International Trade Committee on March 8th, 2021

[The Chair (Hon. Judy A. Sgro (Humber River—Black Creek, Lib.)), Liberal, Judy Sgro]

Happy International Women's Day to everyone participating today, and to anyone watching. We wish you all a wonderful International Women's Day.

Good morning, everyone. I call this meeting to order.

Welcome to meeting number 18 of the House of Commons Standing Committee on International Trade.

Pursuant to Standing Order 108 and the motion adopted by the committee on October 23, 2020, the committee is studying Canada's effort to reform the World Trade Organization.

Today's meeting is webcast and is taking place in a hybrid format, pursuant to the House order of January 25, 2021.

I would now like to welcome our witnesses for the first panel today.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Madam Chair, I just had my hand raised.

Is it appropriate to raise a point of order? It's a notice of motion that I circulated late Thursday, to be read into record with no debate.

[The Chair, Liberal, Judy Sgro]

Go ahead, Mr. Sheehan.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much.

To you and to the rest of the women on this committee, whether politicians or staff, happy International Women's Day.

Madam Chair and committee, I had circulated, in both official languages, the following notice of motion. I just want to read it as part of the public record, to be discussed at a future time by the committee.

That, pursuant to Standing Order 108(2), the committee undertake a study on Canadian exportation of green, clean and low-carbon technologies; that this study include an examination on how Canadian clean technology such as hydroelectricity, wind energy, solar energy, carbon sequestration, grid management, and plastics recycling can impact an ever evolving international market; that this study analyze the role that government agencies such as the Trade Commissioner Service can help Canadian clean technology businesses scale up and export to new markets; and that the committee report to the House.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Sheehan.

Mrs. Gray, did you have a point you wanted to make?

Go ahead, please.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Thank you, Madam Chair. I do have a notice of motion to read in as well, since we're allowing that at this point. I had also submitted this on Thursday.

That, pursuant to Standing Order 108(2), the committee undertake a study of no less than four meetings to evaluate the effectiveness of the Integrity Declaration on Doing Business with Xinjiang Entities and other government measures on supply chains involving forced labour related to the human rights situation in the Xinjiang Uyghur Autonomous Region; that the Minister of Small Business, Export Promotion and International Trade be invited to appear; that the Minister of Foreign Affairs be invited to appear; that the Chief Trade Commissioner be invited to appear; that Canada's Ambassador to China be invited to appear; and that the Committee report its findings and recommendations back to the House.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you, Mrs. Gray and Mr. Sheehan.

We will now go on to our witnesses. Thank you for your patience.

From the B.C. Lumber Trade Council, we have Susan Yurkovich, president and chief executive officer of the B.C. Council of Forest Industries; from the Grain Growers of Canada, we have Andre Harpe, chair, and Erin Gowriluk, executive director; from the Trade Justice Network, we have Jesse Whattam, coordinator.

We also have Mr. Claude Vaillancourt, president of the Réseau québécois sur l'intégration continentale.

Ms. Yurkovich, the floor is yours. Please go ahead.

[Susan Yurkovich, President and Chief Executive Officer, BC Council of Forest Industries, BC Lumber Trade Council]

Thank you very much, Madam Chair and members of the committee.

My name is Susan Yurkovich, and I'm the president and CEO of the BC Council of Forest Industries. I have the great pleasure of representing the majority of forest products manufacturers in the province of British Columbia, which is made up of big and small companies. Together, they produce about 50% of the country's lumber and pulp exports.

I also serve as the president of the BC Lumber Trade Council, representing most B.C. lumber producers on trade matters, including the softwood lumber agreement or disagreement between Canada and the United States.

Given the importance of B.C.'s forest sector to the Canadian economy, our workers and our communities, I appreciate the opportunity to talk about the key role our trade relations and our international trade organizations play in the long-term success of our industry. I wish to share a couple of perspectives with respect to the World Trade Organization and potential reforms.

First, I'll say a bit about the importance of the forest sector in British Columbia and Canada. B.C.'s forest industry has an economic impact like no other on our provincial economy. It contributes nearly $13 billion in GDP and generates about $4 billion annually in taxes and fees. That's money that supports health care, education and the other important social services that British Columbians and Canadians count on.

Importantly, it supports about 100,000 direct and indirect jobs in rural communities and urban centres alike. Today, our sector makes up about one-third of B.C.'s provincial exports. Our products are shipped to about 100 countries around the globe, accounting for 21% of all the traffic at the port of Vancouver, 46% of the container traffic through the port of Prince Rupert and about 11% of rail traffic in western Canada in recent years.

As part of the small, open economy that is both B.C. and Canada, strong trade relations and diversified markets have been critically important to the success of our industry. While the U.S. continues to be the top B.C. destination for our forest products, accounting for about 55% of total exports over the last couple of decades, in partnership with Canada and the B.C. government, over that same period, we have also led a charge in developing new markets for our high-quality wood products. Specifically, we have made great inroads into Asia, where about 30% of our products are now sold. This is critical, because it reduces our dependence on the U.S. market, where we continue to face unwarranted and punishing tariffs on softwood lumber. I will come back to softwood lumber in a minute.

As we look to the future, B.C. is poised to continue to help meet the growing global demand for products that are the renewable, low-carbon material of choice for everything from mass timber buildings to fibre-based packaging. Those are products that are helping to tackle climate change, while also supporting jobs that we are proud of right here at home.

As a trading nation, we are signatories to agreements that govern how we do this business around the world, and as with all relationships, these agreements will from time to time be tested. What's important to B.C.'s forest industry, like many other export-dependent industries across the country, is that we have strong, effective and efficient trade agreements in place, and that we have organizations that can help ensure they are enforced and respected, organizations like the WTO.

With that context in mind, I would like to come back to our decades-long experience with softwood lumber disputes and highlight some observations from our experience that inform our general recommendations with respect to the study you are undertaking. This includes the importance of upholding the WTO dispute settlement mechanism, the need to have a well-functioning appellate body, and the requirement for mechanisms that ensure timely resolution of disputes.

To begin, we can't underscore enough how critically important it is to continue to have a strong WTO dispute settlement mechanism. As a trading nation, Canada has bilateral and multilateral trade agreements with countries around the world, outlining the rules of the game, the terms by which each jurisdiction must abide. However, even with the best agreements in place, from time to time we do find ourselves in disputes with our trading partners. When these disputes arise, we must have a well-functioning neutral body to adjudicate.

Here is a little perspective from our world. The dispute with the U.S. about whether Canada provides unlawful subsidies to the lumber industry has been going on for about 40 years. As we sit here today, we are currently in the midst of the dispute affectionately known as Lumber V.

The prior disputes, Lumber III and Lumber IV, both ended in Canada's favour, with neutral international tribunals forcing the U.S. Department of Commerce to rescind unsupported subsidy findings. A neutral entity, looking at the facts of the case, sided with what is true, and that's the reason we believe that the continuing availability of binding WTO dispute settlement is of critical importance to our industry and many others across our trading nation.

That brings me to our second recommendation: the need to ensure that a well-functioning appellate body is in place.

This past summer, a WTO panel released a 225-page report evaluating the U.S. Department of Commerce's 2017 subsidy determination concerning softwood lumber products. In that report, the WTO identified more than 40 instances where—in its own words—“no unbiased and objective investigating authority” could have reached the findings that the Department of Commerce made based on the evidence before it.

While that was good news for Canada, the good news was very short-lived. In September, the U.S. appealed the panel report, and they did so to an appellate body that doesn't currently exist. The reason it doesn't exist is that the U.S. has been blocking the appointment of new appellate body members for the past several years. By appealing to a non-functioning appellate body, the U.S. has indefinitely stalled the adoption of the final report, meaning that the very favourable result for Canada has, in effect, been neutralized for the foreseeable future.

Given the importance of binding WTO dispute settlement for our industry, we strongly encourage the government to do what it can to resolve the current impasse. The prompt appointment of neutral adjudicators is of key importance to ensure the fair and efficient resolution of international disputes at the WTO. In the case of softwood lumber, this is all the more important in circumstances where the U.S. has likewise prevented the efficient progress of claims under NAFTA or the new CUSMA by delaying the panellist selection process, in the case of CVD, for more than three and a half years.

Finally, while it's essential to ensure the continuing availability of WTO dispute settlement, there is always room to improve the old system. Specifically, reform that ensures timely resolution of disputes would be viewed as both welcome and necessary. For example, while the resolution of disputes before panels and the appellate body is supposed to take a matter of months, it is frequently the case that it drags on for several years. This delay creates both added cost and uncertainty for our industry and, I expect, for all litigants.

The longer a dispute takes to be resolved, the greater the adverse impacts. This is for sure the case with softwood lumber, where the industry has significant duties on deposit, duties that now total nearly $5 billion, as a result of the unsupported findings of the U.S. Department of Commerce. These large financial burdens can only accumulate as the appeals drag on, tying up this cash indefinitely instead of it being invested in plant and equipment, training new workers and developing new products and new markets. In the case of softwood lumber, it also hurts U.S. consumers, as duties increase the price of products, negatively impacting affordability, which is particularly egregious given that the U.S. lumber producers are not able to meet their country's own domestic demand. More importantly, it hurts the thousands of Canadian workers and families, along with companies and communities, who depend on getting goods to market and continued industry investment for their livelihoods.

In closing, I want to thank you for undertaking this important work on this topic and reiterate the importance of having a robust, functioning WTO dispute settlement system for the softwood lumber industry in Canada and for other export industries across our nation. In considering WTO reform, I urge the committee to carefully consider options that will ensure that Canadian companies can get a fair hearing from a neutral body that is fully functioning and able to hear cases through to appeal and deliver timely resolution to disputes when they arise. This is critically important for the economic health of our country, which will continue to be a trading nation for decades to come, and for the workers and communities sustained by getting our goods to market.

Thank you. I look forward to your questions.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Yurkovich.

We now go to the Grain Growers of Canada, please.

[Andre Harpe, Chair, Grain Growers of Canada]

Good morning, everybody. Thank you very much for being here.

Madam Chair, honourable members, thank you for the opportunity to appear today.

My name is Andre Harpe, and I am the chair of the Grain Growers of Canada. GGC is the national voice for Canada's 65,000 grain farmers. Depending on the crops we produce, whether it be cereals, pulses or oilseeds, we export between 70% and 90% of what we grow to a diversity of markets worldwide.

I am also a third-generation farmer from the Peace River region of northern Alberta. I grow malt barley, canola, and peas.

Grain Growers is also a member of the Canadian Agri-Food Trade Alliance, commonly known as CAFTA, which represents essentially all export-oriented agricultural commodities and food manufacturing, and is a strong champion of free trade and the role of the World Trade Organization in trade liberalization.

Ladies and gentlemen, all across Canada grain farmers like me rely on free and fair trade. This is core to the success and competitiveness of our farm businesses, our families and our communities, as well as the larger grain sector.

I'd like to focus my comments on three areas: one, the importance of trade to grain farmers and Canada's leadership at the WTO; two, a full-functioning dispute settlement mechanism; and three, revitalization of the WTO negotiation function.

Grain farmers need a strong, rules-based trade environment to ensure that we have predictable access to international markets. Canada is a mid-size economy, and we are largely built on exports. This means we rely on a predictable trade landscape, expanded and diversified market access, and a WTO framework that can provide certainty of our export markets.

Your study looking at how to modernize the WTO is an important one. Since its inception, there has never been a greater need for an effective and enforceable rules-based system than right now. Grain farmers are concerned with growing nationalism, a focus on self-sufficiency in food production, and new forms of protectionism spurred by COVID-19. Agriculture is often the most vulnerable and the first target for protectionist measures.

However, this approach is neither sustainable nor beneficial in the long term. Canada must hold a firm line against this growing wave of protectionism. Open borders allowed for the movement of inputs, ingredients, workers, and expertise to cross borders throughout COVID-19, and for supply chains to continue to operate. Without open trade for agri-food, things would have been very different for families in Canada and around the world. We would argue that it is more critical now than ever to remove existing barriers, accelerate agri-food trade liberalization, and urgently fix and modernize the World Trade Organization.

In that sense, we are very supportive of the federal government's ongoing leadership through the Ottawa Group on reform, to safeguard the WTO and the rules-based trading system. We appreciate the focus on ensuring that any support measures stemming from COVID-19 are targeted and transparent, avoid unnecessary barriers to trade, and recognize that any emergency measures put in place should be withdrawn as quickly as possible to avoid any adverse effects on trade.

However, challenges to the functionality of our trading system predate the pandemic. The grain sector has faced a laundry list of non-tariff trade barriers in recent years that have restricted market access and farmers' access to technology. We hope the WTO modernization efforts will strengthen the function of the relevant committees for our sectors—namely, the agriculture, SPS, TBT, and the rules of origin committees—which work to review and improve compliance to the WTO Agreement on the Application of Sanitary and Phytosanitary measures and the WTO Agreement on Technical Barriers to Trade, as well as adherence to international standards. These agreements require that the measures introduced by WTO member states be based on science, be applied to the extent necessary, and not constitute an obstacle to trade.

Another major concern for Canadian grain farmers is the dispute settlement mechanism. A system of rules without the ability to effectively and efficiently come to a resolution when disagreements emerge simply does not work. As such, the current paralysis of the WTO appellate body needs to be resolved. Since 2019, the appellate body has been missing the required number of members, leaving it unable to reach quorum and therefore unable to hear appeals. A solution to this impasse is needed so the WTO dispute settlement can address the growing number of complex trade issues.

In addition to the dispute settlement mechanism, a revitalized WTO negotiation function is required to update and strengthen the existing rules of trade and to ensure they align with today's realities.

GGC supports increased momentum leading up to the ministerial conference, now expected in December 2021, to accelerate reforms and to agree on a renewed work program for agricultural negotiations. MC12 must deliver an outcome on agriculture, including on domestic support, along with other measures restricting trade of agriculture. Large agriculture-producing countries employ trade-distorting measures that impact international markets and prices. We believe there must be an equal playing field for farmers internationally and that WTO plays an important role in ensuring that this will happen. Much work remains in multiple areas, from market access to export competition, transparency, timelines of notifications and modernizing of trade rules to fit today's business needs.

As I prepared to appear before this committee, I came across a 2017 report from the Standing Committee on Agriculture and Agri-Food entitled “Non-Tariff Trade Barriers to the Sale of Agricultural Products in Relation to Free Trade Agreements”. I must say that if this document were not dated 2017, I would have guessed it was probably written last month. It supports the importance of WTO modernization and adherence to science-based decision-making. As highlighted in the report—and there has been a substantial amount of economic analysis on the cost implications of non-tariff measures to date—the data show that the sum effect of non-tariff measures for agri-food exporters is equivalent to having tariffs ranging from 25% to 30% in Asia, and 30% to 40% in the European market.

More largely speaking, the federal government must take a proactive strategy to enhance commercially viable access to export markets and to mitigate the trade-distorting impact of non-tariff barriers on our sector's growth and competitiveness.

The absence of WTO modernization will lead to more trade barriers as well as a less predictable, less transparent and less enforceable trading environment. The challenges our sector is facing in terms of protectionist measures will only increase over the next decade. The sooner we can accept this reality, the sooner we, a middle power in global trade, can effectively position ourselves in this increasingly protectionist world.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Harpe.

We go now to Ms. Whattam, coordinator for the Trade Justice Network.

[Jesse Whattam, Coordinator, Trade Justice Network]

Thank you, Chair and members of the committee, for having me.

My name is Jesse Whattam, and I'm here representing the Trade Justice Network, which is a coalition of environmental, civil society, student, indigenous, cultural, farming, labour and social justice organizations that came together in 2010 to call for a new global trade regime founded on social justice, human rights and environmental sustainability.

To name some of our members, they include the Canadian Labour Congress, Unifor, Canadian Union of Public Employees, United Steelworkers, and the Climate Action Network, just to name a few.

The World Trade Organization has failed to serve Canada or create a better, fairer world for all, and the Trade Justice Network welcomes the calls for fundamental reform. For three decades, the regime of hyperglobalized trade investment and supply chains via the World Trade Organization has empowered pharmaceutical, agribusiness, financial and other corporate interests in high-income countries to dominate economies to the detriment of national and local economies, workers, farmers, indigenous peoples, our health and the environment.

In the past three decades, despite increased global economic integration, the numbers of the world poor have increased absolutely and relatively. Without a labour protection floor, we've seen repressed wage growth and increased precarious work. The climate and economic crises have been ignored or needed solutions have been constrained by trade rules. There has been a rise in inequality within and between nations as governments have been stripped of essential tools to pursue the well-being of their peoples.

This is why the WTO is facing an existential crisis. The COVID-19 pandemic has only further exposed the inequality and instability of the current WTO regime. It's time for change.

I'm going to focus my comments on the inequity of power at the WTO, regulatory practices and the dispute settlement mechanisms.

The reality is that while the WTO is supposed to be governed by its 164 members, it's actually managed by its most powerful members. The EU and the U.S., along with most western OECD countries, have remained dominant and set the global rules of importance to multinational capital that have never been mutually beneficial for developing countries. This especially played out when rich countries sidelined the Doha development round priorities while pursuing an explosion of bilateral agreements and plurilateralism at the WTO, which was then foisted on developing countries. The interests of developing countries and the poorest communities and low-wage workers everywhere have been marginalized in many of these new negotiations.

In the realm of domestic regulation, corporate interests have lobbied successfully for deregulation through the current trade regime. Further, dispute settlement mechanisms and other explicit constraints in the WTO and free trade agreements prohibit high standards of public and environmental protection. While claiming that domestic regulation maintains the ability of member countries to regulate in the public interest and facilitate increased trade, in reality there's an inherent tension between the domestic regulatory space and trade liberalization.

While the language in the General Agreement on Trade in Services recognizes the sovereign right to regulate, it does not preclude a challenge against a state on the grounds that it administered a regulation that did not fulfill its standards and the criteria set under international instruments, such as the WTO law. In effect, such questioning of domestic regulations via the WTO dispute settlement mechanisms and based on international disciplines and standards challenges the boundaries of the state's regulatory space and the role of its regulatory authorities.

Since the founding of the WTO, regulatory barriers to trade have been at the top of the priority list for multinational corporations. Developed countries, on behalf of their largest industries and exporters, began to complain more loudly that the food and product safety standards, public health measures and environmental protections were creating market inefficiency. Under this pretense of market inefficiency, it has facilitated a deregulation affecting labour rights, consumer products and environmental protections.

Further, international business lobbies have increased their advocacy of so-called regulatory coherence and co-operation, including a right to intervene in the regulatory process as early and as often as possible, hoping to derail or weaken pro-consumer or pro-environment policies and regulations before they're even implemented, avoiding the need to later challenge them.

Right through the pandemic, this has been clear. Negotiations have continued on limiting domestic regulation of the service sector, even as the concentration of service firms is posing a major impediment to timely and cost-effective procurement and distribution of essential goods. Negotiations to limit regulation and vetting of foreign investors continue, despite a clear need for the production of personal protective equipment and medicines to be diversified.

A fundamental transformation should mean that no country should seek or be required to incorporate the so-called good regulatory practice into binding international treaties, as they've been designed to benefit corporate interests and multinational capital while putting democratic decision-making in a stranglehold.

My next point is on the dispute settlement mechanism within the current form of the WTO and trade regime. One of the biggest shifts of the WTO is that countries that try to restrict foreign trade can be more easily sanctioned, most notoriously by giving foreign investors the ability to sue states under the opaque arbitration process. Previous witnesses have spoken about how this current dispute mechanism has hurt Canadian industries.

Just last week, pharmaceutical companies were asking that countries such as Colombia, Chile and others be punished for seeking to ramp up their production of COVID-19 vaccines and therapeutics without express permission from pharmaceutical companies. Sanctions are being urged by the drug industries, citing alleged threats posed by any effort to challenge basic intellectual property rights. Canada and other high-income nations have refused to sign on to the proposal of the WTO or have delayed approving it. Even in the middle of a global pandemic, the rules of the WTO are prioritizing the profit of multinational corporations over people, especially in the global south.

When it comes to the climate, it is paramount that the WTO and trade rules protect climate policy. WTO trade rules that conflict with climate action should be eliminated to allow communities and governments to advance bold climate protections without the fear of being challenged in trade tribunals. We should not be beholden to agreements, such as the government procurement agreement, that can prohibit, say, renewable power purchasing. A fundamental transformation would align trade policies with climate objectives and enforce commitments to implement international climate accords and to make climate-protecting policy changes.

In conclusion, the WTO has functioned to establish rules for the world economy that mainly benefit large transnational corporations at the expense of national and local economies, workers, farmers, indigenous peoples, our health and the environment. Recently the Trade Justice Network signed on to a global call for WTO reform, which was signed by hundreds of civil society organizations across the world. This call cited the Geneva principles for the global green new deal, where economists, policy-makers, experts and civil society organizations aimed to lay down the foundations of a new multilateralism that builds the rules of the economy towards goals of coordinated stability, shared prosperity, and environmental sustainability while respecting national policy sovereignty.

It's these goals that should shape the WTO reform: people and the planet before profit.

Thank you for having me.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Ms. Whattam.

We'll move to Mr. Vaillancourt, please.

[Claude Vaillancourt, Member, Réseau québécois sur l'intégration continentale]

Good morning. I would first like to thank the Standing Committee on International Trade for this invitation.

The Réseau québécois sur l'intégration continentale, or RQIC, is a multi-sectoral organization of Quebec social organizations from the labour, grassroots and international development communities. The network focuses on free trade issues. RQIC's member organizations represent more than one million people.

I would like to begin with a necessary reminder. The World Trade Organization, the WTO, has a long history. This organization has been for many years, and rightly so, a major target of social movements around the world. The WTO has been the subject of major opposition. Think, for instance, of the WTO Seattle Ministerial Conference, which is associated with the birth of the anti-globalization movement, or those in Cancun and Hong Kong, among others.

The WTO has been criticized on many accounts, such as its lack of transparency, negotiations in favour of very large companies only, negotiations under strong constraints for the countries of the southern hemisphere, a lack of interest in social inequalities and environmental issues, an objective of privatization of services provided for in the General Agreement on Trade in Services, the very negative effects of WTO policies on small-scale farming, and so on.

Reforming the WTO is therefore a project that requires great ambition. Since the failure of the Doha Round, the WTO has operated in slow motion and has not proposed anything of real importance. Yet there has been no collapse or chaos in international trade, contrary to what was predicted.

Many have asked this question: is the WTO really useful if the path of multilateralism does not allow for a better hearing of the concerns of many southern countries and civil society organizations around the world?

One thing is certain; in order to reform, the WTO has a long way to go and a steep hill to climb. In this sense, Canada's proposals in the Ottawa Group seem to us insufficient to effectively reform the WTO. Indeed, strengthening the dispute settlement mechanism, revitalizing the negotiating function, and strengthening the deliberative function of the WTO will not bring about the much more fundamental reforms we expect of the WTO.

The WTO's problems are not about the functioning of its internal mechanisms and will not be solved by what we see as somewhat superficial changes. The Ottawa Group's plan unfortunately looks like a headlong rush and a refusal to listen to the many criticisms levelled at the WTO since its founding. What we are suggesting are changes, not to the form, but to the substance of the WTO's role.

The reformed WTO must completely overhaul intellectual property protection. By delaying the entry of generic medicines into the market, the WTO has reduced access to essential medicines for a large part of the population, especially in the south.

COVID-19 makes it more necessary than ever to remove WTO intellectual property constraints, as called for by, among others, Doctors without Borders, India, South Africa and many experts from around the world. Canada must support this demand, rather than oppose it as it has done. The lifting of these constraints should be allowed in any other emergency situation as well.

The reformed WTO must abandon its desire to systematically address non-tariff barriers. Rather than seeking to attack regulations, specifically environmental regulations, and often viewing them as protectionism, they should be encouraged. It is impossible to address a problem as grave as global warming by advocating unconstrained open markets and unrestricted movement of goods.

COVID-19 also made us realize how important it is to develop an economy focused on short circuits and to manufacture essential products locally.

More stringent regulation must also be developed in certain vital sectors, such as finance, to avoid, for example, a crisis like the one we experienced in 2007-08. This regulation must also apply to the Web giants and e-commerce.

The reformed WTO must exclude certain sectors from trade negotiations from the start. Canada has signed the Convention on the Protection and Promotion of the Diversity of Cultural Expressions, recognizing that the protection of culture is incompatible with the liberalization of international trade.

Other sectors should also enjoy similar protection and be removed from the WTO negotiations, including agriculture, health and education.

The reformed WTO must address tax competition among states. Although the OECD already addresses this issue at the international level, we believe it is necessary that this issue also be addressed by an organization dealing with international trade. International competition clearly distorts trade competition and has the effect of attracting investment to the most tax-friendly countries, thereby increasing social inequalities and penalizing countries with the best social policies. The WTO should, among other things, defend a minimum tax rate for all member countries.

The task of reforming the WTO is thus considerable. It is clear that its original mandate to make international trade as free as possible no longer holds today and is leading to disaster. In the 26 years since its creation, social inequality has exploded and global warming has become one of the greatest threats we face.

COVID-19 revealed how neglecting the environment and weakening public services, direct consequences of WTO-backed liberalizations, have contributed to the spread of the pandemic. It is also clear to us that if the Doha Round had been completed according to the will of the WTO, we would be living in an even worse situation than we are now. We therefore hope that the Government of Canada will have the courage to propose real changes to the WTO and challenge an original mandate that cannot stand today.

In closing, I would like to point out that the time frame we were given to prepare this brief was quite short and our working conditions were quite difficult. We would like to have a longer time frame in the future.

Thank you very much for your attention.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Vaillancourt.

We move on to the committee for questions.

Mr. Lobb, you have six minutes, please.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thanks, Madam Chair, and welcome to all the witnesses.

My first question is for the Grain Growers. It's in regard to the latest issue, even though it's not brand new, of durum wheat and Italy. What are your thoughts on that?

[Andre Harpe]

Go ahead, Erin. You might be more up to date on that situation.

[Erin Gowriluk, Executive Director, Grain Growers of Canada]

Sure.

I'm Erin Gowriluk, executive director of the Grain Growers of Canada.

This is a really important issue and one that the industry has been calling on the federal government, on the Canadian government, to take to the WTO for a couple of reasons. One of the more obvious reasons would be to resolve the issue with Italy in particular, to see them rescind or pull back on the mandatory country of origin labelling requirements.

I think, more importantly, it's to send a signal to Italy and to countries around the world that when Canada talks about promoting rules-based trade, we walk the talk. In particular, if we enter into an agreement and a country is not in compliance, we will hold them to account. That is an example that we would like the Canadian government to set.

In so doing, you prevent what's happening currently, where you see examples of this in other parts of Europe right now with the farm to fork strategy, where the country of origin labelling requirement is now bleeding into other jurisdictions. I think that is due, in part, to a lack of action on the part of Canada.

[Ben Lobb, Conservative, Huron—Bruce, ON]

Thanks very much.

I know one of the reforms that have been ongoing or proposed is in regard to the appellate body and appointing panellists. I know for the previous U.S. administration that was a way for them to never get a resolution on anything. The Biden administration has indicated that it might be open to that.

What is your early take on their ability to appoint panellists for the appellate body?

I'll throw it to the Grain Growers again.

[Andre Harpe]

With the new administration, we're still trying to get a feel for how they act and where they're going in the future. We're looking forward to hopefully some positive outcomes, especially with the WTO and the appellate group.

I guess we're still waiting to see exactly what they're going to do.

[Ben Lobb, Conservative, Huron—Bruce, ON]

If you look at it, the country of origin labelling issue that was around the beef sector—I think Mr. Hoback is on the call here today and he'll remember that—took years and years. You can see that if you delay action on enacting a dispute at the WTO—and the durum wheat is now years old—it's going to take years to have a result. Even though they say it doesn't take years, it takes years. Almost half a decade's worth of time will have passed and we still don't have an outcome or a resolution. We definitely need to move forward on that, and I know our people with the BC Lumber Trade Council would feel the same way.

I want to ask the Trade Justice Network a question, and it's in regard to the idea of environmental goods. Is it tariff-free environmental goods, and what are your thoughts on that?

Maybe they're gone. Madam Clerk, do you know if they're still here, or did they do their presentation and go?

[The Chair, Liberal, Judy Sgro]

I believe they're supposed to still be here.

[The Clerk of the Committee, Ms. Christine Lafrance]

Was the question addressed to Ms. Whattam?

[The Chair, Liberal, Judy Sgro]

Yes, it was.

[The Clerk]

I think she has a connection problem. We're trying to reach her to see what's going on.