International Trade Committee on April 29th, 2010

[The Chair, Conservative, Lee Richardson]

Mr. Dade.

[Carlo Dade, Executive Director, Canadian Foundation for the Americas (FOCAL)]

Thank you, Mr. Chair. First of all, I would like to thank the committee and yourself for inviting me to share some ideas on the free trade agreement between Canada and Colombia.

I've been before the committee two or three times before, so I will actually keep my remarks at or under five minutes to allow more time for the questioning. I will keep my remarks, too, focused on the bill before the committee, Bill C-2, which focuses on a free trade agreement between Canada and Colombia. Should there, however, be questions or interest about proposed amendments or other ideas that the committee is considering, I'd be happy to discuss those, either in the actual or the hypothetical.

In terms of the free trade agreement with Colombia, as I've stated before, context is important--for Canada, Canadian competitiveness, jobs, and the situation of the domestic economy. We've seen since the breakdown of the Doha Round and the Free Trade Agreement of the Americas negotiations an aggressive move by countries throughout this hemisphere to sign bilateral agreements. In that regard, Canada has lagged behind, unfortunately.

We currently have, in effect, five agreements that cover seven countries. Just within North America, the United States has 11 agreements--and is aggressively negotiating many more--that impact 16 countries. Mexico has 12 agreements and is negotiating more—we've heard recently that they're talking with Brazil—and their agreements cover 46 countries.

So even within North America, Canada is falling behind in terms of international trade competitiveness, yet the trade agenda continues. It's not as if the problems that the U.S. has had with the Colombia free trade agreement have prevented it from moving to other agreements, such as the trade preferences for the Pacific, or the TPP agreement, where the United States is looking at a new trade regime between countries that line the Pacific—Colombia, Chile, Costa Rica, etc.—with countries of the Asian Pacific Rim.

So the trade agenda continues, and it continues aggressively. It's extremely important that Canada participate.

Our choice in participating is factored on two bisecting trends and two bisecting interests. One, in places where we have existing trade, we're facing competition...and also the intersection of countries that have an interest and a willingness to quickly negotiate. We've seen this in the case of Panama, where negotiations took three or four rounds, and in the case of Peru, which also moved to aggressively and quickly negotiate with us. We see that, too, in the case of Colombia.

So the reasons for us to be in Colombia are twofold: there are opportunities and it's important for Canadian competitiveness, and the Colombians have shown a willingness to negotiate.

In terms of the importance for Canada, you can look at it sector by sector, province by province. In agricultural products, Alberta has $60 million worth of exports to Colombia; Saskatchewan close to double this, at $117 million, and these are only wheat, barley, and pulses. Quebec is sending $40 million a year of machine parts, including flight simulators and autos; and Ontario, $67 million in similar products. Even in paper and cartons, Nova Scotia, with $23 million, has an important market for that province's paper and carton industry, the wood industry, which has been suffering lately.

Finally, let me note that there is obviously a strong business case for the agreement. Investment will benefit; trade will benefit. It's important for Colombians. You've had Colombian unions here. The flower exporters, I believe, were before the committee explaining the importance of the agreement.

It's important, therefore, that if one is looking to restrict trade with Colombia or to prevent this agreement, given the importance of jobs in Canada, given the importance of exports in provinces across this country, one would need a very good reason. Obviously the human rights situation in Colombia is of great concern, but for it to have an impact on trade with Canada, you would really have to make a strong and compelling case, or even any case, that the products we sell, the commerce in which we engage, has an impact on human rights in Colombia negatively or even positively. Despite the fine work that CIC has done, and others, we really haven't seen this link.

Let me just quote briefly Federico Guzmán. I suppose you know Federico Guzmán, a lawyer in Colombia. Federico was in Canada in February, speaking about an Amnesty International human rights report. He was on The Current. The broadcast is available online—another fine job by Anna Maria Tremonti.

On February 27, the first part of the broadcast, five minutes in—if anyone would like to go and check the tape—he was asked specifically by Anna Maria about the impact of trade between Canada and Colombia on human rights.

His response was interesting. He said there's no real impact between trade; the impact comes from large mega-projects in Colombia--and impacts on displacement and other issues that we've heard.

Anna Maria followed up and asked him if there were indications or any evidence of specific violations or involvement by specific Canadian companies. Mr. Guzmán replied that, no, as of yet there were not, but should there be any violations, well, then, the Government of Canada really needed mechanisms in place to deal with these, should they occur.

Again, if we're looking at an important potential trade market, if we're looking at jobs back home, we really have to look at preventing the hypothetical--with perhaps some regime to identify problems should they arise, but, as yet, we have not found evidence. And this is from someone speaking on the Amnesty International report in Canada.

Finally, the exchange at the beginning of the committee was really interesting--the idea of having witnesses come in, and the difficulty and the shortness of time, and hearing from Canadians who are concerned about this.

Based on that exchange at the beginning, I have an idea for the committee. While it's very convenient for us, even in short periods of time.... I had about 24 hours to respond, too. There's a report waiting on my desk that CIDA, or someone else, will kill me for not getting to them. Be that as it may, it's great to have the opportunity to walk down the street and come here.

Given the interest of Canadians across the country, perhaps it would be more interesting for the committee to go to places such as Kindersley, Saskatchewan, or Brooklyn, Nova Scotia, or Pointe-Claire, Quebec, to talk to people on factory floors, people who are trading with Colombia, people whose jobs and future employment are perhaps tied to this agreement, and ask them about the impact of their products--the beans they sell, the wheat they sell--on human rights in Colombia, and have an explanation at these plants, on these farms, and elsewhere about the work that the committee is doing.

Thank you.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Dade.

Now we have our last witness of the day, the vice-president of Global Business Policy with the Canadian Manufacturers and Exporters, to talk about trade matters.

Mr. Jean-Michel Laurin.

[Jean-Michel Laurin, Vice-President, Global Business Policy, Canadian Manufacturers and Exporters]

Thank you, Mr. Chair.

Good afternoon, everyone.

Good afternoon. Thank you for inviting me to appear before the committee today on behalf of the Canadian Manufacturers and Exporters to discuss Bill C-2, the Canada-Colombia free trade agreement bill.

I believe this is the third time, and I have to admit I also hope it's the last time, that I'm appearing before the committee on this issue. Our position on this important trade agreement hasn't changed, but I'll try to be as original as possible in my opening remarks.

Before I start, I'd like to say a few words about the association and the members I have the privilege to represent. Canadian Manufacturers and Exporters is Canada's leading trade and industry association and the voice of manufacturing and global business in Canada. We represent businesses in all sectors of manufacturing and exporting activity across the country. Our mandate is to promote the competitiveness of Canadian manufacturers and the success of Canada's goods and services exporters in markets around the world. Small- and medium-sized manufacturers constitute the bulk of our membership.

Our work is focused on the issues that are most critical to our members, such as manufacturing competitiveness, U.S. business opportunities, international markets, people and skills, energy, and the environment. We're particularly interested in Bill C-2 because manufacturing is an export-intensive business, as my colleague just explained. Overall, manufacturing accounts for two-thirds of Canada's exports. In fact, the majority of Canada's industrial production is exported, so access to export markets is a priority for our organization.

As you know, the recession has hit manufacturers and exporters more harshly than any other sector of the Canadian economy. For our members, the recession was mostly felt between August 2008 and August 2009. During that 12-month period, our export sales fell by 32%, our manufacturing sales fell by 20%, and manufacturing production overall declined by 17%. Overall, more than 180,000 jobs were lost in Canada's manufacturing sector last year alone. Since 2005, manufacturing employment has fallen by 420,000, or approximately 20% of the manufacturing workforce in Canada.

As we head into recovery, we are realizing that there are significant structural changes that are reshaping market conditions here in Canada, but also in global markets. As a result, new strategies are required on the part of business leaders and public policy-makers alike to ensure business success and to enhance productivity and economic growth. We all need to focus on what it takes for businesses to maximize the value of global supply chains, improve manufacturing competitiveness, encourage investment and innovation, and take advantage of new opportunities in domestic and international markets.

One of the most significant changes we are witnessing right now is a shift in market power and economic growth potential away from the developed markets of North America, Europe, and Japan and towards the emerging markets of China, India, Southeast Asia, and Latin America. In fact, for all countries, but especially for those with an open economy, such as Canada, economic recovery depends on developing new business opportunities in emerging markets. In turn, that rides on the ability of businesses to effectively sell their goods and services in these growing markets. We therefore need to continue to negotiate meaningful market access, investment protection, and tax agreements with other countries, such as Colombia, and this is why our association supports Bill C-2.

Trade between Canada and Colombia is actually complementary. Two-thirds of our exports to Colombia are manufactured goods, such as trucks, auto parts, fabricated metal products, turbo propellers, newsprint, and other paper and cardboard products. On the other hand, most of our imports from Colombia are energy products, such as oil and coal, or food products, such as coffee, bananas, and flowers.

However, Canada's exports to Colombia continue to face somewhat high tariffs that hinder competitiveness in that market. For example, Canadian exporters face tariffs averaging 12% on industrial goods and 17% on agricultural products when selling to Colombia. While Colombia enjoys almost completely open and duty-free access to Canada, with approximately 85% of their products entering our market duty-free, our ability to export to their market remains limited.

In fact, in many cases tariff rates are a real barrier to entering that market. Passage of the Canada-Colombia free trade agreement would get rid of those tariff barriers and provide Canadian manufacturers and exporters with preferential treatment over competitors around the world.

Moreover, on top of immediately eliminating nearly all of Colombia's tariffs on manufactured goods, the free trade agreement would help reduce non-tariff barriers and strengthen investment rules. Despite those trade barriers currently in place, Canadian businesses exported $600 million worth of goods to Colombia last year. From 2005 to 2008—so, right up to the beginning of the recession—Canada's exports to Colombia jumped by more than 58% over the four-year period.

The Canada-Colombia free trade agreement has the potential to have a significant positive effect on Canada's exports to Colombia, for mainly two reasons. First, as I mentioned, exports of Canadian products would grow as a result of the reduction and elimination of tariff and non-tariff barriers; second, the free trade agreement would help preserve existing Canadian exports that would otherwise be lost if Colombia maintained its expansion of free trade agreements with other nations or groups of countries that compete with Canada in manufactured goods, such as the United States and the European Union.

Colombia offers excellent opportunities for Canadian exporters. Colombia and other trading partners recognize this, and Colombia has embarked on a very aggressive bilateral trade agenda involving the United States, as I mentioned, the European Union, the European Free Trade Association, and some of their other trading partners. These countries, especially the United States and those in the European Union, are some of our main competitors.

Implementing this agreement quickly would help us secure a position in this market and give us a competitive advantage over other countries, because we would be an early mover.

On the other hand, or on the defensive side, implementing the Canada-Colombia agreement is unlikely to result in significant new increases in Canada's imports from Colombia beyond those that can be expected to occur anyway, so it doesn't really put our industries at risk. In the case of many trade negotiations, there are obviously concerns about increased competition for Canadian industry, but in this case, because our trade is very complementary, those defensive concerns are not necessarily present.

We expect that Canadian imports from Colombia will continue to increase, but the principal drivers of that increase will be the expansion of Colombia's oil production and the continuation of the duty-free treatment that most Colombian exports already enjoy in Canada.

In conclusion, we believe that this agreement is good for Canada and good for Colombia. It's time that Parliament passed the legislation for the agreement to come into force so that Canadian exporters can benefit from improved market access and improve their presence in Colombia.

Thank you very much. I'll be happy to answer any questions.

[The Chair, Conservative, Lee Richardson]

Thank you.

This has been very helpful, although it took a little more time than we're used to.

We're going to begin our questions, and I'm going to have to keep it tight. It looks as though we're only going to get one round in today. I'm going to ask that the witnesses try to keep their answers concise and tight, in the knowledge that the members only have seven minutes for questions and answers. Of course, I'll remind the questioners to try to keep them tight as well.

We'll begin with Mr. Brison.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you very much, Mr. Chair.

Thank you to all of our witnesses.

We already have a trade relationship with Colombia. It's one that is growing, by and large, and notwithstanding the global economic downturn its secular trend has been one of increase over a period of time. We don't have a robust rules-based system governing that free trade agreement.

How does adding rules--in this case the most robust labour agreement and environmental agreement that not only Canada has ever signed with any other country, but that has ever been signed by any two countries--have the capacity to make things worse?

[Gauri Sreenivasan]

It's true that commerce already exists between Colombia and Canada. It wouldn't be accurate to say that it's not rules-based, because the rules governing international trade still apply.

The question is what is the application of this bilateral trade agreement? And your question is—

[Scott Brison, Liberal, Kings—Hants, NS]

But does this add more rules?

[Gauri Sreenivasan]

Yes, and that's exactly what I was trying to go to. You have to look at the specific new policy measures that are added.

In agriculture, it therefore adds an opening of vulnerable sectors in Colombia, which has price effects and livelihood effects. In investment, it adds unprecedented new powers of enforcement to investors who are interested in controlling aspects of land and resources in a country—because it really matters what country--where there's a lot of local people who are contested and who have been violently displaced from their lands. In a balance of power that's already quite tipped towards corporate interests, it further strengthens corporate interests.

The safeguards are not the top in the world. The environmental side agreement is lower than the one negotiated for NAFTA, and the labour side accord doesn't offer any new, additional safeguard to workers. I think the assumption that is missing, in asking “If we just add rules, what is missing?”, is to underscore that one of the most important conclusions from the signing of the accord is a political agreement between the two governments, which the Colombian government wants very desperately.

I think we can't underestimate the importance of Canada's seal of approval. The main interest on the Colombian government's part is the U.S. deal, on which they are stalled because there are human rights questions. They see, as the ministers identify in their testimony, that the Canadian agreement—

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you very much. In the interest of time....

You mentioned the Colombian government wanting this trade agreement. In the most recent poll of the parties running in the presidential election, the only party that is against FTAs--the party led by Mr. Petro--has 5% in the polls. The other parties are all pro-FTA.

Isn't there a certain degree of cultural condescension for us in Canada to say that we know better than Colombians whether or not free trade can help them improve their lives? With only 5% supporting anti-trade parties, it seems to me to be a bit sanctimonious and condescending an approach to say as Canadians that Colombians don't have the right to self-governance. They are an independent country.

[Yessika Hoyos Morales]

Well, to be honest with you, I'm not aware of those polls you were talking about, but I am aware that the three union federations are against the free trade agreement, that indigenous communities are against the FTA, that peasants and agricultural workers are against the FTA, that more than four million people who have been displaced are against the FTA. The families of the victims of crimes committed by the state are against the FTA too.

[Scott Brison, Liberal, Kings—Hants, NS]

I don't know what polling company you're using, but I know that the two polls I've seen recently, from independent pollsters, are saying that the only party that is opposed to FTAs in Colombia has 5% of the support of the people of Colombia.

I think that's important, because at the end of the day we want to do not only what is good for Canada but something that helps Colombians move forward.

The issue of the independent human rights analysis is an important one. I've read through this, and this is helpful. The Canadian Council for International Co-operation, Canadian Association of Labour Lawyers, the Canadian Labour Congress, the Canadian Centre for Policy Alternatives, are all independent organizations and have provided us with a very thorough assessment of this free trade agreement in terms of the impact on human rights.

So in fact you have helped us fulfill our commitment as a committee to have an independent human rights assessment. And we thank you. That does help inform our thinking on this issue.

The Liberal amendment, which has been read into the record of this committee, and which was agreed to by the Colombian trade minister this week, and read into the record, proposes that we need more than just an impact assessment at the time of the agreement. We need an ongoing mechanism to evaluate the impact of this agreement on human rights.

It calls for the Government of Canada to provide annual reports to the Parliament of Canada on the impact on human rights of the Colombia-Canada FTA in Canada and Colombia. And it also calls for the Colombian government to do the same. So Canadian DFAIT officials and our own people will be writing a report each year on the impact of this agreement on human rights in Colombia.

That report--we've had DFAIT officials appear before the committee, and we asked about this mechanism and how it would work--would be informed by independent human rights organizations, NGOs, civil society representatives, who would feed into that. And Minister Plata also said that the same would be the case in Colombia. We would hear from both.

When this report comes to Parliament every year, this committee and the human rights committee can hear more witnesses, including your organization, on an ongoing basis. I really believe it has the capacity to strengthen governance on human rights on an ongoing basis. And I had a good meeting with Gerry Barr recently, and want to continue that dialogue.

You cited the UN, and some of the reports from the UN commissioner on human rights. The UN commissioner on human rights said that the report demonstrates how the internal armed conflict continues to pose many challenges for the country, including the “complete disregard for international humanitarian laws” by FARC. The commissioner said as well that the situation was “exacerbated by violence against civilians by illegal armed groups” that emerged after the demobilization of paramilitary organizations, links between illegal armed groups and drug trafficking, and the particularly acute impact of the internal armed conflict on indigenous people and Afro-Colombian communities.

Much of the violence in Colombia is a result of this drug war and drug-fuelled civil war. The narco-traffickers and the drug lords don't have labour agreements with the Government of Colombia. The Canadian government has no influence on the activities of these narco-traffickers and these abusers of human rights, these murderers, and these people who drive farmers off their lands so they can produce drugs.

Don't we have an obligation to the people of Colombia to help them by providing them with an opportunity to sell their goods and to enjoy real economic opportunities and not to be forced into this violent drug war?

[Yessika Hoyos Morales]

You're absolutely right, the Canadian government cannot influence the drug traffickers in my country. But you can influence the Colombian government, which is violating human rights as stated in the United Nations report. The human rights commissioner mentioned violations by the Colombian government. We are reporting violations that are being carried out by a government that has the duty to protect Colombian citizens.

You mention the sale of goods; over four million people were displaced and they have no right to sell the goods they could produce. They cannot produce now because their land is in the hands of the paramilitary groups who have not been demobilized. They still exist and they are occupying their land.

[Scott Brison, Liberal, Kings—Hants, NS]

The UN commissioner on human rights has also said that “significant progress” has been made in terms of a dramatic reduction in the numbers of complaints of extrajudicial executions.

She also said that she was

impressed by the increased expenditure on government programmes to protect and support vulnerable groups. Such efforts, in a country facing such a complex and multifaceted armed conflict, must be acknowledged and encouraged.

And President Barack Obama has said:

I commended President Uribe on the progress that has been made in human rights in Colombia and dealing with the killings of labor leaders there, and obviously we've seen a downward trajectory in the deaths of labor union[ists] and we've seen improvements when it comes to prosecution of those who are carrying out these blatant human rights offenses.

Very few people I have met in Colombia, even those opposed to the FTA, when asked if things have improved in Colombia since 2002.... In fact, none of the people we met, including some who were opposed to the FTA, said that the situation had not improved since 2002 in terms of security, rights, and economic opportunity.

In terms of homicide rates—

[The Chair, Conservative, Lee Richardson]

Wrap it up.

[Scott Brison, Liberal, Kings—Hants, NS]

—Colombia has a lower homicide rate than Washington, D.C., Rio de Janeiro, and Mexico City. Again, that has been a huge achievement since 2002.

I do agree there are significant challenges in Colombia, but my view is that we ought to engage them and be partners with them to try to address those challenges, and not isolate them and leave them to their own devices. If we want to have an influence, the worst thing we can do is to say no to economic engagement and have them move forward on their own.

[The Chair, Conservative, Lee Richardson]

I'm sorry, there is no time for a response. That did go over time.

Monsieur Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chair.

Good afternoon to the witness.

My first question is for Mr. Dade. I was surprised to hear you suggest that we go and meet workers in Quebec, Ontario or in other provinces or cities to ask them if they felt confident that they could keep their jobs in the face of a free trade agreement with Colombia. Because, at the moment, there is no signed agreement and their jobs are not an issue.

At the same time, I have to stress that the unionized workers in Quebec that I know have a lot more solidarity than you think with other workers around the world and their cause. Do you think that those people would say that their jobs are at risk but they are ready to say that we should sign the agreement anyway? I am sorry, but that is not how those people react. Unionized workers everywhere have more solidarity than that, especially since there is no threat to their jobs at the moment. The Canada-Colombia free trade agreement does not go very far in creating or significantly increasing exports.

For some countries, we know that there are much greater possibilities of an increase in Canadian exports than for our exports to Colombia. The Bloc Québécois is clear that this free trade agreement is not just about increasing exports or protecting Colombian citizens. It is much more about providing protection in Colombia through investment. Pure and simple.

I just wanted to make that comment to you, because I did not want you to go away with the impression that Quebec workers—those that I know anyway—are not in solidarity with workers in Colombia.

Ms. Morales, are there currently free trade agreements between Colombia and other countries?

[Yessika Hoyos Morales]

The free trade agreement with the United States has not been adopted as of today, precisely because of the violations of human rights still taking place in Colombia. Although it is claimed that huge progress has been made in the free trade agreement with the European Union, a number of parliamentarians have decided not to sign the agreement because of the human rights violations. They realize now that the DAS was also investigating some members of Congress, and they say that until there is real progress in terms of justice and the protection of human rights, they will not agree to negotiate with a country that does not respect the rights of workers.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

So currently there is no free trade agreement between Colombia and any other country?

[Yessika Hoyos Morales]

[Technical difficulty--Editor]

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

If there is no other agreement and if the agreement with the United States and the European Union is still not in effect—you tell us that it is because the question of human rights is not yet settled in their eyes—why do you feel that Canada is able to consider the human rights situation satisfactory when others have concluded that it is not? I find that quite strange. Does it make sense to you?

[Yessika Hoyos Morales]

We're talking about international organizations. We're talking about the human rights commissioner. We're talking about the Inter-American Commission on Human Rights. Just a month ago, they published a report where they expressed their concern because threats are ongoing, harassment is ongoing, and there's still this hostile environment in which to work.

They are still violating human rights in Colombia.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Mr. Chair, before handing over to my colleague Mr. Guimond, I would like to raise a point of order right away, please.

Next time we have witnesses who speak Spanish, would it be possible to have Spanish-French translation without an intermediate stage, please? We have translation from Spanish to English, which then has to be relayed from English to French and it is a lot harder that way.

There have to be interpreters who speak Spanish and French. I feel we have a right to translation like that. I would like us to have it the next time we have Spanish-speaking witnesses.

[The Chair, Conservative, Lee Richardson]

All right.