International Trade Committee on Feb. 13th, 2024

[Viviana Herrera]

Yes, sure. Thank you for the question.

What we know from our work in Ecuador is that there are at least 15 Canadian mining companies trying to advance mining projects in Ecuador. Most of these projects are known for their social and environmental impacts. Most of them are denounced by indigenous-encompassing communities because of their environmental impacts. Why is that?

The reason for that is that most of these projects are located in very ecologically sensitive areas, meaning in the Amazon and also in the páramos. The páramos are one of the most unique ecosystems in the Andes, in South America. These ecosystems—the páramos and the Amazon, as you know—are vital in our fight against climate change, yet these are the territories or areas where Canadian mining is trying to advance mining projects. Because of that, communities are saying, “No, we don't want these destructive mining projects in our territories, which not only are going to destroy the territory but are going to contaminate our water.” Also, it causes division within the communities.

That's what we hear from communities over there—

[The Chair, Liberal, Judy Sgro]

Ms. Herrera, thank you so much. I'm sorry to interrupt, but I have to move on to the next member of the committee. Thank you, though.

Mr. Seeback.

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

Thank you, Madam Chair.

Mr. Walker, I'm just wondering, cereals are the largest export or trade with Ecuador. If I look at the charts, it's somewhere between $300 million and $400 million per year. In 2022, cereals were somewhere in the area of $300 million and something, wheat being the largest part of that, it looks like.

Do you have any estimate of how much trade would actually increase in a free trade agreement? Would we go from $300 million to $350 million, or $300 million to $400 million?

I'm just trying to get a sense of where this is going.

[Mark Walker]

For sure. Thank you for the question.

We would expect, given the growth that we've experienced in the last five years in the market, for that to continue.

What we see in this agreement is a fundamentally defensive exercise. I mentioned the SPS binding resolution and the need for a science base within the agreement. Making sure that we can maintain the market, as much as see those tariff reductions, is as much a goal here as anything else.

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

Do you see a huge increase in the cereals export? Is it more that you want to maintain where we are? Is that kind of what you're saying?

[Mark Walker]

Given the rise in non-tariff barriers within existing trade agreements, we are very concerned about that. We would look to buttress efforts in that area to ensure that we can maintain the market.

I believe it is likely we could see continued growth in the market.

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

When I look at Canada's trade, I think our exports.... The last number we had from the government, from 2022, is $940 billion. If we go up $30 million or $40 million in trade with Ecuador, that's kind of a rounding error in enhancements of trade.

This leads me to this question: Why are we here? There are so many trade issues that the government has. We did a study on non-tariff barriers in existing free trade agreements. Those barriers are worth hundreds of millions of dollars, if not billions of dollars, but the government is choosing to focus on a free trade agreement with Ecuador. It doesn't make a lot of sense to me.

Mr. Trew or Ms. Price, do you have any idea why the government is deciding to pursue this free trade agreement?

[Stuart Trew]

I can answer that. I think it's possibly because Ecuador asked them to. This may be a bit on the pull side for them. There may be political or ideological reasons in Ecuador for that, within the current government.

I think you're right when you say there is not a lot in this for Canada in terms of new export access.

[Kathy Price]

I have no comments to add.

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

I have no more questions.

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you.

Mr. Arya, you have five minutes, please.

[Chandra Arya, Liberal, Nepean, ON]

Thank you, Madam Chair.

Mr. Walker, happy Agriculture Day.

Canadian farmers are very small in number, but they all make us proud. They have made Canada the fifth-largest exporter of agricultural produce and agri-food products in the world. The prosperity that we enjoy today is mainly due to the trade that the farmers and others export. I think 67.4% of the GDP in 2022 came from international trade, so it is international trade that gives us the prosperity that we enjoy today.

For us, every single trade agreement is important. We have about 15 trade agreements with about 51 countries, accounting for about 60% of the world's GDP, and we need more of that. Every small bit counts.

We also need to diversify from the exports that we are focused on. We are trading mostly with our biggest neighbour, the U.S., and we need to diversify our exports. That is one reason why we need to have as many trade agreements as possible with different countries in different parts of the world.

To hear some people—not my colleagues here, but some of the witnesses—seem to indicate that we should not have trade negotiations until certain conditions are met, many times they don't understand that the trade agreement is required, especially for countries like Ecuador. Though it is an upper-middle income country, it is still a developing country. There are still a lot of people in the poor and lower-income group, and trade agreements like this will stimulate economic investments.

It has become very fashionable in Canada to pick on our mining companies. Our mining companies take their corporate responsibility quite seriously. However, I do agree that there are mining companies in poor or developing countries that are from other countries and that exploit where they set up the mines. To apply the same...and paint the Canadian mining companies with the same brush, I think is not good for Canada.

I think we forget that the trade agreements and the investments from the agriculture companies or the mining companies not only stimulate economic growth where they are investing, but they also provide for the development of social infrastructure, from roads and schools to power generation.

When I was growing up, in my country we did not have trade agreements. Every summer I used to spend two months in our village where we did not have toilets or running water. I wish the country had trade agreements where foreign investors could have come and invested in the local economy, creating jobs and helping economic improvement.

Mr. Walker, I'll come back to the agriculture sector.

Ecuador is maybe a small market. Tell me, how does it help in the medium to longer term to stimulate Canadian exposure to the region as a whole?

[Mark Walker]

Thank you for the question.

Really, we view this agreement as a significant opportunity to solidify the market access that we have in Ecuador. For our industry, market maintenance is just as important as market development.

We have seen throughout the region an increasing derogation from science-based trading principles. I mentioned Mexico in my remarks. I mentioned Peru. Ensuring that those frameworks are in place within this agreement to resolve disputes based on science, to have agreed-upon procedures and to resolve them in a timely manner is really essential.

[Chandra Arya, Liberal, Nepean, ON]

Thank you.

Another thing is that Ecuador has gone through various upheavals in its life. It has been an independent country for a very long time. It left OPEC in 2020, if I am not wrong, and joined back as an OPEC member.

Whether it is at the request of Canada or at the request of Ecuador, this trade agreement is being negotiated.

I just want to touch on investor-state dispute settlement. At the end of the day, in my view, Canada has to do what is good for Canada, the Canadian economy and Canadian companies. That is what our trade negotiators have been doing, and I hope they continue to focus on that.

I think my time is up, Madam Chair.

[The Chair, Liberal, Judy Sgro]

You have nine seconds.

Thank you very much.

Monsieur Savard-Tremblay, go ahead for two and a half minutes, please.

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

Mr. Trew, since the last comment was more of an opinion than a question, I'd like you to elaborate on the investor-state dispute settlement, or ISDS, regime.

The member said that that is what trade negotiators will keep doing. However, the infamous chapter 11 of the former North American Free Trade Agreement, or NAFTA, was removed from the Canada-United States-Mexico Agreement, or CUSMA. You recommend not including such a provision in future agreements, and I completely agree. Admittedly, though, the definition set out in the latest agreements is more restrictive than the one that was in NAFTA, which opened the door to all kinds of abuse.

If the definition is more restrictive, why is it still too broad?

[Stuart Trew]

I'm sorry. Could you please repeat the last part? Are you saying that in some of the new language we have...?

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

The ISDS regime is defined much more restrictively in the latest agreements, which means the system is less open to abuse than it was when NAFTA was in place.

Why do you think the definition is still too abroad?

[Stuart Trew]

Okay. I think I understand. Thank you for the question.

To me, the question is that the language is still not restrictive enough. It leaves way too much room for arbitrators to continue to decide on cases based on their own standards with respect to what have become the customary international law norms with respect to investment protections. We see this all the time in cases.

There's still no requirement in Canada's modernized FIPA from 2021 to take into account other obligations on states when it comes to indigenous peoples or the environment. It's still a one-sided process. Only companies can bring cases against governments; you can't have counterclaims against the companies. There are all kinds of reasons. It's still the standard ISDS model.

If you look at some of the more recent cases against Canada under the new USMCA, or CUSMA—like the $20-billion claim from Ruby River against Canada for the cancellation or the non-approval of an LNG plant in Quebec—they're using the new language. They're using the CETA language to make a case against Canada, so even under these new treaties, with this new language, the threat is clearly still there. Somebody still thinks there's a strong case. We're going to see the same kinds of cases popping up again and again.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

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

You said they're using CETA, the Canada-European Union Comprehensive Economic and Trade Agreement, but I think you meant CUSMA.

[Stuart Trew]

Yes, I meant CUSMA.

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

I believe the claim involving GNL Québec has to do with the energy transition requirement.

[The Chair, Liberal, Judy Sgro]

I'm sorry. Your time is up.

We have Mr. Cannings for two and a half minutes.

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

Thank you.

I'm going to continue with Ms. Herrera.

We've heard from other witnesses, including Amnesty International and Ms. Price, about the fact that the government in Canada has instituted the United Nations Declaration on the Rights of Indigenous Peoples legislation. We talk about free, prior and informed consent. We talk about meaningful consultation here in Canada in a very serious way. The courts have agreed, yet abroad we seem to forget all that.

I'm just wondering if you could talk about that in this context of what the Canadian government is saying outside Canada—what the Canadian embassy is saying in Ecuador, for instance—with regard to these principles, which this government—rightly, I think—holds so dear.