International Trade Committee on June 4th, 2024

[Chandra Arya, Liberal, Nepean, ON]

Okay, thanks.

What is your guess as to how easy it will be when the review process starts?

[Steve Verheul]

I think there's going to be a lot of back-and-forth leading up to that. Even though the review is going to be July 1, 2026, I think the process will start probably a year or so ahead of that. There will be lots of positioning—

[The Chair, Liberal, Judy Sgro]

Mr. Verheul, I have to interrupt for a moment. Can you just give us a second?

The bells are ringing, or were ringing. Are they still—

[Tony Baldinelli, Conservative, Niagara Falls, ON]

It may have been a quorum call.

[The Chair, Liberal, Judy Sgro]

Just give us a second here.

They're no longer ringing.

I'm sorry. We'll go back to Mr. Verheul.

[Steve Verheul]

I think there is lots of positioning going on. It will really depend on how the U.S. is going to approach it.

If the U.S. is going to try to rebalance concessions in its favour, taking away from Mexico and Canada, it will be a very contentious review, obviously. However, if we can move to a process whereby we try to benefit the North American market overall and coordinate more closely among the three parties, then I think there's a real opportunity there.

[Chandra Arya, Liberal, Nepean, ON]

Both Republicans and Democrats, as you mentioned, are protectionists. I was born and grew up in a third world country, which is now what we call the global south. These were the kind of words we used to hear from our political leaders. It was that we have to safeguard our industries and save our economy from these imports and put up high tariffs, leading to an inefficient system and inefficient economic sectors.

I'm sure the Trump or Biden administrations will both try to extract more concessions. That, obviously, will lead to very tough negotiations. I don't want to envisage it, but is there any possibility that this review will end CUSMA?

[Steve Verheul]

In my view, it's very unlikely, because it is worth a lot to the U.S. as well as to Mexico and to Canada. I think that would be enough of a big economic shock in the region that we would hope they wouldn't go that far. I would not be surprised if the U.S. tried to make the deal even better for them than it is now, but I think they will see the need for them to continue with the agreement as well.

[Chandra Arya, Liberal, Nepean, ON]

Hopefully, it will not come to the annual review, but if it comes, things will be very, very difficult.

When do you think the uncertainty of the review will start actually affecting investments in business?

[Steve Verheul]

I have certainly been hearing already that the existence of the review clause does create the feeling that it's not as solid as it could be, because you could turn the direction and go towards an eventual termination of the agreement, so it's already having some impact. I think as we get closer, the rhetoric we're hearing, particularly out of the U.S. about their objectives in the review clause, could certainly start to undermine confidence very quickly. Right now we're in more of a state of uncertainty, waiting to see.

[Chandra Arya, Liberal, Nepean, ON]

With your background and presence in our trade negotiating team, do you think we have enough resources and people with expertise to handle this?

[Steve Verheul]

Oh, I'm sure we do. Lots of people have been involved in these issues for a long period of time, as I was. I'm sure they'll do well.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Savard-Tremblay, you have six minutes, please.

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

Thank you, Madam Chair.

I'd like to thank all the witnesses for their presentations.

Mr. Vaillancourt, we agree on one thing: The climate emergency is real. Even though some people deny it, I'd like to think that you do not. At least, that's what I suspect.

People were very happy—except yours truly—when they were told about the chapters on the environment, labour, and so on. It's true that this is progress. I'll take it, of course, it's better than nothing. With regard to the environment, for example, you seemed to say there wasn't much in there. You said that these were fine principles, but that they were not worth much more than the paper they were printed on.

First of all, is that true? Second, what could be improved?

[Claude Vaillancourt]

First of all, it's absolutely true.

The recent climate conferences, as well as the one on biodiversity held in Montreal, show not only the enormous progress that's been made in this area, but also the scope of the disasters that are piling up and the growing danger associated with climate change. So the free trade agreements really have to adapt to all that, especially since, in a way, they have also contributed to it. Indeed, these agreements have made it possible to trade on a very large geographical scale, whereas today, we know that we have to favour short-channel distribution networks.

In my opinion, free trade agreements, and this one in particular, must help fight climate change, and for that we need to change our vision of the economy. It's a bit sad, but I think it needs to be said. For example, as the IPCC has told us countless times, hydrocarbons must be left in the ground. In free trade agreements, we have a duty, as I said in my presentation, to name the things that are causing problems, such as hydrocarbons and methane.

I think my last suggestion also bears repeating: The Kunming‑Montreal Global Biodiversity Framework and the Paris Agreement must be mentioned in CUSMA. There is mention of other international agreements signed by all three parties. So why not include those objectives in CUSMA? In my opinion, that would make it possible to achieve some rather interesting advances on the environment. Even though there's a new chapter on the environment, it's still one of the very weak points in this free trade agreement.

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

Would mentioning international conventions of this kind give them some kind of force of law? In other words, if trade were to go against environmental objectives, could that be subject to a legal squabble?

[Claude Vaillancourt]

Yes, you're right. In fact, environmental issues should even be given priority. That's what our association, the RQMI, thinks. The environment is the most important thing in the world. It's about having a healthy planet in good shape. That's first and foremost. It's not necessarily a trade barrier, in the sense that living in a healthy environment also allows us to trade economically.

However, if we are to give priority to one or the other, for us, there's no doubt that environment protection and the survival of the planet—which are what this is ultimately about—must be the top priority.

This absolute need to protect the environment must be part of free trade agreements, in my opinion. That's crucial for us.

This is not hidden protectionism. It's important to say that it's not. It's a real need being expressed here.

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

You were quite clear about the fact that, even though the investor-state dispute settlement mechanism was eliminated in CUSMA, which is good news, it is still Canada's official position. In fact, although it didn't create this type of dispute settlement mechanism, NAFTA has helped make it extremely popular in an entire generation of agreements that followed.

If you go to the Global Affairs Canada website, you will see that Canada still supports this mechanism and is generally looking to retain it. We know that the United States was in favour of eliminating it in the last negotiations. We will see about the next ones, but there's no indication that they would like to bring it back. You've made it clear that you're not in favour of this mechanism.

Conversely, shouldn't we include more formal mechanisms, beyond a kind of right to profits at the expense of democratically adopted policies, and offer remedies to those who could be victims of certain companies, agreements or provisions?

Should we formalize a legal remedy for victims?

[Claude Vaillancourt]

Yes, that would be interesting. I also think that Canada should improve protection for whistle-blowers. Right now, I don't think whistle-blowers in Quebec and Canada are very well protected. These individuals often do fundamental, extremely important work. They reveal deficiencies, things that are harmful to the population as a whole. These individuals are often penalized or end up in extremely difficult situations.

This protection is therefore really one of the first things that should be implemented with much greater force than it is right now. Perhaps people would then be less afraid to take legal action and use freedom of expression to wage necessary battles, be it on the environment or on working conditions.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Cannings, go ahead for six minutes, please.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you to all the witnesses here today. We have a wonderful crowd.

I'm going to start with Ms. Vipond from the CLC.

You talked about the worker-centred approach, naturally, and the rapid response mechanism. You also mentioned a tripartite formula for bringing together government, unions and business.

Could you talk about that and where it would fit in with this? Has it been tried elsewhere? How can it improve the process?

[Siobhán Vipond]

Thank you for the question.

Obviously, a worker-centred approach is what we want to see. We can see it in the U.S., where it has been successful in terms of framing the agreement to deliver the best, not just for corporations but also for people and communities. The tripartite approach we want to see happening is within the review, and how we get there, in terms of how we look at it. There are a lot of examples of how a tripartite approach is the best approach. We obviously have it internationally. We work with it at the ILO. We will soon see it, hopefully, when we're looking at a sustainable job future.

These are the interested parties. Getting them at the same table so we can talk about solutions and what that looks like means nobody is going to get left behind.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you for that.

How has the labour chapter been working so far? Has that rapid response mechanism been working? We heard a bit from Unifor in our last meeting that there were some issues in Mexico and the United States, where perhaps we should be....

[Siobhán Vipond]

We need to strengthen the rapid response mechanism. It's important that it be enforced across all countries. The reality is that the intention of an agreement like this is to provide equal access to markets, but we must recognize that it cannot result in unequal access to workers' rights. The rapid response needs to continue to be quick in what it's going to look at, because any of these rules without enforcement are not going to be strong enough.

We would encourage that it stays there and stays strong to ensure that it is meeting the needs so that people can access labour rights under this agreement in all countries, including those where we are also looking at the forced labour items coming in, potentially, and that it actually provides a meaningful response.