International Trade Committee on Oct. 22nd, 2009

[Carol Nelder-Corvari]

I think I appeared before this committee in the very early stages of the free trade negotiation with Colombia. I spoke about some academic research that has been done, and I think I tabled it. It was out of Columbia University in the United States, by Professor Sala-i-Martin.

What he says, and he makes a very cogent argument in his work that has been tabled before this committee, is that some of the strongest benefits of these agreements relate to institutional capacity-building in countries, especially agreements between developed and developing countries.

What we're trying to do—and you've heard Alexandra speak about all our levels of engagement—is to make improvements across the board here. This is first and foremost a commercial agreement, but we're very positive that it does reinforce the rule of law in Colombia.

Colombia has been very transparent with the Government of Canada and with all international organizations in other countries. The UN Commission on Human Rights has an office right in Bogota. This is a country that's struggling to make these improvements. You heard President Uribe. He will tell you his challenges are significant.

The point is that they're reaching out to the rest of the world through international organizations, through these free trade agreements, to help build stronger institutions, a stronger democracy, and relationships with countries like Canada, where they feel this will be beneficial to their overall stability and security.

[Alexandra Bugailiskis]

I would just add a few words to what my colleague has said.

It's not only what the Colombians are doing but the fact that they're opening to Canada to provide assistance. I mentioned earlier the moneys that the CIDA program is devoting. A lot of this is going into judicial reform, exactly into the areas you've been speaking about, helping marginalized communities, women, and indigenous groups to be able to have access to the judiciary, actually providing them with legal assistance, and of course it also being involved in the actual judicial reform. So we're strengthening the laws and we're strengthening access. It takes time, obviously, but again I think the trend line is very positive in being able to make sure that they have access to those avenues.

[The Chair, Conservative, Lee Richardson]

Thank you.

Mr. Allen.

[Malcolm Allen, NDP, Welland, ON]

Thank you, Mr. Chair, and thank you all for coming and for the information.

I would like to start with the labour side of things. In a previous life, I sat around a negotiating table and hammered out collective agreements. So I have intimate knowledge about the difference between including letters in the agreement and having them outside the agreement. They can be seen as either part of the whole or separate, and this can pose problems over time, regardless of what you put in as a dispute resolution or a penalty. You can end up arguing about these pieces. You end up trying to figure out what something is, and you get into the argument of whether it's separate or part of something larger.

Nearly every major international labour organization, whether in this country, in Colombia, or elsewhere, has suggested that these sorts of agreements, specifically the labour piece, should be included in the body of the text. Environmentalists would probably say something similar. The suggestion was that the United States had the bigger stick, in the sense that they could use punitive damages against Colombia and force things to happen. Why didn't we do the same?

[Pierre Bouchard]

Canada's approach for the last 15 years has been to have side agreements on labour and environment, together with the free trade agreements. These are linked to the trade agreement, but they're also independent, enforceable international agreements. The dispute resolution mechanism is detailed in the legislation for Colombia. You will see provisions that will ensure that the appropriate mechanisms are created to ensure payment or the receipt of payments from Colombia to put in a fund.

The nature of these agreements make them enforceable. Whether it is inside or outside the agreement is, for us, a matter of format. The implementation of these agreements is the responsibility of ministers of labour. We have found over the years that ministers of labour, being responsible for international agreements, are committed to enforcing them. We hear criticism about this, but in the past few years we've also heard several voices that agree with us. They said it's a matter of format. What is really important is the nature of your clauses. There are some worthwhile labour agreements that other countries have signed, but their dispute resolution mechanism is nowhere near as effective as the one you will find in this side agreement. When you look at this legally, these agreements are just as enforceable as any labour chapter in the main document.

[Malcolm Allen, NDP, Welland, ON]

Far be it from me to suggest that I'm an expert on international trade agreements. But I know labour, and it's not about formatting. The reason we don't have letters outside the agreement is that external documents carry less weight. If you talk to the ILO, the CLC, and the major labour unions, they'll tell you the same thing. That's why they've been lobbying to get it placed inside the agreement. That's the reality they live in, and I think that's the difference.

It may be true that we've been doing this for the past 15 years, but perhaps we ought not to be. Perhaps we ought to be thinking more about getting these considerations in the agreement. But we'll leave this for now.

We still have a lack of capacity when it comes to inspectors of labour standards and health and safety in the country. Yet we want to rush to sign the agreement. I understand what Ms. Nelder-Corvari said about capacity-building and the study out of Columbia University that emphasizes the role of agreements in building capacity. That's one report. There are others on the other side that suggest the opposite. It becomes a bit of a faith-based thing.

That's why a lot of us are still concerned that this matter will stall the development of human rights, labour standards, and environment standards. When it comes to capacity-building for labour standards, inspections, and health and safety, which, by Colombia's own account, are now lacking, why wouldn't we specify the capacity they need to demonstrate in these areas? Then we could check the boxes off: now we've done this, now we've done that, now we've done the other. What I'm hearing from all of you is that the administration in Colombia wants to do this. Let's see them do it. It's all well and good to say they're on their way. Let's see it completed. Has this approach been suggested to Colombia? Have we suggested a system under which we would establish a standard, have it verified in the field, and study the results?

[Carol Nelder-Corvari]

I understand what you're saying, and I guess there are two issues, by way of response. Through this free trade agreement, the Government of Colombia is trying to give Colombian workers new opportunities through the production of goods and new export opportunities, and to provide alternatives to the narcotics trade. You've heard the ambassador speak about this. You've heard the President speak about this. I think Vice-President Santos was here as well speaking about this. This is very important.

On the one hand, we're trying very hard through this agreement, and the Government of Colombia is trying very hard to give its workers new opportunities. To ensure those opportunities result in progress on labour rights, we have a labour side agreement. I guess we could argue about the effectiveness of penalties or not. My personal view is that you make this thing work through real efforts, and those are the things that Pierre is talking about here. The programs we have are in place. What we're trying to do on the ground in Colombia is what's important. This engagement is coming out of a mutual agreement between Canada and Colombia in the context of this free trade agreement. That's very valuable in terms of providing workers in Colombia with opportunities and with improving the application of the labour laws there, consistent with ILO standards.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Allen.

We're going to go to Mr. Holder. Can you wrap this up?

[Ed Holder, Conservative, London West, ON]

I'm sharing my first question with Mr. Miller. It will be a brief one, and then I'll carry on, sir.

[The Chair, Conservative, Lee Richardson]

Yes, they're both going to have to be pretty brief. You can see the clock.

Go ahead.

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

It will be brief.

To our witnesses, thank you very much.

Ms. Nelder-Corvari, in your briefing here to us there's something I need a clarification on. In the top paragraph on the second-last page, you state in there about Ministers Day's and Ritz's announcement and Colombia's announcement to allow all Canadian beef from animals of all ages. Then it goes on to say that Colombia has announced that they will approve Canadian cattle born on or after August 1, 2007.

Now, I'm wondering whether this is referring directly to live cattle. I'm sure there's an explanation in there, but it almost contradicts itself in the way it's worded.

[Carol Nelder-Corvari]

Yes, sorry, it wasn't clear. I think I stumbled over that passage when I read that. The first reference is an announcement that all Canadian beef from animals of all ages will be allowed, and then it was that cattle born after August 2007 would be allowed. Yes, it's live cattle, sorry.

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

Okay, that's good. I wondered if I was out, but I just wanted to clarify that. It's very important. Thank you.

[Carol Nelder-Corvari]

Yes, and this is very important. Both Minister Ritz and Minister Day worked very hard with the Colombians on this, along with our food inspection experts and with the Colombian food inspection experts and veterinarians. It was a complicated process because they had to go through an Andean-level committee on this. The Colombians had made a commitment to work hard, in parallel with our efforts of the FTA, and they delivered on their word here.

[Ed Holder, Conservative, London West, ON]

Thank you for that.

Further to that, and in thanking our guests, I'd like to congratulate our officials on their strong negotiations to have our beef and cattle exports resume with Colombia. That's so huge for our farmers. That's so, so significant. Well done.

I'm compelled by your comment that Colombia imposed tariffs on some Canadian pork products as high as 108%--by the way, not 8% but 108%. That's why if there's ever a reason that this FTA must go through, it's even for that reason alone--but that's not enough.

In my experience, which is short-lived on this committee, I find that agriculture tends to be probably the most challenging issue at free trade agreements. Here, everything that I have read--and I read the Canada-Colombia free trade agreement--is exceptionally beneficial to Canada's agriculture sector. I can't understand, frankly, why any member of this House who has any regard for the agriculture industry would not support your efforts.

I'm not sure what we would say to our farmers in this country. Would we desert our farmers just because dealing with Colombia represents only $700 million in Canadian exports, which is less than 1%? If there's any argument for a free trade agreement, I sincerely believe it's because when we look at even NAFTA, 85% of our trade goes with them, but it's because we have a deal. There are some geographic benefits as well, but if we want to have an opportunity to increase our exports to other countries, it's as a result of having a trade deal such as the one you're negotiating.

I'm just trying to get my head around that. Is there something I'm missing here, that somehow if we don't have a free trade agreement we're going to do fewer exports?

Could you imagine--and perhaps this is to you, briefly, Ms. Nelder-Corvari--that this would do nothing but improve our numbers, our exports to Colombia?

[Carol Nelder-Corvari]

Absolutely. The agricultural community is very supportive of this deal--pork producers, beef producers, and grain producers.

What I heard in Bogota, from actual Colombian importers, was that if the U.S. deal were in place before the Canadian deal, we would lose those markets, particularly the wheat and grain markets. The distributors were willing to pay a premium price for Canadian wheat, given its quality. But with the increased transportation costs they pay for Canadian wheat imports added to the tariff disadvantage, which is in the range of 15%, they would stop buying Canadian wheat. That's $100 million in exports annually in the grain area.

So yes, if we don't pass this agreement, we stand to lose important markets. It's absolutely necessary that we open up new markets for Canadian exporters. This committee has told us to pursue defensive trade agreements in a timely manner. Colombia is exactly that. Colombia is engaged in free trade negotiations with many large economies, and we stand to lose not only the $700 million in exports a year across the board but also significant growth, which we've been experiencing. This is a growing market. Colombia has been growing at an average of 5% to 7% over the last few years. It's a middle-sized, emerging economy in which Canada has a foothold, and we should build on that.

[Ed Holder, Conservative, London West, ON]

If you could do this, what would you tell our farmers and our producers?

[The Chair, Conservative, Lee Richardson]

We have gone over time. We've kept you a little longer than expected.

I want to say how much I appreciated the presentations today and the responses to questions. It is quite clear that you were very well prepared for this meeting, as you have been throughout. I was particularly impressed with the presentations today and with the answers. I also noticed Mr. Kronby and Mr. Lavoie itching to get into the debate as well, and we may have time for that at another time.

Mr. Bouchard, thank you for that very clear explanation of the labour side. It was very helpful. I thank you so much.

I'm not sure how we're going to convince some of our colleagues, or that we have to have this particular treaty solve all the problems of the world and provide a cure for cancer as well, but....

I want to thank you very much for joining us today.

With that, we are adjourned.