International Trade Committee on Feb. 5th, 2020

[Steve Verheul]

That has been a particular focus that we've been engaged in as well on the gender side. We do have a chapter related to gender. We've included gender provisions in the chapter on small and medium-sized businesses. We've included gender in other areas as well, including the investment chapter and the labour chapter, and we've kind of inserted that throughout various provisions within the agreement to encourage women to be able to participate and effectively contribute to more economic access to the U.S. market—and the Mexican market, for that matter.

[The Chair, Liberal, Judy Sgro]

I'm sorry, Mr. Dhaliwal. Your time is up.

We'll go on to Mr. Savard-Tremblay for two and a half minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

I'll try to stay within my allotted time.

I also want to talk about chapter 28 on good regulatory practices, which states that the policies implemented must facilitate trade, growth and investment.

This mechanism seems quite restrictive. The new rules must be made publicly available each year, namely, the rules that will be in force the following year. The authorities must also make publicly available the studies and data that led to the practices in question, and justify the need for them and explain the issue that they wanted to address. A list of alternatives must also be provided. The chapter is 13 pages. However, it seems that we're making the process more cumbersome and shifting public policy toward greater liberalization, in addition to considerably reducing political sovereignty.

Chapter 11 of NAFTA has been eliminated. I want to congratulate you for this. It's a great success and a good thing. However, it seems that the chapter has been replaced by another mechanism that threatens sovereignty and the ability to make decisions in this Parliament.

[Steve Verheul]

Well, I think that certainly when we look at the good regulatory practices chapter, and when we look at the various annexes to the technical barriers to trade chapter and all of the efforts we have made on the regulatory issues, all of this is about co-operation. They are not obligations. There is nothing in those chapters that says one must adopt this U.S. regulation or that U.S. regulation.

It's about agreeing to good regulatory practices involving transparency so that the other country understands what the requirements are to enter their market—so small businesses can be very aware of what is necessary to sell to the U.S., for example—and all of this is oriented around co-operation to try to ease any kind of difficulties going back and forth across the border, not to put up any further barriers, while respecting our regulatory freedom to establish the regulations that we want within a Canadian perspective.

It doesn't mean that we're looking toward harmonizing regulations. It means that we're looking at making sure that we can recognize each other's requirements and that companies can prepare their products in such a way that they can enter those markets. This is all about trying to streamline movement back and forth across the border, not to impose any additional barriers. In fact, it is the reverse—to remove barriers.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Blaikie.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

After the first iteration of the deal was concluded, we heard that Canada's work was done and it was the best deal we could get.

Democrats in the States successfully pushed to have the deal reopened. At that time, did Canada propose any changes? In particular, I'm wondering if Canada brought a proposal to the table around the August 1 beginning of the dairy year and whether or not the coming into force of those provisions could be held back until August 1. Was that declined? Was the offer made?

[Steve Verheul]

First of all, I may ask Aaron to elaborate on some elements of that latter part, but when the U.S. Democrats in the House of Representatives started to engage with the U.S. trade representative, we were very much part of those conversations and had a window into them. We were talking to the Office of the U.S. Trade Representative. We were talking, to some extent, to the Democrats.

If you look closely at the provisions that are in the agreement that was reached to modify the original agreement reached on December 10, you see that when it comes to the provisions in relation to dispute settlement, when it comes to the provisions in relation to environment and in relation to labour, most of these were Canadian proposals that were made—

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

Did Canada make any of its own proposals in the second round of negotiations?

[Steve Verheul]

We didn't really have a need to given that the Democrats were taking many of the proposals we made in the negotiations and picking them up as their own proposals.

[Daniel Blaikie, NDP, Elmwood—Transcona, MB]

In your opinion, it was not an opportunity to try, for instance, to delay the coming into force of the dairy provisions by several months in order to provide some predictability to dairy farmers in this fiscal year.

[Steve Verheul]

That specific issue was not something that anybody on the U.S. side had any interest in, so to my knowledge that was not pursued. I don't know if you have anything to add to that, Aaron.

[Aaron Fowler]

No, just to say that the dairy outcome overall was a very carefully and delicately put together balance of concessions and obligations. Given that no additional U.S. requests fell into the area of Canadian agriculture as part of the protocol, we did not consider that we would seek any changes to the outcome that we achieved at the negotiating table.

[The Chair, Liberal, Judy Sgro]

We will move on to Mr. Fast.

[Ed Fast, Conservative, Abbotsford, BC]

How many free trade agreements does Canada have?

[Steve Verheul]

It depends on how you count them.

[Ed Fast, Conservative, Abbotsford, BC]

How many countries does Canada have free trade agreements with? Are there 51?

[Steve Verheul]

—51 or 53...somewhere in that range. Yes.

[Ed Fast, Conservative, Abbotsford, BC]

How many foreign investment promotion and protection agreements does Canada have?

[Steve Verheul]

I'm guessing a bit here, but I think it's in the range of 30 to 35. I don't know if anybody can....

We have 14 free trade agreements with 51 countries.

[Ed Fast, Conservative, Abbotsford, BC]

All right, we have all those free trade agreements, all those FIPAs as they're known, and virtually all of them have some sort of investor-state dispute settlement in them. Is that correct?

[Steve Verheul]

That's correct.

[Ed Fast, Conservative, Abbotsford, BC]

So now we have a renegotiation with Donald Trump after years of Canada being a champion of ISDS because it protects Canadian companies when they have a dispute with respect to a foreign country changing the rules and acting in a discriminatory manner.

[Steve Verheul]

That's right.

[Ed Fast, Conservative, Abbotsford, BC]

Now suddenly we get to the new NAFTA, and Canada says we have to get rid of the ISDS and, wow, we have a great win because we got rid of something that we've always championed.

Can you explain that dynamic to me?

[Steve Verheul]

I can. When we look at investor-state dispute settlements, they are of most value with countries where we have limited faith in their court systems and with their ability to enforce agreements. So we have investor-state dispute settlements with many Latin American countries, some African countries and various Asian countries—we have a lot around the world. We tend to have less emphasis on that when we are dealing with countries with established court systems and respect for the rule of law and with whom we don't feel that same kind of threat.

But, when it comes to the U.S., we have had the experience through the course of NAFTA of having been challenged by U.S. investors many times, as I mentioned. We have had cases where Canadian investors did try to make moves toward challenging the U.S., but the U.S. has had no cases against us. That simply wasn't working as an instrument between us and the U.S.