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House of Commons Hansard #52 of the 37th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was chapter.

Topics

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3:35 p.m.

Bloc

Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

This government could not be any more arrogant, and this is unacceptable. I ask—

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3:35 p.m.

The Acting Speaker (Mr. Bélair)

Order, please. This is not really a point of order, it is more a question of debate.

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3:35 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

Mr. Speaker, I will be sharing my time with my colleague from Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques.

I would first like to say that the charge by the Minister for International Trade disappoints me. I was fairly happy with the work he had done on transparency, work we had strongly encouraged him to do, we in the Bloc Quebecois, and all the participants in the civil society. I am prepared to acknowledge what he has done, except when he defends, as he has just done, his change in position on chapter 11. That disappoints me.

Let him explain it. Let him say that the United States would not listen, but let him say what he himself has always said. What he has just said today, unfortunately, is not supported by the facts, and by the repeated quotes we can show him. This concerns me, and I think the public too.

I have been told several times by various sources that the negotiators who worked out the NAFTA agreement and the famous chapter 11 never thought it would be interpreted the way it has been by the rather special and secret courts, which evaluate complaints lodged under chapter 11.

Even the negotiators did not think businesses would be so low minded, as some colleagues would put it, as to complain, with the astronomical figures they put forward, because they negotiated in little closed private clubs. Had they asked certain union people what they thought the businesses were capable of doing, they would have been enlightened. They would have made no mistake as to the possibility of expanding these texts in a direction contrary to public interest.

The problem is that, whatever the intention of those negotiators, now, chapter 11, with a number of cases pending—and we can be sure many cases will arise in the future—is tending to limit the ability of governments, at all levels, to make laws that defend public interest.

There are a number of fairly simple cases. For example, Metalclad Corporation, is a waste treatment company from California. It settled in Mexico and asked for a federal permit. The problem is that while it was building its plants, the public was totally opposed to such activities. The governor of the state had no choice but to order Metalclad to shut down its operations. Metalclad turned around, sued under chapter 11 and won. The whole thing cost $16 million to Mexico, which decided to appeal the ruling, and the appeal was heard in Vancouver.

This ruling is disturbing in a number of ways. I am mentioning one, but there are several. In that example, the federal government of Mexico had given its authorization, but the municipality had the authority to legislate, just like the state. By using its powers, the company had the right to sue.

If the government cannot see cases that could occur here, it is because it definitely does not want to see the obvious.

They are now defending chapter 11 without any reservations, when the Minister for International Trade himself had the common sense to say that he would not ratify it again, in its present form. The minister heard many people who also displayed common sense, including Pierre-Marc Johnson, the former Premier of Quebec, who is not a hothead and who told the committee that Canada should not use chapter 11 again, at the risk of experiencing very serious environmental problems. And we know how concerned people are about the environment.

What is extremely disturbing is that Canada, which has held various positions, just boasted about signing an agreement with Costa Rica. In an agreement with Costa Rica, Canada is the one calling the shots. This is not the United States, which is a strong country, with Canada trying to manage. With Costa Rica, it is Canada that has the upper hand.

In a agreement with Costa Rica, Canada is not in a weak position. It is not like in a agreement with the almighty United States, where Canada has to find a way to manage. With Costa Rica, Canada has the upper hand. Yet, the provision of chapter 11 can be found in the agreement with Costa Rica. Canada's position boils down to what is stipulated in chapter 11 of NAFTA.

The House will soon realize that opposition members are against this. Before going any further, we need to reconsider what we are about to do. Because we are about to give more power to companies and foreign corporations. Foreign corporations can file suits for discrimination, something local companies are unable to do. But let us not forget that, abroad, Canadian companies are foreign companies, and that we promote international exports not only for the big corporations, but also for smaller businesses.

At the Standing Committee on Foreign Affairs, important business people for whom exports have no secrets told us “It is not a market for small companies, because you stand to lose your shirt again and again”.

This is a very serious issue, and I want to thank the NDP for raising it, as we did previously, so that we could hold this debate. The important thing is for parliamentarians to be able to express their views before the agreement is signed. It is crucial.

I am going to introduce a private member's bill of which I am very proud, which was introduced earlier by the member for Beauharnois—Salaberry. This bill must become law. I am sure that there are government members who share our view, but whose hands are tied right now and who will be able to do nothing but talk among themselves and look sad, hoping that things are not as bad as some are saying.

What is really being decided right now is the future, not just of Quebecers and Canadians, but also, and even more so, of the citizens of Mexico and of Central and South America.

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3:45 p.m.

An hon. member

The Americans too.

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3:45 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

Yes, the Americans too, but they have more weapons, including democratic ones, to defend themselves than we do. They have much more clout, as parliamentarians, than do Canadian parliamentarians.

Chapter 11 is not the only issue that concerns us. It is one that, along with others, poses the problem of the need to expand trade. We are all for this, but not unconditionally and not just for the rich and the strong.

It needs to be said that while free trade has produced some good results, it has not been good for everyone. This is true between countries and within countries.

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3:45 p.m.

London—Fanshawe Ontario

Liberal

Pat O'Brien LiberalParliamentary Secretary to Minister for International Trade

Mr. Speaker, I listened very carefully to the comments of my colleague from Mercier. It was refreshing to hear a member of her party recognize the outstanding leadership of the Minister for International Trade in trying to bring the greatest possible transparency to the FTAA process. It was largely because of the efforts of the minister in Buenos Aries that we had an agreement to publish the negotiating text.

My colleague from Mercier mentioned that there was a long list of cases that had been arbitrated but she only mentioned one, Metalclad and I know about that case. I would submit that there is not a long list.

Kept in context, I challenge the member on the number of cases. My information is that there are only five cases under arbitration involving Canada. That is not a large number considering we do $1.9 billion of trade every day with the United States and Mexico. I would like to have her answer.

I would like to ask her one final question. Is it the position of the Bloc Quebecois that we do not need to protect investors in Canada and that we do not need to protect Canadians when they invest abroad? Surely that is not the position of her party is it?

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3:50 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

Mr. Speaker, while I did recognize that the Minister for International Trade did good work, I did not talk about outstanding leadership. I said that we, as well as civil society, had to push him a lot. But I want to recognize that he did something.

However, I take this opportunity to say that we still do not have the texts. I was at the Standing Committee on Foreign Affairs and International Trade when the sherpa, Mr. Lortie, came today with Mr. Carrière, the chief negotiator. We asked them where the texts were and how come they had not brought them along. They are still waiting for one of them to be translated. Concerning transparency, they made an effort, but we have yet to see the result. We have seen nothing so far.

As for the number of cases, I will tell my colleague that there are problems with this agreement because everything is secret. If he did any research, he should know that, if he speaks to certain groups, they will tell him that they know there are many cases because everything is secret. It is a horrible part of the process.

The number given to me was 17, but it is just a start. With the decisions that were handed in, there will be more and more of these cases to scare all levels of government. Governments in poor or developing countries are much more vulnerable to these threats. That is what we have to act on.

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3:50 p.m.

NDP

Bev Desjarlais NDP Churchill, MB

Mr. Speaker, the Minister for International Trade indicated that there had been great transparency. That has not been the case. He flip-flopped over whether or not Canada would go in there with a proposition of an investor state trade rule in chapter 11. Now another story has come out.

There really has been no transparency. Had there been, we would not have objected. We would have known and could have discussed it.

Could the member comment on whether or not there has been transparency with the government?

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3:50 p.m.

Bloc

Francine Lalonde Bloc Mercier, QC

Mr. Speaker, I acknowledged that the minister had defended this position. I have seen the Buenos Aires declaration but I am waiting for the texts. It is true that it was decided at Buenos Aires that we would have the texts, and have them regularly. That is a step forward, I find.

I am pleased about that, but I am really anxious to have them, just dying to have them. We do not, and we did not at the time of the summit. So the Buenos Aires declaration is all very well, but it stated “after the Quebec Summit”. That is not what we had been told. We are waiting for those texts and they had better hurry up and get here, or we will be even more disappointed.

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3:50 p.m.

Bloc

Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Mr. Speaker, I am pleased to speak today to the NDP motion. I will read it again so that our audience will have a proper understanding of what is going on. It reads as follows:

That this House calls upon the government to respect the spirit of the evidence given by the Minister of International Trade before the Foreign Affairs Committee, who stated “I can assure you that we are not seeking an investor-state provision in the WTO or anywhere else”, by refusing to sign any trade agreement, such as the FTAA or the GATS, that includes a NAFTA Chapter 11-style investor-state clause.

In other words, what it says is that there is a problem in the government's present position in wanting to negotiate a free trade agreement with all of the Americas. We hope there will be a free trade agreement with all of the Americas, and that it will be an agreement with a human face.

The attitude we are seeing at the moment on the part of the government could lead, in a pinch, to a situation in which the people would have to speak out against the free trade agreement if things that are unacceptable, such as chapter 11 of NAFTA, persist. Chapter 11 leaves room for things that are unacceptable and strangely reminiscent of the multilateral agreement on investment.

So the people watching may understand, chapter 11 concerns the whole issue of dispute settlement. When there is a problem between a business and the interpretation of NAFTA, by which governments may intervene, the agreement sets out the mechanisms so we know how it is to work.

Among other problems, there is the fact that precedents are not taken into account. There is a lack of transparency as to whether the decisions that will be taken will be appropriate. The governments themselves have realized that there was a major problem with the application of these articles. It could be seen in a matter involving Mexico, and we can see it in matters involving Canada.

This article also defines just what constitutes an investment. It moves from the closed concept of an investment to a concept open to interpretations that give short shrift to the rights of governments over the rights of businesses. It is a repeat of the debate involving the multilateral agreement on investment.

The agreement also deals with national treatment, providing that a foreign business should be entitled to the same benefits as a business from the country in which the economic activity is taking place. This would eliminate many of the possibilities of support for local and Quebec businesses. These are things we should look at closely before signing such an agreement for all the Americas, in addition to the whole issue of expropriation.

Where things get even worse is when one realizes what is actually going on. This is probably what prompted a reaction from the minister earlier. When we are forced to eat our words, it is not easy. A few months ago, the minister said that he would not sign a free trade agreement of the Americas containing a clause similar to the one in NAFTA. For him, this was unjustifiable and unacceptable.

Now he tells us that maybe chapter 11 is fine after all. On the one hand, there is what he said on December 13, 2000, when he maintained that he would not sign an agreement with anything resembling chapter 11. On the other, there is his statement on April 24 that the government believed strongly that chapter 11 was working reasonably well. Something happened between these two statements. Someone, somewhere, changed the minister's mind.

It is the same with respect to his comments earlier on the issue of his having apparently obtained agreement in Buenos Aires for the texts to be made public.

It must be remembered that these texts were made public once the business council told the heads of state “If we want there to be less pressure so that we can get through the summit, it would perhaps be best to agree to publish the texts because, if we do not, we are going to meet with even more resistance. So, let us agree to make them public, which we will do later on, after the summit.”

Now that things have quieted down and the summit is over, they are taking their time to have them translated. In this marvellous federal Parliament, where translation in both official languages should be a source of pride, we have not found a way to make these documents public because we had a problem.

This is what brings us back to reality. I think today's motion is interesting and acceptable and that we should support it. If we were to sign a free trade agreement with the Americas only to suddenly find out, the day after its implementation, that it contains something similar to chapter 11 and that corporations can tell national governments what to do, I think many of us will not have much to be proud of and will have to answer to their constituents.

Also, we made the commitment to implement the FTAA in 2005. For this to happen, debates need to be held. And there could be a federal election riding on this issue.

We will have to be able to tell our fellow citizens that, yes, the agreement is acceptable to the people of Quebec and Canada, yes, such an agreement is beneficial to us and, yes, we will create wealth and distribute it fairly. But we must ensure that we do not engage in something that we will not be able to get out of and that we do not have to spend public funds to defend ourselves against businesses that want to do unacceptable things.

The free trade agreement must not become some kind of operating code that would put states at the mercy of businesses. It is very important to avoid this type of situation.

That is why today's motion requires the attention as well as the support of the House. I intend to support it.

We are not saying that the agreement should not contain any definition regarding the treatment of investment. That is not what we are saying. But we want to be sure to draw from past experience, from the situations we faced with NAFTA and are still facing now, so that the agreement takes it into account. We want the texts to be amended accordingly to give enough power to the states so that businesses cannot impose their will upon them.

Let us not forget that the great challenge of the free trade area of the Americas is to ensure that the agreement does not only create wealth but also allows for the fair distribution of such wealth, so that it enables the government to continue to represent the people.

Democracy was the key issue at the summit of the Americas. If democracy is to be more than a policy statement, if it is to eventually translate into concrete action, the chapter on investments in the agreement on the free trade area of the Americas will have to include an assurance, a guarantee.

Clear and specific answers are required on the whole issue of the dispute settlement mechanism, and the definition of investments, national treatment and expropriation, to ensure that control over development remains with the members states and has not been completely handed over to businesses, multinationals and people whose objectives are very specific, but do not necessarily take into account the well-being of the public.

This is why I will support that motion and urge all members of this House, particularly the government majority, to also support it. Surely, there must be some Liberals who were opposed to free trade. We all remember that the Liberal Party was completely opposed to free trade a few years ago. Today, there must still be some watchdogs in that party to stress that, in the end, we must have an agreement that is acceptable.

I will end on that note. This agreement will not be in place for two or three years. This matter, including the whole issue of investments, will have an impact on the lives of our children and grandchildren. I saw it in Quebec City. I saw young people who were very aware of why they were going there, and this was the main reason why they were opposed to the free trade agreement of the Americas.

They probably had an even keener and deeper vision than ours, because they had already anticipated the possibility of a flip-flop by the Minister for International Trade like the one we have witnessed today.

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4 p.m.

Liberal

Peter Adams Liberal Peterborough, ON

Mr. Speaker, I listened with interest to what my colleague from the Bloc was saying. One of the things he said was that democracy was one of the most important things about the summit of the Americas in Quebec.

He is absolutely right in all sorts of ways. It seems to me that we would never have been in the position of holding such a summit had all 33 or 34 countries not moved toward democracy so considerably. We know a great deal of progress still has to be made but at least the development of the trading framework has encouraged those countries to move toward democracy.

My colleague also talked about democratization of the organization itself, which is very important, but he focused most of his remarks on chapter 11. I wonder if he could comment on another thing. I have been struck by the spin off or side benefits of these trade agreements, like the summit of the Americas.

Something that particularly struck me in Quebec City, which I had not realized before, was how much we had in common with the nations of this hemisphere with respect to first nations. Given that our first nations were inside the fence and outside the fence, does the hon. member believe that this summit provided great hope for first nations people in the Americas?

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4:05 p.m.

Bloc

Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Mr. Speaker, I have been talking about the importance of making democracy stronger. When I say that in a chapter on investment, we should avoid the problems we have met in NAFTA, I mean that this may be the best service we could provide to countries with a fledging democracy.

If, with the excessive powers this agreement would give them, corporations can override the governments and get decisions that will abolish democracy and turn corporations into the governments of these countries, we will go back to the banana republic era.

The gist of the matter is that, if we have a good free trade agreement of the Americas, with a clear framework, it will be better than pure competition, where the big fish always eat the small ones, and the small ones have a hard time getting away.

On the other hand, the rights the people or the states have must be protected. The hon. member gave the example of aboriginal peoples. When we define national treatment in a free trade agreement dealing with investment, we must make sure that the countries that are party to the agreement are allowed to promote the development of aboriginal communities, for example.

Should we not make sure that multinationals cannot sue the government for having given special consideration to aboriginal peoples to improve their condition? We have to make sure that those issues are dealt with in the agreement.

We are not saying today in this motion that there must be no investment clause, but rather that this clause should be acceptable. It should be well structured, take into account past experiences and above all avoid what we felt was coming with the multilateral agreement on investment, that is government by multinationals. That is what the people are telling us. Those who went to Quebec City to protest, the 60,000 who engaged in peaceful protest in Quebec City said: We might find a free trade agreement acceptable, but it must have a human face. That must be obvious in every aspect of the agreement, especially concerning investments.

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4:05 p.m.

NDP

Peter Stoffer NDP Sackville—Musquodoboit Valley—Eastern Shore, NS

Mr. Speaker, the Liberals continuously talk about democracy but what about democracy for lower income people throughout the hemispheres to have the right to public health, public education and a clean environment? That is part of our democracy as well. This particular deal, as it stands, threatens those very institutions.

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4:05 p.m.

Bloc

Paul Crête Bloc Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC

Mr. Speaker, in the free trade agreement signed with the United States, there were some very positive aspects, like the market growth. But there were also some very negative aspects, like the attempt to standardize the employment insurance plan to align it with the American one, a decision that penalized our workers.

When we sign agreements in the future, not only will we have to benefit from the trade, but we also have to ensure that the wealth is adequately distributed. This is what we must do as parliamentarians and this is where we will hopefully assume our role. We must go beyond simply rubberstamping agreements negotiated elsewhere without anyone knowing what they include.

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4:05 p.m.

Algoma—Manitoulin Ontario

Liberal

Brent St. Denis LiberalParliamentary Secretary to Minister of Transport

Mr. Speaker, I am very pleased to join in the debate today on the NDP motion which, while focusing on the so-called chapter 11 of NAFTA, is really a cover for the NDP's very negative attitude toward free trade. I am very pleased to assist in putting down to some of the ideas that the NDP would put forward.

I come from the riding of Algoma—Manitoulin in northern Ontario where a large number of people—and we hope more in the future—work in the forestry sector, the mining sector and in tourism. If nothing else, these are very important commodities in trade. We should try to imagine what our lives would be like if we did not trade in forest products and minerals, and there was no movement of people across our borders to enjoy our fine country.

We could start with the premise that all trade begins between two people bartering something. In the history of humankind, trade started with two people bartering commodities for each other's mutual benefit. If we take that notion and carry it to the level of trade within a village and among villages, and take it to a higher and more sophisticated level involving trade among nations, the simple premise that trade should be mutually beneficial applies as much at the international level as it does at the local level. What is good between two people in terms of trade must and should be good between two people at opposite sides of the planet. There is no line beyond which trade no longer is a good thing.

What we are really debating is not that there should be free trade but that there should be freer trade. It is hard to imagine a world where there would not be some rules of engagement, but the point is that we want to move forever closer to a notion of free trade in a universe where everyone can play by the same rules.

I had the opportunity to spend two years teaching high school math and physics in Jamaica back in the early 1970s. Jamaica traded mainly bananas and sugar within the commonwealth. At the time it had a sweetheart deal with the United Kingdom. The United Kingdom actually paid a premium for Jamaica's sugar so that it would have a guaranteed supply. Some years ago the United Kingdom decided it did not want to pay a premium for the sugar and abandoned Jamaica as one of its suppliers.

During the years when Jamaica had a preferred sale for its sugar to Britain, a certain dependency was created. As a result, diversification in the Jamaican economy did not occur. When the British buyers decided to no longer pay that premium and abandon Jamaican producers, there was no diversified economy in which to respond. I had a chance to visit a couple of summers ago, and sadly the economy in Jamaica has gotten worse over the years, not better.

What we really want to be sure about in free trade is that there are as few rules as possible because the best and most effective way to eradicate poverty, not only in our own country but around the world, is to make sure everyone has equal and fair access to the markets of others.

If we really want to make sure that education, health care and other social services are available around the world on an equal basis, we must share the benefits and the markets, which are easy for Canadians to access but very difficult for poor countries to access, through trade.

In terms of our own economy, I have a few simple facts. Others may have mentioned these but they certainly bear repeating. Since 1993, under our watch, the country has produced something like two million new jobs, 80% of which are the result of trade. In fact, exports make up about half of our gross domestic product. There is $2.5 billion a day in trade. There is no question that Canada is a trading nation.

Again there is the guise of a concern about chapter 11. I want to make it very clear that our Minister for International Trade and, I think, our Prime Minister have said that we need to look at chapter 11. We need to tighten things up and we need some clarification, but let us agree that things are generally working. It is not unusual when we have an agreement to need to fine tune things from time to time.

I submit that if we waited at all times to sign an agreement that we knew was perfect before we began, we would never sign agreements. We would never buy a house. It would have to be perfect before we bought it and there is always something wrong with a house when we buy it, whether it is new or old. This is something we have to face after we get the key and open the front door for the first time.

We have to go into agreements and deals with the idea that we have made the best arrangement possible in the circumstances facing us and that we know ongoing negotiations will be necessary to ensure that as time goes by we can make those adjustments and tweak those rules and regulations so that things get better for all players.

A deal that impoverishes one partner and enriches another is not a deal. The government believes in trade that is fair, honest and transparent. I submit that the government, through the whole FTAA process, has been totally open to an extent limited only by our obligations to other nations in terms of confidentiality. To the extent that the Canadian government could be open, it has been so.

Before I use up all my time, I want to comment on a question from the member for Peterborough, who asked about the place of our first nations, our aboriginal people, when it comes to free trade or national trade. I think it is a very poignant question.

I have about 25 first nation communities in my large northern Ontario riding. In fact, with the support of trade officials with whom I have had a chance to discuss these matters, we are in the process of planning a one day conference on free trade in my riding to make sure that our aboriginal people as well as aboriginal people right through the Americas have an equal and fair opportunity to participate in the whole free trade process. To the extent that we leave people behind—and nobody on either side of the House would argue that we would leave anybody behind—either for reasons of illiteracy or reasons of access to resources and so on, to that extent we have failed.

Mr. Speaker, did I let you know ahead of time that I am splitting my time with the member for Mississauga South? Pardon me for not reminding you of that at the beginning.

Let me conclude by making a comment about the well televised protests we saw at the recent Quebec summit. I was a university student in the late sixties and early seventies and was involved in protests myself, although I never threw a brick or damaged any property. If one was in university or college in the late sixties and early seventies, one was no doubt involved in some form of protest or another. Those who would damage the reputation of legitimate protesters by damaging property have ill served all parties to the discussion.

Mr. Speaker, I just want to thank you for this opportunity, as I pass this on to my colleague, and say that the government plans to continue its excellent job when it comes to negotiating free trade for all its citizens.

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4:20 p.m.

Bloc

Ghislain Lebel Bloc Chambly, QC

Mr. Speaker, I listened with great interest to the speech made by the member opposite. I share the opinion of my colleague, the member for Mercier, who was telling the minister a few moments ago that what troubles her—and it is troubling, even if the minister does not like it when we say that he did a complete about-face—is the fact that he changed his position dramatically with regard to chapter 11.

If it makes him happy, let us say that he did not do an about-face, but rather that he failed to give us an explanation and that, like the member who just spoke, he does not seem to be aware of the deadly political implications of chapter 11. Once adopted, chapter 11 could prove disastrous to future generations.

Governments can make mistakes and they have. I saw maybe 35 finance ministers table 35 budgets year after year, and they all said their budget was the best that had ever been prepared and presented to the people. Nevertheless, we ended up with a huge debt.

If the member takes for granted that governments do not make mistakes, would it not be fair, in case they make one some day, to discuss with the opposition in order to find mechanisms that could, should there be a threat, allow parliament to express its opinion on the matter? I am not sure the Liberals have a monopoly on the truth.

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4:20 p.m.

Liberal

Brent St. Denis Liberal Algoma—Manitoulin, ON

Mr. Speaker, I thank the member for Chambly for his question. As I said in my remarks earlier, it is impossible to go into any kind of agreement with a perfect document.

I recall that in the lead-up to the summit of the Americas it was reported, in the papers at least, that the international trade minister had asked the president of Mexico to work with Canada in terms of finding some adjustments to chapter 11 in order to make things clear, to provide for clarification.

It is my understanding that for the time being the president of Mexico is saying it is well enough as it is, but I think the very fact that our trade minister asked his counterparts in Mexico to look at this shows a very clear intent that as we move forward we would always want to try to improve things. We support making improvements. We are not in support of throwing the baby out with the bathwater, so to speak.

The member suggests that maybe the opposition could have an opportunity to propose mechanisms for a new or revised chapter 11. This is the very opportunity for the member to do so. I would encourage all colleagues who want to see improvements to chapter 11 to take the opportunity here in this debate to bring forward some good ideas.

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4:20 p.m.

NDP

Bev Desjarlais NDP Churchill, MB

Mr. Speaker, I want to clarify that my party is not opposed to trade. We recognize there has to be trade. We recognize that trade is a good thing. We always have.

However, trade without regulations, trade without ensuring the environment is looked after and trade that threatens the sovereignty of nations, that kind of trade is not a good thing.

I say to the hon. member on that side of the House that if his government is not ashamed of that agreement then let us see it. Let us see it on the table so people can have honest discussions. That is what democracy is about. Let us see the text. If the hon. member is not too ashamed to show it to the people of Canada and people throughout the Americas, let us see the text.

We were in Quebec City. We listened to people from throughout the hemisphere, from those countries that trade is doing so much for. We heard how the wages have been lowered by 10% in Mexico. We heard about the first nations or the aboriginal people who are being wiped off their land; it is no different from what our governments did to the aboriginal people here in Canada. It is exploitation of indigenous people and we want to ensure that their rights are there as well.

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4:20 p.m.

Liberal

Brent St. Denis Liberal Algoma—Manitoulin, ON

Mr. Speaker, I appreciate the member for Churchill taking the opportunity to comment. Just before I came here I was meeting with some aboriginal leaders from my riding. We were talking about free trade. They are working to find ways for businesses in their communities to become more involved with international trade, not the contrary.

The very fact that there was a huge lack of protest from the poorer nations, who are looking at the store window from the outside, from the sidewalk looking in, shows that they want to be part of the process.

I can agree with her that we do not compromise sovereignty but rather that we advance access to education and health. There is no disagreement there. What I am talking about is the long term. As the resources and access to social programs become more equalized around the world, there will be less need for rules and regulations.

Message From The SenateGovernment Orders

May 1st, 2001 / 4:25 p.m.

The Acting Speaker (Mr. Bélair)

Order, please. I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed a bill, to which the concurrence of this House is desired.

The House resumed consideration of the motion and of the amendment.

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4:25 p.m.

Mississauga South Ontario

Liberal

Paul Szabo LiberalParliamentary Secretary to Minister of Public Works and Government Services

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.

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4:30 p.m.

Bloc

Stéphan Tremblay Bloc Lac-Saint-Jean—Saguenay, QC

Mr. Speaker, I am back from my riding and I just became aware of the very interesting debate on chapter 11 of NAFTA being held here today.

We are hearing pretty incredible things in this House today. I do not object to the remarks of my colleague, who spoke of the benefits of international trade, stating that $1 invested abroad brings in $2 in return, and of other such spinoffs. I am not against that, and I could hardly be.

What we should be very careful about today is the wording of chapter 11 which, I believe, has a profound effect on democracy.

My fellow citizens are appalled when I explain to them that companies and multinational corporations are able to sue governments, which are elected by the people, and take them to court.

Take for instance the case of Ethyl Corporation, which is probably the most talked about. I want to address my comments to the people in the galleries, because when they hear that for the first time, I am sure they will think it goes against common sense.

We have adopted an environmental rule. I voted in favour of that rule because I agreed with the government on the need for a rule to ban the use of MMT. However, an American corporation sued the Canadian government for potential market loss. This turned against the Canadian government before the NAFTA tribunal. So, I believe that the question to my colleague opposite—

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4:35 p.m.

An hon. member

Three hundred and fifty-four million dollars.

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4:35 p.m.

Bloc

Stéphan Tremblay Bloc Lac-Saint-Jean—Saguenay, QC

Yes, it was sued for $354 million. However, it was settled out of court, and the Americans were paid $15 million.

The question is the following: what becomes of democracy in such cases?