House of Commons Hansard #102 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was agreements.


Question No. 70
Routine Proceedings

10:10 a.m.

Some hon. members


The House proceeded to the consideration of Bill C-32, an act to implement the Free Trade Agreement between the Government of Canada and the Government of the Republic of Costa Rica, as reported (without amendment) from the committee.

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

10:10 a.m.



Don Boudria for the Minister of International Trade

moved that the bill be concurred in at report stage.

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

10:10 a.m.

The Acting Speaker (Mr. Bélair)

Is it the pleasure of the House to adopt the motion?

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

10:10 a.m.

Some hon. members


(Motion agreed to)

Canada—Costa Rica Free Trade Agreement Implementation Act
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10:10 a.m.


Don Boudria Glengarry—Prescott—Russell, ON

moved that the bill be read the third time and passed.

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

10:10 a.m.



Pat O'Brien Parliamentary Secretary to the Minister for International Trade

Mr. Speaker, I am very pleased to speak to this important bilateral free trade initiative between Canada and Costa Rica on behalf of the Minister for International Trade.

I would like to offer our congratulations to several people: to our colleague from Ottawa Centre, the chair of the trade subcommittee, who held hearings on the bill; to our colleague, the member for Etobicoke--Lakeshore, who is the chair of the sugar caucus as it is called and who had some very important input, along with other colleagues, on the legislation; and, indeed, to all members of SCFAIT, the Standing Committee on Foreign Affairs and International Trade. I, on behalf of the minister, would like to thank both the opposition members and the government members for the good and co-operative spirit in which they worked on the legislation. We were able to move the legislation along at a very good pace. On behalf of the Minister for International Trade, we offer our thanks and appreciation for the work that was well done.

We are now in the final stage of debate on the Canada-Costa Rica free trade agreement implementation act. I welcome the opportunity to address the House on this important matter.

However, before I get to the matter at hand, I would first like to say a few words about the impact of the terrible events of September 11.

Many Canadians find it difficult to believe there are those who claim that our country can return to business as usual. Our economy and the entire global economic system has been severely shaken by the tremendous human and economic losses we experienced last month.

As members know, many sectors have felt an immediate impact. The air transport, hospitality and communications industries, for instance, have been hit by a dramatic and sudden reduction in consumer demand. However, as you will no doubt recall, Mr. Speaker, in 1991 there was an economic slowdown related to concerns about international political instability. This was quickly followed by a decade of very strong growth.

Today there are also reasons to have faith in the future. Governments of the free world, including our government, are taking unprecedented steps to combat global terrorism and improve security within their own borders. Economically, we know that our markets are resilient and that difficulties such as those experienced at the Canada-U.S. border crossing are starting to ease.

Together we can overcome the inertia of fear or worry and establish a new standard of normalcy now strengthened with a renewed sense of purpose.

While it may not be business as usual, we are certainly taking care of the usual business for the good of all Canadians. The free trade agreement we are discussing today is certainly an integral part of our efforts in that direction.

I would like to turn now to the benefits of the Canada-Costa Rica free trade agreement.

The agreement in question would give Canadian businesses barrier free access to the small but dynamic Costa Rican market. We will see the immediate elimination of tariffs on most industrial products upon implementation. This includes some key Canadian export sectors, including automotive goods, environmental goods, prefabricated buildings and some construction products, such as steel products. The advantages do not stop there. In fact people right across the country will benefit from the agreement.

Some 94% of Canada's current agriculture and agrifood exports to Costa Rica would realize market access benefits. Significant gains would be realized for products such as french fries, peas, beans, lentils and other pulses, greens, fresh fruits and vegetables and processed food products.

While on the subject of agriculture and agrifood, it is worth noting that supply managed dairy, poultry and egg products are exempted from tariff reductions.

Tariffs on the remainder of goods would be gradually phased out over a period of either 7 or 14 years, depending on the type of product.

As a result Canadian exporters will gain an important advantage over their principal competitors in the Costa Rican market, including the United States, European and Asian suppliers. At the same time Canada will achieve a level playing field with Costa Rica's other preferential trade partners such as Mexico and Chile.

This really represents a win-win scenario in the best sense of the word. Of course Costa Rica also stands to gain under this agreement. One of the most important benefits for this small country is the asymmetrical treatment that the Canada-Costa Rican free trade agreement provides for.

As members know, this means that to take into account the difference in the levels of development and the size of the two economies, Canada will liberalize its market more quickly than Costa Rica. We sincerely believe that the government will demonstrate conclusively that free trade agreements can be negotiated between larger and smaller economies.

Clearly this will also serve to advance the debate taking place in the FTAA and how the interests of larger and smaller economies in the region can best be reconciled. As a result, the asymmetrical aspect of the agreement serves the broader interest of our country.

This is an important point because Canada's continued engagement within regional free trade agreements, such as the FTAA and the NAFTA, is critical to our collective economic prosperity and social well-being. After all, with a population of 800 million, the Americas is one of the fastest growing markets in the world in terms of consumers and growth in per capita income. Latin America and the Caribbean collectively boast a total population of nearly 500 million people and the region produces a GDP of approximately $3 trillion.

The FTAA will create the conditions for greater prosperity for all participants. This widespread prosperity will in turn provide the poorer countries of the hemisphere with the resources to address such problems as poverty, crime, environmental degradation, threats to democracy and human rights.

In the end our efforts to liberalize trade on a multilateral, regional and, as in the case of Costa Rica, bilateral level all lead to the same goal: a more open rules based trading system. It is absolutely fundamental to the success of our economy that with a relatively small population in terms of our trading partners we have an open rules based trading system. This helps to promote such a system.

While the elimination of tariffs is at the heart of any free trade deal, the agreement between Canada and Costa Rica goes further in a number of key areas. For example, the Canada-Costa Rica free trade agreement is the first bilateral free trade agreement including innovative stand alone procedures on trade facilitation which will reduce costs and red tape for Canadian businesses at the border.

This has special significance far beyond this particular agreement. Within the World Trade Organization, Canada has long been a leading proponent for binding rules and disciplines on trade facilitation. This agreement also includes a precedent setting framework for competition policy which could serve as a model for the region in the context of the free trade area of the Americas.

In fact, as a country that draws great benefit from foreign trade, Canada is working very hard to strengthen the rules based international trading system. That is why we strongly support the launch of a new WTO negotiation round. We are working closely with our trading partners, including the United States, the EU, Japan and key developing countries, to build support for new negotiations.

In this respect I have to note that when I represented our colleague, the Minister for International Trade, in Shanghai last June, I saw how highly respected he is personally by the trading partners in APEC in the leadership that he has shown. That leadership deserves to be recognized here today.

WTO members have many difficult issues left to resolve before the meeting scheduled to take place in Doha, but I believe that with political will on all sides we can make good progress in bridging the differences among members. A key to success in this area is to demonstrate to smaller countries that they stand to benefit from liberalized trade. Agreements like the Canada-Costa Rica free trade agreement do just that.

To digress from my text for a moment, I know that in discussion with many groups in my own riding and in other parts of Canada, the support for free trade in this country is quite strong. It is in the order of some 70% to 75%. Much of it is based on the fact that Canadians expect that there will not be losers in free trade. The basic fairness of Canadians comes into play here when they say that they are for free trade. Most, with their eyes open, understand how it has benefited our economy. However, they expect that it will also benefit the economies of the developing countries of the world. I think that is the Canadian basic sense of fair play. Much of their support is contingent on us doing everything possible to ensure that, and that is exactly what we are working toward as a country.

If I could turn now to the somewhat contentious issue of side agreements in the areas of environment and labour. Until now I have only addressed some of the many economic benefits of this free trade agreement. While they are of course central, they are not the only advantages that flow from this agreement. After all, while pursuing the goal of liberalized trade, we owe it to future generations to ensure that this increased economic activity is also sustainable.

At the same time, as a progressive and democratic society we have a special responsibility to foster improved environment and labour standards in those countries where we do business. I am pleased to note that parallel agreements in both these key areas were also negotiated.

In light of the growing economic, environmental and social links between our two countries, both agreed that a commitment to environmental and labour co-operation, along with the effective enforcement of domestic laws, should go hand in hand with free trade. These parallel agreements will ensure that we not only reap economic benefits but important social benefits as well.

In fact, Mr. Juan Somaria, the director general of the International Labour Organization, recently stated in Ottawa that he supported side agreements and that Canada had been very creative in using these side agreements.

At a meeting of the trade subcommittee, I personally had an opportunity to explore this with the director general of the ILO. Some of our colleagues, specifically those in the New Democratic Party, are saying that we must have these environmental and labour agreements right in the text of our trade deals. Therefore, I put the question to the director of the ILO as to whether he supported that. Quite frankly, he said no. He said he supported and congratulated Canada very effusively for its creative use of side agreements. He said that we take what tools we have and make progress that way. I think it came as a bit of an eye-opener for the NDP members at that particular meeting.

On this same issue, I had an opportunity to attend a conference representing my colleague the Minister for International Trade where we talked about trade and the benefits to less developed countries.

Again, there are colleagues in this House who talk about EU and cite it as a very advanced organization in its trade and other practices. EU ministers are adamant that we not litter up trade deals by trying to include environmental and labour standards in those trade deals. It is best done in side agreements.

That is the view I believe of all parties in this House, save and except for the NDP. It is certainly the view of this government. It is the view expressed earlier this week by the director general of the ILO. It is important that his support and congratulation for Canada be noted.

For example, the Canada-Costa Rica environmental co-operation agreement includes obligations which provide for high levels of environmental quality and effective enforcement of environmental laws which promote open, transparent and equitable, judicial and administrative procedures. It provides for public accountability for those commitments to effectively enforce environmental laws. It will also seek to involve the public, as appropriate, in all aspects of the implementation of the agreement.

On the labour front, the two countries have signed the Canada-Costa Rica agreement on labour co-operation.

The main elements of this agreement include: coverage of industrial relations; employment standards and occupational safety and health; a mechanism allowing the public to raise concerns about the application of labour law in the other country; and development assistance to help the Costa Rican department of labour and social welfare improve its institutional capacity.

Unfortunately, time does not allow me to catalogue all the benefits of our free trade agreement. However I believe it is clear from the examples I have outlined today, as well as from the comments from many other members who took part in this debate on both sides of the House, that the Canada-Costa Rica free trade agreement is another step in the right direction for Canada. Like other free trade agreements that came before, this one will contribute to Canada's long term prosperity as well as help us achieve our broader goal for international trade liberalization.

Finally, it represents a symbol of our faith in the future. The Canada-Costa Rica free trade agreement is a definitive response to those who seek to sever the lines of communication between nations and retreat into a medieval isolation. Canada will never find itself among those timid souls. Free trade is as much about ideas and values as it is about goods and services. Let us increase such exchanges.

It has been an honour for me to speak on the debate today and to congratulate and thank those who participated on both sides of the House on behalf of my colleague, the Minister for International Trade. I welcome the support of all members of the House who surely must see the undeniable benefits of the agreement.

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

10:30 a.m.

Canadian Alliance

John Duncan Vancouver Island North, BC

Mr. Speaker, I am pleased to talk to Bill C-32, an act to implement the free trade agreement between Canada and the Republic of Costa Rica.

The purpose of the bill is to implement the free trade agreement with Costa Rica, the objective of which is to establish free trade between the two countries by gradually eliminating barriers to trade in goods and services.

I will put a summary at the front end, which is that this is not a controversial bill, with one singular exception. I believe, as the parliamentary secretary made reference to, that we have dealt with that quite adequately at committee. We tried very hard to make that a co-operative arrangement with the government. The compromise we came to hopefully will stand the test of time. This will be seen as time marches on. I will certainly be getting into that in some detail during my presentation.

The bill follows the free trade agreement with Chile in 1997 and NAFTA in 1994. One of the major stated purposes is to promote regional integration through an instrument that contributes to the establishment of the free trade area of the Americas, the so-called and so-named FTAA negotiations. This could be the first of several of these agreements with other countries in South and Central America.

Eighty per cent of what Costa Rica exports to Canada, primarily fruit, vegetables, coffee and coal, already enters Canada duty free. Canada was looking to expand its market for some specific things. Interestingly, french fries, metal structures, fish, paper products, auto parts, plastics, wood and agricultural products were among that mix. These products had very high tariff rates applied to them. One interesting example is french fries. Even though Costa Rica does not grow potatoes, it has a 41% tariff on imported french fries. This shows the need for tariff reductions on all kinds of fronts. That was very much a focus of these negotiations.

In 2000, Canada's total exports to Costa Rica were about $86 million. In the same year we imported $183 million worth of products from Costa Rica. These are Government of Canada statistics and I do recognize that there is some difficulty in identifying exactly what are the imports and exports because some of them flow through the United States and are attributed in that fashion.

The Canadian Alliance promotes free trade and the joint elimination of tariffs with our trading partners. We support securing access to international markets through the negotiation of trade agreements. We will vigorously pursue reduction of international trade barriers, tariffs and subsidies. Additionally, we will ensure that Canadians' concerns about labour practices, environmental protection and human rights are reflected in these agreements.

I did mention that there was one aspect of the bill that was contentious. I will spend some time making reference to it. It is an industry that is important to us. I am talking about the domestic sugar industry. Historically we have grown sugar beets in Canada in many provinces, and now, based on a closure of export opportunities with our trading partners, sugar is one of the most protected markets in the world. Canada has the most open market in the world for sugar.

What has transpired is that we have one sugar beet producing province left, which is Alberta. We have gone from seven sugar refineries not very many years ago to three. Those refineries have made major capital expenditures to ensure that they operate with world class efficiency.

We basically are supplying our own domestic industry with our own refined sugar. We are importing a lot of raw cane sugar. We produce beet sugar and have almost no export opportunity. For example our total export opportunity to the United States at this time is, I believe, 10,000 tonnes, which works out to one tenth of 1% of its total consumption. We are facing tariffs on exports to other countries in the Americas of anywhere between 50% and 160%. Our only protection for our domestic industry is an 8% tariff or about $30 a tonne. It is a very small tariff and we do not subsidize our sugar industry in any other way.

As an example, Costa Rican sugar prices are about $650 a tonne higher than world prices. What that really means is that Costa Rica can cross-subsidize any exports of its sugar anywhere in the world, including Canada. What this has done of course is create a lopsided agreement on sugar. In a sense we have sacrificed our sugar industry in many agreements. That is why our place in the sugar world has shrunk.

A very significant concern came forward from the refiners and the growers as represented by the Canadian Sugar Institute. They felt that although the bill would not be in itself a major problem because Costa Rica has no refining capacity, if the market provisions of this agreement were to be built into the ongoing negotiations with central American countries such as Guatemala, Honduras, El Salvador and so on, or with the free trade area of the Americas, we basically could write off our sugar industry. We would be doing that in a non-free trade environment because no one else is practising free trade. We believe in free trade but it has to be fair trade.

I will move on to some of the important parts of the agreement. We as a nation of 31 million people have entered into an agreement with Costa Rica, which has a population of less than 4 million, no military and longstanding democratic traditions and institutions. This is an important agreement because Costa Rica is very much viewed as a stable, democratic entity in that part of the world and one that we should be doing our utmost to do business with and to practise the purest of free trade with if we can.

Canadians have a lot of investments in Costa Rica. The Bank of Nova Scotia has 12 branches. Hollinger owns the newspaper La República . Canada has major solid waste treatment facilities, hotels and tourism oriented enterprises and Hydro-Québec is involved in a large hydro generating station in Costa Rica. Our total capital investment is running at about $500 million. I think investors have had generally pleasant experiences.

That gives a good summary of where we are. I will move now into the area of some of the things that would be exempt from tariff reductions under this agreement. Canada has a long tradition, under the Liberal government, of exempting some things from tariff reductions. They are simply not on the table. There is no change from that in this agreement. Exempted from tariff reductions from our perspective are beef, culture and our supply managed industries such as dairy, poultry and egg products.

The basic message is that when government negotiators negotiate a free trade agreement or any kind of international trade agreement, they do have to make choices. I believe, and I know others believe, that historically we have tended to sell out our sugar industry. This agreement is viewed as being no exception.

Our single protection for the sugar industry is an 8% tariff. As I mentioned, the lowest in the Americas is 50%, up to 160%, for all of our competitors. Canada is basically excluded from any ability to export beyond our boundaries for any significant amount of sugar. Nothing would change under this agreement. It is a very lopsided agreement in regard to our access to their sugar market. In the words of the industry, it is token access.

I would like to quote from the website of the Canadian Sugar Institute, which states:

The recently announced Canada-Costa agreement is a case in point. Costa Rica has a 50% tariff compared to Canada's 8% tariff, and supports its sugar production through high prices that are far above the Canadian and even the supported US price. Yet, Costa Rica is demanding approximately six times more duty free access than it is willing to give Canada during a transition period. Further, it will only grant access for a token amount of Canadian refined cane sugar (which makes up 90% of Canada's sugar production) and even that depends on Costa Rican sales to Canada. In spite of objections from the industry that this is both a bad deal and would set a dangerous precedent for the CA-4 talks (countries whose combined exports are 1.5 times greater than Canada's total production) and the FTAA, the government seems willing to accept these lop-sided terms.

It is referring to the Canadian government. The CA-4 talks are to be held with the Central American countries I referred to earlier.

This is what they were saying prior to the bill getting to committee. These are some of the other things and some of the background of the Canadian producers. There is only one beet sugar factory remaining in Canada. It is in Taber, Alberta. At one time beets were also grown and processed in Manitoba, Ontario and Quebec.

Canada has three refineries that process raw sugar. They are in Montreal, Toronto and Vancouver. In the past 20 years four other refineries have ceased operations. The total Canadian market for sugar is about 1.2 million tonnes. Beet sugar supplies about 10% of this amount. Of the remaining 1.1 million tonnes a small but significant portion is imported into Canada in a refined state.

Sugar is one of the world's most trade regulated commodities. Most countries severely restrict imports through a system of duties, quotas or other mechanisms. Canada is among the most liberal countries in the world with an 8% duty on refined sugar and free import of raw sugar.

Guatemala places a 160% duty on sugar imports. Canada is allowed to export only about 12,000 tonnes of sugar to the U.S. due to its quota system. This is sugar from beet sugar as restricted by country of origin rules. No other viable export opportunities exist for the Canadian industry. In other words we are locked into our domestic market.

I have covered the basics of the sugar situation fairly well. It is worth adding that the Costa Rican market currently does not include refined sugar. Only raw sugar is sold. The fact that we have gained entry into the Costa Rican market is academic from the standpoint that there is no current market. Its domestic prices are about $650 a tonne more than world prices.

This leads to cross-subsidization. It also leads us to ask why would they import sugar if they have those kinds of domestic pricing arrangements.

I will go into this a bit further. Guatemala is one of the CA-4 countries. CA-4 will be the next set of negotiations on free trade along with the free trade area of the Americas. Guatemala's current sugar exports amount to about 1.2 million tonnes. That is virtually identical to the entire Canadian market.

The CA-4 countries, the four major countries in Central America, have current export surpluses in refined sugar of about 300,000 tonnes. That is without further investment in refining capacity or anything else. That is immediately available capacity. This could totally displace the entire western Canadian market, which is the most likely place for these exports to arrive because their ports are on the Pacific coast.

This is a major concern. One can understand why members of parliament from every part of Canada are receiving a lot of solicitation from sugar refiners, sugar growers and the Canadian Sugar Institute, and why they are taking the Costa Rica agreement so seriously.

If it were to be a precedent for the next negotiations we could see the sugar industry in Canada, a non-subsidized industry protected by a tiny tariff, swallowed up with a loss of 1,500 refinery jobs and about 500 grower jobs. I am not sure anyone would consider this to be free trade in the sense of unsubsidized industries competing with unsubsidized industries. It is not.

In the House of Commons we have something called the national sugar caucus to which the parliamentary secretary made reference. Some of the hon. members on the sugar caucus were also on the committee which met earlier this week and heard witnesses representing the Canadian Sugar Institute, sugar refiners and beet growers.

At that meeting I tabled amendments to the preamble of the bill, not to the treaty, to give clarity to the fact that the sugar provisions should be seen as unique to the Costa Rica agreement and not as a precedent for the upcoming CA-4 negotiations or the free trade area of the Americas negotiations. What ended up deriving from discussions among all parties at the meeting was that I would withdraw the amendment if we could somehow build a similar thought process into the language of our report and a subsequent letter to the minister.

That is where we are. I can quote from the third report to the House of Commons which was tabled recently. I will outline the relevant paragraph. The Sub-committee on International Trade, Trade Disputes and Investment, which is an offshoot of the Standing Committee on Foreign Affairs and International Trade, is studying the bill. It stated:

The Sub-committee wishes to highlight the specific concerns of Canada's sugar industry and asks that their interests be taken into account in any future trade negotiations involving Canada.

That is what we did. I am hopeful the government and government mandated negotiators will take heed that those are the sentiments expressed by the all party subcommittee. It was done in the right spirit and with good intentions on all sides. It is an eminently correct way to proceed in our future negotiations.

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

10:55 a.m.


Francine Lalonde Mercier, QC

Mr. Speaker, the Bloc Quebecois supported this bill at second reading. I refer to the Canada-Costa Rica free trade implementation act.

The member for Joliette, who is responsible for this matter, moved some amendments in committee. However, even though at second reading we supported the principle of the bill, we said we had serious misgivings. None of these serious misgivings were settled during committee deliberations so today we will vote against this bill at third reading.

It is not that we do not support free trade, because I think everyone knows we do. However we support it on the condition that free trade does not lead to the stronger dominating the weaker. Free trade must improve the economies and the rights of all countries.

We had and continue to have three major complaints. The first is a matter of principle. Since the Bloc arrived in the House, it has protested as each new international treaty, trade agreement or convention comes to the attention of the House after the government had already reached its decision. We find this a rather backward way for parliament to operate.

The government cannot point to the British parliament in defence of this approach, which is neither transparent or consultative, either civil society or parliament, since, surprise, surprise, Great Britain has itself changed its approach and consults its parliament.

We find ourselves in a situation where our debates on the content take place after the treaty is signed. This is the case with the implementation bill before us. In the course of the debate in principl, the government side says “But you have the implementation act. You can vote on an implementation act”. Yes, but the problem is that although we can vote on it and against it we can do nothing to change it.

What is the point of a parliament that can only express views and not change anything? That is the situation in which the Parliament of Canada finds itself and this must change.

My former colleague, the member for Beauharnois--Salaberry, presented a private member's bill that was not selected for debate in the House. I presented the same bill. I hope that this time it will be deemed votable and a majority of members will have changed their minds so that this parliament can modernize the way it proceeds and can take into account, in its extremely important international dealings that affect the lives of Canadians and Quebecers, the notion of respect for consultation.

In addition to providing no opportunity for input, there are two other elements that we find completely unacceptable about this approach. The first is an obvious lack of transparency. The government is always saying that it is the best in the world when it comes to transparency, but when it talks about transparency it refers people to an Internet site. This is not what democracies consider transparency. Throughout Quebec and Canada many people are suffering because of this situation. There is a lack of transparency.

There is also the issue of disregard for provincial jurisdiction. When Canada signs these trade agreements or international conventions, not only is it acting within its own jurisdiction but it is also acting within that of the provinces. We cannot gloss over this.

However, this is not the reason we will be voting against the bill at third reading. We agree on the content of this implementation act, and we could vote in support of it after having the chance to speak eloquently to the issue. However, there are two other serious problems with this trade agreement and its content, and, consequently, the implementation act.

This free trade agreement with Costa Rica was signed on April 21, 2001, after negotiations conducted while preparing for the summit of the Americas that was held in Quebec City on the free trade area of the Americas, an issue that is still of interest to Quebecers and Canadians. Here again, if that free trade agreement is signed, it will have an impact on our lives.

During the preparations for the Quebec summit, the government stressed through, among others the Minister for International Trade, that it agreed with numerous observers that the way NAFTA, the free trade agreement among Canada, the United States and Mexico, deals with issues relating to foreign investments is not the appropriate way. The Minister for International Trade said, and I quote “Canada is not advocating the replication of NAFTA investor state rules in the FTAA.”

The minister added “--and has not supported the proposals made so far by other FTAA countries to include such a type of dispute settlement mechanism”.

I can give the address of the Internet site where this quote from the minister is to be found.

At the same time that the minister was making that statement, he was negotiating to renew the free trade agreement with Costa Rica that had first been signed in 1998. He was very proud when he showed up with this renewed free trade agreement with Costa Rica. We noticed that the rules in the agreement between Canada and Costa Rica to settle disputes between investors and states are exactly the same as those found in NAFTA.

In committee, I pointed this out to the minister. He turned to his negotiator, who said “No, the member is mistaken. That is not the case. What we have renewed is a foreign investment protection agreement”.

Oddly enough, this foreign investment protection agreement, or FIPA as it is called, contains the very same provisions as chapter 11 of NAFTA, which many people with an active interest in free trade agreements oppose.

How can this be explained? Not too easily, and it is a big concern. It is why my colleague, the young and brilliant member for Joliette, brought forward an amendment on this issue in committee. He suggested that the bill be amended by replacing the wording in the agreement signed by the government with the following “dispute settlement, by providing for the repeal of article 12 of the agreement between the Government of Canada and the Government of Costa Rica concerning the encouragement and protection of investments”.

In fact, the important thing to understand, even if it seems complicated, is that, until 1993, all agreements signed by Canada with other countries were based on the principle that, when there was a dispute over foreign investment--if there was nationalization, a government policy, rules which seemed to prevent a company from setting up business, or a dispute of any sort--the rule was that the two states discussed the problem and, if no agreement was reached, they could take their case to a tribunal. That was for two states.

When NAFTA was signed by Canada, Mexico and the United States, this approach, which had been recommended by the OECD, by the way, was replaced by the principle whereby an investor who has cause to complain may bypass its state of origin and take its case directly to a tribunal.

This possibility, this capacity awarded to investors, has had disastrous effects on the role played by states.

With NAFTA we are beginning to see that the settlements coming out of these tribunals, which operated in a totally secret and discreet way until this summer's agreement and which does not change their intrinsic nature, make it possible for an investor to take the state in which he has invested before a tribunal which is all powerful. This is so much the case that private tribunals have in secret, without a third party being allowed to attend to listen in on the proceedings or make representations, made decisions that equated a governmental decision, to protect the environment for example, with a measure that would reduce profits.

This was very far removed from the principle of nationalization for which compensation was required. Loss of profit was considered as something for which the state should compensate. I believe everyone agrees on the effect of this. It is that businesses in countries needing investment, and some here in Canada as well, will launch huge suits, because they are allowed to do so, in order to get government policies withdrawn.

In Quebec, the public might perhaps tell the government “Paying for that makes no sense at all. Quebec is entitled to decide on its own policies, environmental or otherwise”. The situation remains, however, that the fear of having to pay is going to be very great, and will run counter to the democratic power of a country. This will in my opinion be even more the case with the poorer countries, which are in greater need of foreign investment.

As for the famous NAFTA chapter 11, which sets out the principle of the investor's right to challenge a state directly, this principle must absolutely not be part of the free trade agreement of the Americas. If Canada is to act consistently with the statements of the Minister for International Trade when it renews agreements, often with developing countries, it must do away with this principle, which is tantamount to investor domination over states desperately in need of investments and often vulnerable.

Despite our speeches and our references to the Minister for International Trade, after debate on whether or not it was admissible, this amendment was rejected in the end.

There is also a third and different problem, to which our colleague from the Canadian Alliance referred, and that is sugar. This agreement opens the market to sugar from Costa Rica. This provision, if it were limited as we recommended, would not have provoked our opposition in and of itself, since the sugar that Costa Rica could export to Canada would not threaten the current situation in the sugar industry despite the fact that the industry has some concerns.

In Quebec, Lantic Sugar is located in Montreal. This is a world class refinery that employs 345 employees and has just invested $100 million to modernize its Montreal refinery.

Workers came to my office to share their fears with me with respect to the talks that are currently underway with four other sugar producing countries in South America, Guatemala, Nicaragua, Honduras and El Salvador.

Guatemala's exports of refined sugar alone represent 75% of the Canadian market. This gives us an idea of the size of Guatemala's sugar exports. We cannot blame this country for wanting to export its sugar, to the contrary. However, in Canada this refinery and the industry are telling us that they themselves are in a situation where they are prevented from selling products that contain a single grain of sugar in their exports to the United States. Even cookies have to be made with sugar substitutes rather than sugar. This shows how major the barrier is that they are facing.

What we and the member for Joliette proposed in committee were basically two things. We proposed an amendment that read as follows:

It is understood that the agreement must not serve as a model for future bilateral free trade agreements, and that all future negotiations on sugar must take place in a multilateral context and within the framework of the future Free Trade Area of the Americas.

I think that this amendment is easily understood. The Bloc Quebecois and industry are not against continuing negotiations, but they must take place within a multilateral framework. The idea is not to open up markets to Quebec and Canada alone, but to have other markets open up at the same time. This amendment was ruled out of order.

Being very much pro-free trade, we are in favour of bilateral agreements with countries in the southern hemisphere. We therefore find ourselves in a situation where we would have liked to vote in favour of this bill. Given the fact that this agreement essentially reproduces the contents of chapter XI and given the government's refusal to provide assurances that this agreement will not be used as a basis for other bilateral negotiations before an attempt is made to sort out sugar exports within a multilateral framework, we are voting against the act to implement the free trade agreement at third reading to show that our concerns are serious.

In conclusion, I wish to say that the issue of opening up markets to southern hemisphere countries is fundamental. It is not a question of being opposed. It is also obvious that opening up markets in this way will not in itself improve the situation of southern hemisphere countries. The effects on the labour force will have to be considered.

It is incompatible with treaties that are negotiated in secret without consulting the public and without even making provisions, as was done after 1988 and during the 1988 discussions, for dealing with any negative impact, given that the expected benefits are so much greater.

We cannot ignore the real and serious concerns of industry workers. If we want to further develop this type of agreement, and we do, we must do it in an open fashion, through open consultation with the provinces, the workers and the public.

People in northern countries must realize that it is urgent for them to have access, through southern countries and, I should say, through oriental countries to the markets of the richest countries. In order to do so, the preparation work must be based on consultation and on results, so that we can indeed open up and allow for a better sharing of wealth.

Oddly enough, it cannot be said that opening up markets, even though everyone right now thinks it is the be all and end all, is the only factor that will ensure a better sharing of wealth. If, in those countries where wealth is growing there is no sharing of it, whether here, in southern countries or in the orient, there are people who will get richer. However, the gaps between societies will not be bridged.

One way that the European Union, among others, has found to help southern or eastern countries in its bilateral relations is to open up its market and buy the production but also provide real assistance by injecting money to promote diversification. We cannot complain about or regret the fact that some countries rely on a monoculture, that they sell only coffee or peanuts, and ignore history.

If today these countries only sell coffee or peanuts, it is because of what happened during the 19th century with colonial empires, where industries did what they wanted and countries that had a diversified production were transformed into countries relying on a monoculture.

It is absolutely necessary to recognize that southern hemisphere and Asian countries should diversify. Some are doing so rapidly and are becoming developed countries. However, those experiencing the most difficulty should be helped.

I would have liked to be able to say that at last parliament was consulted before the signing of a treaty. Perhaps some provisions would have been included in the agreement to reassure our workers and to inform the public about the needs of southern countries. Unfortunately, because this was done behind closed doors, without consultation, without transparency, we find ourselves in a situation where we can only say after the fact that we deeply regret the way things went, and this is what I am doing.

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

11:25 a.m.

The Acting Speaker (Mr. Bélair)

I wish to point out that starting with the next speaker, members' speeches will be limited to 20 minutes, followed by 10 minutes for questions and comments, unless members indicate that they will be sharing their time.

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

11:25 a.m.


Bev Desjarlais Churchill, MB

Mr. Speaker, I am pleased to have an opportunity to speak to Bill C-32, an act to implement the free trade agreement between the Government of Canada and the government of the Republic of Costa Rica.

It is not the intention of the New Democratic Party to support the bill. That should be of no surprise as we have indicated that previously. I will expand on the reasons in the next few minutes.

Bill C-32 and the Canada-Costa Rica free trade agreement follow the North American Free Trade Agreement and the FTAA model of free trade that the New Democratic Party has consistently opposed because they put corporate rights ahead of human rights, the environment and democracy.

The side agreements on labour and the environment are insufficient to promote higher standards across the board in these areas. Costa Rica's record on labour is atrocious. We see no reason to make things worse.

The purported advantage of free trade in agricultural products is unproven. While Canadian farmers are not seeing the benefits of increased imports, the livelihood of Costa Rican farmers is endangered by an agreement such as this one. Many must wonder how that would be the case.

The bottom line is that the specific agreements are set out with the right of the investors to make a profit. They are the ones who benefit from these trade agreements and they do not encompass a holistic approach to the well-being of a country, a community or an industry within a country.

My hon. colleague from the Bloc mentioned that colonialism in southern countries does not allow for diversification in some of those countries. Quite frankly we see that happening even within Canada where there is no diversity and as a result certain industries are suffering.

The Bloc will not be supporting the bill at third reading. I am pleased to see the Bloc come on side with the New Democratic Party's view that trade agreements are not okay if they do not encompass environmental rights, human rights and labour rights.

I know there were numerous members from the Bloc who went to Quebec City earlier this year, along with members of the New Democratic Party caucus. We listened to many people from southern countries who have seen the effects of trade agreements in their countries. They said that the effects were not always good and in some cases were detrimental.

According to the National Farmers Union, Canadian farmers and consumers have not benefited from increased agricultural exports, nor have farmers and consumers in the developing countries to which we export. The position of the governments of Costa Rica and Canada that it is a good deal for everyone is just not the case. There is no benefit when products go on the market at an extremely low cost. Flooding the world market with food prices far below production costs damages the ability of other countries to feed their citizens. That is exactly the case.

In Costa Rica in 1998 a flood of cheap imported grain drove the local farmers out of business. The number of farmers growing corn, beans and rice, the staples of the local diet, fell from 70,000 to under 28,000. Therefore it was not a good deal for everyone.

The problem with a number of the trade deals is that they put the rights of investors ahead of everything else. That is extremely important to the New Democratic Party because we represent a number of people who know that making a profit is not the only thing that counts.

New Democrats are not opposed to trade. Trade is necessary for strong economies,but not unfettered trade. Trade agreements must include labour, environmental and human rights. It is absolutely a necessity, and that is where we differ from the Liberals.

I was absolutely shocked as I listened to the Parliamentary Secretary to the Minister for International Trade this morning. That is the Liberal member for London--Fanshawe. He referred to labour and environmental rights within trade agreements as littering up the agreements. He said “environmental rights and labour rights litter up the agreements”. That is like saying labour and environmental rights are garbage. That is not the case. The Liberal member for London--Fanshawe called environmental and labour rights garbage. If we refer to them as littering up an agreement, that is not good enough.

However this sets the scope of how the government tends to deal with labour and environmental rights. We have seen numerous environmental issues come before the House many times where the government uses tough talk but never follows through on environmental rights.

The government waves the ILO banner. Costa Rica and Canada would fall under the ILO banner; they would do everything it says. Frankly Costa Rica has implemented more of the ILO conventions than Canada.

Let me tell members about the history of labour rights in Costa Rica. Costa Rica is notorious for its persistent denial of labour rights, especially the rights of collective bargaining, association and strikes. In Costa Rica's private sector it is virtually impossible to form or join a trade union because of the hostility from employers and the government's unwillingness to enforce labour laws. That is Costa Rica's history. That is its position on labour rights yet it has introduced more of the ILO conventions than Canada.

We acknowledge that in some areas we have been able to succeed in having good labour legislation in Canada. We all know it is not automatically there. The reason those rights are maintained is the strong efforts of a number of labour unions, the number of people involved in social justice making sure that those rights are upheld, and the legal system built around that. Those things are not a given forever. Civil liberties are not a given forever in Canada. We are seeing that now with the anti-terrorism bill whereby our civil liberties would be jeopardized.

We must ensure strong legislation dealing with environmental and labour laws and the protection of privacy and civil liberties. We must fight for those things on a daily basis because they are not a given. It is crucially important that we do not accept willy-nilly every trade agreement the government comes up with.

My colleague from the Bloc mentioned how the deal was put forward. Negotiations on the trade deal began in June 2000 and the agreement was signed during the third summit of the Americas on April 23, 2001. It is coming before parliament as a fait accompli. Parliament did not even have a say in it. Really and truthfully we did not. The government went ahead and did what it wanted. It said the heck with every elected member of parliament, including its own members on that side.

I do not believe for a second that each and every one of them told the minister to go ahead and sign the deal. I do not believe they did not care or worry about our sugar producers or refineries in Alberta or Quebec. However that is what the government did. It went ahead and signed it, much like it did with the patent legislation.

The WTO ordered Canada to change its patent legislation and increase it to 20 years. We are now in a situation where we have huge drug costs. Drug companies were not suffering with a seven year patent. I acknowledge that there needs to be patent protection, but excessive patent protection jeopardizes the well-being of a country and its citizens. We are seeing that now.

These trade agreements should not be a fait accompli. A booklet was passed around and I chuckled when I read the comments. It was sent on October 24. It contains Canada's objectives for the fourth WTO ministerial conference. I laughed because, as my hon. colleague from the Bloc mentioned, there is never any consultation with the government. Everything is a fait accompli. The document is from the Minister for International Trade and it states:

The government continues to seek still better ways to inform a mutually beneficial dialogue with concerned Canadians. Citizen engagement on foreign and trade policy issues is the key to informed debate and decision making on public policy, and that has been an ongoing process.

Where is the informed debate? When do we go out and have a dialogue? Has anyone ever seen the government getting the views of Canadians and of members of parliament? The government throws something in front of Canadians and says this is the way it will be. We have to take it or leave it.

The government will not listen to any amendments put forth in committee. These are amendments that would protect industries within our country and protect human, environmental and labour rights. Is any of that there? No. The government does not care.

These documents are a waste of taxpayer money. They are not accurate, to say nothing of the fact that we have to get ourselves around the words “to inform a mutually beneficial dialogue”.

Trade agreements have not benefited our agricultural industry. I am encouraged by the fact that the member of the Canadian Alliance for Lethbridge is here. He pointed out that in February of this year any agreement with Costa Rica would lay the foundation for future negotiations on trade agreements. We know that to be true because the government is following along with NAFTA and the FTAA. The member went on to ask:

Will the government live up to a commitment it made to western Canadian beef producers when it was in western Canada last year that it will do nothing to destroy their industry?

Does anybody believe for a second that the government would live up to any commitment it made during the election? We have seen the government break one promise after another on a continual basis. We were promised infrastructure dollars, good environmental legislation, and support for our agricultural industry and grain farmers. Have we seen any follow-through? It has not been followed through for one second because the election is over.

The government pulled the wool over the eyes of Canadians once more. I will wager the government will not be able to do it in the next election because Canadians are not fools.

Canadian farmers are not fools. Farmers know that the government has not supported their industry. If they look at the facts they will know the government's position that trade agreements are good for farmers is not true. Farmers will see that. Farmers know that the government is not supporting the agricultural industry. The beef farmers in Alberta and refinery workers in Quebec will know that is not the case.

This is critically important. I challenge the Canadian Alliance. Every time it supports one of the government's trade deals it jeopardizes the agricultural industry in Canada. Every time it supports one of these deals without taking a stand it jeopardizes Canadian industries. It jeopardizes human and labour rights. If it supports the government then it is as detrimental to Canadian industries as the government is because it jeopardizes those industries in the same way.

I challenge the Canadian Alliance to say for once that the trade deal is not good enough and that it is not what is best for Canadian farmers. This trade deal does not include environmental rights, human rights or labour rights. I would hope that members within the House do not talk like the Liberal member for London--Fanshawe and call environmental rights and labour rights littering up an agreement. They are equally as important as any profit that will be made which will send a paycheque across some investor's table or some company's table. They are important for Canadians and they are important for people in those other countries.

We all know that Canada has a good standard of living for the most part and we do not want to jeopardize that. That is why there are those of us who fight hard to make sure that there is more to a trade deal than just profit and that there is a holistic approach to a strong, healthy economy and country. It is not just profit for one company.

There is more to it such as the value added industry that benefits the local economy. We all know that the little grocer down the road and the small and medium sized businesses need those industries because they benefit from the value added to those industries. We all benefit as a nation by paying our fair share in taxes and supporting each other and our social programs. There is more to it than just one company making a profit, such as everything that goes along with having those industries within our country and supporting those industries.

If something reads made in Canada it is an extra incentive for me to buy it because I know I am supporting an industry in Quebec or an industry from the east coast. If I see Manitoba potatoes in the grocery store, I will buy them before any others. That is what it is about. It is about supporting each other because that is how we maintain a strong country. However it is also about supporting the people in those other countries. I am not saying we should never buy their products; of course we should. We want to make sure that they have a chance of attaining the same benefits we have.

One of the classic quotes that New Democrats use is by J.S. Woodsworth who said “What we desire for ourselves, we wish for all”, and we do. We want people in other countries who do not have some of the advantages we have to have those chances.

Will they have that chance when their governments do not enforce labour legislation or do not allow them the right to collective bargaining or to make a decent wage for the work they do? Will they have that chance when their governments do not ensure that their human rights are upheld or do not give their children a chance to have an education instead of being made to work at a loom or in the fields? We want the right to education for children. We want the right to social infrastructure. We want people in other countries to have the same benefits that we have in Canada.

The New Democratic Party is not opposed to trade. However we certainly are opposed to unfettered trade. We are absolutely opposed to trade that does not consider human rights, environmental rights and labour rights. We are not opposed to trade, not for a second.

Our national sport in Canada is hockey. Our Deputy Speaker's son plays for the Montreal Canadiens. However even in hockey there are rules. One team cannot be stronger than the other so it wipes out the other guys. There are rules in place involving a draft process so certain players cannot get all the cash and certain teams cannot get all the very best players. Imagine a team with Gretzky, Lindros--

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

11:40 a.m.

An hon. member

Team Canada.

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

11:40 a.m.


Bev Desjarlais Churchill, MB

Team Canada, sounds great. Imagine one team with all the muscle and all the power. What does that do to the other guys?

They do not survive. That is the problem when trade agreements do not consider everything and when they do not consider the whole scope of how it will affect a country and the world.

Until the government comes up with trade agreements that include environmental, labour and human rights as equal to the profit of a corporation, it will not get the support of the New Democratic Party, and I am proud to say that.

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

11:45 a.m.



John O'Reilly Parliamentary Secretary to the Minister of National Defence

Mr. Speaker, I listened with great interest to the member's speech. As she was denigrating the member for London--Fanshawe, she mentioned he had indicated that something in the agreement was garbage. I heard the speech of the member for London--Fanshawe and I did not hear that. I am sure the member is mistaken.

The member wants to talk as though no negotiations took place and the agreement suddenly fell out of the sky. The fact is the two governments dealt with environmental and labour co-operation. They go hand in hand with trade liberalization. That is tantamount to the agreement. It is not something that just happened. It is something that was negotiated between the two parties, keeping in mind labour and the environment and the side agreements on them.

If we look at the Canada--Costa Rica free trade agreement, we will see that it complements the environment and labour and strengthens both environment and labour management, while reaping the benefits of increased trade with Canada.

Her side is indicating that somehow this did not happen, that it all just came together and there were no negotiations that took place. Yet Canada is a trading nation and depends on trade to be a nation of prosperity, such as we have.

Would the member withdraw the words she put in the mouth of the member for London--Fanshawe? He is quite capable of defending himself, but perhaps she would want to think about that. Could she comment on that?

Canada—Costa Rica Free Trade Agreement Implementation Act
Government Orders

11:45 a.m.


Bev Desjarlais Churchill, MB

Mr. Speaker, quite frankly Hansard will show the comments of the Liberal member of parliament for London--Fanshawe tomorrow when he said that environment and labour standards were seen as littering up the trade agreement so that is why they should not be in there.

I never for one second said there were not negotiations. There was no debate in the House before the agreement was signed. That is the problem. That is the comment I was making.

Negotiations with another country before we have discussions in the Parliament of Canada leave out a very important group of people: the people of Canada and members of parliament who represent the people of Canada. When that deal was signed without it coming here first, that said “To heck with you. Your view isn't worth anything”. That has been a problem in the House.

Quite frankly on the issue of a side agreement for labour, human and environmental rights, when do those values become secondary to a buck? That is the problem with the government's position. They should not be side agreements. They should be an integral part of those trade agreements, which should state that if countries do not do certain things in the area of human, labour and environmental rights, we will not trade with them. They will not have access to our markets.

The problem is the government sees them as side agreements and secondary and we do not. The New Democratic Party sees them as of more value than a dollar, but definitely in those trade agreements they had better be on an equal footing.