Mr. Speaker, today's motion basically suggests that Canada not enter into any trade agreements that include a NAFTA chapter 11 style investor state clause. I am not sure whether most Canadians would know very much about that subject, but certainly chapter 11 does conjure up all kinds of interesting discussion and debate.
My contribution to the debate is simply to look at a little of the history and background of trade liberalization. The main agreements to which Canada is currently or has been a party to are: GATT in 1947; the free trade agreement or FTA; NAFTA; the WTO agreement; the Canada-Israel agreement; the Canada-Chile agreement; and most recently, the Canada-Costa Rica agreement.
Each of these makes provision for dispute settlement mechanisms that apply in specific cases. That is the reason why the member from the NDP would raise issues such as the environment, poverty and sovereignty, et cetera. There are issues that do come up that do touch on those issues and are very relevant.
In order to fully understand how the dispute settlement process works, it is important to review the history of how the process emerged, starting with GATT in 1947. Where the GATT is no longer in effect, the dispute settlement mechanisms that were applied for nearly 50 years under the treaty have served as a reference and have greatly influenced the conflict resolution measures adopted in contemporary trade agreements.
The dispute settlement mechanism of GATT in 1947 is contained in articles XXII and XXIII of that agreement. It provided that in the case of a dispute the contracting parties must initially hold consultations in an attempt to settle that matter. If the dispute cannot be resolved through consultations, the point at issue may then be put before contracting parties who may suggest corrective measures.
Over the years the contracting parties adopted complementary procedures to articles XXII and XXIII in the form of understandings or decisions by the contracting parties. Under these procedures, if there were no successful outcomes, consultations with the secretary of the GATT would act as a mediator before the dispute was submitted to the contracting parties. Moreover, when a question was put before the contracting parties, they had the option of forming a panel to review the matter, to hear the claims from the parties involved and to prepare a report.
The contracting parties then had to decide, by consensus, whether to adopt that report. Even when adopted by the contracting parties, the report was not directly binding although the parties would try to implement it. Under GATT there were no procedures for appealing or challenging the report adopted by the contracting parties.
With regard to the FTA and NAFTA, the FTA incorporated and improved on the dispute settlement mechanisms of GATT. It contained not just a single dispute settlement procedure, but rather a number of procedures applicable to specific areas. Chapter 18 of the free trade agreement, like GATT, provides for a general dispute settlement procedure respecting the application and interpretation of the treaty.
It contains the following various stages of the procedure. First is inter-party consultation, followed by calling of a joint Canada-U.S. trade commission, with the possible assistance of a special adviser or mediator. Next is the constitution of a panel of experts who report to the commission. Finally there agreement by the panel on the solution to the dispute.
Chapter 19 of NAFTA provides for settlements of disputes over anti-dumping and countervailing duties. This is a procedure for reviewing the decisions of international bodies responsible for implementing domestic legislation and countervailing duties. The usual review proceedings that may take place under the applicable legislation before a national tribunal may, at the request of one of the parties, be conducted before a binational panel constituted for this purpose under the provisions of this chapter.
With respect to investment, a dispute over the application or interpretation of chapter 14 of the FTA may be brought before a board of arbitration or a panel constituted under chapter 18. However the panel that rules on the dispute will do so internationally under internationally recognized rules of trade arbitration.
NAFTA also made changes and improvements to the procedures previously in effect. Chapter 20 now contains measures for settling disputes over the application and interpretation of the treaty. Chapter 19 concerns the consideration and settlement of disputes over anti-dumping and countervailing duties. Chapter 11 deals with the settlement of investment disputes.
Pursuant to the WTO agreements, articles XXII and XXIII of the GATT of 1994, and the WTO understanding on the settlement of disputes or USD, set out the rules of procedures for settling disputes over application and interpretation of the WTO agreements.
The WTO structure also includes a dispute settlement body. This is a plenary conference of all members of the WTO whose function is to supervise the application of the dispute settlement procedure under the various WTO agreements.
I would like to take this opportunity to point out that Canada has used the dispute mechanism in NAFTA and the WTO to great effect. According to the WTO Uruguay round of negotiations, all countervailing duty orders must be reviewed at least every five years to ensure that they are still needed. Recent reviews under the United States government concluded that at least six of the countervailing duty orders were revoked. These included steel jacks, elemental sulphur, racing plates, sugar and syrups, red raspberries and potash, just to name a few. The ultimate result of these decisions will mean a further increase in trade that flows.
It would appear to me in listening carefully to the minister and to other members, that there are things which have occurred in the past and which have led to some concern about the consequential items. Chapter 11, a dispute settlement mechanism with regard to contracts and agreements, is one aspect. Many members raised concerns about some of the more socially oriented subject matter, such as the impact on the environment and on people who cannot help themselves.
However one thing we know is that $1 invested in promoting trade in Canada results in $2 of export trade. It also means that one in three jobs in Canada is sustained by that trade. When we improve the economy, when we grow the pie, there are more resources available for Canada to invest in Canadians.
Therefore, I can only conclude that free trade is good for Canada and that there are areas which have to be constantly monitored. That is why we have the very best Canadians making sure that our agreements are fair and equitable, that we protect Canadian investors and that we protect Canadian interests as well as the interests of all, especially those who cannot help themselves.
It also is good for the 34 countries of the Americas that met and agreed to pursue this.
I believe members would agree that we cannot wait for the perfect situation in order to move forward on this. I think they are approaching the summit of the Americas dialogue in a responsible fashion. I look forward to receiving, as do all other members, more information on the specifics of that trade agreement.