Debates of Nov. 5th, 2001

World Trade Organization

[John Duncan, Canadian Alliance, Vancouver Island North, BC]

Mr. Chairman, I am pleased to take part in the take note debate on the World Trade Organization. I will give a little background for neophytes and as a reminder.

The WTO is a new organization started in 1995. It grew out of the general agreement on tariffs and trade, commonly knows as GATT. We all remember reading about GATT which was established after World War II. The WTO, the World Trade Organization, is the only global international organization that deals with the rules of trade between nations. The goal is to help producers of goods and services, exporters and importers conduct their businesses. It is a rules based, member driven organization. I believe there are 142 member countries right now. All decisions are made by the member governments and the rules are the outcome of negotiations among members.

Canada supports rules based trade. It is very much in our interest and in the interest of the international community that we live by rules based trade. We obviously are not considered a least developed nation but we certainly are a small nation, particularly compared to the United States. Given that the U.S. is our largest trading partner, and given that the internal trade laws of the U.S. allow it to be very protectionist when it comes to trade, we support the concept very strongly of a neutral forum where Canada can appeal for free and fair trade rulings.

The highest decision making body of the WTO is the ministerial conference. This week we are talking about the WTO conference in Qatar which is the fourth ministerial conference. It has to meet at least every two years. It brings together all members of the WTO. The ministerial conference can make decisions on all matters under any of the multilateral trade agreements.

It is obviously important for Canada to attend these ministerial conferences. It is equally important in my view that we have opposition members along with the other organizations. Non-government organizations are present so that Canada's breadth of various voices can be heard.

The WTO's rules are made by the members after much negotiation and discussion. If the only Canadian voice other WTO members hear is that of the Liberal government then surely they will have a skewed vision of what Canada stands for in its entirely.

I am personally committed to going to Qatar to advance Canadian views. Most often they will be reflective of the general direction of government policy but they certainly will not always be those views necessarily held by the government. We need to show the international community the whole breadth of thought in Canada in order to advance rules based trade.

We have had some recent examples where the actions of government have not been the best in terms of supporting rules based trade. The first thing that comes to mind is the 1996 to 2001 softwood lumber agreement. It has now expired and is a subject of much dispute again, but that diabolical agreement, under which we lived for five years, was a compromise on Canada's part that cost thousands of jobs and much investment in our forest industry.

In my view, that was somewhere we did not need to go at the time and it is what has festered and led to the depth of the current dispute on softwood with the U.S. If we had pushed harder on the free trade direction rather than cutting a deal, which ended up in a managed trade or quota system arrangement that terribly distorted the Canadian industry over the last five years, we would be in a better circumstance now.

What happened is that the government of the day caved in on the last bitter round of fighting about lumber by entering into the softwood lumber agreement, which has now expired, in order to buy some peace, but it was not proper, rules based free trade such as that envisioned by WTO or, for that matter, NAFTA.

The government will try to say that a choice has to be made, that it is either free trade or some other choice, and that I am blinded by the fact that we should pursue free trade at all costs. Of course not. That would be like suggesting pedestrians should cross the road if they have the right to walk according to the signage. That does not do a pedestrian a lot of good if they end up with tire tracks across their chest, does it?

However, with a neutral dispute resolution forum like the WTO and trade rules that we ourselves have negotiated and agreed upon, we must demonstrate more consistently than the government has done that we will support the WTO and the NAFTA rules. We cannot abandon international rules available to us on any number of disputes, including the softwood lumber dispute.

Everyone is well aware of the major issue we have right now on softwood lumber but we need to remember not to characterize that in the sense of it being a Canada versus U.S. issue. It is basically Canada against a special interest with favourable legislation favouring that special interest. The U.S. laws have favoured the producer lobby for the last 20 years but the climate has changed and we need to encourage that change.

Canada's primary focus at the WTO should be on rules based trade.

The second thing we need to focus on is agriculture. The agricultural talks and the agricultural things that need to be forwarded at this ministerial conference are crucial for Canada because we cannot meet the level of subsidy emanating from the U.S. and the European Union and they are crucial for the developing countries that need fair access to agricultural markets. We can make common cause with that.

Finally, the meeting will do a lot of favourable things for the war against terrorism because a growing, healthy economy in more countries of the world is beneficial for all.

[Pat O'Brien, Liberal, Parliamentary Secretary to the Minister for International Trade]

Mr. Chairman, I will try to be brief. I listened to my colleague with interest. I thought he knew but having heard his speech I want to assure him again that the government is very strongly committed to the WTO, to the launch of a new round at Doha.

When I met with Director General Mike Moore he indicated that Canada is considered one of the strongest supporters of the WTO. I think our track record there is quite a good one.

My colleague brought in softwood lumber and the unfortunate dispute we are in right now. He mentioned the five year agreement on softwood lumber that expired some months ago. He indicated that we ought to be proceeding at the WTO. That is exactly what we are doing. We are proceeding at the WTO. We launched a request for a panel on October 25. We have six specific fronts on which we are proceeding.

My colleague seemed to suggest that we should not make any kind of short term agreement such as the last softwood lumber agreement. At this point the government is determined to continue to move on the two fronts: the WTO and a series of high level discussions with officials.

I want to ask my colleague directly, is he advocating something less than going the distance at the WTO on softwood lumber? Is he advocating a more short term solution, such as the last agreement? There are some, who are in the minority, who are starting to propose a short term agreement on softwood lumber. Could my colleague clarify if he feels that is the way to go or should we see this through to the conclusion at WTO?

[John Duncan, Canadian Alliance, Vancouver Island North, BC]

Mr. Chairman, there was certainly more than one question.

In terms of the commitment to on the part of the government to WTO, I said the government should not abandon WTO. There are times when the government has done exactly that.

The specific example I can point out was on the four year battle with Brazil in terms of the aircraft subsidy dispute between Bombardier and Embraer. We actually won. After four years we had the ability to apply tariffs. Rather than do that, we ended up getting back into the subsidy game.

When WTO ruled very recently in a judgment that was not very favourable, or at least the press reports it was not favourable because I do not have access to all that, the Minister of Industry was quoted as saying that he really did not care what WTO had to say, he would continue in the subsidy business. That is a very bad signal to send. It basically says that we will support WTO when it is comfortable and convenient for us to do so and not at other times.

The other question the member asked was what I am recommending on the softwood lumber dispute in terms of a role for WTO and whether I am saying we should have a short term or a long term solution.

We have had discussions and debates on this before. I said clearly last week that in order for us to make the right decision right now on whether we will litigate or whether we will be able to negotiate or come to some other accommodation, we have to know what the costs and benefits are of going those two ways. I do not see any movement on the part of the government heading in that direction where we are developing scenarios and costs and benefits in either way. There are private citizens who are doing that so I would like to see that kind of leadership.

I do not think we can make a decision in a vacuum. We need that kind of data.

[Betty Hinton, Canadian Alliance, Kamloops, Thompson And Highland Valleys, BC]

Mr. Chairman, my colleague the member for Vancouver Island North has covered a number of the things I wanted to talk about today, whether it should be a short term fix or litigation. I will not need to go any further there.

I have been listening very carefully to my colleagues from the Liberal side of the House. They are talking very tough today. I hope that tough talk continues when we end up at the WTO. If it does not, we will be right back where we are today.

Today I have heard them say that there has been a leadership role taken by government. I disagree with that. There has not been a leadership role. We have been very weak in our negotiating skills. We have used an apologetic attitude every time we have approached anything. The penalty for that has been that we have suffered as Canadians.

In particular, my riding is going to be losing a number of jobs because of the expiry of the softwood lumber agreement. It is going to impact us dramatically. I want to see a solution to that and I want to see it soon.

The member for Vancouver Island North mentioned earlier that there had been a number of jobs lost. Does he have a specific number from the last set of negotiations from 1995 until now?

[John Duncan, Canadian Alliance, Vancouver Island North, BC]

Mr. Chairman, being from British Columbia it is easier for me to talk about that context.

In terms of jobs lost as a consequence of the softwood lumber agreement from 1995 to 2001, they are certainly measured in the thousands. The difficulty is that there are other things going on that are also impacting on labour and the forest industry, such as market boycott campaigns and all kinds of other pressures.

It is virtually impossible to quantify it, but everyone in the business recognizes that the great distortion the softwood lumber agreement created cost British Columbia investment in jobs and jobs certainly measured in the thousands.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Chairman, the Minister for International Trade, in my view, outlined earlier today the importance of the WTO negotiations and especially the importance of agriculture. I was pleased to see he suggested that agriculture would be a priority. He also outlined very clearly the need to achieve an agreement. As well, I was very pleased that he outlined his dissatisfaction with the performance of our major trading competitors, the United States and the EEC.

In my remarks I first want to outline how very serious the matter is that the United States and the European Economic Community have not decreased their subsidies as they were supposed to under the GATT round. On the other hand, I want to point out as well, using some statistics, that Canada may have in fact reduced its area of support too much.

A review was done by the foreign affairs and international trade committee in June 1999. I want to outline a couple of points it made which I think are very pertinent to the discussion we are involved in today. It stated:

Given that Canada has more than met its reduction obligations and done so faster than most of its trading partners and that it has respected both the letter and the spirit of the Agreement on Agriculture while many other countries have been fairly lax in their interpretation of the rules set out in the agreement—

It went on further to state that the Canadian negotiators in the next round of meetings “will have to drive home the message that it is essential that the farm income safety net be preserved to a sufficient degree to allow governments to deal with the market's ups and downs that have always been a part of farming”.

The essential question is, has Canada gone too far while the United States and the European Union have not?

According to information compiled by the OECD, the Organization for Economic Co-operation and Development, in the period 1986 to 1988 which was prior to the GATT round of WTO discussions, the support to farmers on average was 25% for the United States, 33% for Canada and 44% for the European Union.

All that changed dramatically in the years after the GATT and WTO discussions were concluded, to the point that in the period 1998 to 2000 the average support to primary producers for all commodities was down to 23% for the United States. Canada was at 18% and the European Union was at 40%. Let me point that out in a way that may be more understandable. In other words, the United States support reduced from 25% to 23%, Canada reduced from 33% to 18% and the European Union reduced from 44% to 40%.

I would think that spells out part of our problem, which is that Canada, being the good guys we so often are, reduced our support levels probably too fast and there were areas which we maybe should not have reduced them in.

I want to also draw on another point that was made by one of the former negotiators for international trade, Mike Gifford. I point out that in this round we have to clearly send a message that Canada is not going to stand by idly while other countries continue to subsidize their farmers and not abide by the rules of the agreement. We cannot allow that to happen. If necessary I believe the government must support our farmers at similar levels.

When Mr. Gifford was speaking before the agriculture committee he had this to say:

Our obligation over the six-year transition period was to bring it down from $5 billion to $4 billion. However, that only included so-called trade-distorting support. There is no obligation to reduce the green programs.

He further said:

If Canada chose to increase its trade-distorting support, it could go up from $2 billion to $4 billion (in support).

That makes my point. The fact of the matter is the government and the country should be supporting our farmers in these times of difficulty. According to Mr. Gifford, we can do that without violating the trade agreement rules because we have reduced our support programs in a gentlemanly fashion and we cannot continue to do that.

The member who spoke before me, and I want to take issue with him on this point, suggested that the industry minister said we would support the WTO when it was comfortable and convenient for us, but would not when it did not suit us.

What the industry minister was clearly saying was that if other countries were supporting certain industries, then we would not back away and leave our producers or industries in a lurch and that we would stand by our industries and support them as well. That is the kind of position I believe the country should take.

In preparing for this upcoming round, there are a couple of recommendations that the foreign affairs and international trade committee reported in June 1999, and I want to reconfirm and support them.

In recommendation 12, the committee said:

Canada should open the discussion in the upcoming multilateral trade negotiations on agriculture by demanding that all signatory countries begin by respecting their current obligations.

That is the point that my colleague who sits behind me made earlier in her remark. We should not start negotiating from the levels we are at now, rather we should go back to the levels that the countries were supposed to be down to at this point in time.

I also want to quote recommendation, 13 which said:

Canada should also make sure that the new rules on agricultural trade are transparent and apply equally to all countries according to their respective commitments.

I want to try to wrap up with the point that Canada is a trading country and our exports and agricultural products have been increasing since the nineties. Have our primary producers benefited?

The NFU told the task force on September 11 this year:

Over the past 25 years, Canadian agri-food exports have increased six-fold—from $4 billion in 1975 to approximately $25 billion today...however, farmers’ net incomes have fallen over the same period. The current farm income crisis comes in spite of Canada’s tremendous success in winning market access and finding foreign customers.

The farm community cannot be asked to continually shoulder this burden of increasing exports and not being paid for the products they sell.

On the domestic side, we need to maintain our good marketing programs and supply management and we need to very seriously encourage other countries to use those kind of programs as rural development programs in their countries. We need to expand the green programs allowed under the WTO.

On the international side, we must gain an agreement to reduce subsidies. Although our strategy is to be lined up with the Cairns Group, I would also suggest that we build alliances with many other countries, countries that can adopt some of the programs that we have in Canada.

The last time the United States and the EEC cut a deal, the rest of the countries fell into line.

This time very clearly we must send a message that we will accept that kind of an arrangement any further. We need to negotiate to ensure that the subsidies are indeed brought down. If they are not, then we will back up our farmers with the our treasury.

[Loyola Hearn, Progressive Conservative, St. John's West, NL]

Mr. Chairman, the hon. member comes from a small island province much the same as I do. In fact, I guess I can say I come from a bigger island than he does. The concerns he raises about the agricultural products from his island certainly are very legitimate.

As chair of the fisheries committee, he is also very much aware of the fact that we suffer the same way with the export of our fish products, especially to the European market. Unfortunately for both of us, the exports of agriculture and fisheries amount to only about 6.6% of our total exports, which means that even collectively they do not draw a lot of attention. The primary producers in the country, fishermen and farmers are left outside the vision of many of the people who worry about exports generally.

However our exports to the European Union only totals about 5%. Therefore, when we combine the small amounts of fish or agricultural products plus the small amount we send to the EU, no wonder the government perhaps does not worry too much about duties on Newfoundland shrimp going to the European market.

One problem we face with trade is Newfoundland shrimp which goes to the European market is charged a 20% tariff, when really it is not the EU that is concerned. Most of the countries in the EU would want no tariff to get a cheaper product. Denmark and, more specifically, one or two fishing companies within that country are concerned.

Does the member not think that the minister and the department should address many of these smaller trade issues outside of the World Trade Organization and not worry about having to wait for two, three or four years to get agreements? We cannot afford to wait that long. Some of these issues could be addressed by the minister at a political level, and I am sure a lot of our problems could be solved.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Chairman, this was an issue that was talked about at the fisheries committee meeting last week. The member's point is valid in terms of how the Europeans are operating with their tariff, basically making it impossible for our fishermen mainly in Newfoundland to compete against that tariff wall. The fact is the Danish and others are fishing not far off the coast of Newfoundland, just on the Flemish cap. They are able to take their product home and process it. As a result, they have a 20% cost advantage.

I believe the member is correct in that there are ways and means of trying to resolve that issue by bilateral discussions, but I do not believe for a minute that the minister or the government is just locked into the WTO negotiations at those rounds. We are consistently trying to deal with countries on a bilateral basis to try to resolve some of these issues and we are trying to resolve that one as well.

There is another point I want to bring up because the member raised it. There was an implication there that perhaps because food exports were considered small in the overall general picture of things they did not seem as important. I do not believe that to be true.

I do believe there is a problem in terms of the public's attitude toward food security. Whether it is fish or agriculture, people believe they can go into the grocery store and pick the product off the shelf. Since September 11, we should take our food security issues more seriously. We will have to ensure that the producers can survive economically. They cannot continue to produce below the cost of production as they have done for so many years.

We need an attitudinal shift in our society that puts primary producers as the generators of wealth that they are and recognize the important place they have in our society in producing the food that goes on the grocery shelves which sustains our life.

[Joe Comartin, NDP, Windsor—St. Clair, ON]

Mr. Chairman, I was interested in the figures my colleague from Malpeque gave out today with regard to the subsidies and the comparison with some of our trading partners. I want to take some issue with those.

I recall about six months or so prior to the last federal election, which was the spring of 2000, a number of farmers' associations in my area in the province of Ontario got together and hired an economist to do an analysis of what had specifically happened to the farming communities around the world after the last round of GATT negotiations in Paraguay. The analysis was significantly more shocking if one looks at the impact of what the government did after Paraguay and its impact on the farming community in Canada.

The economist analyzed the situations in Canada, the United States, Japan, Australia, Europe and New Zealand. As my friend has suggested, the subsidies and assistance Canada provided to farmers were dramatically wiped out, and I do not use that term mildly, in comparison to what those other countries did, with perhaps the exception of New Zealand which did very close to what Canada did. It was illustrated on a chart or by a graph and it really was shocking.

What I am worried about, and I would suggest this to my friend, is if in fact they are using his figures when they go to the WTO this time around or in any further negotiations would they not be better to use the other figures? If we do not get the other governments to drop their subsidies, is he prepared to encourage his government to spend that $2 billion or perhaps more per year to bring our farmers on par with the rest of the world?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Chairman, to answer my colleague's last question first, he can bet I am. I have been saying that for a long time. I have said it today and I will continue to say that if other countries are not going to abide by the rules of the WTO and continue to subsidize their farmers, then the Canadian public, the taxpayers and the government need to support our producers to the same level. There is no question about that in my mind. If we send any other message to our competitors, all they have to do is wait us out. Our farmers cannot continue to compete on this uneven playing field as efficient as they may be.

I will come back to the member's question on the figures. There is another set of figures. The figures I quoted earlier were from the OECD as they relate to the percentage of subsidy support and how they compared prior to the last round of negotiations to where they are now. Although all countries have come down, Canada has come down to a much greater degree.

I would put on the record that OECD figures indicate that the per capita support for Canadian agriculture has declined by close to 40% over the past decade. During the same period, per capita support to American farmers increased by 22% and now exceeds the OECD average. In two countries, New Zealand and Australia, their total support for agriculture as a percentage of gross domestic product is certainly lower than that in Canada. They are the only countries that are lower.

[Judy Wasylycia-Leis, NDP, Winnipeg North Centre, MB]

Mr. Chairman, I realize the time is short. I will cover a number of issues pertaining to the WTO discussions and health care.

This debate has been an important one as we head into a week when our Minister for International Trade heads to Qatar for important discussions on world trade.

The best thing I can do in concluding the debate is relay the concerns of many Canadians and express the hope that the government is listening carefully to the concerns of organizations that come from far and wide representing many different interests.

We have pursued the issue vigorously these last several hours. If there is one concern I am left with it is the notion I have heard time and again from Alliance members and others that when we in the NDP raise legitimate concerns we are being bleeding hearts and keeping our heads in the sand.

Let us be clear that we are dealing with serious situations in terms of Canada's ability to govern as a sovereign state and in terms of our role on the world stage. If members in the House want to suggest we are bleeding hearts when we talk about 14 million people dying annually around the world from communicable diseases we will wear the title with pride. It is unfortunate when we cast aspersions on members for raising legitimate points of view.

It is important in this debate to remember the facts some members would like to keep hidden: the fact that about a third of the world's population lacks access to essential medicines; the fact that every year two million people die of tuberculosis and eight million people develop active TB; the fact that there are 300 million to 500 million new cases of malaria every year; and the fact that there is a serious pandemic in the world of HIV-AIDS.

These are serious issues we have an obligation to address both in the House and as we participate in world trade discussions.

In the few minutes I have left I will put before the House the importance of weighing the issue of upholding public health over private wealth. It is an issue that comes up time and time again in these discussions. It is important to recognize that Canada has a role to play and can offer the world important leadership on matters of public health.

The first area we must look at is patent protection versus patients' rights or property rights versus public health. One of the major discussions coming forward at the WTO pertains to changing the rules or ensuring nothing can be done to prevent countries from taking measures to protect public health or the human right to health.

We have asked questions in the House about Canada's position with respect to a strong ministerial declaration in terms of allowing countries to take strong measures to protect public health. We have asked about ensuring Canada plays a role in allowing cheaper and more accessible generic drugs to be made available in third world developing countries.

To date unfortunately the government has not taken that kind of strong position. I refer particularly to the Médecins sans frontières organization which says Canada has joined a handful of wealthy countries in putting forward a vague counterproposal that does little more than restate what is already in the Trips agreement. The counterproposal fails to address most of the key needs identified by developing countries.

It certainly is a serious omission on the part of the Canadian government, which has to be addressed, and I hope this debate will move the Minister for International Trade to actually go to these ministerial discussions in Qatar with the absolute, unequivocal position that we will join with the 60 or more other countries that want to ensure public health comes first.

In that regard let me suggest to the government that it also look at its strong but incomprehensible position, because of its whole focus and fixation on patent protection, around preventing generic companies in Canada from producing drugs needed in third world and developing countries. Surely it would be in the interests of Canada's role on the world stage to ensure that third world countries and developing countries have access to drugs that can be produced here.

Let me also point out that as the government goes forward with WTO discussions it should also look at carving out very clearly Canada's public health system from trade-offs on the world stage. That is a concern that has been identified by many organizations, in particular the Canadian Medical Association, an organization that certainly has presented a balanced position and has called upon the government to at least have consultations with Canadians.

Finally, there is a role for Canada to play on the world stage in terms of tobacco control. Canada has been offering some leadership with respect to the framework convention on tobacco control, or FCTC, but has not mandated its officials to go forward in a firm way to ensure that we play a leadership role on that front.

Those are three areas that I think the government can begin to address immediately and ensure that it is standing up for public health versus private wealth.

[The Chairman]

It being 7.15 p.m., the hour provided for the take note debate has now expired. Pursuant to Standing Order 53, the House will adjourn and I will leave the Chair.

[The Deputy Speaker]

Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24.

(The House adjourned at 7.15 p.m.)