Debates of Nov. 29th, 1994

World Trade Organization Agreement Implementation Act

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, it is with pleasure that, after being interrupted by oral question period, I take the floor again to say that I support Bill C-57 because Quebec is very open to international trade. We have always been very open to the world, particularly as regards trade.

I was in the process of explaining that rational solutions must be found, solutions such as encouraging economic growth within Quebec and Canada by providing our businesses with an effective trading environment. There are serious problems for businesses, because they have to deal with two governments which, in terms of taxation for example, use two different systems.

These two levels of government have environmental regulations and legislations that are completely different, which makes life extremely difficult for businesses dealing with them. For example, they have to conduct some environmental studies under Quebec legislation and others under federal legislation.

So it really hinders big projects that affect the environment. Everything is duplicated, like the manpower office, so that business does not have the environment it needs to develop. To act quickly on environmental issues, we must restrict the obligations that companies must meet in this regard.

One solution is international trade. It is not the only one, of course, but it is a very important way to promote our companies. Again, I must mention here that I tabled a motion in this House which was defeated last night. Its purpose was to provide the steel industry, among others, with sufficiently strict regulations here in Canada, or at least regulations that are as strict as those in the United States for import-export and especially for dumping.

This motion was defeated and, again, I did not understand why the government still did not accept this motion. On many occasions, representatives of the steel industry asked us to revise the regulations in Bill C-57. The government refused to support my motion and I am very sorry that this part of the law could not be amended.

I want to say to people in the steel industry, who are surely listening to me today, because they care about what is going on here, that we in the Bloc Quebecois did all that was necessary to meet their requests. Unfortunately, the government did not consider our demands or those from the steel industry.

To face this international competition, we must also encourage creativity. We also tabled a motion. The bill says, for example, that present products must be protected. We tabled a motion that would also have protected future products. We think it is very important, if you want to encourage creativity, our business people and small businesses, to protect future products in the same way as existing products are protected by law.

Once again the government refused to accept this motion, a motion we felt was entirely normal and fair in its attempt to help our creators, SMEs and researchers improve their prospects of succeeding in these increasingly globalized markets.

We must take an intelligent and structured approach. We must avoid wasting energy and resources on taking on all markets indiscriminately, without considering factors such as transportation, specialization and economies of scale. We need good strategic planning that considers our strengths and weaknesses, the benefits and drawbacks, while monitoring the development of attractive and promising markets.

In Quebec, we must consolidate our positions on the North American market, now and in the future. In Quebec especially, we supported the North American Free Trade Agreement, and we also supported the first free trade agreement with the United States, which, as I remember, was a very controversial issue. I was a member of the government at the time, and in 1988, when I ran for Parliament, I did so mainly to help adopt the free trade agreement with the United States.

I was supported in this endeavour by the vast majority of Quebecers. We were practically unanimous in our approval of free trade between Canada and the United States. For us in Quebec, it was crucial.

For many years and many decades, we have been involved in trade with the United States. About 80 per cent of our exports go to the United States. It should come as no surprise that we want to go on consolidating our efforts to continue our exports to this very important market.

To give you some idea of the size of the U.S. market, I will look at the number of people living within a certain radius. For instance, if we look at the number of people living within a radius of 1,000 kilometres from Montreal, including the United States and Toronto, there are 100 million people. Imagine, 100 million consumers, among the richest in the world! That is why it is so important for us in Quebec to continue to develop our exports and to do business with the northeastern United States.

This is not to say we should neglect other markets, such as Asia and the Pacific Rim. We know that in this region, markets are developing and the standard of living is going up, especially in Japan and China. Last year, China's economic growth was between 12 and 15 per cent. There are 1.2 billion people living in China. We should position ourselves so that we can take advantage of the future opportunities in those countries, especially in China.

We are somewhat apprehensive about letting the federal government be responsible for helping Quebec promote its economy. We have heard-it is not official, but there are indications-that the Canadian government intends to reduce the number of employees in charge of international trade in the United States, and increase the number deployed in Asia and the Pacific Rim.

This is cause for some concern as, for obvious reasons, and I mentioned this earlier, we want to continue doing business with the United States, and increase our trade connections with them. First of all, it is a great market, where trading is made easier by the fact that the Americans speak a familiar language, namely English, and that our cultures -economic cultures and social cultures- are similar. We live in a space that is almost the same, but it is quite another story when you talk about the Asia-Pacific area, with the linguistic difficulties being bigger, the distances longer and the efforts required to promote our products take longer and cost more to produce results.

In a context of staggering deficit and debt, I think that we must look at the easiest opportunities to increase the profitability of our businesses, so that our economy becomes healthier and that the governments can get afloat as soon as possible.

That is why I think and we, in Quebec in particular, think that continued efforts are necessary to try and maintain and increase our market opportunities in the United States.

Of course, this will require a high level of cohesion between our industries, the unions, the government, our universities, and so on. Without this co-operative effort, I think that we will find it increasingly difficult in the future to be efficient and productive.

This is why we, in Quebec, are looking forward taking our future in our own hands in order to act together and eliminate duplication of all kind that gets in the way of united action and efficiency. In that sense, we are looking forward to gaining control over our taxes, to spend this money according to our priorities and ensure that we succeed more rapidly in this global context.

[Philippe Paré, Bloc, Louis-Hébert, QC]

Mr. Speaker, first I want to congratulate my colleague from Longueuil on his speech, which is practical and sticks to reality. It is not a theoretical speech. We see that the member for Longueuil has experience.

I also thank him for reminding us that Quebec is open to free trade and foreign trade. Quebec is not a society that is turned in on itself, quite the opposite. I also thank him for recalling the importance of trade with the United States for Canada and Quebec; 80 per cent of our trade is with our big southern neighbour.

I would like to ask him this question: Does he believe that the agreements reached following the Uruguay Round negotiations will help the poorest countries progress? Under these agreements, will it also be possible to protect the environment and better protect the rights of workers in countries that are less well organized than western countries?

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I thank the hon. member for Louis-Hébert for his kind words.

I think that we must be very careful in helping the poorest countries, because we tend to think in the short term and to pay more attention to trade than to the poorest in the world. I think it is obvious that if we increase our productivity, our trade, our ability to pay, we will be in better position to help the poorest countries.

In many ways, we must be very careful not to work only with the countries from which we stand to gain the most. We must also develop markets with the poorest countries, thus helping them ensure their own development.

I made several trips to developing countries with External Affairs officials. The ambassadors I met told us that one way to help developing countries was to trade with them.

Since Bill C-57 is aimed at opening up trade, I think that if we do it with dignity, we can increase trade with these developing countries, thus helping them become better traders. There is nothing better than practice to learn how to do business.

If we can show developing countries how to borrow, how to lend, how to do business, how to make goods, I think it would be one of the best ways to help them.

This does not mean that we should not help those in need, those who must be fed every day, those who need help to become better farmers, and so on.

In this regard, I think that opening up markets to the entire world will give developing countries better opportunities to trade and to learn from successful trading countries. I am convinced that this will help them a great deal in the future.

[The Acting Speaker (Mr. Kilger)]

I understand the hon. member for Winnipeg Transcona and hon. the member for The Battlefords-Meadow Lake will be splitting this next block of interventions, so ten and five each.

[Bill Blaikie, NDP, Winnipeg—Transcona, MB]

Mr. Speaker, it gives me great pleasure to be able to participate in this debate this afternoon. The NDP finds itself in the position of being the only party in this House to oppose the legislation we have before us, the legislation that would bring into being the World Trade Organization.

It appears that unlike the government, the official opposition and the Reform Party we are the only party willing to develop and maintain a sustained critique of the way the world is going according to GATT, according to NAFTA, according to FTA.

Some would say this places us in the position of being defenders of things past and in some sense that is true. We would like to defend the notion of fair trade and markets adjusted to meet social and human need rather than accede to the demands of the multinational corporations that the world be arranged for their pleasure, which is the way we view the WTO and the legislation to implement it.

The WTO is in effect a new constitution for the globalized economy that is written by and for multinational corporations. One of the ways this could have been offset would have been if some effort had been made during the negotiations or even after to introduce the notion of a social clause that would ensure multinational corporations and others recognize basic labour and environmental standards for instance, to prevent the race to the bottom or what is also called social dumping.

This was not done during the negotiations, although I understand that some countries did bring the idea forward, not Canada unfortunately. It was not able to be done during the debate on this legislation despite the amendments that the New Democratic Party brought forward because the government rejected our amendments suggesting it ought to work on a social clause and report back to the House of Commons on a regular basis as to what it had done in respect to developing such a clause.

Another concern we had during this debate, which we expressed at report stage and we express now, is that this new WTO, even though it supposedly offers a new rules based trading regime that will bring relief from trade harassment, in spite of this, American behaviour under NAFTA rules and the evasive measures the Americans put into their implementing legislation make it very unlikely that the Americans will play by the rules.

That is why we offered through our amendments to put into our legislation that which the Americans had in their legislation. We thought what is fair for the Americans is fair for Canadians. What is good for the goose is good for the gander, or however the expression goes. No deal, the government defeated our amendments, argued against them as did others.

One has to ask the question of globalization through the WTO, but on whose terms? It would seem to be on the terms of the multinational corporations and in a secondary way on terms that are more favourable to the Americans than to Canadians and to others. Americans always make sure they have these riders, these qualifiers, these caveats in their legislation to make sure the rest of us will play by these rules. When push comes to shove if their interests are at stake they do not have to play by the rules.

The WTO as it now stands without a social clause would be a constitution for a new world order in which the multinationals would preserve their position as what we would like to call outlaws. They would be free to pursue their own interests outside the power of the law of any one land whereas the constitution for the new world order of the global marketplace, the WTO agreement as it stands is remarkably one sided in our

view in its defence of the rights of investors and its silence on the rights of workers.

It pretends that labour, social security and the environment are not trade issues and that attempts to regulate in these areas will be considered barriers to trade. It is eloquent about the multinationals' right to be free of any public policy that would affect their rights to intellectual property or to the free movement of capital but it refuses to allow similar protection for workers' rights to form trade unions or to have a safe workplace.

In the developed economies of Europe and North America globalization has contributed to the chronically high levels of unemployment, falling real wages and workers facing the stress of longer work hours. Most important, wages and salaries are dramatically falling as a percentage of GNP. That is, workers are getting a smaller and smaller piece of the pie.

When robust rates of growth such as we are now experiencing in Canada continue to be accompanied by depression like rates of unemployment and falling real wages, it is clear that benefits from growth in the new globalized economy are going to a very select group of people at the expense of most Canadians.

Some developing countries in Asia have experienced phenomenal rates of growth in the new order but in the most successful countries like Indonesia, South Korea, Singapore and China such growth has occurred in societies without basic human rights, without independent trade unions and with economies in which child labour, prison labour, conscript army labour are widely practised. This is sometimes referred to as the Asian miracle, the new miracle. I call it just an old form of exploitation revisited and does not deserve the word miracle at all.

The WTO as it stands puts its seal of approval on a world economy in which the benefits of growth flow more and more to the shareholders of the multinationals and less and less to their employees and to communities. What we should be seeking is a WTO that concerns itself not only with the classic trade disputes between nations but also the problem of what has become known as social dumping, which I referred to earlier; that is, a nation's competitive advantage that results from unregulated labour markets and lack of environmental protection regulations and other ways in which nation states are being asked by this new order to play this sort of beggar thy neighbour game by reducing the quality of their social standards in order to create what is euphemistically called a good investment climate.

A social clause needs to be added to strike a balance between the market efficiencies of liberal trade and investment practices and the social solidarity of all communities that want basic human rights and decent employment practices enforced everywhere where capital is free to come and go.

In debate on report stage, as I mentioned, we proposed an amendment to Bill C-57 that would have had the government report to Parliament regularly on progress made in WTO negotiations toward a social clause. In a related amendment seconded and supported by the Bloc Quebecois we also proposed prohibiting the importation of goods made by children in contravention of International Labour Organization conventions.

The idea of a social clause is one that enjoys wide support around the world as a necessary counter weight to the liberalization of investment. A social clause for the WTO is supported by the International Labour Organization's secretariat which earlier this month recommended to the governing body of the ILO that there should be a social clause to the WTO.

The majority report of the joint committee that recently reviewed Canadian foreign policy also included a recommendation that there should be a co-ordination of international labour and social standards. We were disappointed therefore but not surprised that the Liberals who wrote that report did not support our amendment that would have been a step toward the goal that they share.

In debate on our amendment on child labour, the Parliamentary Secretary to the Minister for International Trade said that he agreed with the spirit of our motion and that the government was working with the OECD and the ILO on the question. He did not say, however, that at a recent UN meeting on the upcoming UN conference on social development Canada came down firmly against any attempt to link trade with labour or environmental standards. Shame on the government.

This confirms the dramatic drift of the Liberal Party to the right on trade issues.

The Liberals opposed NAFTA during the election on the grounds that there was no definition of subsidies and that the labour and environmental side agreements were not strong enough. They then proceeded to ratify NAFTA without a definition of subsidy and with the existing weak side agreements.

The Minister for International Trade then talked about the deepening and broadening of NAFTA, even comparing NAFTA to the early days of the European community. Now the Liberals say they are opposed to any linking of labour standards and environmental standards to trade in the WTO. The metamorphosis is complete.

On his recent visit to China and Indonesia, the Prime Minister claimed that the best way to improve the human rights situation in certain developing countries was to engage with them in trade. However, the WTO as it stands without a social clause will allow existing human rights abuses to flourish. There is nothing in the WTO that prevents countries from allowing child

labour, from using prison labour and conscript labour or from denying workers' rights to form independent trade unions.

China could join the WTO, as it is likely to do, and expect to enjoy the protection of the WTO free trade rules while it continues to allow 10-year old children to work in unsafe factories for virtually nothing. Indonesia could continue to operate an economy where over two million children work in contravention of ILO standards. For the government to deny any link between trade and labour standards makes a mockery of its claim to support human rights through trade.

Furthermore, and in conclusion, the advocates of the liberalization of world markets assumes that as developing countries become more prosperous internal social pressures will be generated from a maturing and self-confident workforce to insist on higher wages and better working conditions as happened in the past. This assumption fails to recognize that the vast pool of unemployed workers in rural sectors in the economies of east and south Asia, for example, not to mention in the former Soviet Union, creates a huge drag on the ability of wages to rise at a reasonable rate.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Mr. Speaker, I rise today to speak on third reading debate of Bill C-57, the act that implements the agreement establishing the World Trade Organization and ties Canada conclusively to the GATT agreement.

Canadians know very little about the 26,000 page agreement that their government signed on their behalf at the special GATT meeting in Marrakech on April 15, 1994. The agreement was reached after eight years of negotiations. It is a huge deal that takes Canada even beyond where the Canada-U.S. Free Trade Agreement and the North American Free Trade Agreement dared to go.

Now, with very little debate, the federal Liberal government is going to accept the new world economic order dictated by the multinational corporations and reduce Canada's ability to determine its own economic destiny even further.

After yesterday's vote in which the Reform Party and the Bloc Quebecois joined with the Liberals in supporting this bill at report stage, it is easy to see who Canada's real opposition is here in Parliament. Only New Democrats, who have taken the time to examine not only the previous trade deals but this one as well, are standing up for the interests of ordinary Canadians in the face of economic globalization and the dominance-no, Mr. Speaker, the tyranny of the multinational corporations.

Make no mistake, the implementation of the agreement and the establishment of the World Trade Organization is the creation of a new world government which has the power to tell countries what they can or cannot do within their own borders. This will not be a democratic government. This is a new government dominated by the unelected and self-appointed multinationals that replace the possibility of a democratic response to the problems of the world.

This was the deal that was negotiated by the Mulroney team, but it was signed and is now being implemented by the Liberal government without opposition from anyone but the New Democrats. This is quite extraordinary.

The agreement through this legislation sells out farmers and working people alike and jeopardizes the future economic prospects for all of Canada's youth and particularly the youth who live in the regions of this country.

At this time in our history and at this time in our economic development, we should be doing everything in our power to stand up for Canadians in all walks of life.

The World Trade Organization is in effect the new constitution for the globalized economy that is written by and for the multinationals. The Liberal government has rejected a policy of developing a social clause to the WTO that would ensure that multinationals recognize basic labour and environmental standards to prevent the race to the bottom. I made comments about this and about child labour at report stage the other day.

Let me take a moment to try to tie together a couple of what would appear to be unrelated events. Only a short time ago the Prime Minister and all of the provincial and territorial leaders, except the premier from Quebec, toured China on a major business trip. They talked trade and they made a lot of deals. Every one of those deals was paraded in the pages of the newspapers around this country. What the Prime Minister and the premiers were telling us is that the economy in China is booming, or is expected to boom in the very near future, and that Canada must be a part of that.

Meanwhile, back home in response to their interpretation of the GATT agreement clauses, the Ministers of Transport and Agriculture were telling Canadian farmers that our domestic transport support program known as the Crow benefit will have to be changed. It would seem that the net result will over a few years reduce the money available to the Canadian grain to port for export, reduce the dollars available to farmers at the farm gate and likely as a result reduce the grain grown for export across the prairies.

Let us go back and have a look at China again for a minute. I just finished reading an article done for the Worldwatch Institute called "Who will feed China"? I certainly recommend the article by Worldwatch president Lester R. Brown to everyone.

Mr. Brown acknowledges the growing affluence of the Chinese. He acknowledges the growing population, the growing demand for food, the growing demand for meat in particular. More important, he points out China's shrinking capacity to produce food.

We know from circumstances around the world that as incomes rise, one of the first things that low income people do with their money is diversify their diets, shifting primarily to more meat, milk and eggs. In China as in Japan, South Korea and Taiwan before it, this is beginning to happen. Of course with the rising demand for a diversified diet also comes the demand for additional grain.

China has been encouraging the production of laying hens and therefore the production of eggs. The official goal of the country for egg consumption has been set at 200 eggs per person per year by the year 2000, double the quantity consumed in 1990. By the way, that is about the equivalent of what residents of the United States consume in a year.

With the Chinese population expected to reach 1.3 billion people by the year 2000, annual egg consumption would be expected to rise to 26 billion. Interestingly enough, Chinese hens lay about 200 eggs per year each so China will require a flock of about 1.3 billion hens to meet its needs.

The point to be taken here is that to reach this goal China will require at a minimum an additional 24 million tonnes of grain to feed those birds to produce those eggs and 24 million tonnes of grain just happens to be the equivalent of the entire grain export from Canada.

If the per capita grain consumption climbs even modestly in China from under 300 kilograms per person at present to 350 kilograms in the year 2030, demand will also climb to 568 million tonnes of grain. With a total production of only 263 million tonnes by 2030, the deficit will be made up by imports which will have to rise to a staggering 305 million tonnes of grain. We must recognize that in 1993 the entire export of grain from all countries around the world was just 200 million tonnes. In other words, by the year 2030 China could eat up almost two thirds what the world is producing today for export grains.

We know that China is not the only country that is growing and likely to experience a grain deficit. India, Iran, Ethiopia, Nigeria and others fall into this category.

We need our federal government more than ever to stand up for strengthened orderly marketing, single desk selling and internal transportation support so that as the world needs our grain we are not only producing it but we are also able to deliver it quickly and efficiently as required.

I see that my time is running out. Although there are many more things that I would like to say to contribute to this debate, in conclusion let me say to my colleagues in the House that not only am I opposing this legislation in front of us today but I am encouraging all members to oppose it and give Canada and Canadians a fighting chance to make it in the world today.

Trade can spread wealth and knowledge or it can accelerate the destructive trends now under way. Sadly, I see this legislation and through it this government taking us down a very destructive path.

[Ian McClelland, Reform, Edmonton Southwest, AB]

Mr. Speaker, I have a question for the hon. member. I will preface it with a truism. The truism is that if you do not compete you cannot be competitive.

Accepting that truism, I wonder if the hon. member would comment on whether or not in his opinion various protected industries in Canada have been made more competitive, which has resulted in lower costs and better product to the consumer as a result of restrictive trade processes in the past within Canada, trade barriers within Canada, and whether there is a parallel between interprovincial trade barriers which raise prices and decrease competition and national trade barriers.

[Len Taylor, NDP, The Battlefords—Meadow Lake, SK]

Mr. Speaker, I am happy to answer that question and actually another one that came to my mind as the member from Edmonton was speaking.

Essentially, as I view the world I see the words competitive and efficiencies working hand in hand. A competitive economy or an efficient economy are one and the same thing.

To me, and more importantly as I look at the whole country, when the country or the world looks at an efficient economy it sees an economy that will produce wealth that can be redistributed to ensure that all members of that particular area will be able to benefit from that increased wealth.

An efficient economy produces jobs. The world economy today is not increasing jobs. The OECD countries are all exhibiting unemployment rates from 7 per cent to 30 per cent. Those sorts of numbers tell us that we are not a very efficient economy.

One of the things that I had hoped to indicate in my remarks while I had the floor but was unable to because of time dealt with the matter of trade and the environment. I wanted to indicate in answer to this question that I believe that trade and the environment are also very much linked. When we look to the future of the world and the carrying capacity of the earth it is very easy to see that our task as leaders on this earth is to ensure that we plan far enough ahead to ensure that our grandchildren will be able to

survive on this planet without eating foods made from artificial substances.

Currently when we look at GATT planning documents we see that these leaders are predicting declines in employment for many sectors of the existing economy. High on that list scheduled for future unemployment are our farmers, agricultural workers, textile workers and office clerks. From that list it would appear that the GATT planners seem to be expecting us to go hungry with no clothes on our backs, without any information from people who are supposed to collect it for us.

With world populations increasing the way they are, surely this is absolute nonsense. Canada's leaders should be looking at building an efficient economy that produces wealth to ensure that Canadians have the jobs to be able to compete with those in the rest of the world.

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

Mr. Speaker, I did not have a list of speakers so I have been rising pretty regularly. I finally made it and I appreciate your indulgence.

It is always a pleasure to rise in this House and speak on the issues. Today it is the World Trade Organization bill. It is a pleasure as a farmer and now as a politician to address some of these problems.

I have heard so much today about trading with different partners. I would like to remind some of the hon. members in this House that when we talk about trade with the United States we have a trade surplus of roughly $35 billion right now as far as goods are concerned. We can imagine increasing our trade with the U.S. but I think we will also have to be realistic and realize that we import more from the U.S. at that time.

The problem as I see it is that we lose this huge trade surplus with the U.S., with negative trade balances with a lot of other countries that could really afford to pay for more products that we have to sell. Japan has a $2 billion trade surplus with us. Germany has the same amount, more or less. The British Isles have over a $2 billion trade surplus. Even Mexico has a $2 billion trade surplus with us.

When we look at those points there has to be something wrong that we cannot penetrate these markets. I have a big feeling that some of it goes back to the inefficiencies of our manufacturing and exporting companies. We have heard over the last couple of weeks in testimony before the Standing Committee on Agriculture and Agri-Food that we could probably donate raw products that our farmers produce to the manufacturing companies and they still would not be able to compete. It does not really seem that the problem of competition is in the primary producers' field.

Therefore I have to address one of the big problems that I see and that is in the transportation policy. If members watched the CBC last night they would have seen the CBC addressing the issue of backtracking grain from Thunder Bay to Winnipeg and into the U.S. We have heard so much that this Liberal government is trying to correct some of the problems that are there. I point out that the western grain transportation policy was passed by the previous Liberal government. It had a very nice provision in it where non-performance could be thrown against transportation companies like the railways and they could be charged if they failed to deliver the products that were guaranteeing under the Western Grain Transportation Act.

Backtracking is simply a breaking of that agreement. It is disrupting the transportation system. It is making it inefficient. It is not allowing us to compete with other countries. It is also putting an extra tax burden on our taxpayers. The one backtracking issue is costing taxpayers today anywhere from $15 million to $40 million a year. We cannot afford that in this country with the debt load we have.

We also have to realize that the railways probably are in a pinch in some areas. When we look at the over taxation on fuel compared with the United States and some other countries, if we look at the extra taxes that our corporations are paying compared with the Americans, they also are in a bind and are trying to somehow make ends meet.

Some other problems are in the management of the crown corporations. When we see a management person getting $300,000 as just a little benefit of interest free money, this is added into the cost of shipping our products. Those are issues that we have to address.

We say we need more value added. This has been the theme that I have heard on the farm for the last 10 years now. We need more value added but in the next breath we hear that we have lost 100 food processing plants and abattoirs.

Why has this happened? It has happened very simply because we were not competitive in the world's finished products. We are very competitive in raw products. However when it comes to the processing end and we see markups of 200 per cent from the time it leaves the farm gate until the time it hits the retailer, this is not efficiency.

These are things that have to be addressed before we will become competitive in the World Trade Organization. It makes one wonder sometimes why we would stress the point to become more efficient always at the primary producer to produce more. If we look back at statistics we see that we have increased production in grains and oilseeds. We have increased production in all other products far ahead of the efficiencies that have been built into our manufacturing plants.

We have to start realizing that something has to happen because if we are going to compete, we have to be competitive. It is imperative that the western grain transportation subsidies be revamped. Somehow under GATT it is going to be forced on us and the sooner we do it the better off we will be.

During the election the Reform Party promoted very strongly its plan of a trade distortion program that would take over the transportation subsidies. It seems to me that maybe that is the direction we will have to go to make our transportation system more efficient.

If I look at what is happening under the World Trade Organization rules and subsidies today, it means that we will be shipping a fraction of our grain under these subsidies and still be qualified as green. All of a sudden one day in the middle of a month we will find out that we have shipped an amount that we were qualified to ship under these subsidies and we will have a totally different freight rate.

This is going to cause a lot of stress in marketing especially when farmers are realizing that products like canola have a very small quantity allocated to them under this grain subsidies program because the quantities have been set according to the production that we had in the 1985 to 1990 period.

This means that canola production increased drastically from 1990 to 1993. Our limits on subsidized transportation on canola will be very small so that the producers who may be selling into that market in the first month will qualify for the subsidized freight and then the rest of the canola production will have to go under full freight rate costs.

This will also pertain to wheat and I can see this being very disruptive and argued among farmers trying to push their product on to the market, trying to get a little advantage, get a little better price, and it is going to create a lot of hardship and a lot of heard feelings in the farming community.

That is why I would suggest very strongly to this government that it quickly restructure the western grain transportation subsidies into another program so that we do not have these disputes arising even among farmers. We do not need any more disputes. We need more co-operation.

If we do not get more co-operation between farmers, manufacturers and transportation we will not compete in this World Trade Organization globe. It is very important that we do enter this World Trade Organization and play fair ball with it.

Mr. Speaker, it was mentioned before that you had some experience in refereeing. I think you will also agree that the linesmen were very important in that game, that they did have to help in keeping the game under control.

I think this is where the hon. member from the NDP failed to realize that we will have referees and linesmen who are not from the multinational food processing corporations. These are going to be set and enforced by countries. It is only with the will and determination of countries like Canada supporting this trade organization, making sure that the laws are kept and abided by that we will have a very successful entry into this trade organization.

I would appreciate it if the hon. members on the other side of the House would take it to heart and make us competitive by becoming competitive inside the country, doing away with trade barriers, doing away with overtaxation and doing away with some of the disruptions in the grain handling system by strikes. We need co-operation. We need this country to get more exports to improve our balance of trade and to make this country productive and rich again.

[Ted McWhinney, Liberal, Vancouver Quadra, BC]

Mr. Speaker, this is an historic occasion.

[The Acting Speaker (Mr. Kilger)]

On a point of order, the hon. member for Vegreville.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, actually I was standing for debate. We had shared time, the member for Lisgar-Marquette and I.

[The Acting Speaker (Mr. Kilger)]

Certainly in reviewing and consulting with the table it would confirm that the member for Lisgar-Marquette only used 10 minutes. Regrettably, the Chair was not apprised that the member would be sharing his time, but having only used up 10 minutes I will recognize the member for Vegreville for a 10-minute intervention followed by five minutes question and comment. My apologies to the member for Vancouver Quadra.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I am pleased today to take part in this debate on the implementation of the GATT agreement and the World Trade Organization.

This is the first time since GATT negotiations have taken place that agriculture is a substantial part in the agreement which is very encouraging. As we can see from the general support for this legislation which will implement GATT and put in place the World Trade Organization, there is widespread support in this House as well. I think it is very encouraging to see that.

There are however some problems with this bill. I would like to speak about some of the concerns I have with the bill, although again I want to reiterate that Reform does support this bill strongly and I support this bill. However, there are still some concern mainly with regard to implementing GATT and the workings of the World Trade Organization.

I know farmers are ready for this trade organization. I have seen this over the past years as the GATT negotiations have proceeded. I certainly hear it now from individual farmers and farm groups that they do support this deal. Clearly farmers are ready for this deal to be in place and to have the World Trade Organization in place as a referee, to use the analogy of my colleague. Is government ready?

I am going to ask a lot of questions today about whether this government is ready for the implementation of this GATT deal and for the World Trade Organization to be put in place.

My questions fall into two areas. The first question is in the area of interprovincial trade barriers and the lack of this government's dealing with that area, especially in agriculture.

Agriculture is a major part of the GATT negotiations. Yet in the negotiations on reducing interprovincial trade barriers held by the government with the provinces over the past summer, there was virtually no substantial agreement or deal made between the provinces and the federal government in the area of agriculture. This important part of trade in the world situation and in the GATT has not been dealt with in this country. That is the first area.

The second area is with regard to government agencies. I have questions about whether the government is ready for the deal when we look at how it is taking part and refusing to change certain government agencies.

I would like to briefly talk about interprovincial trade barriers. Agriculture is an important part of the overall GATT deal, but it has not been dealt with as a serious issue in terms of freeing up the barriers between provinces in the area of the trade in agricultural commodities. It is important that there be some action on the part of the agriculture minister and other cabinet ministers in the area of lowering and removing interprovincial trade barriers.

The third area is government agencies and how the government has dealt with them. The agencies I am talking about particularly are the Canadian Wheat Board, the supply management system and the Western Grain Transportation Act. I will keep my comments on the Western Grain Transportation Act very brief because the member for Lisgar-Marquette has already dealt with the issue to some extent. I will talk about the Canadian Wheat Board and some of the questions I have with regard to changes that will be required to the Canadian Wheat Board to make the GATT deal work.

In the agreement there are two changes to the Canadian Wheat Board Act. They are laid out in clauses 48 and 49 of the bill. Clause 48 deals with changes to section 45 of the Canadian Wheat Board Act. Under these changes the Canadian Wheat Board will control only exports and no longer control imports of wheat and barley.

I want members to think about that a bit. Right now the Canadian Wheat Board controls imports and exports of wheat and barley. Under the change the Canadian Wheat Board will only control exports of wheat and barley. I ask if it makes much sense for our government to control exports when we have just negotiated a trade agreement which is meant to allow for freer trade of goods in and out of the country. It makes no sense.

Clause 49 changes section 46 of the Canadian Wheat Board Act. It says that the Canadian Wheat Board no longer controls licences for imports into Canada. It gives up the restriction on imports of grain and gives up the control of licensing imports. At the same time it maintains under the Canadian Wheat Board Act restrictions on exports. It seems absolutely ridiculous that imports are no longer restricted under the act and exports continue to be restricted under the Canadian Wheat Board Act.

What does that mean in terms of what will happen in the grain industry? I think it means a lot of things. It means that American farmers will now be able to sell directly to Canadian millers while Canadian farmers may not. Does that sound incredibly ridiculous? It is. We need further changes to the Canadian Wheat Board Act to allow Canadian farmers to sell directly to Canadian millers. American farmers will have this right after the bill is passed, as it surely will be.

I would like to tell a story about a Canadian entrepreneur that I heard at the wheat board rally in Regina three or four weeks ago. To diversify his operations a farmer built a flour mill on his farm. He employed people from off farm to run the mill. It was the type of operation we all want to see.

What was his concern and why was he one of the speakers at the wheat board rally in Regina? The reasons are really quite simple. For him to use his own wheat in his flour mill, it was necessary for the farmer to sell his grain through the Canadian Wheat Board to be strictly operating under the law. He needed his own flour because he was making specialty flour products and selling them across western Canada. Yet to do that, to use the wheat that he was growing to produce flour, he had to go through the Canadian Wheat Board. That sounds almost unbelievable when we are talking about opening up the trade environment.

The farmer also wanted to expand into the American market with his specialty flour. What was restricting him from doing that? The Canadian Wheat Board was restricting him from doing that. He would have to get a permit under the Canadian Wheat Board Act to sell his flour into the American market, a restriction that he did not want to live with.

If we look at the particular situation of the farmer and carry it a little further and if the bill passes as it almost certainly will, the farmer may go to an American farmer across the border, buy his flour without going through the Canadian Wheat Board, buy wheat for his mill without going through the Canadian Wheat Board. He will not be able to do that under the changes. The sellers will not need a licence to import the wheat to be used in his mill. Yet he cannot use his own flour in his own mill. He cannot use his neighbour's flour in his own mill because of the restrictions of the Canadian Wheat Board. It sounds absurd and it is absurd.

I would like to ask the minister a series of questions. First, does it seem reasonable to allow Canadian farmers the same freedom American farmers enjoy? Does that seem reasonable? Should not Canadian farmers at least have the same freedom in marketing their wheat and their barley as American farmers have, especially when we are talking about marketing into the Canadian market? They do not now have the same freedom.

The second question is in regard to giving farmers control of the Canadian Wheat Board which, after all, is their organization. Farmers pay the bills to operate the Canadian Wheat Board. The Canadian Wheat Board supposedly exists for the benefit of farmers. That being the case, how could the minister or any other minister possibly refuse to give farmers control over this organization?

I have asked the minister this question several times over the past few months and the answer has been that they have to study the matter or the answer went in some other direction entirely.

When I am talking about giving farmers control over their own organization, I am only talking about farmers electing a board of directors to replace the present appointed board. That would make the Canadian Wheat Board accountable to farmers who really pay for the operation of the organization. Why on earth would the minister or anyone else have to do a study to decide to give farmers control over their organization by electing a board of directors? I cannot think of an answer.

I would just like to ask a couple more questions in the time I have left. Has anyone asked farmers whether they want the wheat board maintained as a monopoly operation? I know other Reform members and I have. The minister certainly has not and it is time that he did. The minister has an obligation to ask farmers whether they want this monopoly maintained. Has anyone asked farmers whether they want appointed commissioners replaced with an elected board of directors?

[The Acting Speaker (Mr. Kilger)]

Order, please. I know 10 minutes can sometimes go by rather rapidly, with the greatest respect.

[Nic Leblanc, Bloc, Longueuil, QC]

Mr. Speaker, I have a short question for the hon. member from western Canada. I would like to know what he has to say about the fact that we are still paying the cost of shipping western grain, in other words, Canadians have to subsidize the transportation of western grain. I always thought we should subsidize the transportation of grain in proportion to the distance involved. The fact is that although we subsidize the transportation of western grain, there are no subsidies for the transportation of grain from the East. I always thought that was unfair. I would appreciate some explanations from the hon. member from western Canada.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, the question was with regard to subsidies and whether subsidies should be distance related. A further comment by the member that there were no subsidies to grain from central Canada was untrue. The seaway is a very expensive system to keep open and operating. A lot of government money has gone into and continues to go into it. Certainly there are subsidies to central Canadian farmers in terms of shipments as well as to western farmers.

The second point was why the Crow benefit, as it used to be called, came into being in the first place. It came into being early in this century to get raw product to central Canada for processing. That was the reason that the Crow benefit was paid in the first place. It was not because western farmers needed a subsidy. It was because central Canadian processors wanted western farmers to be hewers of wood and drawers of water. This is no longer acceptable. The Crow benefit payment has prevented western farmers from developing a processing industry in western Canada.

We can no longer talk about whether or not the subsidy should be distance related. The question is whether we should have a subsidy. The answer is no. There should be no subsidy connected directly with distance or to be paid out in any other way.

The money now paid out under the Western Grain Transportation Act, the Reform Party has said, should be put into a trade distortion adjustment measure which would compensate farmers directly for damage done due to unfair trade practices in other countries. The compensation could be for damage in any commodity; it would be commodity neutral.

The way things work, probably the compensation would be for grain at first. Certainly over time the compensation would be for other commodities as well.

[Jean Landry, Bloc, Lotbinière, QC]

Mr. Speaker, I have a question for the hon. member about grain transportation. Today, to be eligible for the subsidy, western grain is first shipped to Thunder Bay, and we are talking about grain that is going to be shipped to Europe. Then, they ship it back to Vancouver, and from Vancouver the grain is sent by ship through the Panama

Canal to Europe. I would like to know whether the hon. member has some alternatives, when we are talking about saving money. I wish he could suggest some ways to save money in this particular instance.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I believe the question refers to the backtracking that has been occurring for several years and was pointed out to the minister very clearly a year ago. Backtracking involves grain being shipped under the subsidized rate to Thunder Bay and then going back at the full market rate. It makes no sense.

As my colleague mentioned before, it costs Canadian taxpayers between $15 million and $40 million a year. It is absurd. It should not be happening. Why could the minister of agriculture not say it will not happen any more within a month of when he found out it was happening? Why? There is no good answer for it. It should have happened.

The minister himself is backtracking. Originally he said that the backtracking would cease to exist on January 1. Now he has put it off until the end of July, to the new crop year.

Certainly there are some problems with contracts that were made before this problem was widely recognized but those should be dealt with directly and backtracking should have ceased long ago.

[Ted McWhinney, Liberal, Vancouver Quadra, BC]

Mr. Speaker, it is an historic occasion to enter this debate because it does mark the end of half a century of specialized experience in world trade, what we would think to be flawed experience, and the moving into the 21st century.

I am reminded of the vision of the great wartime leader President Franklin Roosevelt whose plans for the post war period included not merely a United Nations organization but a parallel international trade organization that would promote principles of liberalism, free trade and that would remove trade tariff barriers around the world.

President Roosevelt did not live to see his vision implemented or to see it fail. The reasons for the failure are a matter for historians. Some wrongly blame it on the cold war but we would have to say it was the persistence of protectionist feelings in the United States associated with that tragically ill-advised attempt retroactively to cure the world depression, the Smoot-Hawley high tariff wall approach.

Mr. Roosevelt and his heirs, Mr. Truman and others, had to fight against that. They also had to fight against the neo-isolationist American thinking that one found bound up with the Bricker amendment controversy seeking to limit an affirmative American role in western Europe's political and economic recovery.

The failure of the International Trade Organization, the failure of the high hopes of Bretton Woods toward the end of the war led to the creation of this strange institution. Some have said, borrowing from Guys and Dolls : ``The oldest permanent floating crap game in the world,'' but in fact it is a periodic, recurring international diplomatic conference, GATT.

GATT had many things to offer in terms of history, but if one looks back on it it was a concentration of particular problem solving operations, each bringing in its own set of specialists, each producing an arcane set of diplomatic negotiations that were never open to larger public debate.

GATT had a function to fulfil but the quest for overarching principles or an overarching vision of a world economy was simply not there. This is the significance of the revival half a century later of the concept of a World Trade Organization. It will finally balance in the economic sense what the United Nations is intended to do in a governmental sense.

With the World Bank and the International Monetary Fund, it completes a triad of international economic organizations. That is all to the good and we might say that it is about time. It is a federalizing process. It is a constitutional process. It will mean that the large issues of world trade are no longer debated in secret in those holiday resorts visited off season because that is really where the GATT conferences were held.

They got cut rate rates. One visits Uruguay in winter instead of the beach in summer. GATT had its function but it did not really answer up to the problems of the emerging 21st century. This WTO initiative comes with a period when the walls are falling down all around the world, all the walls. The Berlin wall falls politically. You cannot shut out the economic ideas when you open the way to political ideas.

It has been said, and it is true, that you can achieve a market economy without having a liberal democratic society but you cannot maintain the one without the other. The English historical experience was that certainly free trade principles emerged before the political liberalization but the political liberalization marches hand in hand with that.

In very many respects this is an historic occasion for us. The debate has been constructive and helpful. I noted in particular the interventions of my colleagues, my friends of the Bloc with their concerns about federalism. I can assure them that on this side of the House we share the desire for a more flexible, co-operative federalism in which there is, not merely as a matter of political common sense but also of a genuine sense of goodwill, co-operation and liaison between the federal government and provincial authorities. So much of the achievement of

free trade depends on the working co-operation at all levels of government.

Those interventions have been helpful and have been taken note of. You may be assured that in the implementation of the government's structural reform programs they will be operated on so that we move from a period in which Canadian economic policy has been governed by bilateralism plus multilateralism through this periodic international diplomatic conference that is called GATT into what has been called a mondialist, one world type of conception, a parliamentary constitutional organization where the debates are open, where the delegates can make thrust and counter thrust but where everything is into the open. That I think accords with the spirit of our times.

It is not a closed organization, although it is important to stress-and I think we have borne this in mind-that you cannot in our debate on an act to implement the World Trade Organization and in the guise of making amendments to national legislation insert unilateral reservations to an international treaty. If we are to be in at the beginning as a charter member of the World Trade Organization, we must do so without reservations and with the full confidence of our ability to make the system work.

We have disengaged more easily and more elegantly than some other countries, certainly more easily than our neighbour, the United States, from the old order. The swords are being turned into ploughshares. Economic forces guide the next century. The old order on which the cold war was based is over. As a charter member of the World Trade Organization we are in a position to make very concrete suggestions on the accession of new members. We can help the entry of China into this organization. We can look at the special case of Taiwan because I do not think Taiwan can be ignored. We can look at a place for Russia with its new liberalizing phase still to be completed.

There is an enormous challenge in this transition from a cold war, politically and militarily based world order to one based on free trade and the free commerce in intellectual ideas that goes with this.

This is something of a challenge to Canada because we have led in foreign policy in so many areas. We invented peacekeeping. In very many senses if you look at the substantive principles of the United Nations they are our ideas for a democratizing of a world organization that perhaps too easily fell into the concept of a permanent members' club. We are in the fight there.

This is the challenge of the new bill and in some sense the happiness that we find such a consensus around the House from virtually all the members of the House in support of this principle and this idea.

In moving the new system into the 21st century there is no derogation from our special relations with the United States and Mexico under NAFTA. These agreements subsist but they are seen in the larger context of one world with its own principles in which a pluralism of decision making occurs. This has been the Canadian way from the beginning. I return to my original point. It is a moment in history. Half a century, in a certain sense, of the carryover of the old, pre-World War II economic order comes to an end with new hopes and new visions. It is a privilege to have been part of it.

[Vic Althouse, NDP, Mackenzie, SK]

Mr. Speaker, I was pleased to hear the hon. member for Vancouver Quadra put an historical sense to what is being proposed at third reading of the World Trade Organization, something that was attempted after the second world war and was always, by my reading of history, blocked by the United States.

It was interesting to note the hon. member mentioned that in his opinion and apparently in the opinion of the government as well because they did stop all attempts to insert unilateral reservations into international agreements.

I think he was referring to the amendments that NDP members had put before the House at report stage. Essentially we were attempting and continue to make the argument for a level playing field between ourselves and the Americans. Their law which we copied and we are hoping to insert into our law effectively says that where a dispute or problem arises on trade matters, U.S. law shall prevail. That is something the United States has adhered to ever since it became a country. Its constitution gives its Congress that right. I understand that.

However, I have greater difficulty understanding the action it has taken with its proposed law which effectively says the U.S. considers that consensus is still the rule in mediating disputes. That is not what all people conclude the international agreement says. It says where there is a dispute, the disagreement shall be resolved by a vote with the majority carrying. The U.S. persistence in saying that consensus is required means that in any dispute we might have with one of the largest economies and certainly a country with one of the largest armies in the world will only be resolved by consensus. This means if the U.S. does not agree to it, we do not get an agreement.

Since this is an historic occasion and we have gone to a true World Trade Organization where a majority rules and where the same rules will apply to all parties, does the member not have a bit of a suspicion in the back of his mind that as far as our relations with the United States are concerned, it is still going to

be its rules and the World Trade Organization will take a couple of more decades before it arrives between Canada and our major trading partner.

[Ted McWhinney, Liberal, Vancouver Quadra, BC]

Mr. Speaker, I thank the hon. member for his very thoughtful question. We believe in the rule of law. The World Trade Organization has its constitution, its charter and its rules, including the rules as to how decisions are made. We will try to apply that to other countries, including if necessary our neighbours the United States.

The charter will evolve of course. I would hope that we will be submitting amendments in the future that will strengthen the dispute settlement procedures and submit, in the ultimate, issues to the compulsory jurisdiction of the World Court. We are not afraid of that. For a number of reasons the United States is. But we can perhaps bring them along to our point of view.

Business Of The House

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, a point of order.

I am sorry to interrupt. I will be just a second. I think you will find there is unanimous consent in the House for the following motion:

I move:

That if during Private Members' Hour a recorded division be demanded on Thursday, December 1, 1994, the same shall stand deferred until the conclusion of time allotted for the consideration of Government Orders on Tuesday, December 6, 1994.

(Motion agreed to.)

The House resumed consideration of the motion that Bill C-57, an act to implement the agreement establishing the World Trade Organization, be read the third time and passed.

World Trade Organization Agreement Implementation Act

[Roger Gallaway, Liberal, Sarnia—Lambton, ON]

Mr. Speaker, it is my pleasure to rise today and speak in support of Bill C-57. I am not going to discuss agricultural issues today. I want to discuss the implications of this bill with respect to a major segment of Canadian industry, the petrochemical industry.

I am speaking in one sense out of self-interest because the petrochemical industry happens to be the largest industry in my riding. It came about as a result of chance when oil was first discovered about 20 miles outside the city of Sarnia in the mid-1850s. Oil was brought into the city by truck and train and later by pipeline to the point that Sarnia became an oil town. Out of that evolved the petrochemical industry which now plays a major role in the economy.

The demand for oil and oil related products particularly following the second world war led to an expansion of petrochemical companies throughout Canada but in particular in my riding.

We saw during the post-war period, after the second world war through to the eighties, massive expansion, massive demand for petrochemical related products. We saw that the income of those who worked in this particular segment of the economy was probably the highest per capita income of Canadians.

However, in the eighties, in the downturn, the petrochemical industry suffered a number of economic set backs. There has been a decrease in demand since 1988 due to the recession. There has been an increase in competition in particular in the Asian rim. Changes in government regulations have had a negative impact on an industry that remains very vital to our Canadian economy.

I would point out that in the province of Ontario the provincial government has imposed a number of environmental regulations which are driving business out of this part of the economy. In my riding alone there have been more than 5,000 jobs lost since 1988. Still, it is a vital part of the economy employing something like 17,000 people.

There are 17 petrochemical facilities in my riding. There are the Imperial Oils, the Shell Oils, the Duponts, the list goes on and on. There are 10,000 people directly employed in it and another 7,000 people working in related fields. It is interesting to note that employees in the petrochemical industry earn two and one-half times the annual salary of the average Canadian worker.

We realize that trade liberalization is a key to continued development in this industry. That is why passage of Bill C-57 is essential for the economic well-being of a large number of my constituents. To understand why that is the case, we only need to consider the chemical industry or the petrochemical industry in Canada.

Canada's chemical manufacturing sector has annual sales of over $10 billion and employs some 30,000 Canadians. It provides the basis for a broader chemical and chemical product sector which employs another 90,000 Canadians. This industry is Canada's third largest manufacturing sector and is also third in terms of value added. The chemical industry depends on international markets for its survival. Exports account for well over 50 per cent of annual production in Canada. In some facilities, especially in southern Ontario in my riding, it is well over 80 per cent that is exported.

That is why the normalization of tariffs achieved by the WTO is so important. If we consider for one moment the size of world trade in this industry, we will know that in 1993 total exports of chemicals worldwide were some $313 billion U.S., or 9.2 per cent of total world exports. For the same year total world production was over $1.25 trillion in U.S. funds.

Bill C-57 represents a significant step forward for the chemical manufacturing industry in my riding, throughout Canada and particularly in Alberta. By joining the World Trade Organization Canada and its major trading partners, including the European Union, Japan and the U.S. as well as other industrialized nations have agreed to harmonize a broad range of chemical tariffs at low rates of duty. Any Canadian tariff that is currently below the harmonization levels will remain unchanged.

Also included in the agreement are new global rules for the protection of intellectual property rights, including a set of standards in the area of copyrights and trademarks which commit each government to protect and enforce intellectual property rights. That is very important for Canadians where we have invented a number of procedures of a chemical nature that have been given protection as intellectual property.

This agreement will also result in several benefits for Canada in general. Once again I speak in favour of my riding which will benefit from it.

The reduction and harmonization of most favoured nation tariffs will improve market access for Canadian exports of chemicals and chemical products and plastics to niche markets. This improved access will be particularly beneficial for the export oriented petrochemical and synthetic resin industries located in Canada.

For Canada the strength of the World Trade Organization and the GATT lies in their broad country participation. The disciplines that will apply to developing countries will improve our access to these markets. By providing more open international markets the World Trade Organization agreement will assist the Canadian industry to become better oriented to global markets.

The traditional Canadian branch plant structure is giving way to one that is increasingly world competitive. International manufacturing mandates and research development mandates for Canada will be facilitated by this agreement. The World Trade Organization will also provide an improved dispute settlement regime for a more effective alternative to trade wars.

I would like to talk briefly about the future. Market access for petrochemical products is essential to the continued growth of the industry. It is vital for economic renewal, notwithstanding in whose riding it may be. To be globally competitive means to have real access to global markets. In ratifying this agreement we as a country are taking an important first step. We must continue our efforts if we are to ensure continued growth in this very vital sector of our economy.

Canada's trade negotiations are, in my opinion, to be commended for their accomplishments during the Uruguay round. They were successful in getting the key target markets of Korea, Singapore and Hong Kong to agree to most of the tariff lines. These markets are of particular interest to the petrochemical sector in Canada.

However, other countries-there is no question this is something that must be worked on-must be encouraged to join in in harmonizing their chemical tariffs in the future. In particular I am thinking of China, because China has a chemical industry that is two and a half times the size of Canada's in terms of production. The Chinese industry is growing at the rate of 15 per cent a year and we must convince the Chinese to harmonize their chemical tariffs and discipline restrictive border measures for chemicals so that their borders are also open to our products.

Briefly in conclusion, we have to realize that we are living in a world in which economies of scale are the determining factors. At the present time in Ontario and most Canadian manufacturers of petrochemicals are sized for the national and regional markets but they are not of international scope in size. To be truly competitive these facilities must be world scale in size. To be world scale in size they must be able to freely enter world markets without barriers in place. The larger our market the more efficient and competitive Canadian industry can be. That is obviously a truism.

Our world scale plants in the manufacturing of petrochemicals such as ethylene located in Joffre, Alberta and in my riding of Sarnia, add substantially to our balance of trade with other countries, especially the United States.

As Pacific rim countries attempt to break into the marketplace we are still in a position of strength. Recent studies clearly show that the workforce required to operate these petrochemical facilities is the second most educated and trained workforce today in Canada, second only to the software industry but in many respects virtually identical.

To ensure that there is a place for our technical graduates we as a country must constantly strive to ensure open markets for our goods. Quite simply many of our Asian competitors do not have the skilled employees needed to operate such facilities effectively or efficiently.

We must also remember that the production of petrochemicals ranks highest in Canadian manufacturing in adding value to raw materials. We have the raw feed stock in abundance, one need only visit the gasfields of Alberta to realize the volume of the gas stocks have. We have gas stocks in Ontario also. We must now ensure that we pass this bill in order to ensure that we have

the markets to which we can ship Canadian products. We can use these raw stocks and we can add great value to them in the end.

Finally, without the passage of this bill we will slowly but surely strangle this important segment of our industry in our economy.