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.