International Trade Committee on March 15th, 2012

[Nancy A. Donaldson]

No problem.

[Mathieu Ravignat, NDP, Pontiac, QC]

I would like to follow up on what you just said. I have a fairly clear question for you. What is the problem with Jordan? Is it a matter of laws or of how they are being enforced? Does the issue really have to do with the legislative framework or does it have to do with the will to do something to improve working conditions?

[Nancy A. Donaldson]

There are many reasons, and I can give you some examples. In these special export zones, there are some laws that are not the same; for example, the minimum wage is lower in those zones than for the country. Although recently the migrant workers were allowed to join unions, they're not allowed to form them, and there are restrictions on their freedom of association. These are laws.

In terms of working conditions, for example, there is some progress around manufacturers setting curfews. They're not really allowed to set curfews, but it still happens. There are issues about how many hours, whether overtime or extra working hours are compulsory, and things like that. That is more in the application of the manufacturers.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you. I have a supplementary question about that. What is the current reality of children working in Jordan? I know that Jordan is trying to improve its situation, but what is the reality of the children working in factories?

[Nancy A. Donaldson]

We published the latest synthesis report for the factories that Better Work has visited, and we had two last week. There was only one problem found with children in hazardous work, and that was actually with 16-year-olds, I believe, and it's been corrected. Now that the law has changed, new plants will come online, but there's not much problem in the factories.

In the country, we are involved in a major child labour initiative, and that happens more in the fields and in other categories. With the U.S. government I think there is a $10 million project to eradicate child labour. The most recent dimension of it that we think is important is that rather than just focusing on child rescues, there is also a national effort to create a mainstreaming of ending child labour in Jordan, with a national strategic effort as well as work in the fields and the places where the problems are.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you, Ms. Donaldson. According to you, there is still work to be done, especially in terms of factories.

[Nancy A. Donaldson]

Yes. I will say that's always true in working in the garment industry around the world. So trending progress is what we look for in enforcement, labour inspection, and performance of the manufacturers.

[The Chair, Conservative, Rob Merrifield]

Thank you very much, Ms. Donaldson.

Mr. Cannan, you have seven minutes.

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

Thank you, Mr. Chair.

Thank you to our witnesses. Thanks for taking the time out of your schedule. To our friends in Dubai, there's a time change difference, so thank you for fitting us in as well.

I just want to pick up on the question my colleague, Mr. Ravignat, asked Ms. Donaldson. I have three daughters in their twenties. You caught my interest when you said they have a very low employment rate for women. I'm thinking that in the garment industry, it would be a little bit of a misperception from my viewpoint. I just wonder if you could elaborate why that is. Is it culture, or are there other reasons?

[Nancy A. Donaldson]

Let me say that I don't have the statistics for the garment industry. Worldwide, generally, the majority of workers in the garment industry are often women. I believe the 14% of participation is about Jordanian women, and I do think it's cultural and religion-based. It's one of the lowest rates of participation of women in the world, in the lowest 10 countries.

I am happy to say that we are involved in a national pay equity initiative with the government to both increase awareness and to advance pay equity for women going into work. I think because the population coming into the workplace is so young, we are going to see changes in that percentage. Having employers and the economic sectors ready for that is I think going to be part of the work.

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

Following up on the economic perspective, that's where we are trying to grow the economies of our countries, with a joint perspective and the philosophy that the rising tide lifts all boats. We've had a trade agreement implemented with Colombia, as Washington recently has. We're working on Panama as well.

Have you had any experience in labour agreements in Panama?

[Nancy A. Donaldson]

I'm sorry, I'm trying to remember if Panama was part of CAFTA. I don't know much about Panama; I know more about Colombia. On Colombia, there's a very specific labour action plan that is coming. Preparations are coming into place in terms of the U.S. government Colombia bilateral agreement. I understand from my colleagues in Geneva that Canada is also going to be participating and giving financial support to help advance labour cooperation efforts in Colombia. There's a great deal of work to be done there.

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

So it's fair to say that the trade agreements are helping with these labour side agreements, helping to strengthen the labour relationship and the protection of the workers.

[Nancy A. Donaldson]

Let me say that it's all about incremental progress.

Let me talk about the Middle East region. The U.S. has four free trade agreements—with Bahrain, Oman, Morocco, and just recently Jordan. It's really fair to say that if you look at where there is progress—and this is evident in different ways, from gender to working conditions to labour rights, the Arab states in which there is progress are clearly those that have bilateral trade relationships. Those are one component of it.

What's interesting to us is that countries that do not have agreements are beginning to reach out to us to help reform and make some progress as well, so they see that these things are working.

I think the labour unions would say progress is slow, and I would agree with them. If you want me to, I can give you more concrete examples. Sometimes there is backsliding. But the overall picture is that it's a meaningful thing in the context of the practical work we're doing with our partner countries.

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

Thank you for that pragmatic response. Slowly and steadily we're making progress.

I'll move on to our friends from the Canadian Cattlemen's Association and the opportunities for further expansion. A few years back our trade committee travelled to the Middle East, and my belief is that this is a good stepping stone in the right direction.

John, maybe you could expand a little more on the opportunities you see for the Cattlemen's Association through this trade agreement with Jordan.

[John Masswohl]

I think that's right. We see Jordan as a part of the Middle East region. Whether Jordan is the gateway or the stepping stone, or if it's an added benefit to have that available when you're doing business in one of the other countries, I guess is a matter of semantics.

But the point is we have beef exporting companies that have been very interested in Saudi Arabia, the United Arab Emirates, and, even more recently, Kuwait and Qatar. If they're going to invest their resources to be in those countries travelling there, having materials in Arabic, those sorts of things, it is very easy for them to also include Jordan in their plans if we can get rid of the tariff differential we've had basically since I think the U.S. free trading with Jordan has been in place, since 2001.

It's only a 5% tariff, but if you're a buyer in Jordan saying you can buy the same thing from an American company or a Canadian company, but you have to pay 5% more from Canada, that does make a difference.

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

That's just common sense. I thank you for that explanation.

This is a quick question for Mr. Hudson.

You haven't had a chance to comment on the trade agreement that's been proposed between Canada and Jordan. Do you have any specific comments as far as the opportunities you see for industry go?

[David I. Hudson]

I'm all for free trade agreements. Until two years ago I was living in India and was chairman of the European business group. We advocated for many years for a free trade agreement with India. So I'm a great believer in them.

Jordan is a stabilizing country in the Middle East, in a troubled area. It is a western-influenced country with very strong ties. I'm surprised it wasn't mentioned that it has been invited to join the Gulf Cooperation Council and is receiving a lot of aid from the gulf countries. As Ms. Donaldson said, if you have a free trade agreement, you can bring in your own standards and influence the government to increase their standards. It gives you that influence.

It would be good for Canada. It would allow Canadian companies to come in to deploy their expertise. I have recently been involved with a number of Canadian companies, and there's a vast array of talent in your country.

I believe that Jordan is desperate for water. This is the number one problem in Jordan. It is a poorish country, and it is looking all the time for people who can help it, not just with aid but by bringing industry technology.

The apparel industry does a great deal of good for Jordan. Jordanians generally are not as gifted as the southern nations with apparel, but it provides employment for them. It provides services and uses a great number of suppliers. I read your note, and although the apparel industry uses migrant labour, it's not totally migrant labour. It provides some well-earned revenue for Jordan itself.

[The Chair, Conservative, Rob Merrifield]

Thank you.

[David I. Hudson]

The apparel industry is good, and a free trade agreement would definitely help it. The head of your Apparel Federation, Mr. Bob Kirke, was all in favour of it.

[The Chair, Conservative, Rob Merrifield]

Thank you very much, Mr. Hudson.

[David I. Hudson]

I don't think it came over very clearly.

[The Chair, Conservative, Rob Merrifield]

Thank you very much for that answer. I have to move on to other questioners. Time has evaporated on this answer.

We'll go to Mr. Easter. He may have follow-up questions.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Thank you to all of the witnesses for being here in one fashion or another.

I'll turn to John first.

The Canada-Jordan agreement seems to be fine from the agriculture industry perspective. It's not much of a market for agriculture, from what I understand, but it does provide a template for Saudi Arabia and others.

Specifically, what does the Jordan market mean for the beef industry, beyond being a template? What do we export there? You mentioned three tariffs levels coming down, which is great. I didn't realize there was 10% on genetics.

Go ahead.

[John Masswohl]

Yes, it's a small country and it's a fairly small population, but if you look at their food production domestically, you'll see that they have less than 50% self-sufficiency in food. They import more than half of their food.

It's an arid country. It's a desert country. I believe that somewhere around 7% of their land base is arable land, so what they're going to produce on that land is largely going to be fruits and vegetables. They have some dairy production. They have sheep and goats.

They have almost no beef production to speak of, other than old dairy cows, and that really comes from their land base. As you know, beef cattle take a lot of land, they take a lot of grass, and they take a lot of water. Those are some resources that they don't have, so certainly in that region we see an opportunity.

On the genetics side in particular, if you look at their livestock industry and how it's evolved over the last 30 years, say, you'll see that they have significantly increased their dairy herd. There are some indigenous breeds in the Middle East that can tolerate the hot weather pretty well, but they don't produce a lot of milk.

I would say that over the last 30 years or so their dairy herd has increased about tenfold—that's about 50,000 cows—but they've also really moved into the Holstein-Friesian breeds, and they really need to purchase those genetics, probably in terms of small heifers, young heifers. There are certainly some opportunities there for Canadian producers.