Mr. Speaker, Bill C-32, the Canada-Costa Rica free trade agreement implementation act, must be examined in the context of the debate that has already taken place regarding the current process for negotiating a free trade area of the Americas and in the context where clearly we are in the midst of a globalization process. I believe that the exchange we just witnessed between the NDP member and the Canadian Alliance member demonstrates this fact.
Currently it is clear that the Canadian government's strategy consists of multiplying bilateral agreements to speed up the process of economic integration with the continent and with the world.
We already have a free trade agreement with the United States and Mexico, NAFTA. We have a free trade agreement with Israel, and another one with Chile. This weekend the Prime Minister announced that there would be negotiations for an agreement with Singapore. We also know that the government is interested in negotiating a free trade agreement with four Central American countries: Guatemala, Honduras, Nicaragua and El Salvador. The Standing Committee on Foreign Affairs and International Trade recommended that the government enter into negotiations with the European Union to establish a free trade agreement.
This then is the context in which we must look at the bill before us, regardless of whether we are friends with Costa Rica or not. I think it is clear that the people of Canada, like those of Quebec, are friends of the Costa Ricans. This is not the issue. The issue is what is we are getting in the Canada-Costa Rica free trade agreement.
I think the position of the Bloc Quebecois on free trade, like that of most Quebecers, is well known. We support it. We think it is an excellent idea because it encourages countries, by opening their borders, to specialize according to the advantages they enjoy such as natural resources, human resources or capital. This increases the general productivity of our economies. What I mean by productivity is not working intensely, but more effectively, more intelligently. All of this generates additional wealth, which can then be shared, and the problem often lies here, in the equitable distribution of the resultant wealth.
We must face the fact. The world has never been as rich as it is now. At no other time in recorded history has the world been as rich. At the same time, we must acknowledge that globalization and free trade agreements have not reduced the gap between the rich and the poor. Quite the contrary, they have widened it. A certain set of qualifications and a certain mobility are needed to benefit from globalization, free trade and specialization. Unskilled workers, as this is all the more apparent in industrialized economies, are unemployed and underemployed, in unacceptable working conditions and living in poverty.
The same can be said for regions. If free trade is not guided by a number of rules about the creation of this wealth across the continent or worldwide, inequalities among regions and among various classes of people within countries will grow. Accordingly, all aspects of our life must be taken into consideration, not just the economic issues more directly linked by trade agreements, but also the various social, environmental, cultural and democratic aspects. If they are not considered we may end up, under the guise of improving economic activity, creating inequalities, eradicating cultures and violating democratic rights.
Returning to the hockey analogy, although I unfortunately missed the beginning of it, I again congratulate you, Mr. Speaker, on your son's choice.
At this time, the professional teams and leagues have systems to try to level out disparities. If the top team had its choice of players during the selection process, not only would their team keep getting better but the one in the cellar would stay there. Professional hockey leagues have therefore come up with a plan to share player talent around more fairly by letting the bottom team in the rankings have first choice.
This of the same sort of philosophical approach we would like to see used by the Government of Canada in the free trade agreements, particularly in negotiations for the FTAA, as well as in the upcoming WTO negotiations.
Unfortunately there was nothing on this in the Canada-Costa Rica agreement. The Canada-Costa Rica free trade agreement is a first generation agreement, as is NAFTA, as are those with Chile and Israel. It does not take the social, democratic and environmental dimensions into consideration.
The only new reference I was able to find in this agreement is one to the WTO declaration of 1998 on fundamental rights. This reference, however, has no mechanism for application.
We must take into account these economic, social and environmental concerns. Quebecers and Canadians should have been consulted in a meaningful manner, but this was not done. All that was put at their disposal was a website where they could make comments. Some groups did receive 18 months ago a letter from the Minister for International Trade inviting them to express their views. However, no systematic consultation process was set up. At no time were parliamentarians involved in the process. Now the government is coming up with an agreement that is presented to us as a fait accompli, expecting us to blindly pass the implementing act. We will not.
I hope that the federal government will realize that it can never again put parliamentarians, Canadians and Quebecers before a fait accompli.
In this case and in future ones, if there is no true consultation process that includes parliamentarians, civil society and all Canadians and Quebecers, we will vote against these free trade agreements out of respect for our democracy.
The first fundamental flaw of the whole process leading to this agreement is that it was not transparent. Negotiations were not conducted following a monitoring of the whole process by parliamentarians.
The second element which in our opinion is a serious mistake in the Canada-Costa Rica free trade agreement is the investment clause.
In its documentation, the Minister for International Trade tells us that nothing is changed in terms of investment and services. I realize that nothing has changed regarding investment and services. An agreement had already been negotiated in 1998 between the Government of Costa Rica and the government of Canada for the promotion and protection of investments.
In the Canada-Costa Rica free trade agreement, reference is made to this previous agreement. Under the provision on investment, article VIII.2 reads, and I quote:
The Parties note the existence of the Agreement between the Government of Canada and the Government of Costa Rica for the Promotion and Protection of Investments, signed in San José, Costa Rica, on March 18, 1998.
When we take a look at the 1998 agreement, what do we see? We see that the provisions of NAFTA's chapter 11, which we condemned here and the Minister for International Trade said he wanted to change, are all there.
I would remind the House that in the debate we led and are continuing to lead for the negotiation of the free trade area of the Americas, we do not want to see investment protection provisions similar to those in chapter 11 of NAFTA, which give multinationals and private corporations too many rights over governments, states and the democratic will of peoples.
There were many problems with chapter 11, but I will mention just four: the definition of investments, which is far too broad; national treatment, which means that we cannot have a specific policy to further the economic development of a particular sector; the concept of expropriation, which is far too broad; and finally, the dispute settlement mechanism, which allows a company to go directly to an arbitration tribunal to challenge a government decision or policy. The agreement between the government of the Republic of Costa Rica and the Government of Canada contains these same provisions to promote and protect investments.
I will take the example of investments. The agreement reads as follows:
(g ) “investment” means any kind of asset owned or controlled either directly, or indirectly through an enterprise or natural person of a third State, by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with the latter's laws and, in particular, though not exclusively, includes:
(i) movable and immovable property and any related property rights, such as mortgages, liens--;
(ii) shares, stock, bonds and debentures--;
(iii) money, claims to money--;
The list goes on.
The definition of investment is far too broad in the Canada-Costa Rica agreement, and it is inspired by the NAFTA definition.
Now as for the national treatment provisions, there is exactly the same clause as in chapter 11 and for expropriation exactly the same type of definition. I will quote from article VIII:
- Investments of investors of either Contracting Party shall not be nationalized, expropriated or subjected to measures having an effect equivalent to nationalization or expropriation--
This is rather broad. Finally, as far as dispute settlement is concerned, I will quote from article XII:
- If a dispute has not been settled amicably within a period of six months from the date on which it was initiated, it may be submitted by the investor to arbitration in accordance with paragraph (4).
Chapter 11 is found indirectly within the Canada-Costa Rica free trade agreement and runs contrary to the commitments made by the Minister for International Trade when he stated that he did not want to see any equivalent of chapter 11 in the treaty on the free trade area of the Americas.
The final element that makes this agreement with Costa Rica unacceptable is the matter of sugar, as has been stated already.
In this case, there has been a unilateral liberalization of the sugar market on the part of the Canadian government without anything corresponding being done on the other side by Costa Rica or any of the other Central American governments that will follow later. There is no way I will be convinced that in agreements with Guatemala, Nicaragua, Honduras or El Salvador we will have what is not in the free trade agreement with Costa Rica.
In the case of Costa Rica under the agreement, the doors are now open to selling in Canada, with no applicable tariff, over 20,000 tonnes of refined sugar starting in 2003, and the volume involved will have no limits starting in 2009.
Canada is one of the countries, if not the country, that is most open to sugar imports. There is no tariff on raw sugar and there is a $30.84 tariff on refined sugar, which is the equivalent of 8%. Our price for sugar is one of the lowest in the world, whereas the U.S. and the European Union have many protectionist measures that resultsn distorted prices on the world level.
In Central American countries such as Guatemala, the tariffs on refined sugar may be as high as 160%. We are opening up our market while there are no market opportunities for Canada in these economies. The previous speaker mentioned this and I agree with him.
The United States is the obvious market for our refined sugar industries, but there is so much protectionism that even though they consume ten times more sugar than Canada they import less.
The four countries of Central America that I mentioned produce 2.8 million tonnes of raw sugar, of which 1.6 million tonnes, half, is exported. Three hundred thousand tonnes of that is refined sugar. In total Canada consumes approximately 1.2 million tonnes.
Guatemala, for example, currently produces and exports 1.1 million tonnes of sugar per year or the equivalent of our annual consumption. In 2000, Canada imported 273,000 tonnes of raw sugar from Central America, compared to our exports of 110,000 tonnes, under the quota, to the United States, a country that consumes ten times more sugar than we do, as I mentioned earlier.
Our industry is competitive, but in a market where there is no price distortion. On the world market and in the United States and Europe, where protectionist measures are in place, such distortion exists. I refuse to believe that there will be a market for Canadian refined sugar in Costa Rica, Guatemala and Nicaragua. Why? Because of the rule of origin.
We would have to import raw sugar from Central American countries and refine it in Canada in order to sell it back to these countries. The transportation costs alone explain why it would be difficult to sell this sugar, notwithstanding the fact that they produce raw sugar themselves,and could develop their own refining capability.
In Montreal, 345 jobs are being threatened. This may not seem like a lot to the Minister for International Trade, but in the Montreal area, particularly in these troubled economic times, these are jobs we want to keep.
Why were the opinions of industry, the unions and opposition parties not taken into consideration on this issue, if “it is not true”, as the Minister for International Trade said?
I personally presented an amendment to the Sub-Committee on International Trade, Trade Disputes and Investment to make sure that this provision would not be included in the future. It is true that in the current context Costa Rica is not a threat, but Guatemala is.
I presented an amendment to make sure that in future free trade agreements with Central American countries we would not have the provision that is included in this one. That amendment was rejected by the Liberals. Now they would have us believe that they care about the 345 workers at Montreal's Lantic Sugar. Come on.
I think this provision should have been left out of the agreement. We must negotiate the liberalization of the sugar market. My proposal to the Minister for International Trade is to put this item on the agenda at the negotiations on the free trade area of the Americas and also at the WTO. We want the liberalization of sugar at least at the continental level, if not at the world level, so that Canadian and Quebec businesses that are competitive can compete in a fair market in terms of the practices used.
Because of these three elements, namely the lack of transparency during the negotiations, the fact that chapter 11 is indirectly included through the agreement for the promotion and protection of investments, and the fact that Canada's refined sugar industry is put in jeopardy, the Bloc Quebecois will vote against Bill C-32.