International Trade Committee on May 28th, 2008

[The Chair, Conservative, Lee Richardson]

I call the meeting to order.

I'm sorry to keep everyone waiting. We had votes in the House, and now we have high-level discussions at the back of the room, but we're going to have to proceed without them.

We'll start with our witnesses in our continued study of the free trade negotiations between Canada and Colombia. Today we are welcoming Tom d'Aquino, chief executive and president of the Canadian Council of Chief Executives, and Sam Boutziouvis, vice-president of economics and international trade. We also have Carl Potts from Pulse Canada and Greg Simpson from Simpson Seeds.

I think we'll ask Mr. Potts to start off. I understand you're sharing your time to begin with, so could you keep it collectively to 10 minutes? Then I'm going to ask Mr. d'Aquino to give an opening statement as well.

We'll begin with Carl Potts from Pulse Canada.

[Carl Potts, Director of Market Development, Pulse Canada]

Thank you, Mr. Chairman, and thank you very much to the committee for the opportunity to present here in front of you today on an issue that's of great importance to our industry: bilateral free trade agreements generally, and the one that Canada is negotiating with Colombia specifically.

I'm very pleased today to have with me Mr. Greg Simpson from Simpson Seeds in Moose Jaw, Saskatchewan. He's a seasoned veteran of this industry, and I'm going to ask him to make a few comments more specifically related to Colombia just a little bit later.

Pulse Canada is the national industry association for the pulse crop industry in Canada. We represent growers, processors, and exporters of pulses and special crops here in Canada. We work generally on market development, but we also deal with market access-related issues for our industry here in Canada.

The pulse and special crops industry here in Canada exports about 70% to 75% of our products to about 150 countries around the world. Those exports average about $800 million per year. Last year, in 2007, they exceeded $1.25 billion, so given the importance of exports to our sector, maintaining competitive access to international markets is extremely important for us.

The pulse industry has had a keen interest in bilateral free trade agreements since about 2004. That was the time when some of our competitors, in particular the U.S., embarked on a very aggressive campaign to pursue bilateral free trade agreements with key countries that were key markets for Canadian pulses.

We've been supportive of pursuing strategic bilateral agreements for quite a while now. For us Peru, Colombia, Dominican Republic, and Morocco rise to the top of that list. We were very pleased to see Canada launch negotiations in 2007 with Colombia, Peru, and Dominican Republic.

In FTA negotiations, we seek tariff elimination under the fastest possible timeframe. That's really what our goals are for pulses and special crops, but at a very minimum it's very important that we at least have access parity--that we negotiate an access that's at least as good as what our competitors negotiate--to ensure that we don't become uncompetitive because of preferential tariffs.

Overall, Colombia is Canada's seventh-largest market for pulses and special crops, averaging about $42 million per year in exports. In 2007, export value was about $57 million; overall, in agriculture and agri-food exports to Colombia, pulses ranked second behind cereals, so it's a very important market for us. But if we look more specifically at individual products within the pulse and special crop category, the importance of Colombia becomes even more apparent: Colombia is either Canada's first- or second-largest market for green lentils, with about $37 million worth of exports in 2007; we export about $15 million worth of dry peas to Colombia; Colombia is Canada's sixth-largest market for canary seed; and Colombia is a top-five market for Canadian chick peas.

In terms of the impact of competitors' agreements on our industry, the U.S. agreement negotiated with Colombia gives U.S. pulses preferential access. It gives them tariff-free access for an unrestricted quantity of peas, lentils, and chick peas, and for some special crops as well. For beans it provides for a tariff rate quota system that will progressively increase U.S. access to Colombia over about 10 years.

What does that mean for the competitiveness of Canadian products? Well, it means that Canadian products will face about a 15% tariff disadvantage for peas, lentils, chick peas, and canary seed. As an example, for lentils that are worth around $1,000 per tonne or more, a 15% tariff disadvantage works out to about $150 a tonne. In a business in which a few dollars a tonne really matters and sometimes determines who does the business, obviously a 15% tariff disadvantage will shut Canadian products out of those markets.

While committee members, I understand, have travelled to Colombia and heard comments from Colombia's perspective, I want to share just a few comments that we've received back from Colombia.

We had a seminar and some meetings in Colombia in 2006 with importers. We found that the Canadian delegation was confronted by quite angry Colombian pulse importers. Their anger was directed at us and at the Canadian government because of, at that time, a lack of movement on a negotiation with Colombia; as importers, Colombians benefit from having equal access for pulses relative to other pulse-producing countries, and they're desperately interested in continuing to have access to Canadian product. This ensures that there's market competition within Colombia and ensures that they have competitive access to the products they need.

Will Colombian citizens benefit? Yes, absolutely: with pulses being an important protein source for people throughout the world, lower tariffs have the potential to provide food at lower costs.

In summary, I would say we're looking for three main objectives out of a Canada-Colombia free trade agreement. First off, we can maintain tariff parity access with the U.S. and other competitors to ensure that the Canadian industry is not placed at a disadvantage relative to our competitors. This is an absolute must for this agreement with Colombia and for any other FTA that we negotiate, and I understand that other agriculture sectors have provided similar comments and have a similar position on that.

Second, we can also regain parity with other countries for beans, rather than face a 60% tariff disadvantage relative to Andean countries. A Canadian agreement can help to secure and regain tariff parity for a market for small red beans in Colombia.

Third, lower tariffs reduce the cost of food and of products for importers and consumers; when we are talking about certain price-sensitive commodities such as canary seed, for example, that's particularly important in helping to encourage additional demand.

I'll ask Mr. Simpson to make some comments specifically about the Colombian market. He's been involved there for nearly 25 years and has specific expertise there.

[Greg Simpson, President, Simpson Seeds Inc., Pulse Canada]

Thank you, Mr. Chairman, committee members, and ladies and gentlemen.

I want to thank you for this opportunity to be able to present to you my perspective on the impact this bilateral free trade agreement would have on our business and the industry.

I'm from Moose Jaw, and Moose Jaw is in the production heartland for lentils and many other pulses. If it weren't for lentils, our farm and our business would not have survived the past 30 years, and this is largely due to the fact that low grain prices meant that we needed to diversify into something that would be profitable on our farms.

We supply seed to, and purchase back the lentil production from, nearly 2,300 farmers in a range of around 200 miles around our farm and our company. Just to give you an idea of how much growth we've had, when we started the business 30 years ago, we had three employees and we shipped about a million tonnes per week. Now we've expanded to three processing mills and 65 employees. We are running 24 hours a day and exporting 5.5 million pounds per week. It's been a substantial growth. We ship somewhere around 25 containers per day when we're at full steam.

Needless to say, this is an important industry to us. Colombia is one of the number one buyers of lentils from our area, particularly the large green layered variety that is predominantly grown in our particular area. As a country they import around 68,000 metric tonnes a year, and we deal directly with importing companies in Colombia. We deal with the number one importer in Colombia right now, who imports about 50% of these lentils on an annual basis.

Successful negotiation of a bilateral agreement between Canada and Colombia is an opportunity for Canada to sustain a viable industry and to be instrumental in the development of an industry that's been largely grown without government intervention.

If the U.S. beats us in the race, we stand to lose a significant amount of the market in terms of competitiveness and market expansion. Colombia is important; without them we would quickly have an overproduction in Canada, which would result in a lowering of prices to farmers. Farmers would then get the signal not to grow the lentils. That would then have a direct impact on us in terms of reduced exports. Reduced exports mean fewer employees, because we wouldn't be shipping nearly the same amount of product. Of course we would try to find alternative markets, but that would be very difficult because Colombia has been such a big part of our business.

At the end of the day, Canada has been blessed as a resource-rich country. As citizens of Canada it's important for us to steward these resources to the benefit of all people, whether they are growers, processors, or exporters. What's also important at the end of the day is being able to take these peas, lentils, and chick peas and be able to deliver them to consumers. Bringing down the barriers of trade will allow me to do my job better and be able to bless those who are in need of food.

The cost of the tariffs right now, at $150 per metric tonne, is significant. The price of food has doubled, if not tripled, in the last year because of what's been going on worldwide. This represents a huge amount of money when you consider the people who are trying to buy our products from Canada.

Thank you for listening to me, and I'd be interested to take some questions regarding what I've said.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Potts and Mr. Simpson.

Before we go on, I want to just close up this section of our grain and food producers and seed growers. You all received, I think, a letter from the Canadian Wheat Board. We had also suggested the Wheat Board might have appeared today as well. They did send us a letter, and I think I'll just quickly read into the record the salient parts of their agreement and save them a trip, but if you do want to have the Wheat Board come and appear, we can also extend.

Just for the record, then, this is from the Canadian Wheat Board:

Colombia is one of the fastest-growing Latin American markets for CWB grain, and it is the single largest market for Canadian barley in Latin America. In 2006-2007, western Canadian farmers exported roughly 417,000 tonnes of wheat and 73,000 tonnes of barley to Colombia.

[Serge Cardin, Bloc, Sherbrooke, QC]

Would you have a French version of that letter? The interpreters are complaining that they do not have the text and that it is difficult for them to translate because you are reading too fast. Would you have a copy for them?

[The Chair, Conservative, Lee Richardson]

I don't have a copy with me in French, so I'll read it a little slower if that helps. It's only a couple of paragraphs.

We were talking about the farmers, and I'll continue with that:

Together, at today's prices, Canadian wheat and barley sales were worth over $230 million. The potential loss of this key market is a major concern for our organization. As you are aware, the U.S. government has signed the U.S.-Colombia Trade Promotion Agreement. If ratified, Canadian wheat and barley to Colombia could be placed at a 15 per cent applied tariff disadvantage to its U.S. equivalent. This translates into roughly $70 per tonne of wheat at current prices. Additionally, Colombia is also negotiating an FTA with the European Union. The commercial disadvantage of such deals will exclude Canadian wheat and barley sales from the Colombian market, resulting in lost sales opportunities for western Canadian farmers. On behalf of the CWB, I strongly encourage your committee to endorse these negotiations. Please do not hesitate to contact us if you have any further questions or require additional information.

That's from Larry Hill, chair of the board of directors of the Wheat Board. It will be in the minutes and available on record.

With that, again, thank you, and I'm not taking this out of your time, Mr. d'Aquino.

We'll now hear from Thomas d'Aquino, from the Canadian Council of Chief Executives,.

[Thomas d'Aquino, Chief Executive and President, Canadian Council of Chief Executives]

Thank you, Mr. Chairman. We're always prepared to cede some time to the Canadian Wheat Board.

Good afternoon, ladies and gentlemen. I'm going to present a very short introductory statement. I promise you it will not exceed 10 minutes. I and my colleague, Sam Boutziouvis, will then be happy to answer any questions you might have.

As representatives of the Canadian Council of Chief Executives, we're very pleased to be here today to talk about something that we think is very important to Canada. I will try to make the case for supporting the government's current negotiations towards a free trade agreement with Colombia and to address a number of concerns about human rights, labour, and the environment.

For those of you who do not know us, the Canadian Council of Chief Executives is made up of the CEOs and leading entrepreneurs of 150 of our largest companies in Canada. The organization is a research, policy, and advocacy group. The vast majority of Canadian investment, Canadian exports, Canadian research and development, and training is conducted by the member companies of the council.

The other thing I should tell you, if you don't know it, is that we've had a long record of involvement historically in playing a leadership role and advancing the Canada-U.S. Free Trade Agreement; the NAFTA; and our free trade agreements with Chile, Peru, Costa Rica, Israel, and the EFTA; and now we are very deeply involved in looking at, hopefully, free trade agreements between Canada and India and Canada and the European Union. So we've had a long history of engagement, because we believe an open economy, and one that can build on the tremendous trade advantages that Canada has had, will be good for Canadian jobs and for Canadian growth in the future.

So let me begin. First, Mr. Chairman, we think that an ambitious, comprehensive Canada-Colombia free trade agreement would enhance access to a new and growing export market. With a population of some 45 million people--you know this, as you were there--and strong economic growth, Colombia represents an important market for Canadian products and services. The potential of Colombia has not gone unnoticed by Canadian companies. More than 1,000 Canadian enterprises are engaged in commerce with counterparts in Colombia. The current level of Canadian foreign direct investment in the country is about $3 billion and is expected to increase as we move closer to the conclusion of the agreement.

Canada's annual exports to Colombia have more than doubled in the past five years to $660 million. The proposed agreement would benefit companies and workers in a wide range of industries, including the automotive sector, steel, chemicals, public infrastructure development, oil drilling, environment, engineering, agriculture--you've heard from our colleagues on the importance of Colombia for lentils, and we've also heard from the Canadian Wheat Board with regard to barley and wheat--fertilizer, paper and other forest products, copper products, textiles, apparel and footwear, mining, and advanced manufacturing such as mining machinery and equipment.

In our view, ladies and gentlemen, a free trade agreement that is ambitious, comprehensive, and offers reciprocal access will raise awareness and further open this dynamic and growing economy to Canadian know-how and ingenuity well beyond the products and services I've just listed.

Canada's business community would strongly support a Canada-Colombia free trade agreement that includes the following key provisions: greater access to government procurement; liberalization of the services sector; strengthened protection for Canadian patents, trademarks, and trade secrets; improved customs facilitation; greater benefits for small and medium-sized exporters; reform of the domestic legal and business environment to encourage business development and investment; and finally, an agreement to prevent double taxation.

The second reason we so strongly support the agreement is that it will level the playing field for Canadian workers, farmers, and businesses. The Canadian market, as you know, is already open to Colombian imports. Last year more than 80% of what we imported from Colombia entered Canada duty free. A free trade agreement would give Canadian businesses, farmers, and workers similar access to this important growing market.

As you've already heard, Colombia imposes tariffs averaging 11% on industrial goods, 17% on agricultural products, including 15% on wheat, and as high as 80% on beef products and 15% to 20% on cotton yarns and paper products. The elimination of these tariffs would greatly benefit Canada.

It is vital that we keep in mind the international context. For example, the United States has already completed its own free trade negotiations, though I realize the agreements are now stalled and that Nancy Pelosi and the Democrats have said no, for the time being at least. I've absolutely no doubt in my mind that it's only a question of time, after we see the transition take place, that Colombia will come to the fore again.

When one looks at Canada and the United States, we've had many instances of leaders saying “I will not support this agreement, and I will cancel it if I'm elected”, when history proves otherwise. So we're very hopeful that the compelling reasons, whether it's under a Democratic regime or a Republican regime, will move the United States closer to Colombia.

Meanwhile, as you've heard, Colombia is pursuing liberalized trade with the European Union, the members of the European Free Trade Association, Chile, Mexico and others. In our view, Canada cannot afford to fall behind lest we be rendered less competitive and possibly be shut out of the market by more aggressive negotiators.

The third reason we support it, Mr. Chairman, is that a Canada-Colombia free trade agreement would contribute to economic growth and poverty reduction in Colombia. Reforms introduced over the past decade have served Colombians well. As recently as 2006-07, the World Bank listed Colombia as one of the world's top ten economic reformers--not performers, reformers--and last year Colombia's economy grew by over 6.5%. As well, the International Monetary Fund expects that over the next five years annual economic growth will average an impressive 5%. Unemployment has dropped from 16% in 2002 to roughly 10% last year, and an estimated 10 million Colombians have been lifted out of poverty in the past five years. Wages have been rising for five straight years and inflation has declined to about 5%. Those of you who are members of this very important committee would know that those numbers are numbers that many countries would aspire to have. They are very encouraging.

The conclusion of a Canada-Colombia free trade agreement would signal Canada's strong support for the pro-growth initiatives of President Alvaro Uribe and would further increase confidence in doing business in Colombia.

The fourth point, Mr. Chairman, is that in our view the agreement would strengthen democratic reforms and human rights in Colombia. Contrary to what I know you've heard from some earlier witnesses, recent history demonstrates beyond question that pro-market reforms encourage the development of the democratic institutions that are so important to the effectiveness of a functioning government. They deepen relations among countries, improve the protection of human rights and accountability. The increased economic activity that would result from a free trade agreement would create more and better jobs and more opportunities in the formal economy. It would discourage corruption. It would not eliminate it, but it would discourage it and enable the government to make additional investments in institutions that promote the rule of law and greater transparency.

Less than a decade ago, Colombia was thought by many to be a failing state. As recently as 2000, much of the country was controlled by terrorist groups and ruthless drug cartels. Much more needs to be done, but Colombia's transformation in the past few years has been nothing short of remarkable. The facts speak for themselves. Since 2000, the levels of general violence have been reduced by 40%. The murder rate has dropped by 40%. Kidnappings have dropped by 83%, and terrorist attacks on public infrastructure have declined 76%.

Free trade and stronger economic growth will bring new opportunities for the informal and illicit economies that for too many years have been dominated by the drug trade. Already, growth and greater openness have resulted in the demobilization of more than 40,000 paramilitary fighters; fully 95% of them have been successfully reintegrated into mainstream Colombian society.

Let me be clear: violence continues to plague Colombia. We know that. The social and economic costs of conflict are extremely high, but the problems that remain are being dealt with successfully. Colombia has a vibrant democracy with a long history of free elections, a free press, and effective opposition parties.

Importantly, the Colombian people have given the president an 80% approval rating. Colombia, in our view, is on the right track.

May I conclude, Mr. Chairman, with a fifth and final point. Colombia is a vital element in Canada's strategy of re-engagement in a region. For too long Canada has been a fair-weather friend to our neighbours in the southern hemisphere. Fortunately this is now beginning to change. Building on our existing free trade agreements with Chile, Costa Rica, and now Peru, Canada's government is currently negotiating with several Caribbean and Central American countries. A free trade agreement with Colombia would anchor Canada's strategy of increased engagement in the Americas, which we think is a very positive development. Not since our accession to the Organization of American States and the signing of the landmark free trade agreement with Chile has Canada been so constructively engaged in the hemisphere.

The council is convinced that these negotiations are in the economic and strategic interests of both Canada and Colombia. Of course we will have to await the outcome of the negotiations before determining whether the agreement itself is sufficiently ambitious and comprehensive. We're not interested in a piecemeal agreement. In our view, it should be comprehensive and very broad.

I think delaying or cancelling these negotiations would send the wrong signal, certainly at a wrong time, to the people of Colombia. Any postponement would constitute a commercial and foreign policy setback.

It is my understanding that the Government of Canada is pursuing high-quality labour and environmental accords in conjunction with the proposed free trade agreement, with recourse to dispute settlement mechanisms. In addition, our government is committed to working closely with Colombia in the areas of corporate social responsibility and capacity-building.

Regrettably, some labour representatives and political activists have said it would be wrong to negotiate a free trade agreement until Colombia improves its human rights record. In my view this represents a misdirected effort to derail an initiative that would greatly benefit the people of Colombia and the cause of democracy.

A moment ago I referred to the dramatic decline in violence in Colombian society. Let me offer a few more examples that illustrate the rebuilding of trust and the enhanced sense of security. In 2002, some 131 mayors throughout Colombia were forced to exercise their duties and responsibilities from outside their municipalities. Today all Colombia's mayors live and work in their respective municipalities. Ridership on Colombian roads has doubled since 2000, and the number of tourists visiting Colombia has doubled in the past five years. The International Labour Organization apparently agrees with the direction of human rights and labour reforms in Colombia; for the first time in 20 years the ILO has removed Colombia from its labour watch list.

To reiterate, Colombia continues to experience significant social, human rights, and poverty-related challenges. The good news is that Colombia is making progress. We should encourage these economic and democratic reforms. Far from walking away, we should engage the country's leadership as much as possible.

In conclusion, Mr. Chairman, we think Canadian workers and businesses of all kinds would benefit from the negotiation of an ambitious, comprehensive free trade agreement with Colombia. Furthermore, it is in Canada's interest to engage with countries such as Colombia, that are committed to democracy, the rule of law, peace, and greater security. Successful conclusion of this agreement would certainly offer better protection for workers and the environment while strengthening capacity-building and corporate social responsibility. For all these reasons, we support it.

I should say, Mr. Chairman, consistent with our philosophy as an organization--we would apply the same reasoning to China or any country in the world, whether it be Cuba or, for that matter, North Korea--our view is constructive engagement, the opening up of markets, and the patient pursuit of those goals, if necessary, that are absolutely essential to the gradual bringing in to the family of nations, in a full way, of countries that do not necessarily share our democratic values.

Thank you very much.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. d'Aquino.

With the late start today, we have boxed in our time a bit. It looks like we're only going to get one round in. In fairness, I wonder if we could ask members to keep it to five minutes for this group. We have another group that was coming in at 4:30, and we're going to delay that a bit. But I'd like each party to have an opportunity to have five minutes. If you want, quickly decide whether you want to split that time. You're only going to get one round with this group of witnesses.

We're going to start with Mr. Bains from the Liberal Party.

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

Thank you very much, Chair, and thank you, gentlemen, for coming before the committee.

As you know, this is a very important issue. We travelled abroad to Colombia, as well, to try to better experience firsthand the complexity of that country. Mr. d'Aquino, I think you alluded to it in your remarks. It's not a matter of black and white. The country is full of extreme contradictions. You've alluded to some of them, but I want to illustrate some of the points we saw.

There is extreme growth, at 7% or 8%, but extreme poverty. You have Uribe at 80%, so he's very popular, but you have a Congress with 30 in jail and 30 being investigated. You have a country that is very democratic, but they're dealing with a lot of internal conflicts. So it's not so rosy. There are extreme challenges that I think need to be addressed. That prompted this study on human rights and the environment, specifically.

You mentioned that free trade shouldn't be examined in isolation. You said that there needs to be a concrete effort made to examine these other issues. How far do you think the free trade agreement should go in addressing human rights issues, labour issues, and environmental issues? That's one set of questions.

Second, you mentioned Colombia being a priority. How would you prioritize Colombia in light of some of the other potential free trade agreements we could pursue or other markets we should pursue in terms of our strategic interests? Where would Colombia be in terms of priority?

If you could answer those questions, it would be greatly appreciated.

[Thomas d'Aquino]

Thank you very much, Mr. Bains.

Let me answer your second question first. On the issue of what should be a higher priority--for instance, whether the European Union or India should have priority over Colombia--if we get into the business of identifying free trade agreements strictly on the basis of the size of a market, then one could simply have a list of one to five and forget everybody else. You know that we don't want to do that.

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

But we do have our own resources...[Inaudible--Editor]

[Thomas d'Aquino]

We do not support the idea of just negotiating bilateral agreements with anyone. The reason we think Colombia is so important is because Colombia is a very important country in the hemisphere, and I'm sure you would agree. It certainly is a very important country in South America. It's a country of significant size, of significant maturity, and of significant depth. It has a lot of things going for it, in addition to having a very troubled history and, as you say, a lot of unresolved problems.

I stressed in my remarks that Colombia would help to build a series of bridges and cornerstones for Canada in a continent where for too long we have not been present. I don't have to remind you that before we did our bilateral agreement with Chile, our presence in South America, indeed our presence, really, south of the southern border of the United States, keeping in mind that our relationship with Mexico is a relatively recent one....

The importance of moving into that hemisphere for us is very important, first because we think we have something to offer. Second, we think there are some very important synergies. If you ask me where it fits in, I would say that in our world, in the world of the western hemisphere, after having done the agreements with Mexico and Chile, we would put Colombia way up there. If you asked me whether that is more important than Brazil, well, Brazil is really not on the table right now, and it's not likely to be for quite some time.

As to the first issue, personally, all my professional life I've believed that the connection between open markets, democratic liberalization, rule of law, and respect for the environment are inextricably linked. That's one of the reasons, in my view, the Soviet Union collapsed. That's one of the reasons China is now joining the family of nations. There are many countries that do not have our, in absolutist terms, democratic values or protections for the values that are important to us--the environment, human rights. But we don't say to those countries that until they have achieved our level of perfection, we don't want to have anything to do with them. Why are we engaged with China? Because we want to bring China fully into the world of the family of nations, even though there are imperfections to deal with that will take time. Colombia is the same.

So in our view, environment, human rights, corporate social responsibility, and building capacity are enormously important. Should they be given the same degree of prominence as the negotiation of what I call the hard black and white elements of the free trade agreement? The answer, simply, is yes. I'm a great believer in that. I don't think we should go to any country and negotiate free trade agreements without taking into account these other things, because these other things are essential.

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

Thank you very much.

Do I have any time left?

[The Chair, Conservative, Lee Richardson]

Yes, you have one minute.

Okay, Mr. Dhaliwal, short and sweet.

[Sukh Dhaliwal, Liberal, Newton—North Delta, BC]

I'll carry on with this question where you said you favour having human rights and corporate responsibility as part of the agreement. Do you think it should be a separate clause or part of the agreement itself?

[Thomas d'Aquino]

Our position is that, going right back to the very first of the free trade agreements that were negotiated, the Canada-U.S. agreement being the precursor to many others—a lot of people don't realize that it was the cornerstone of literally thousands of bilateral agreements that followed—when we began our negotiations with Mexico, we faced many of the same issues.

My view has always been the following. A free trade agreement should stand on its own. Protocols, agreements that deal with the environment, labour rights, and human rights, should stand on their own as well. I've never been of the view that because they stand on their own, they have less value or less importance. So this insistence that we throw it all into the same....

If I were a 110% full-time human rights activist, I would say I would not want free trade agreements to be integrated with my human rights agreement. The reason I wouldn't is that I wouldn't want it to besmirch the purity, the clarity, and the importance of that. You throw it all together and then what do you have?

So I'm all for side agreements that have teeth, that really matter, and that are taken very seriously in the negotiations, but I would not put them all together. When you put them all together—I'm a trade lawyer by profession—there's a tendency on the part of people who are dealing with trade agreements not to think perhaps as much about human rights agreements. I want the top commitment of our country and of the Colombian authorities to human rights to stand on its own, to have a very strong set of foundations so that it will stand on its own, but not as an adjunct to something.

You know, the economists will say that free trade agreements are vastly so much more important, and we just have this little side thing over here called human rights. That's not the way I see the world. So I say, let's have side agreements—I don't even like to call them side agreements, let's call them “complementary” agreements—that have real meaning, real teeth, and that are negotiated in earnest. I think in the case of Colombia, that's extremely important.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Dhaliwal and Mr. d'Aquino.

Monsieur Cardin.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. chair.

I will share my time with my colleague, if time permits because I have a lot to say.

Mr. d'Aquino, you are a representative of the SPP, the Security and Prosperity Partnership of North-America, or you are close to it. Unfortunately, as MPs, we are not. You said that you are very concerned by human rights, workers' rights and the environment, and you are to be congratulated for that.

On April 7th and 8th, I attended a conference in Montréal entitled “Humaniser le commerce” where more than 20 experts from many different fields made presentations. After two days of presentations and debates, all the participants agreed on one thing and that is that no free-trade agreement has ever contributed directly to the advancement of workers' rights or to environmental issues. I understand that you would not want to speak of side agreements because, in relation to a free-trade agreement, that is just what they are, side agreements. They have little in common, if anything, with the basic agreement. Similarly, complementary agreements which are not integrated in free-trade agreements have never been beneficial either to human rights or the environment.

If we really want to make progress-- and that seems to be your wish-- how should we go about it and how can we make sure that such agreements have teeth?

[Thomas d'Aquino]

With your permission, Mr. Cardin, I will answer in the language of Shakespeare rather than the language of Molière to be able to explain myself more clearly.

Of course, we are in disagreement.

What you say is so contestable to me—not detestable, but contestable—because if we look at the whole evolution of the post-war world, what is it that we have seen? If you and I had been meeting in this committee room 15 or 20 years ago, the majority of the countries of the world would have been under dictatorships and under centralized economies. What have we seen in the last 25 years? Most of those dictatorships have been swept away. Why? Because concomitant with it, we've seen an opening up of the economies.

What is the European Union other than a massive internal free trade agreement? Are we suggesting to ourselves that the workers of France, Britain, Germany, the Netherlands, Belgium, Italy, and the 27 countries of the European Union somehow have seen no connection between the opening up of the European Union and the protection of workers' rights? Go and say that to any leader in any western European country, and they will say,

“I wonder what world you live in, Mr. Cardin.”

Secondly, look at the case of Mexico. Mexico is a country that still has a lot of problems. If you were to compare the Mexico of today, in which you have a much more vibrant free press, in which you had a Mexican president who defeated the dominant central party that had been in power for 72 years in the last election when he won by a razor-thin majority, what is it that you have in Mexico today? You have a much more vibrant democracy, much more openness and, with that, greater accountability, greater transparency, and all the things that go with openness.

In reality, what is the WTO but a gigantic free trade agreement? The reality is that the post-war world negates totally the assumption of many people that somehow free trade is incompatible with human rights.

The last thing I would say is that I would argue to the contrary, Monsieur Cardin, that the reason we are seeing democratic reforms in China today is not that the Chinese leaders have decided out of their benevolence to start bringing out reforms. They've been brought about because a market is alive and well with people, the Internet, communications, technology, fax, and all these things. This is what opening up really means--

[Serge Cardin, Bloc, Sherbrooke, QC]

I am sorry to cut you off but, since you do not really want to answer my question, I will let my colleague ask his own questions.

[Guy André, Bloc, Berthier—Maskinongé, QC]

During our trip to Colombia, we were told that trade-unionists' murders had increased in the past few years and that, out of 61 members of Congress, 31 were in jail and 30 others were being investigated in connection with activities of the paramilitaries. As far as I'm concerned, this is a clear sign of a political crisis. Furthermore, we have heard of US companies-- not Canadian so far--being associated with o paramilitary groups and having contributed to the displacement of 3 to 4 million people. This was discussed during the previous meetings of the Committee.

I would like to hear your comments about this as well as about corporate social responsibility. How do you think corporate social responsibility will apply in the context of an agreement with Colombia? Do you believe that this principle should be included in the free-trade agreement or in a chapter of the agreement?

[Thomas d'Aquino]

I will try to answer your question, Mr. André.

First of all, let me speak to the very tragic issue of killings. I'm very familiar, and have been for a long time, with unacceptably high rates of murder, not just in Colombia but in many parts of the hemisphere. It's going on in Mexico today. It's going on in many countries, and this is terrible.

The only thing I would point out is this. The Economist magazine points out that the murder rate among Colombian trade unionists declined to five per 100,000 in 2007. And that's one-seventh of the rate of the murder of Colombians generally.

Now, I make no distinction between the loss of life of a trade union leader and of any other Colombian. The loss of one life is a great tragedy. But I'm only pointing out that the homicides of trade unionists have fallen about 80% from a high of more than 200 in 2001 to 33 last year. That's 33 too many, but let's be very clear: unless you and I are working from a totally different database...and I'm not quoting Le Conseil canadien des chefs d'entreprise here. I'm quoting the International Labour Organization and The Economist. Those are the numbers. Any loss of life is a tragedy.

The second thing I would say is that of course enterprises have a responsibility to carry their values and social responsibility to wherever they invest. I would say that the record of Canadian companies, and by and large the record of American companies, British companies, French companies, German companies, Australian companies, New Zealand companies--we can go through the list of those companies that are operating in the emerging world--show that these companies bring values that represent those countries, bring a higher commitment to social responsibility, and have been the driving forces for bringing the issue of accountability, in terms of good governance, to many parts of the world.

You may say to me, “Did you know that mining company X was throwing cyanide from its gold operations into the local stream?” You will always find the odd rogue company doing that. But I would ask you to cite for me one example of a Canadian company that has acted in either a criminal or an irresponsible fashion in Colombia. I don't know of one. If there is one, I'd like to know who it is.

[The Chair, Conservative, Lee Richardson]

Thank you.

Sorry, we're running out of time there.

We're going to have to move on to Mr. Julian.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Thank you, Mr. Chair. Thanks to the witnesses. I have three questions and one comment.

To Mr. Potts and Mr. Simpson, I'd like to know how much you've received in support for trade product promotion around the world over the past year. This is one of the ongoing problems we have in Canada. We invest absolutely nothing in trade product promotion, while other countries invest considerably more.

My other comment and questions are for Mr. d'Aquino. There is a lot in some of the comments you made that I think is contestable. I'd certainly love to challenge you to public debate on a lot of these issues--for example, Pinochet's Chile being a free-market reform state where there were appalling abuses of human rights; the rural meltdown in Mexico that has taken place and has accelerated this year because of many of the provisions of NAFTA; and what's happened in Canada. The Canadian Council of Chief Executives is extremely proud of the economic development over the past 25 years, and the figures contradict what you say. Since 1989, real income has actually declined for two-thirds of Canadian families, and we now have the same kind of income inequality that we had in the 1930s, where 50% of all income goes to the wealthiest Canadians. Those are the facts. That's what Statistics Canada tells us about what has happened since 1989.

So I simply find that your arguments around economic development don't hold water. Essentially what we have now are jobless exports. We're shipping raw logs across the border. We're shipping oil and gas. We're not creating jobs with it. That's why real incomes are falling. That's why, instead of good manufacturing jobs, we're looking at minimum-wage service industry jobs.

Those are my comments. My questions, coming back to Canada-Colombia, are around some of the things we heard in Colombia. We heard testimony about allegations of collusion between paramilitaries--thousands of them are still on the ground--and major companies like Nestlé and Coca-Cola and Chiquita. The Colombian government is refusing to investigate those allegations, which are very serious and have resulted in the potential death of labour unions.

Do you think that companies are above the law or do you feel, like the NDP does, that when a corporate executive breaks a law it should be thoroughly investigated, and, if the allegations are true, they should be prosecuted to the full extent of the law?

My other question is around the labour side agreement. You mentioned high-quality labour accords, when we know from our briefing that what's actually in the agreement is essentially a fine, that if the Colombian government continues to abuse human rights, if there continue to be deaths of labour activists and ties between the paramilitaries and the government--the many allegations there--then essentially the Colombian government would have to pay a fine into a solidarity fund.

Do you feel that's an appropriate high-quality labour accord, and if so, what price would you put on the continuing slaughter of labour activists and human rights activists in Colombia?

[The Chair, Conservative, Lee Richardson]

Just before you begin, we have two minutes for the answer, first from our other witnesses, and then maybe take a minute each, just to be fair.