Mr. Speaker, I am very happy to rise today in this House to take part in this third opposition motion on matters of international trade in as many weeks. Obviously, matters of international trade interest our parliamentarians and all Canadians, and that makes me happy.
Free trade and NAFTA have been beneficial for Canadians, that is clear. Since NAFTA came into effect, trade, investment and jobs have grown spectacularly in Canada and in all countries in North America.
Recently, at the Quebec City summit, the 34 countries of the Americas, the representatives of small and large countries, the heads of the most developed and of developing countries and those representing countries whose economies are especially vulnerable expressed their interest in and desire to establish a free trade area of the Americas.
A number of these 34 countries are headed by socialist leaders. Others are headed by centrist leaders and others by conservative leaders. Yet there was unanimity. They all wanted free trade in the Americas.
There must indeed be something good about this project if all countries, large and small, developed and less developed, and all leaders, socialists, conservatives and centrists alike, want free trade.
All 34 countries want in, whether they come from smaller or bigger countries, whether they come from the most vulnerable economies to the largest and stronger economies of our hemisphere. That says a great deal about the importance of international trade. It says that international free trade leads to development and to democracy. The vast majority of Canadians and the vast majority of citizens across the Americas understand that very well.
It is too bad that the opposition today on this particular motion does not want to understand what even most socialist leaders believe. Even labour leader Tony Blair said not too long ago in this House that free trade was for the poor. Only one party here does not seem to understand that.
A clear set of rules applicable to the conduct of international affairs constitutes one of the key reasons for NAFTA's success.
The rules applicable to trade and investment form a road map or navigation system, which guides and protects the flow of trade and investment capital.
Being a country more oriented towards investment and international trade than any of its competitors, Canada has an interest in maintaining the vigour of this bilateral flow of trade and foreign investment. Foreign investment helps to guarantee that Canadian businesses will have the capital they need to succeed and grow in the highly competitive world economy.
Investment creates jobs and encourages innovation through the contribution of new ideas and new technologies to our businesses. It gives Canadians access to the capital and skills which will strengthen our country.
Canadian investment abroad is equally important as this helps Canadian firms establish a presence in foreign markets and share Canadian expertise through exporting goods and services to those markets.
It should be further noted that a large proportion of profits from new investments is reinvested in Canada contributing to a higher growth rate and a rise in Canadian living standards. There is no doubt today that foreign direct investment in Canada and Canadian investment abroad have joined the international trade in goods and services to become our principal engines of growth and job creation.
Direct investment abroad by Canadian business is part of its strategic effort to increase market share and stay competitive in foreign markets. Companies are increasingly using outward investment to strengthen their operations, penetrate new markets and acquire new technologies, resources and skills. The value of Canadian direct investment abroad has increased fivefold between 1985 and 2000, that is from $57 billion to $301 billion.
Since 1995 the stock of direct investment abroad by Canadians has exceeded the stock of foreign investment in Canada. This reflects the maturity and wealth of the Canadian economy. This type of investment results in increased sales and production from home facilities.
A recent study by the OECD found that on average every one dollar of investment is followed by two dollars of export. It adds up altogether to jobs and opportunities for Canadians.
We have also seen that income from Canada's outward foreign direct investments increased during recent years helping to improve our standard of living.
More than ever, it is important for Canada to try to seek a fair, open and secure environment for international investment, both in Canada and abroad.
The part of the North American Free Trade Agreement dealing with investment, better known as chapter 11, guarantees investors fair treatment in accordance with international law. This chapter and especially the investor-state provision are a fundamental component of the agreement.
It is important to point out that the benefits Canada has gained from investment have not jeopardized our main economic and social values. Foreign investment in Canada is subject to the same legislation and regulations as Canadian investment, including those protecting the environment and ensuring higher labour, health, construction and safety standards.
When one compares the number of challenges under chapter 11 of NAFTA and the amount of the claims to the two-way trade daily of $1.9 billion between the United States and Mexico, one quickly realizes that the number of challenges these last few years has been minimal compared to the overall trade and investment activities.
Last year, the overall investments of our NAFTA partners in Canada reached $186 billion. All in all, we were able to attract, last year, a record high of $93.2 billion in new foreign direct investments.
Yet, from this important growing source of investment, and despite thousands of new laws and regulations passed by each level of government in Canada since 1993, the Government of Canada is facing only five challenges under chapter 11 of NAFTA that are currently under arbitration.
The Government of Canada believes that NAFTA, including chapter 11, works well, and we are not seeking to re-open the agreement. As the Prime Minister has noted in the House, there are many thousands of investments among NAFTA partners and thousands of measures are taken by governments that can affect investments: laws, regulations and programs of all sorts and at all levels of government. However, of all these investments and government measures, only five have resulted in complaints against Canada under chapter 11 of NAFTA.
As we have noted in the House, the Government of Canada does want to clarify the provisions in chapter 11, which would give future tribunals clearer and more specific understanding of the obligations of chapter 11 as originally intended by the drafters. There are mechanisms built into NAFTA to allow for this type of clarification.
Even more important is the fact that we want the investor-state dispute settlement mechanism to be more open and more transparent so it is more effective. In fact, Canada has already taken measures to make this process more transparent.
The foreign affairs department's website contains all publicly available documents relating to chapter 11 arbitration cases involving the Government of Canada.
We would like to make all the documents public, within certain limitations, obviously, to protect confidential trade information. We would also like to open hearings to the public.
I will stop here to allow for a brief exchange with opposition members. But that is our government's position, its true position, not based on a short sentence taken here or there, but based on its true intention with regard to NAFTA's great success.