It's good to see you.
Let me begin by thanking you, Madam Chair and members of the committee, for inviting me here today. My bet is that I was invited to come and talk to you because I was serving on the minister's advisory committee on this matter with a bunch of others. Let me also begin by telling you that I had quite an interesting ringside seat in these negotiations. That being so, it's quite a pleasure to see that you all get to join me in all this fun and decode these issues and address them in the public interest. I'm grateful for this opportunity to share a few reflections and, if I may, offer the committee one piece of advice.
I have two opening compliments. My first compliment is to say that I really do think, having watched these negotiations, that Canada was extremely well served by its negotiating team. They deserve to be thanked for their work. Canada, in my view, had the most experienced and thoughtful and prepared and competent set of officials at the table. I'd say our officials had the important comparative advantage of being rationally led. If I can say this across the partisan fence, Minister Freeland did an excellent job in her role and thoroughly earned her recent promotion. It was a pleasure to watch her work.
My second opening compliment is to my own tribe's trade critic, the honourable Daniel Blaikie from Elmwood—Transcona, who is apparently talking in the House right now. Last week's agreement between the NDP opposition and the government over ratification was another nice piece of bargaining, in my view, but it's also something else. It's an example, which I hope you're all watching, of how empowered, well-informed and responsible members of Parliament can take advantage of their leverage during periods of minority government to open the windows and turn on the lights in this place and renew accountability and transparency and democratic debate; nicely done.
About this agreement, I recommend that this committee refer USMCA, the son of NAFTA, to the House of Commons for ratification. I recommend this for three reasons. First, I think this agreement should be ratified because it captures an extraordinary moment in history. It's an extraordinary moment when the President of the United States, the Senate of the United States, the House of Representatives of the United States, the Republican Party and the Democratic Party all agree that cheap-labour-seeking, race-to-the-bottom trade agreements have gravely hurt American workers, have therefore gravely hurt the United States, and are therefore bad ideas that need to be fixed.
That's a true revolution in world trade after decades in which American governments of all hues set the tone around the world by pursuing a very different agenda. They aggressively pursued rules that drove the offshoring of North American jobs for the purpose of capturing low wages and standards overseas, driving down incomes, pensions and terms of work here in North America. In lieu of that, here we have a trade agreement, much improved by the U.S. House of Representatives, that takes some first steps towards raising standards, raising incomes and improving access to unionization and free collective bargaining. It actually intends to enforce these steps. That, I submit, is something that we should grab. It is something that we should build on.
Second, in my view, this agreement should be ratified because it frees Canada from chapter 11 of NAFTA. This committee is familiar with the arguments. I won't rehearse them here, but let's keep this point clearly in view. The public interest in achieving this is hard to overstate. Our sovereignty was in some respects fundamentally undermined by this now quietly buried investor-state dispute settlement mechanism. I don't think Canadian exporters to the United States are going to miss it much, given how much leverage the United States government could bring to bear against Canadian companies who tried to use it south of the border. I'll return to this point about leverage in my one piece of advice to you.
Third, in my view, this agreement should be ratified because it abolishes the proportionality clause in the energy chapter. This clause was one of the principal American gains from the original free trade agreement and from NAFTA. It was a highly problematic constraint on Canadian sovereignty that Mexico exempted itself in NAFTA, and we're well shot of it. That said, the quiet death of the energy proportionality clause, and the fact that our American partners don't value it anymore and have quietly let it die, says something important about the underlying realities of Canada-U.S. trade. That gets us to my piece of advice for you.
I strongly advise you to say the following to your colleagues in Parliament, in addition to recommending ratification: If there's any lesson in this whole USMCA story, a renegotiation that Canada didn't go looking for, it's this. We are far, far too dependent on trade with the United States, nowhere more so than our energy trade, which our American partners felt they no longer had an interest in guaranteeing.
We, therefore, have dangerously little leverage when the random clock-spins of politics south of the border put our economy at risk. Thus, we must, as a matter of urgent and pressing necessity, aggressively and systematically invest in our new trade agreements with the EU and with the Asia-Pacific, backed up by a real, coherent plan that weaves the federal government, the provinces and territories and the private sector together in joint effort, and pursued with determination for many years to come, even when it's not fashionable.
We need better leverage. We need to re-empower ourselves in North America by growing and deepening our trade relationships with partners outside North America.
We got lucky this round. The target was Mexico. Then we got doubly lucky. Amazingly, the goal was to leverage up instead of leverage down. However, counting on luck isn't a wise strategy for any country. Having bought some time, we shouldn't go to sleep because what just happened with the USMCA wasn't just a bullet that we skilfully dodged and that Parliament can quietly celebrate by quietly ratifying this agreement. It was a big wake-up call.
Thank you.
