International Trade Committee on May 28th, 2008

[Prof. Penelope Simons]

It could be in a side agreement, but I would prefer to see it in the basic agreement. If they have all these rights--for example, the right to national treatment, and if that is breached, the right to take the state to binding arbitration--they should also have obligations. So perhaps they shouldn't have that right if they have been complicit in egregious violations of human rights. Why should they get this type of protection if they are committing human rights abuses, for example?

It depends on how the side agreement is linked with the actual free trade agreement, as well. Will there be some sort of sanction that has to do with trade or investment provisions that's linked to the side agreement, or is it just totally separate, with the weak compliance mechanisms that those side agreements have had traditionally?

[Joyce Murray, Liberal, Vancouver Quadra, BC]

Okay; so it's how it's done.

Mr. Hodgson, you're essentially saying that your organization prefers pure trade-related agreements, and you're not in favour of the side agreements. It sounds like there's a bit of ambivalence as to whether this is a priority, given that it's 0.15% of Canada's exports.

Is any of your lack of passion for the free trade agreement with Colombia associated with the human rights violations in Colombia?

[Glen Hodgson]

I heard all the discussion earlier about the fact that murder rates have dropped. Clearly the rule of law is being applied much more rigorously. But Colombia is a very complicated and messy place, where there have been private militias and drug lords. There are border disputes with neighbouring countries right now. So if I were setting a national trade priority for Canada, Colombia wouldn't be at the top of my list.

[Joyce Murray, Liberal, Vancouver Quadra, BC]

So it's as much about that as about it being small potatoes from a trade perspective.

[Glen Hodgson]

It is certainly that as well. I went searching through some of the information from Foreign Affairs on our bilateral treaty with the United States, and it struck me that these tiny U.S. states are much more important to Canadian companies. We actually do twice as much trade with Rhode Island as we do with Colombia right now.

So as a matter of setting national trade priorities, deepening our relationship with the United States is job one for me beyond anything else. Then as you go down the priority list--

[Joyce Murray, Liberal, Vancouver Quadra, BC]

As a last clarification, having tools like strong side agreements that address human rights and environmental issues to address Colombia's complex and difficult situation is not a solution, in the mind of your group.

[Glen Hodgson]

It's theoretically doable in practice, and I'd be interested in hearing from Professor Simons where it's been done. It's nice in theory but hard to do in practice.

[The Chair, Conservative, Lee Richardson]

We have to move on, sorry.

Mr. Cardin.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. chair. Welcome, ladies and gentlemen.

We have been talking about Columbia and human rights, workers' rights and the environment for some time already. I believe that, in the context of our free-trade agreements, we should be able to differentiate between people who want to export and people who want to invest. Exporters want to sell their goods, that's all. We all wish there were no trade barriers at all. As far as investments are concerned, some are already being made. There is no free-trade agreement but there are people working in Colombia, people operating companies and mines there. My colleague gave an example a few minutes ago. A free-trade agreement should cover all of these matters.

We know that the objective of 200 countries that trade on a global basis is to get rid of all trade barriers. Of course, that is a bit of wishful thinking because there are differences-- which are not necessarily inequalities--between societies and countries. We know that companies investing abroad try to take advantage of situations that are different from ours. If there are weaknesses relating to human rights, workers' rights and the environment in some countries, they will obviously move to those countries and try to make as much profit as possible, as long as the international community will not decide to set up some rules and to make sure that they're enforced. That would obviously be fairer to everybody.

I have the feeling, Ms. Simons and you, Mr. Hodgson, that you share my opinion that we are on the cusp of a new era in the field of free-trade agreements in the sense that we are on the verge of including components such as those, of being proactive to make sure that nobody is exploited and that we do not give our blessing to corporations which take advantage of others by associating with drug traffickers and paramilitary groups or which trade with money launderers. This is a world problem and I believe that, if we do not take the initiative, if we do not innovate with our trade legislation and our free-trade agreements by including those factors, we will never make any progress. We are in a race for profits where corporations try to take advantage of other countries.

I seem to understand that your position is that there should be strong chapters on these issues in those agreements. This is just a comment I wanted to make.

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

I have a brief question on Columbia and the issues of human rights, workers' rights and the environment. I found it very interesting that there is already no tariff on 80% of our exports. We should be trying to help this kind of country, either through international aid or through other steps.

As far as you're concerned, would it be preferable to use political pressure before signing an agreement with Colombia? Do you believe it would be possible to include in an agreement specific provisions relating to human rights and to corporate social responsibility?

[The Chair, Conservative, Lee Richardson]

I'm sorry, sir, but you have one minute to answer those questions.

[Glen Hodgson]

Okay.

Well, this is the ultimate issue in terms of the linkage between human rights and trade: what do you do first? I think the evidence in a lot of other countries is that engagement is what really matters with countries that have a bad track record when it comes to human rights and that are not fully democratic. That's why I mentioned the Chinese case. I think it's in Canada's interest, for example, in China to engage as a means to try to influence Chinese adaptation of the rule of law and more democratic practices going forward.

I can see why there's a tendency to resist that in the case of Colombia, because so much of the evidence is shocking and the abuses have been so profound. But ultimately we have to find the channels that exist and serve our interests as a way to engage.

So I would tend to put the engagement around trade first, and then use that as a means to try to influence other behaviours going forward. But I can understand why there's another perspective.

[The Chair, Conservative, Lee Richardson]

Thank you.

Mr. Julian.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

I have a point of order, Mr. Chair--

[The Chair, Conservative, Lee Richardson]

No, Larry, we have five minutes here and five minutes there.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

My point of order is that he's here as 8% of the members of the committee and he's getting 25% of the questions today.

[The Chair, Conservative, Lee Richardson]

I'm sorry, but that's just the way it turned out today.

Mr. Julian, go ahead.

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

Thank you very much, Mr. Chair. I assume Mr. Miller was talking about the quality as well as the quantity of the questions.

Ms. Simons, you had a very effective rebuttal to Mr. d'Aquino in talking about the fact that there is no real link between investment protection and democracy and building for human rights. Even as we approach the potential for signing an agreement, we have seen a number of summary executions by the Colombia military climb and the number of deaths of trade unionists rise as well, so there is reason for us to be legitimately worried as we go into discussions around a country where the human rights situation is actually getting worse in 2008 than it was in 2007.

I have a couple of questions regarding some of the dynamics that we heard about in Colombia. The first was this link between companies and paramilitaries. They were very clear allegations. I mentioned the companies earlier--Nestlé, Coca-Cola, Chiquita--where there are very clear allegations of abuse, companies being tied into using paramilitaries, and the end result is the deaths of trade unionists.

I'm wondering whether you think an agreement like this is an effective way of bringing those corporate executives who may have been colluding with paramilitaries to justice, or whether you think it is exactly the opposite reward, in a sense, for criminal behaviour if we move ahead with an agreement.

Secondly, I wanted to ask you about this so-called fine for the killing of labour activists, human rights activists. Essentially there would be a solidarity fund and there would be some money—no one knows how much—deposited in that solidarity fund if there are ongoing abuses. Are you aware of any agreement where you can get off with murder by simply paying a fine? Do you think that's an effective way at all of stopping horrific human rights abuses?

[Prof. Penelope Simons]

To answer the second question first, no, I don't think it's an effective way of dealing with human rights issues that there be some sort of fine. I find it rather appalling.

In terms of the free trade agreement, as to whether that will benefit or somehow reward corporations if they were to become involved in human rights abuses, I think it depends on what type of agreement you negotiate. If it's the typical agreement with the typical investment provisions that have no obligations on corporations, then yes, it will reward them. If you actually include very stringent but minimum obligations on corporations not to become complicit in egregious violations of human rights and to screen their security forces and this sort of thing, then it may not.

I'm not advocating for or against the free trade agreement; I'm just saying it depends on what type of agreement you have.

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

The briefing we had indicated that this was a NAFTA template agreement, so including the chapter 11 provisions, the investor-state clauses. In that context, knowing that--

[Prof. Penelope Simons]

In that context, then all it does is provide corporations with more protections. It does nothing for human rights. So it will not do anything that....

There are a number of ways Canada could address this. They could start by implementing the consensus agreement, the consensus recommendations from the national round tables that just happened, as a beginning. They could actually extra-territorially regulate corporations acting abroad when they're operating in conflict zones. I don't think a company could argue against the types of provisions that I suggested because no corporation is out loud going to say, “We should be allowed to be complicit in violations of human rights that constitute international crimes.” I don't think a corporation would argue that, for profit, we should be allowed to do that. Most corporations say they are doing all of this already. The corporations that have these corporate social responsibility programs say, “We are screening their security forces. We support human rights.”

I don't see there is a business argument against actually bringing in binding legal obligations.

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

I have one minute left, so I'll go to Mr. Hodgson.

I appreciate your testimony because you raised the question of whether or not signing this agreement would be tacit support for human rights violations. You work with studies and reports.

I want to raise two issues that came up when we were in Colombia. First off, the Colombia government changed the definition of “unemployment” so that essentially anyone working eight days a year was considered employed. In that way they lowered the unemployment rate.

I am wondering if you think that is a credible way of dealing with economic matters. You simply change the definition.

Second, we heard testimony from the president himself that essentially there were no paramilitaries in Colombia because they changed the definition: a “paramilitary” was now a “criminal”. So according to CINEP, the fact that there are thousands of paramilitaries still in place in Colombia was eliminated by the stroke of a pen, by simply changing that definition from paramilitaries to criminals.

Do you think that's a credible way of dealing with these kinds of issues, and would you sign your name to a report where you simply changed the definitions of things in an effort to make things look better?

[Glen Hodgson]

Unfortunately, right now in Latin America there's a habit of changing definitions if you don't like the outcome. In fact, the Argentine government has done exactly the same thing around inflation. Measured inflation is announced at 8%; it's probably more like 25%.

So the answers are no and no; of course you don't fiddle with definitions in order to get the outcomes you want. A worthy interlocutory for Canada would try to adopt the same kind of high standards that we have.

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

Thank you.

Do I have any time left?

[The Chair, Conservative, Lee Richardson]

Well, you're just a minute over, but that's pretty good for you.

Mr. Cannan.