International Trade Committee on March 29th, 2012

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

I ask that question because I also know that in the side agreement on the environment, both parties—Canada and Jordan—commit themselves not only to complying with their domestic environmental legislation as it currently stands, but also to not weakening but in fact strengthening their environmental laws, providing proceedings for a remedy, increasing public awareness, and ensuring that there are environmental impact assessments. It sounds as though by engaging with Jordan we're actually strengthening their environmental provisions and empowering them to raise their standards. Wouldn't that be an expectation of this agreement? If that were the case, then giving companies an opportunity to come along and challenge those increased standards would be inconsistent with the agreement.

[Theresa McClenaghan]

Yes, challenging the increased or more protective standards would be inconsistent. Those kinds of provisions, I think, are good. Even in the NAFTA we had the commission for environmental cooperation, which does some very good things. For example, it compares the national emissions by the biggest polluters across the three countries. Those kinds of extra provisions are helpful.

I will be quite interested, as more and more of these agreements are negotiated, to see how much the parties—the states—actually give them living force, in terms of paying attention to how much they are improving and increasing the protective level of their environmental protection. Language is useful. It's somewhat vague, but it's useful, especially if the parties actually pursue that line of inquiry to say, “Well, what have you done lately to increase your environmental protection? Can you demonstrate that?”

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

I haven't heard you say it, but it almost sounds as though you are suspicious that Jordan or any country that would be party to an agreement with this language might try to use environmental standards as a non-tariff barrier. That's what the companies that would be impacted would be fighting against. Is that kind of an indirect way of saying what you are concerned about?

[Theresa McClenaghan]

It's not my concern that environmental regulation amounts to non-tariff barriers, but that is a claim that is often made by industry. A lot of the language in the free trade agreements is trying to both address the avoidance of non-tariff barriers and still allow for environmental regulation. I believe that's where it comes from in the first place, from the drafters.

[Russ Hiebert, Conservative, South Surrey—White Rock—Cloverdale, BC]

I also have read that the side agreement on the environment does not include any financial penalties to be applied when a party is deemed to be not in compliance with a panel report. Did that strike you as interesting, or is that standard?

[Theresa McClenaghan]

It didn't strike me as interesting or as standard either. I was more concerned about whether that would extend into the investment agreement, and it doesn't. In the investment agreement, the investors still have the right to bring claims for expropriation or indirect expropriation.

The fact that the parties wouldn't seek financial claims for regulating or not regulating in the interests of the environment doesn't really surprise me. If they thought, for instance, that the other wasn't complying with the provisions to pursue high levels of regulation, I assume they would pursue other remedies in this agreement, such as talking to each other or setting up a committee, etc.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Ravignat.

[Mathieu Ravignat, NDP, Pontiac, QC]

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

My question is for Mr. Vogt. When workers' rights have not been established, it is usually women and children who must work in the toughest conditions. I am wondering if you could describe the situation for female and child workers in the Hashemite Kingdom of Jordan.

[Jeff Vogt]

In the garment industry, as is typical in many places, the workforce is typically female. I am not by any means an expert on the question of child labour within Jordan. I can certainly research that and provide information to you on that question. I'm afraid that's probably the extent of what I can provide to you now. I'll be happy to prepare something in writing on that question.

[Mathieu Ravignat, NDP, Pontiac, QC]

That would be very helpful.

Often, the unions that are active in the region have a better idea of workers' conditions and the advantages of a possible agreement or the disadvantages of a possible free-trade agreement.

Do you know what concerns unions in the Hashemite Kingdom of Jordan have when it comes to trade liberalization? Do they support this measure, yes or no?

[Jeff Vogt]

I do not know what the position of the federation is on that issue. I know, though, that since Jordan entered into an FTA with the United States, the QIZs have shrunk substantially in size. So I think there was an indication that this would be a lifeline to the garment industry in Jordan, but that turned out not to be the case. I can't speak on behalf of the Jordanians on this legislation.

[Mathieu Ravignat, NDP, Pontiac, QC]

Very well.

Speaking of the U.S., I have a question for you. It has to do with the very principle of side agreements on labour. The free-trade agreement with the U.S. does not include a side agreement on labour, but the main trade agreement contains some labour clauses.

In light of the U.S.'s experience, do you think that the part on labour in the Canada-Jordan agreement should be included in the main document? Would that help things? Can side agreements really be implemented?

[Jeff Vogt]

I think the real question is, what are both the standards and the dispute mechanisms that are available in such circumstances? I think the reason why there was such an outcry on the labour provisions of the NAFTA was that you had a very obviously substandard set of dispute resolution processes under the side agreements, whereas I think if you move the text within the agreement but still have a tie to a different or lesser set of dispute settlement mechanisms, you're not really accomplishing much.

For example, in the case of CAFTA, in the United States, you had the labour provisions moving from the outside to the inside, but it also had a kind of second-tier dispute settlement mechanism. You actually weren't gaining much by the fact that it was in the agreement because you had a lesser dispute settlement mechanism.

I think what is important is that you have high standards, that those standards are fully enforceable, and that sanctions are available in a case where one of the parties is not living up to its commitment under the agreement.

I think the U.S.-Jordan free trade agreement is an example. Both parties entered into that agreement. At the time, it had probably the strongest labour provisions available, yet the labour laws were not compliant from day one. Still, many years later, there remain issues, fewer than before but there are issues, and we still have many problems with implementation—

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

We'll have to move on to the next questioner now.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Chair, I just want to make sure that the information with regard to the condition of women and child workers will be forwarded to this committee.

[The Chair, Conservative, Rob Merrifield]

We actually should ask the next questioner that question. I think you would probably get more direct and firsthand information.

Mr. Shory.

[Devinder Shory, Conservative, Calgary Northeast, AB]

Thank you, Mr. Chair.

Thank you witnesses as well.

Mr. Chair, everyone knows that this government has an ambitious trade agenda, because we strongly believe that trade creates jobs and also provides opportunities for businesses, specifically for SMEs. That in turn creates jobs here in Canada. I believe this is a win-win situation. This free trade agreement will benefit both Canada and Jordan by opening markets for Canadian and Jordanian exporters, by providing unprecedented access to our respective markets, and by eliminating tariffs on a number of key products.

Mr. Chair, I don't understand the NDP's position that by opening new markets we will lose the jobs here in Canada. It's quite funny that during the leadership convention last week they hired a Spanish company over a Canadian company. Perhaps they need to “walk the talk”.

My question is for Mr. Vogt. Just as in the case of the Canada-Colombia Free Trade Agreement, we believe that engagement with Jordan through free trade will help raise the standard of living and improve Jordan's labour and environmental standards. However, the NDP believe “the only way we will get countries like Colombia to elevate their standards of labour and human rights is by not allowing them to play in that sandbox of globalized capital trade”.

We have seen improvements in Colombia since we signed the free trade agreement with Colombia. My question is—

[The Chair, Conservative, Rob Merrifield]

Get very quickly to your question.

[Devinder Shory, Conservative, Calgary Northeast, AB]

—do you believe, as in the case of Colombia, that labour and environmental standards will be improved with the signing of the Canada-Jordan free trade agreement?

[The Chair, Conservative, Rob Merrifield]

We have time for a very quick answer.

[Jeff Vogt]

I think at this moment—and this could be said about the U.S.-Colombia free trade agreement—you have substantial leverage prior to entering into an agreement to try to encourage the other country to live up to its legal obligations under the FTA. Once the FTA is ratified, there's usually a reluctance on the part of the governments to vigorously enforce labour clauses once the agreement is in force. I think withholding, in the U.S. context, the FTA with Colombia created substantial leverage, which over time led to the ability to negotiate a pretty extensive—not perfect, but extensive—labour action plan that the Colombian government is moving to implement, again not fully, and certainly with issues.

But in the case of U.S.-Jordan, just signing the agreement did not lead to worker rights being respected. It was only after a major exposé in The New York Times and a trade complaint against Jordan that we began to see some progress being made.

[The Chair, Conservative, Rob Merrifield]

Thank you very much, Mr. Vogt and Ms. McClenaghan, for your testimony and for your answers to the questions.

That brings us to the end of this segment of our committee. We will set up now for the next presenter.

I appreciate your time with us. Have a good day.

[The Chair, Conservative, Rob Merrifield]

I call the meeting back to order.

We had a little technical hiccup in our video conferencing from Pittsburgh, Pennsylvania. Mr. Charles Kernaghan, you are with us from the Institute of Global Labour and Human Rights. Are we coming through all right?

[Charles Kernaghan, Director, Institute for Global Labour and Human Rights]

Very good. Fine.

[The Chair, Conservative, Rob Merrifield]

There seems to be a bit of a delay, but let's try it and see how you make out.

We want to thank you for coming to the committee and testifying with regard to Bill C-23, the Jordan-Canada free trade agreement.

The floor is yours, sir.