International Trade Committee on Oct. 18th, 2010

[Tim Waters]

That's right.

[Malcolm Allen, NDP, Welland, ON]

Are you aware that the Canadian free trade agreement talks about the labour rights and labour organizations outside the agreement? I say this in terms of what both you and I have experienced in doing collective bargaining and what we think it means when you put things outside the body of an agreement versus inside it.

Do you have any comments on how you feel about that, knowing full well what happened with the U.S. free trade deal with Jordan, which had that internal to the main body of the document?

[Tim Waters]

Yes. If I may, before I answer that, let me just say that Mr. Casey here works for an industry that's represented by the United Steelworkers, so we're here today understanding the kinds of things he's saying and the importance of products being sold elsewhere to help our members as well, notwithstanding our argument today. I just want to point that out.

The North American Free Trade Agreement had the language that protected so-called worker rights in side letters, outside the core text of the agreement, and by all rights, as far as what it has meant for workers goes, I think it has been a disaster. Not only have there been significant job losses and an exodus of jobs to Mexico in the first five years after the North American Free Trade Agreement as multinational corporations chased lower wages south of the U.S. border--not only from the U.S., but also from here--but it brought downward pressure on wages. With worker rights protections being in side letters and decided by tribunals and these kinds of things that were outside the scope of the agreement, it just didn't allow for real protection.

Again, the Jordan free trade agreement did allow for that, but it didn't work because it wasn't enforced. So not only does it need to be in the core text of the agreement--otherwise, you don't have any weight--but it also needs to be enforced. There are two pieces to that.

[Malcolm Allen, NDP, Welland, ON]

There's no doubt that clearly the enforcement has to come from the Jordanian government through its ministry of labour or whatever due process it has to make sure that happens.

Let me talk to Mr. Kernaghan about a number of these corporations that you've mentioned, places like Walmart, Nygard, and a number of others. Are you familiar with the sense that over the years a lot of these companies have--and it was spearheaded by Nike a number of years ago--had these so-called “workers' charters” when they were looking at the offshore industries they were producing?

In Nike's case, they are the ultimate brand in North America in the sense of not making anything here. They make no product here. They keep the brand here. They make the swoosh that they basically put on a product, but they actually don't make any shoes in this country or in the United States anymore. They also have become the ultimate in branding in the sense of not having to own the means of production anymore in the sense of owning a factory: you let someone else do it.

Of course, the big complaint--and it started on campuses--against Nike was sweatshops, as they called them then. This goes beyond the sweatshops, in my estimation; this basically is like a jail. Ultimately what you have is a throwback to the 1600s or 1700s, where we actually have a bunch of slaves. That's what these folks are. They've been trafficked into a slave situation under the guise of a free trade agreement, which I find hugely reprehensible.

Can you speak to the sense of why it is that these major multinationals--Walmart being one of the largest retail outlets in the world, if not the largest--where they have a workers' charter, seem unable to or simply don't enforce what is supposed to be in their charter and work with their so-called offshore producers, if you will, when they said they would make sure to take care of that?

[Charles Kernaghan]

Well, corporations have what they call corporate codes of conduct or charters, and they do say they investigate the factories to make sure they are in compliance with those codes. It never works. As a matter of fact, not long ago, Professor John Ruggie, the Harvard professor who is the Special Representative of the UN Secretary-General on the issue of human rights and transnational corporations, came right out and said that corporate monitoring never works because people cheat. In other words, when they send in these monitors, the workers are already threatened and are trained in what to say.

We've been tracking this stuff for 20 to 25 years now, and it doesn't work. The only way to implement labour laws is for the Jordanian government and the ministry of labour to do it, and for the United States government to do it through the U.S. Trade Representative's office. In the United States now, under this administration, there is more push-back from the U.S. TR's office. In fact, as I said earlier, someone is leaving to go to Jordan next week just to look into these violations and all of that.

Monitoring can't be done by companies; it has failed for the last 20 years. It has to be done legally, by the U.S. government in this case, and by the Jordanian government.

[Malcolm Allen, NDP, Welland, ON]

I heard my colleague, Mr. Cannis, say earlier that we don't want to be on the sidelines being boy scouts per se, and I understand that two wrongs don't make a right, as Mr. Holder's mom from Cape Breton would say. My mother taught me the same thing. It seems to me that if we have evidence that says this is what's happening in Jordanian factories under a free trade agreement, why would we want to be complicit with that?

My sense is that if we can't learn the lesson from what happened, then shouldn't you be pressuring your own government in the U.S. to withdraw it as well and saying to us at the same time that until the Jordanians intend to push for their own laws to be upheld...? We're not asking them to increase their minimum wages, but only to apply their own laws; we're not taking ours and extrapolating them and putting that on top of them. So is it not fair for us to say to you, well, if we hold back—which I believe we should, because the evidence is clear in my mind—should you not also be saying to the U.S. government, like the United Steelworkers, the AFL-CIO in the States, and the social justice groups are, that they should terminate this or at least put it in abeyance until some point at which you can be assured that the Jordanians can actually implement and uphold their own labour law?

[Tim Waters]

We've asked for a review. We have also worked to pressure the companies operating there, with some success. But we also don't want to see the 30,000 guest workers, who borrowed from loan sharks and spent all of the money they had to get to that country, thrown out of Jordan. Because as bad as things are in Jordan, what scares the workers more than the conditions they're in is being sent home without the money to pay back the people they've borrowed from. It's a tricky situation.

The interesting thing about the situation the Canadian government finds itself in right now is just as you said: you're in a different situation than we were because you know what has happened. We have shown you the proof and would be happy to show you more. You have a unique opportunity to try to change it. That would change it for everyone. We're not interested in ending the free trade deal if we can get enforcement like it was supposed to be. We supported this thing from the beginning, but it needs to be enforced and cleaned up.

The biggest export from the U.S. to the country of Jordan is money, so there is a big stick there. We give a lot of foreign aid to the country of Jordan and have for a long time. They're a key ally in a key place, but they need to understand that decency and respect for human rights and labour rights by a country like Canada will take precedence. I think you guys have a unique opportunity to do that right now.

[The Chair, Conservative, Lee Richardson]

Thank you for that, Mr. Allen and Mr. Waters.

Mr. Allen, you just took two minutes of Mr. Julian's time next week.

[Voices]

Oh, oh!

[The Chair, Conservative, Lee Richardson]

We're going to move to the final round. I think we're going to wrap it up with Mr. Keddy.

You have seven minutes.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Thank you, Mr. Chairman.

Welcome to our guests.

I have to say that I'm a little bit perplexed by the testimony up to this point. I actually am going to pick up where Mr. Allen left off. I don't quite understand how we have two witnesses here who are saying to the Canadian government that we should somehow cancel this trade agreement, that we need to take it on the chin, but, by the way, the United States will continue to trade with Jordan because that's okay.

I'm not trying to be cute here, guys. That's what I'm hearing. Quite frankly, that's unacceptable. You can't come to us and tell us we have to change the rules. Under our agreement on labour cooperation, we have put some very strict guidelines in this agreement. This does not apply simply to Jordanian workers; it also applies to migrant workers and migrant labour. It is under the International Labour Organization's international guidelines and, quite frankly, it recognizes that some of the migrant worker regulatory regime in Jordan has been less than perfect, that there have been some abuses and some mistakes made, and that we need to have a more robust system to govern this.

I appreciate--I think we all do--the challenges surrounding labour and human rights, but what I'm not hearing is that your union is willing to take on the Walmarts of the world or the Hanes of the world. You're not willing to do anything about this in the United States, but you say that in Canada we should. That is simply not fair.

[Charles Kernaghan]

I would respond by saying that when we released our report, it was very directed at the U.S. government's failure to monitor the situation. In fact, the core ILO labour standards are violated in Jordan right now. Guest workers have no right to organize, so you can't possibly implement that because at this moment they have no right to organize as guest workers.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

On that point, in our agreement we also have the ability to facilitate the dissemination of information--specifically, labour information--to guest workers and migrant workers so that they actually do understand their rights. I'm going to ask you just to shorten up your answer because I know Mr. Holder has a question and I want to let him get some time here.

[Charles Kernaghan]

Very quickly, we asked the Jordanian government to allow NGOs in from the countries where the workers are from, from Bangladesh and from Sri Lanka--and that would be the single biggest element--so that the workers would have advocates. They flat out refused. They said that you cannot have foreign NGOs in Jordan. That would have changed the picture enormously.

We've been struggling on this for years, probing every way we can to move this thing forward and, at the same time, being very critical of the U.S. government. It's not like we're jumping up and down with pride about these garments that are made under these conditions coming into the United States. We're trying to push this and push the Jordanian government as well.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Ed?

[Ed Holder, Conservative, London West, ON]

Thank you very much.

I want to thank our guests for being here today to present their testimony.

My sense is that we're missing a piece here, that I haven't yet heard testimony about, and that is, what about the Canadian worker? What about taking care of our economy as well? I have huge respect for our obligations internationally, I absolutely do, but here's the circumstance: can any of our guests tell us about the change in two-way trade between Jordan and Canada in 2008 to 2009? Can any of our three guests tell us what that number is, what the change is in overall trade...?

All right. I'll assume you may not know and, respectfully, I understand that. Trade between Canada and Jordan decreased over 11% in 2008 to 2009. While that number in and of itself may not be the biggest number relative to all the trading we do in the Middle East, the fact that we have a double-digit drop should concern us all. The fact that Canada has something like 80% of the balance of trade in its favour over Jordan means that it dramatically impacts the Canadian worker over the Jordanian worker, or the guest worker, as you've indicated. But in fact, from an economic standpoint we've been penalized that much more.

What this is intended to do is to allow the elimination of tariffs immediately, by some 99% of Canadian exports to Jordan, and what does that do for us? That allows us to put quality Canadian products produced by quality Canadian workers into Jordan, and I think that's critical: that for our sake, we don't forget that we have to take care of the Canadian worker. I think that's essential.

What is that going to help? That's going to help our farmers, our manufacturers, and our agriculture and agrifood. It's going to help pulses, frozen potato products, animal feed, and beef. Folks, it matters to us, not just because of Jordan, but because of what it means. Because we have something like $11.5 billion of two-way trade between Canada and the fifteen countries in the Middle East. Please, let's not forget that: Jordan becomes the starting point.

The thing I'd like to capitalize on as one quick follow-up to what Mr. Keddy said--and I think this is important--we trade with Jordan anyway. We all know that we trade with Jordan, so why don't we have a rules-based system in place whereby we can have some influence over treating not only Jordanian workers and the International Labour Organization agreement, which, Mr. Waters, as I heard you say, is a great standard, an appropriate standard.... I appreciate that, but what does it do? It means that collective bargaining and freedom of association are guaranteed, and it means the elimination of forced labour and child labour, the elimination of discrimination in the workplace, minimum standards in employment, workplace safety, and compensation for sick and injured workers.

My point in all of that is this: is that perfect? Well, I think it's probably a far sight better, knowing that we trade with them anyway, to have some rules in place. And if we're at the table, then we have the opportunity, gentlemen, to be able to have some dialogue--

[An hon. member]

He's on a roll.

[Ed Holder, Conservative, London West, ON]

I'm sorry. I--

[The Chair, Conservative, Lee Richardson]

I take it that you've finished your question; you've just not quite finished your answer--

[Ed Holder, Conservative, London West, ON]

I had a question, but I'm sorry. I did take time.

[The Chair, Conservative, Lee Richardson]

No. Carry on. Ask your question. I want to hear it.

[Ed Holder, Conservative, London West, ON]

But if we would agree that generally this is better not for Canada.... By having a rules-based system in place--

[A voice]

It's better for Jordan.

[Ed Holder, Conservative, London West, ON]

--it's better for the Jordanian worker and, frankly, better as a standard for what we're trying to do in the Middle East, how can we say no to trying to be at the table? How can we say, “You know what? Since we're trading with you anyway, we're going to take all our rules off the table”.

If you and I were doing business together and I told you that I wanted to try to influence your conduct--you were trying to influence mine--if I decided that I wasn't going to play anymore, that I was just going to take my circumstance and go away, my sense is that your ability to influence me would be very limited. But the stronger the relationship is and the more I'm in contact with you--and I say this to all our guests here--my opportunity to influence you in a positive way is there.

So can you please explain to me how taking our marbles and going home helps the Canadian economy and the Canadian worker?

[Tim Waters]

Your chance to influence this--and as for what's going on over there, I don't think anyone in this room would disagree, it's flat out wrong--is best right now. That's what we're saying.

As for the criticism, Mr. Keddy, just to respond, the initial part of your question assumes that somehow there was a benefit to the U.S. in the U.S.-Jordan Free Trade Agreement. There was very, very little, if any. The benefit--