International Trade Committee on April 8th, 2014

[Don Davies, NDP, Vancouver Kingsway, BC]

That's fair enough.

I'll tell you why I ask. We don't engage with North Korea, we don't engage with Iran—in fact, we are embargoing Iran—and we don't engage with the Yanukovych government of Ukraine, because those countries don't conform to normative standards on the international stage. This is for various reasons. I'm not comparing them exactly. When countries don't behave in civilized ways, when they do not conform to basic behaviour that we expect of countries, we generally don't reward those countries with preferential trade terms.

Now, contrary to Mr. O'Toole's characterization of the record I gave as Google facts, the list of facts that we've raised is as long as my arm and from reputable sources of every type, showing that the situation in Honduras is simply appalling when measured by a human rights and democratic standard. It's not just civil society; the government itself is participating in these democratic and human rights violations. So I'm just asking....

You could make the argument that we should engage with every country in the world because that's the way to improve things. But that's not the way we conduct our foreign policy. We don't say that we should bargain a trade agreement with Iran because it's only by engaging them that things will improve.

I'm just wondering how this fits in terms of Honduras. Have you had any of those discussions or thoughts?

[Cameron MacKay]

I might just say that there is a qualitative difference between some countries on the planet that are engaging daily in state-sponsored repression of human rights, etc.—and you may have named some of them—and a country like Honduras.

The human rights issues and the problems associated with violence that you have described, in my experience when I was there, were not state-sponsored, directed by the government with orders from the top to “arrest my political opponents”, etc. This is simply not the situation in Honduras.

It has a different set of challenges. It is generalized violence. It is particularly driven by narco-trafficking, which is verging on being out of control in the region. It is a very serious concern, and it is for that reason that Canada and its like-minded partners, I should emphasize—the United States, the European Union, the Japanese, the Inter-American Development Bank, the World Bank—are together, as the major donors in the country, engaging with that government to try to address these challenges. This includes our free trade policy, and it is likewise with the U.S. and EU.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you.

I'm going to turn the floor over to Madam Liu.

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Thank you very much for your testimony and for appearing before committee today.

Mr. MacKay, you mentioned that the elimination of tariffs and the creation of better conditions for Canadian investment in Honduras were the motivating factors behind the negotiation of the Canada-Honduras FTA. But going over internal DFAIT reports, notably the report that was made public in October 2013, I was interested to read that in fact the bulk of top import and export items currently traded between Canada and Honduras are subject to very low tariffs, less than 5%. Moreover, statistics on the level of Canadian direct investment in Honduras are not actually publicly available.

We know that Honduras is Canada's 104th export market in terms of the value of exports, and internal DFAIT reports confirm that the benefits that Canada stands to gain from this FTA are in fact marginal. As a parliamentarian, I have quite a lot of trouble understanding the urgency and the need to negotiate a free trade agreement with a country like Honduras, especially considering the rampant human rights abuses that country faces.

But I'd like to touch on the question of the agricultural industry in Honduras. Bananas are the second-highest import into Canada from Honduras. But according to Festagro, which is a federation of agro-industrial unions, since 2009 there have been 31 trade unionists and 52 rural workers murdered. We still have reports of high-profile trade unionists, such as José Maria Martinez from Festagro continuing to receive death threats.

How aware is DFAIT of these human rights abuses, and how much information does DFAIT actually have on these human rights abuses and the threats these trade unionists face?

[Cameron MacKay]

I'd just like to come back to the first part of your statement, or your questioning, about the size of the Honduran market and its relative importance. We recognize that Honduras is nowhere near Canada's most important trading partner, and our bilateral trade, as I mentioned in my opening statement, is $280 million, which compared to daily trade with the United States, or something, is indeed very small. But $280 million is $280 million. For the businesses in Canada looking for opportunities in that market, these are dollars that matter. Where they don't have a level playing field, because other countries have a free trade agreement with Honduras and we don't, they will be commercially disadvantaged, and for that reason—

[Laurin Liu, NDP, Rivière-des-Mille-Îles, QC]

Is it true that Canada has a trade deficit with Honduras?

[Cameron MacKay]

Yes, and the trade agreement is not a tool to address that. That is not its purpose. The purpose of a trade agreement is to provide a level playing field.

If I can answer the question on human rights, the embassy is well aware of the human rights abuses that are going on in Honduras. There certainly are shockingly high rates of violence. You mentioned murders of trade unionists, journalists, etc. I would add to the list lawyers, accountants, and public officials. I'm willing to guess that probably the highest rate of homicide would be young, unemployed men between the ages of 18 and 30, who are dying at a very high rate because of this narco-trafficking. So the embassy and the department are well aware of the human rights challenges that Honduras faces.

[The Chair, Conservative, Rob Merrifield]

Thank you very much.

Mr. Hoback.

[Henri-Paul Normandin]

Yes, and if I can add, Mr. Chair—

[The Chair, Conservative, Rob Merrifield]

Oh.

[Henri-Paul Normandin]

—we work on those issues. Contrary to some of the other countries that were mentioned before in Honduras, we can work with and in Honduras to address those human rights issues. We can entertain dialogue with the Honduran government, which we do. I was there a month ago, and I did raise human rights issues in my meetings with the minister of foreign affairs. We can carry on projects with various units of the government. We can also support civil society, which we do very actively in Honduras.

All those things are possible in Honduras, unlike some of the other countries that were mentioned before. I've worked in several countries, actively promoting human rights, and Honduras is in the category of countries where we can do some work with them to address those issues.

[The Chair, Conservative, Rob Merrifield]

Very good.

Mr. Hoback.

[Randy Hoback, Conservative, Prince Albert, SK]

Thank you, Mr. Chair.

Thank you, gentlemen, for being here this morning.

It's interesting to listen to my colleagues talk about this agreement, and all the reasons why they think it's not appropriate. It seems to come around to the fact that they don't want to give Honduras a helping hand. The way I see it is that one of the best social programs we can have is to give somebody a job. Now, the impact in Honduras of a job can be two ways. If you have a job in narco-trafficking, you have the cancerous effects of that type of job, which result in violence, murders, human rights abuses, and other types of illegal activity. Or you can give them a job that's fair-paying and honourable.

You talked about the cacao industry, Mr. MacKay. Can you maybe expand on the opportunities in that industry, with this type of agreement, and what impact that would have on ground to the individual Honduran?

[Cameron MacKay]

Let me say that when I was there, we had at the time—and I believe it's still ongoing—a CIDA project to help the local cacao farmers. There is already some local production. We worked closely with some consultants from Colombia, who were experts in this kind of agricultural production. We brought them in to work with local Honduran farmers on the coast, and one of the top objectives of this kind of program is to provide alternative employment and alternative economic opportunity to poor landowners and labourers in these underdeveloped coastal areas.

Frankly, if they don't have that kind of economic opportunity, if they can't make a living through this sort of legitimate economic activity, then right there at their doorstep is the opportunity for illegitimate economic activity, which leads directly to the kind of violence and human rights concerns we've been discussing here this morning. I think these kinds of programs are important.

[Randy Hoback, Conservative, Prince Albert, SK]

You brought up the word Colombian. I've been to Medellin, and Medellin is kind of like Chicago in a lot of ways. If you talked about Medellin in the early eighties, you would have thought of it as the drug capital and of all the horrible things that went wrong with the drug trade. If you look at Medellin today, and you look at the growth in Colombia and the totally different country it has become, do you see that type of opportunity actually happening in Honduras because of the economic activity that can happen, such that an FTA would provide?

[Cameron MacKay]

Well, I think that's certainly the goal of the Honduran government and the entire donor community. Again, it wouldn't just be Canada. But I've mentioned before that the United States, the E.U., the World Bank, and the Inter-American Development Bank programming are all very mindful of the fact that Honduras is facing all of the challenges now that so troubled Colombia 15 or 20 years ago. I think everyone's aspiration is that over time—and it will take many years, frankly—Honduras will turn around, and we'll be able to look at it as the success story that Colombia is now.

Colombia still faces many serious challenges but it's come a long way, and ideally Honduras will go in the same direction.

[Randy Hoback, Conservative, Prince Albert, SK]

It's interesting, because historically Canada is known as the country that helps people when they're in need. We've done that in areas around the world. We go into areas that are not necessarily polite, but five or ten years later, when you see the advancements, what we've done is we've cemented that maple leaf solidly in that country. It shows up 20, 30, 40, 50 years later.

Do you see that happening in this scenario?

[Cameron MacKay]

I have my fingers crossed. I hope so. I think it can be done. If we were talking about Colombia 15 or 20 years ago, it would have looked like a very desperate situation. It's much better now. Honduras has all the opportunity to achieve the same kinds of outcomes.

[Randy Hoback, Conservative, Prince Albert, SK]

So if we look at the agriculture sector, we have access for beef products coming out of Alberta. By the way, Saskatchewan has very good beef also. I just wanted to make you aware of that. We definitely have to get our flag out there for Saskatchewan.

[The Chair, Conservative, Rob Merrifield]

You're just about out of order there.

[Voices]

Oh, oh!

[Randy Hoback, Conservative, Prince Albert, SK]

I do have the chair working against me, in that scenario anyway.

How do you see the tariff removal happening for the agriculture products? How do you see that unfolding, the impact it will have here in Canada, and the impact in Honduras?

[Cameron MacKay]

Just on beef and pork, seeing that you mentioned beef, this was a very sensitive issue for the Hondurans. They have local beef and pork production. This was one of the more difficult areas of the agreement to finalize negotiations on. The outcome that was negotiated with respect to beef, and in particular, high-quality beef, which is typically what we would export to the region, is that upon implementation of the free trade agreement there will be a quota of 500 metric tonnes of duty-free Canadian high-quality beef allowed into the country. That will grow by about 25 metric tonnes per year over a period of 15 years. Eventually there will be duty-free unlimited access for Canadian beef into Honduras.

Pork is likely to be an even more important export product for us. The quotas start much higher, at 1,600 metric tonnes, when the agreement comes into force. That will increase by about 100 metric tonnes per year. Once again, after 15 years, in order to allow the Honduran beef and pork producers to adjust, it will be duty-free unlimited for Canadian pork exports. It's a good news story there.

As I mentioned in my opening statement, there's a wide variety of other agriculture products, including linseed oil, etc., from Saskatchewan, where the tariffs will be coming down either immediately, or where they were more sensitive for the Hondurans, over some period of time.

I should acknowledge that the outcome in the trade agreement is asymmetrical in that we recognize that Honduras faces development challenges that Canada doesn't. So we are dropping more of our tariffs earlier, and the Hondurans have more time to adjust.

[The Chair, Conservative, Rob Merrifield]

The time is gone.

But I do want to thank you for coming in and kicking us off on this bill that we hopefully will get across the line with regard to a free trade agreement with the Republic of Honduras.

Cameron MacKay, you were director general of the trade negotiations, so thank you for your testimony and what it meant for us.

Henri-Paul, you're now director general of the Latin America and the Caribbean bureau. We first met in Haiti, as ambassador to Haiti, and I want to thank you for your work down there.

[Henri-Paul Normandin]

Thank you.