International Trade Committee on Oct. 25th, 2022

[H.E. Nadia Theodore]

Maybe I'll do it in English. I'm sorry that I'm a little bit long-winded.

I don't know if it will be a case, and it's not because we don't anticipate cases; it's just because, as I said, nothing prevents somebody from bringing a case. Could somebody bring a case? Absolutely. Does this mean that either the United States or Canada or Mexico, any of the USMCA members, was wrong? No. Does it mean that we would win the case or that they would lose the case? No.

[The Chair, Liberal, Judy Sgro]

Thank you, Ambassador.

It's on to Ms. Barron for two minutes, please.

[Lisa Marie Barron, NDP, Nanaimo—Ladysmith, BC]

Thank you, Chair.

Thank you again to the ambassador.

I'm going to build off the questions I was asking you before. I'm going to be heading right to my fisheries committee and we're going to be doing a study coming up about illegal, unreported and unregulated fishing.

I appreciate much of what you talked about around the importance of sustainability within our fisheries and around the prohibitions in place on WTO members against providing fisheries subsidies in the areas as we discussed before.

Can you clarify what was in place prior to these agreements being put into place? How will these prohibitions be enforced? How do indigenous rights play into these discussions?

I realize it's a big question, but do your best.

[H.E. Nadia Theodore]

Before the agreement there were not comprehensive disciplines on subsidies. With the fisheries subsidies agreement, we actually have enforceable rules that regulate this area, and I won't go through the three pillars that we already talked about before on the agreement.

Before, we had no predictability and no enforceability. Now we have actually put fences around the subsidies in those three areas that we've already discussed.

The question of indigenous rights for Canada is an interesting question, and I'm going to take too long and I'm happy to come back to it. The question of indigenous rights in an organization like the WTO is quite complex, because what the term “indigenous peoples” means in countries around the world is different from what it means in Canada or even in North America.

For Canada, when we were negotiating the fisheries subsidies agreement, we were, as I said, very intentional about making sure that we negotiated something that would allow us to balance this need to protect the ability of our fishers to fish and to export on the one hand, and on the other hand to protect our environment.

[The Chair, Liberal, Judy Sgro]

Thank you, Ambassador. My apologies for interrupting. I know we have limited time with you. I have two more speakers here, which will give another eight minutes or so if you can just bear with us.

Go ahead, Mr. Seeback, for four minutes.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Thank you very much, Madam Chair.

I think I understood when you were answering a question from my colleague, Mr. Baldinelli, that the United States is not part of the MPIA. Is that correct?

[H.E. Nadia Theodore]

That's correct.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

In long-simmering disputes like softwood lumber, which the U.S. is clearly intent on not resolving at the WTO, if they're not going to be part of the MPIA, how does Canada resolve trade disputes with the United States? It seems like we're in an impossible situation without a solution.

[H.E. Nadia Theodore]

The good news is that in the case of the United States, we have different forums that we can use. We do have the new NAFTA, the CUSMA, which we can use with softwood lumber in particular.

Again, I think it's important to be frank. Is not having a dispute settlement system with a multilateral appellate body ideal? No, it is absolutely not. The United States, for a very long time, has been putting forward their complaints. We are working towards resolving them, but with the United States in particular and with softwood lumber in particular, Canada does have another forum through which we can resolve disputes with the United States.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

That would be the government actually doing the tough work of negotiating a settlement, because there clearly won't be a settlement arrived at through the WTO or through the MPIA. It would seem to me that the route to resolve this is a government-to-government approach.

Would you agree with me on that?

[H.E. Nadia Theodore]

Not to be too blunt, but it has not been since the appellate body was blocked by the United States that we have not found a solution for softwood lumber. The softwood lumber dispute has been going on for decades. It is not the case that if we just had a functioning appellate body this year, we would solve that bois d'oeuvre case. Bluntly, that's not so.

[Kyle Seeback, Conservative, Dufferin—Caledon, ON]

Has the softwood lumber dispute with the United States ever been resolved at the WTO?

My recollection is that ultimately it just had to be the governments negotiating a solution. Is that correct?

[H.E. Nadia Theodore]

That's absolutely correct.

The first softwood lumber agreement was indeed a bilateral solution that we reached with the United States. When that solution expired, we were not able to reach a new settlement with the United States. We continue to work on all fronts, frankly, to figure out a way forward on softwood lumber.

[The Chair, Liberal, Judy Sgro]

Thank you very much, Mr. Seeback.

Ms. Dhillon, you have four minutes, please.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Thank you, Madam Chair.

Thank you, Madam Ambassador, for coming to testify today.

I'll ask you my two questions together because I don't have much time.

First, could the committee hear your views on the importance of the WTO's role and the function of dispute settlement mechanisms?

Second, could you give us an overview of the timeline for having a fully operational dispute resolution system by 2024?

[H.E. Nadia Theodore]

I'll answer your second question first.

In terms of timing, by the end of the year, members will be working on concepts and ideas that, by January, will form the basis for concrete proposals to address the dispute resolution system by 2024.

So by the end of the year, we'll be looking at the concepts and, in January, members will come up with proposals and solutions. We'll work on this until the 13th WTO ministerial conference, scheduled before March 2024.

If I understand correctly, your other question is about the link between the WTO as an organization and the dispute settlement system. Is that correct?

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Exactly.

[H.E. Nadia Theodore]

As I said earlier, the dispute settlement system is one of the major pillars of the WTO. Being able to resolve issues and disputes between members remains very important to the organization. There's no doubt about that. All but one of the WTO members—and I'm talking about the United States, of course—recognize that the system, in its current form, works. It works well enough to satisfy members.

Could it work better? Yes, it certainly could. Could it be improved? Yes, definitely.

However, I'm really comforted by the fact that all members except the U.S. recognize that the system, with the Appellate Body, is working as it is. In January, we'll be discussing how to ensure that the system is fully operational by 2024. However, all members agree that the system, as it is now, can work, and that will be good for us. We'll then be able to work on very specific solutions to the problems identified by the U.S. That will allow us to move forward.

I must admit that it's mainly because of the political situation in the United States that it's sometimes difficult to get them to participate. As I was said earlier, the United States isn't just a participant. The fact that they are the initiators of the process we're using now really increases the possibility that the situation will be resolved at the next ministerial conference.

I'll stop there.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

I'm sorry; we just don't have enough time, Ambassador.

The committee seems to have thoroughly enjoyed your visit and your questions. We may, at some future time, want to invite you back for a bit of an update. Thank you for giving us an extra 10 minutes so that all of the members had an opportunity to have at least some of their questions answered by you.

Do you have any closing comments, Ambassador?

[H.E. Nadia Theodore]

I will just say that it was a real pleasure and that it would also be my pleasure to come back at any time, even to answer the hard questions from Mr. Tremblay.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We will suspend for a moment while we go in camera for a few minutes of committee business.

[Proceedings continue in camera]