I'm Sheila Katz, representing the Canadian Council for International Co-operation. Brittany Lambert is a colleague. She is the coordinator of the Americas Policy Group of the council.
As always, I want to thank you for the opportunity to speak to you today on behalf of the Canadian Council for International Co-operation. For those of you who don't know, the CCIC is a coalition of close to a hundred Canadian voluntary sector organizations working globally to achieve sustainable human development. The Americas Policy Group, APG, is a working group of the CCIC. Its mandate is to provide coordinated policy positions on Canadian foreign policy towards Latin America. My testimony today is therefore representative of a broad group of organizations and their partners on the ground in Latin America. I personally have 30 years of experience of observing and participating in Latin American processes and situations and history from a civil society perspective.
I want to speak to you today about the intersection of the Pacific Alliance—and Canada's joining it or not—with Canada's strategy for the Americas, and the implications for Canada's ability to honour its human rights commitments in this context. I refer also to how joining the Pacific Alliance, or not, might help or hinder Canada's Americas policy within the region as a whole.
I'm going to refer to something that probably not many of your witnesses have referred to, and that is human rights and democracy.
On announcing Canada's re-engagement in the Americas in 2007, the Prime Minister stated:
We are a country of the Americas.... Re-engagement in our hemisphere is a critical international priority for our Government. Canada is committed to playing a bigger role in the Americas and to doing so for the long term.
Canada's three key objectives announced at that time for the Americas were, first, to strengthen and promote Canada’s foundational values of freedom, democracy, human rights, and the rule of law; second, to build strong sustainable economies through increased trade and investment; and third, to meet new security challenges as well as natural disasters and health pandemics.
On reviewing the implementation of the Americas strategy in 2012, the CCIC observed that the record of action to date has been narrowly focused on free trade agreements and the protection of corporate interests and investments at the expense of deep engagement on such important issues as development, security, corporate accountability, democratic governance, and human rights.
Allow me to give you a few examples.
The Americas Policy Group has recommended that Canada refrain from concluding free trade agreements with countries that have poor democratic governance and human rights records. Yet in 2008 Canada signed a free trade agreement with Colombia, the country with the worst human rights record in the hemisphere. There were, and continue to be, legitimate reasons to fear that an FTA would exacerbate the already fragile human rights situation in Colombia. Yet Canada went ahead with the deal, sidestepping this very committee's recommendations to not proceed with the agreement until an independent human rights impact assessment had been conducted. Instead, it implemented a side agreement requiring each government to report on their own actions every year after the implementation of the FTA, a process that so far has failed to produce serious monitoring and accountability.
The second example was Canada's eager recognition of a president who came to power in a military coup in Honduras in 2009. This is another example of Canada prioritizing the trade pillar of its Americas strategy above the rest. Since the coup, hundreds of regime opponents have been intimidated, arbitrarily arrested, disappeared, tortured, and killed. The Americas Policy Group is concerned that Canada has validated this regime by adopting a business-as-usual approach and signing a free trade agreement with Honduras in spite of its human rights record.
In spite of Canada's stated commitment to human rights and good governance, it seems that the real driving force behind our free trade agreements is the provision of strong, enforceable rules to protect the rights of investors. This is done by replicating the model of NAFTA's investment chapter, which gives private companies the ability to sue national governments for actions that might impinge on their profits or potential profits.
In many cases, these investor protections clash with the human rights of citizens, such as the right to health, clean water, clean air, and freedom of expression. In the framework of these agreements, the scope of government to enact public policies for the common good is severely curtailed if these policies affect the profit or property of a private company. As such, it results in putting a chill on legislators, who are less willing to legislate for the public good, knowing they may be challenged by private companies.
When these challenges occur, the recourse for companies is to sue the government, not in a national court, but in a transnational body or a panel of experts operating in secret. However, the states are then expected to enforce the decisions of the secret panel on taxpayers and citizens. This clearly favours the interests of transnational corporations over the democratic rights of nations and is a clear challenge to democracy.
Driven by corporate interests in mining, finance, and other sectors, policy-makers in Ottawa, closely allied with Washington, attempted to extend the NAFTA model to the entire hemisphere in the free trade area of the Americas in the mid-1990s, pushing for deeper corporate penetration in the hemisphere via a favourable investment regime and other free market reforms. Critics quickly pointed out that this would establish an international regulatory regime that would lock in place the last two decades of structural adjustment policies in the region, creating opportunities for Canadian business interests, but giving little consideration to human rights, ecological costs, poverty reduction, or social development. It also would have opened the door for commercialization of such social programs as health care, education, provision of water, and the like.
As the FTAA negotiations lurched ahead, it became clear that the rhetoric of democracy, human rights, social justice, and shared prosperity coming from Ottawa and Washington sounded good, but they were in fact empty promises. The FTAA was defeated in 2005, in an effort by the newly elected socially progressive governments in the south, led by Brazil and its partners, leaving Canada and the U.S. isolated as its sole proponents. Although the FTAA was dead, both Washington and Ottawa remained strongly committed to its neo-liberal, free market fundamentals, and shifted strategies to promote the same model through free trade agreements and investment protections at the subregional and bilateral levels.
The isolation of Washington and Ottawa, which emerged from the FTAA failure, has deepened. The Latin American and Caribbean states have come together to seek a new destiny for the region through the formation of new institutional groups, such as UNASUR, the Union of South American Nations, and CELAC, the Community of Latin American and Caribbean States, to which neither the United States nor Canada have been invited. Has anybody asked why?
I would like to make a few comments about the specific case of Mexico, since Mexico is the largest of the Pacific Alliance economies and has had a longer and deeper relationship on free trade with Canada and the United States through NAFTA.
NAFTA proponents promised technology and capital that would modernize the Mexican economy, leading to industrialization and increased productivity and competitiveness. Wages would rise, creating economic alternatives to involvement in the drug trade, and would slow migration to the United States, so they said.
Now, 20 years later, official statistics show that between 2006 and 2010, more than 12 million Mexicans joined the ranks of the impoverished, causing the poverty level to jump to 51.3% of the population. It is perhaps most striking that according to new research by Bank of America Merrill Lynch, Mexico's hourly wages are now about a fifth lower than China's hourly wages. Ten years ago, they were three times higher.
Writing in The Miami Herald last month, Andres Oppenheimer, a well-known journalist, made the observation that “Everybody is upbeat on Mexico – except Mexicans.”
Furthermore, an unintended consequence or collateral damage of NAFTA in North America, through Mexico, is that it has aided significantly in the expansion of illicit markets, primarily in the drug sector.
Phil Jordan, the former director of DEA's El Paso Intelligence Center, in 1997, remarked that NAFTA served as a “godsend” to drug trafficking, “the best thing that happened to product distribution since Nike signed up Michael Jordan”. This is the DEA speaking.
Similar shocking conclusions were drawn in the 1999 study called The Illicit Global Economy and State Power, documenting the impact of Mexico’s market reforms on the illicit drug trade. One of these was that the increased trade flows between Colombia, Mexico, and the United States brought about by trade liberalization provided the necessary cover for increased drug trafficking. This situation took advantage of the privatization of companies and services, the deregulation of the trucking industry, foreign debt repayments, higher incentives for bribes, and other issues of that nature. Financial liberalization also increased money-laundering opportunities for drug cartels, and capital market investments created a narco sector.
Human Rights Watch now refers to a human rights crisis in Mexico, the culmination of an unprecedented body count and forced disappearances, along with the terror, bombings, beheadings, mutilations, torture, mass graves, and other forms of suffering that have been inflicted upon the Mexican people in recent years. Groups analyzing this sector have issued a call for caution by policy-makers in light of Mexico’s admittance into the Trans-Pacific Partnership, but the same word of caution can be applied to the ongoing development of the Pacific Alliance: lest history repeat itself.
To sum up, I suggest that the following questions need to be asked regarding whether or not Canada should become an official member of the Pacific Alliance.
Number one, how would full participation in the Pacific Alliance contribute to a reinvigorated Americas strategy and strengthen Canada's role and relationship with the hemisphere as a whole, given the bifurcation that's taken place between the Atlantic- and the Pacific-facing countries?
Number two, with over 50% of the mineral exploration market in Latin America controlled by Canadian companies, is the Pacific Alliance a place where Canada can show its leadership in addressing the social and environmental ills that so often characterize the extractive sector?
Number three, how would the Pacific Alliance react to a disruption in democratic governance, such as what took place in Honduras in 2009 and in Paraguay in 2012?
Number four, will discussions about the service industry in the Pacific Alliance acknowledge that education, health care, clean water, electricity, and pensions are essential services rather than profit-making opportunities for private companies?
And finally, number five, is the Pacific Alliance consulting on its members' compliance with international human rights standards? Is there a human rights working group? And will the trade agreements that come out of it put human rights ahead of corporate profit, creating just, more just, and sustainable societies?
I close there and welcome your questions.