australia or China have done, where they have 30 to 35 agreements. The Mexicans actually have a bilateral already in place with the EU. We really are not a player in the great game of trade globalization, and fundamentally that goes back to our attitude at the WTO, and whether we're a champion of freer trade multilaterally or pursuing it regionally and bilaterally.

So as the first principle, we think Canada should put much greater weight on trade globalization.

The issue for me in Colombia is whether this is the highest-priority case or whether we should look to other high priorities, like the EU, for example.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

I have one more quick question on that, specifically about Colombia. I know that we've heard about even today, and the Prime Minister has alluded to, fair-weather friends. You know, do you become friends with a fellow once they've won a lottery? I think there's something else to say as Canada is showing our leadership and the Prime Minister is going to Central America, to these countries, and saying that we want to help you and more or less give a hand up instead of a handout. It's not just the economics, but I think from a moral leadership perspective, do you not see Canada showing some leadership in that respect, entering into an agreement with countries like Colombia?

[Glen Hodgson]

There is certainly a need for Canada to engage Latin America in a much deeper way, and that's why pursuit of free trade on a regional or sub-regional basis would be my preferred route. But clearly there are things to be done to try to move forward the agenda of transparency, democracy, respect for human rights, and the whole gambit of issues within Latin America. So the visit the Prime Minister made to the region was very important as a signal that Canada takes Latin America very seriously.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

And that's our goal, our ultimate united goal.

Mr. Keddy.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman, and welcome to our witnesses.

Just on the comment about where we should be engaged, on how many fronts, and the free trade negotiations around the globe, I think we have to understand that we were in a serious free trade deficit compared to the rest of the industrialized world. We're still there. There's been a real re-engagement with the Americas under this government, and this Prime Minister in particular. There also is Canadian direct investment in the Americas of over $100 billion. That's significant, and it can't be ignored. Colombia is part of that. Peru was part of that, and it has now signed. There are free trade negotiations going on with the Central American four countries: Guatemala, Honduras, Nicaragua, and El Salvador. There are free trade negotiations going on with CARICOM, and there are free trade negotiations going on in Asia and in France. So I don't think it's quite as simple as saying that you can ignore what's going on on your doorstep, where there is significant Canadian investment and bilateral trade, and put all your eggs in the EU, when the EU is just in its infancy as far as negotiations go, because there were none.

Ms. Simons, I'd like you to expound on the whole idea of the labour and environment side agreements. I really have some difficulty following the logic that the glass is half full and that mankind is kind of born in sin and we'll never get out of that. That's an ideology that I've never really aspired to. But I think there are positives here, and there are real positives. It's not as simple as saying corporations are all evil and will never drag themselves out of the mire. I had the opportunity to visit with a number of corporations doing mining in Central America. They were doing great work.

So what do you do? Doing nothing is not an option. Allowing investment to just go rampant is not an option. Having regulated, governed, rules-based trade is an option, but I'm not hearing that from you.

[Prof. Penelope Simons]

I didn't say that having rules-based trade wasn't an option. What I said was that if you want a free trade agreement to actually have an impact on human rights, then one of the things that need to happen is that you need to regulate corporate activity as well. You need to impose some obligations on corporations, and there are other provisions that need to be included in these types of free trade agreements. And there needs to be study done as to what exactly those provisions would be so that they actually help push forward sustainable development, because right now they're geared towards purely economic issues. My point was simply that you do need to have minimum obligations for corporate investors.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Another one of the points raised was the fact that 31 of the members of the Colombian Congress are being charged, and 30 of them, I think, are charged and under investigation, which is deplorable. But the Colombian system has a president and an appointed cabinet, and they run on a ticket separate from Congress, so I fail to see the association there. But I'd like to hear your thoughts on that.

The other point I'd like you to comment on is the fact that they're under investigation. Some of them have been arrested. I think that's a step in the right direction. That's the rule of law prevailing.

[Prof. Penelope Simons]

I'm certainly not an expert on Colombia and the Colombian government. I do know that there have been links to the paramilitary within Congress--

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

And that's what they're charged for.

[Prof. Penelope Simons]

Right--but I'm not an expert on Colombian politics, so I don't feel qualified to answer that question.

[The Chair, Conservative, Lee Richardson]

Thank you very much. I'm sorry that we were a bit rushed today, but I think we got through a pretty good round of questions. I hope everyone was satisfied with the time they had. I must say we welcome your testimony and the witness you gave today. Thank you for coming.

We are adjourned.