International Trade Committee on May 11th, 2010

[Mauricio Ferro]

Absolutely, because there is no agricultural crop as profitable as the drug trade.

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

Mr. Benedict, I would certainly enjoy a longer meeting where we can discuss more granularly the specifics of the amendment. You started off your testimony saying that you saw it as a positive sign. Then, in a response to Mr. Julian's question, you said it wasn't credible.

I suspect that when we have the opportunity to meet and to review granularly the specifics, and with the fact that we will have an opportunity on an annual basis at this committee to hear from witnesses like yourselves and to study the report, which will be written by Canadian public servants, you will go from being a detractor to being one who demands that it be part of every free trade agreement, if, in fact, any of your member organizations ever support one.

I would certainly welcome the opportunity. Part of politics is pedagogy. If I can help educate you as to the benefits of economic engagement on human rights, I certainly want to help in any way I can.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Brison. We'll look forward to that.

Mr. Holder, are you going to start again? We have five minutes on this side. How you want to spend it is up to you.

[Ed Holder, Conservative, London West, ON]

Thank you. I think I'll do a redirect, Mr. Chair.

Thank you very much.

Again, to our guests, I appreciate what you've said.

We had testimony a couple of weeks back from a Saskatchewan processor, an exporter of pulse crops, primarily, Murad Al-Katib, and he talked about the challenge of putting red beans into Colombia. He said that we have a 60% tariff on red beans.

What's particularly important about them is that it's a basic protein food for Colombians. He talked about it with great passion, because one of the difficulties that Canada has is that we effectively have no red bean market in Colombia because of the challenges associated with the tariffs. He talked about it almost like a human right: that there was an obligation to put nutritious and proper food into the hands of Colombians. I was very touched by that comment.

Mr. Casey, you've made a different comment. You've talked not so much about the tariff issues, although you have some tariff issues in some areas. Have you done any kind of study to have a sense of what the impact would be for Canadians and ultimately for Colombians should--as and when--we put the free trade agreement in place? What would the impact be in terms of jobs for Canadians and jobs for Colombians?

Because, by the way, lest we forget, we're talking about significant trade currently between our countries and what we're talking about now is putting a rules-based system in place with, I think, significant labour and environmental conditions that are not currently in place.

Do you have any sense, Mr. Casey, of what the impact economically would be in terms of your industry?

[Andrew Casey]

From our standpoint, as I said earlier in my testimony, we're looking at a market of about $750 million a year in forest products, which is what they're importing. If we become more competitive in that marketplace, we will obviously grow what we're already selling there, which is about $60 million worth.

So going from $60 million to anywhere upwards of that is going to be helpful. It's going to keep some mills open, and maybe open new facilities and new product lines, whatever it may be. I think it's safe to say that at a minimum it will keep jobs, but I think it will actually grow jobs if we get greater access.

The other point I would make—and maybe it speaks a little bit to your point on the beans side—is that some of the products we're selling there are a version of a raw product. With pulp, of course, you take pulp and turn it into other products. So that is selling a raw commodity to their paper-making industry, which is obviously growing, given that their pulp imports are growing at remarkable rates, at about 17% a year. I would take it that anything that can help their industries grow locally is going to benefit their economy and raise their standard of living.

Our industry pays on average about $47,000 a year, a fairly good wage, so I would presume if we can get that matched in Colombia, that would be a fairly good wage there too. I don't think they'll get to those levels, but anything that helps along that road I think would be beneficial to their economy.

[Ed Holder, Conservative, London West, ON]

Thank you.

Ms. Hallé, for the record, I did not at all intend to misrepresent your position, so I thank you. As much as I got a little garbled at the end there, I certainly would not want to misrepresent your perspective. I want to make that very clear.

Mr. Ferro, you live there. You're there 12 months a year. One of the things that you talked a lot about was corporate social responsibility. I haven't heard that spoken about a lot. But what I did hear you say in your earlier testimony was that you spoke of founding a college for post-secondary, for training. You have 10,000 employees in Cerrejón.

I'm trying to get a sense of why your firm would do that. What inspired your company to choose to take this approach, which seems to me to be a fairly progressive attitude towards Colombians themselves? Would you help me understand that, please?

[Mauricio Ferro]

There is a very important reason. Non-renewable natural resources are going to end some day. Basically, some years from now, there will be no more coal to be extracted from our mine. What will happen to the population when there is no mine? What are they going to do? How can they live? What kinds of jobs are they going to have?

We have to build an industrial infrastructure that will allow the population to have a high standard of living after the mine closure. We are in the business of sustainable development. The only way to achieve that is if we can build an industrial infrastructure that doesn't depend on coal.

[Ed Holder, Conservative, London West, ON]

I understand that you're actually living in Kanata, so unless that's in Colombia, you actually spend a fair amount of time in Canada; I wanted to clarify my own comments.

Elections are coming up on May 30, 2010. We've seen some polls recently which suggest that five of the top presidential candidates, of which, I understand, there are six, support the free trade agreement, Mr. Ferro, and that somewhat less than 5% of the population supports the Polo Democrático Alternativo, which is against free trade. Do you have any opinion on why some 95% of the population of Colombia is supporting parties that support the free trade agreement?

[Mauricio Ferro]

There is a basic reason behind that: we believe that Colombians are industrious people. We work hard and we want to improve our standard of living. We know that the only way to improve it is if we have jobs, and good jobs, at that. The only way to achieve that is by integrating ourselves in a globalized economy. A means of achieving is to reach free trade agreements with countries like Canada.

As a side comment, one of the things I am afraid of if we don't sign this free trade agreement is the following. I told you that we sourced $70 million from Canada last year, and that's an average of the things that we buy from Canada; the next time around, we will source those things from Brazil or from China. So I think it's extremely important and in the enlightened self-interest of Canada and Canadians to sign this trade agreement.

[Ed Holder, Conservative, London West, ON]

And I would imagine that we're allowed to have a little enlightened self-interest in this process.

I thank you for your testimony, sir.

[The Chair, Conservative, Lee Richardson]

Thank you, Mr. Holder.

We have time for two quick ones, I think.

Monsieur Guimond, for five minutes.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Thank you, Mr. Chairman.

Good afternoon, everyone.

Ms. Hallé, I want to congratulate you and thank you for your testimony. It was very eloquent and very clear, particularly since you have experience in the field in Colombia. You have spent a number of months there. You know what you're talking about, and this is very eloquent. I thank you once again.

I'm a farmer. In my life, I've been president of an agricultural union. If I had worked in Colombia, I would probably be on the Colombian government's black list. I understand what's going on. Population displacements affect families, of course, but also peasants and farmers.

In your presentation, you said the government was financing population displacements. Can you tell me a little more about that?

[Tania Hallé]

What's going on, in concrete terms, is that the army, in collusion with the paramilitary, are displacing peasant communities where lands represent an economic interest in the context of a potential export development project. You have to understand that these communities had a functional local economy, but that that has been destroyed. These are unemployed people who are being given work. They had a functioning economy, but the army displaced them because these lands represented an economic interest. Subsequently, they finance the companies that implement agri-industrial projects on their lands. These peasants are converted into cheap labour on the plantations. No, their living conditions have not improved. No, they haven't created good jobs for them. That's absolutely false.

As regards the financing of these businesses by the agricultural financial company, we now know that a number of members of the boards of these businesses have serious ties to the paramilitary groups. This is absolutely deplorable. The main African palm company in Bajo Atrato is Urapalma. However, one of the members of its management committee, Antonio Zúñiga Caballero, belongs to a family recognized for its connections with drug trafficking in Colombia. That family's tentacles have extended into the government's agrarian bodies. His daughter, María Fernanda Zúñiga Chaux, was a member of another African palm business in Curvaradó, but she was also a director of Fido Agraria, a rural development trust company in Colombia. That body, which reports to the department of agriculture, gave Urapalma, in which her father is involved, the equivalent of CDN $1.85 million in agrarian bank credits. That gives you an idea of how things work.

These businesses were established on the lands of the communities following their forced displacement. Brigade XVII of the Colombian army is directly involved. It joined forces with the paramilitary to conduct the forced displacement. Yes, the government is directly responsible. In our opinion, the implementation of a free trade agreement between Canada and Colombia would merely worsen this kind of situation. That's how they implement development projects in that country.

[Claude Guimond, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I respect what the other people say around this table, but it's being said that an agreement of this kind will improve the country's economic health and create jobs. I would like you to take the remaining time to tell us, based on the experience you have acquired in the field in Colombia, what the benefits of this kind of agreement in Colombia would be. Would there be any?

[Tania Hallé]

They are very hard to see. As I was saying earlier, the communities we work with had functional local economies. They produced foodstuffs; they sold them at the local market, and on the national market. As regards a free trade agreement, first, we know that the farmers market in the countries of the South—this isn't just the case in Colombia—are inundated by foodstuffs from the North. Peasants can no longer sell their inventory into the local market. They're stifling their economy. That's not counting the fact that their lands have been confiscated in order to implement agri-industrial projects such as the African palm project. This palm is intended for export. Incidentally, the palm is intended for European and North American markets in the form of biofuel.

These peasants are being turned into casual plantation workers. In fact, I should even call it a new form of slavery. Workers on the plantations don't even earn wages. In exchange for their work, they receive chits that enable them to get their foodstuffs from the stores that belong to the same entrepreneurs, that is to the palm companies. We're going back to colonization. This is a new form of slavery. This is how development projects are implemented in Colombia. We don't believe that a free trade agreement between Canada and Colombia would improve the situation. I really don't see how that would be possible.

[The Chair, Conservative, Lee Richardson]

Thank you.

You can have a very quick question, Mr. Cannan. You'll have a couple of minutes and then we'll have Mr. Brison close.

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

Thank you, Mr. Chair.

Thanks to our witnesses.

Just quickly to Mr. Casey, coming from British Columbia, representing the riding of Kelowna—Lake Country in the Okanagan, just as Mr. Julian from British Columbia, I know that forestry is a big economic driver. I know that it is in Ontario and Quebec.

My understanding, in meeting with folks from the forest industry, is that the biggest advantage of this agreement is that it provides some certainty, rules-based trading, so some certainty and confidence for investors. Can you just clarify what that means to the forest sectors of those specific provinces?

[Andrew Casey]

Yes. Specifically, the newsprint is one that gives us great certainty. There is no tariff there now, but this locks that in. Colombia could access a tariff under WTO of up to about 35%, I think it is, and that could come in at any time. This locks in the zero rate on the newsprint.

The other parts give you certainty in the sense that once all the tariffs come down, you're essentially competing. Basically, you can get as productive as you possibly can and beat out your competitors in other countries. We're pretty darned good at that, so we feel pretty confident about the fact that we can take advantage of that new marketplace. It's a diversification.

I can't say where products are coming from, but if you increase a pie for one part of the country, they'll divert their product there. That opens up space in other parts for other parts of the country. It generally balances out because we're such a global marketplace.

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

Certainty and stability, like the softwood lumber agreement...

[Andrew Casey]

Absolutely.

[A voice]

Oh, oh!

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

Thank you, Mr. Chair.

[The Chair, Conservative, Lee Richardson]

Thank you.

I think we have time for one quick question. You can have a couple of minutes, Mr. Brison, and then we'll wrap.

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

I'd like to ask each of you about the role of FARC in Colombia in terms of violence against Colombians, as well as the role of the drug trade in terms of violence against Colombians.

Secondly, I'd like to ask Mr. Ferro about the role of Venezuela in hosting FARC, the role of the Hugo Chavez administration in hosting FARC--you have operations on the border with Venezuela--and more broadly, the recent threat by Mr. Chavez to cut off trade to Colombia and what effect that would have on the economy.

Thirdly, Mr. Ferro, since 2002, President Uribe has been president of Colombia, and since 1999, Hugo Chavez has been head of Venezuela. Can you describe what has happened in each of the countries and whether things have improved under Chavez in Venezuela and also whether things have improved under President Uribe in Colombia?

[The Chair, Conservative, Lee Richardson]

I'm sorry. We may not have an opportunity. The bells are flashing. That indicates that the House of Commons is about to have a vote. The members have to return to Parliament Hill. We would need unanimous consent of the committee to continue, even to have an answer to that question. Is there unanimous consent...?

There is not unanimous consent.

We don't need a speech, thanks.

I will just have to wrap it up. I'm sorry, Mr. Ferro, that you haven't had an opportunity to answer that great question, but thank you very much for your participation.

Also, to our panel, I'm sorry that time is so limited at these things that you were unfortunately not always able to complete your answers. Thank you for coming.

That's it for today. We'll be back on Thursday.

The meeting is adjourned.