Mr. Speaker, we routinely hear calls from the left in Canada denouncing NAFTA's chapter 11, the World Trade Organization and free trade in general. Unfortunately their pedestrian understanding of trade matters undermines the rights of union workers whose interests they claim to represent.
Had the NDP view prevailed during the FTA debate in 1988, auto workers would have been in deep trouble when the WTO struck down the longstanding Canada-U.S. auto pact. That decision alone could have wiped out union jobs in towns like Windsor, Oakville, Oshawa and Sainte-Therese.
However the FTA agreement, an agreement the left so strongly denounces, protected those jobs and established free market rules that allowed auto exports to the U.S. to grow by 15%. That has increased the opportunities, wealth and living standards of thousands of Canadian auto workers.
If members of the radical left in Canada want to be taken seriously and not labelled hypocrites, they should adopt the same standards of openness, democracy and transparency they demand from others. If they want open door free-for-alls when Canada negotiates bilateral or multilateral trade deals they should be willing to live by the same standards.
In fact they should lead by example. They should demonstrate to Canadians how their nirvana of openness would work in practice. They should open up all future union-management contract negotiations to public scrutiny. They should answer questions from citizens who are concerned about the impact of proposed labour deals on the environment, culture, the economy and society at large. They should discuss the impact of such deals on the cost of labour, on post-secondary education and on the way we all feel about one another. The media would of course be invited to these free-for-alls.
Fortunately no serious economist, social scientist, commentator or politician believes such a system could work. More important, no serious unionists or business leaders would impose such a regime of unreasonable checks on their own behaviour. They understand that there is a place for consultation and closed door negotiations and then a place for the rank and file to vote on a final agreement. That is the approach that the Canadian Alliance and I support, and that is exactly what needs to happen.
When I hear that the fourth party is opposed to the investor state provisions in NAFTA's chapter 11, I cannot help but wonder what they stand for and, more important, where they have been for the past few years. Consider the following paragraph:
The investor affected shall have a right, under the law of the Contracting Party making the expropriation, to prompt review, by a judicial or other independent authority of that Party, of its case and of the valuation of its investment or returns in accordance with the principles set out in this Article.
The text I just read is not from NAFTA's chapter 11. It is article 8, paragraph 2 of the Canada-Egypt foreign investment protection agreement. It is also article 8, paragraph 2 of the Canada-Philippines foreign investment protection agreement and article 8, paragraph 2 of the Canada-Venezuela foreign investment protection Agreement.
It could also have been taken from similar foreign investment protection agreements, or FIPAs, that Canada is negotiating with a growing list of countries from Armenia to Uruguay. It could just as easily have been taken from article 8, paragraph 2 of the Canada-Croatia foreign investment protection agreement. That agreement went into effect on January 30 of this year and the NDP does not even appear to have noticed. It is still fighting battles from 1988.
The NDP seems unconcerned that all these agreements have clauses allowing investors to submit disputes with signatory states to arbitration by the International Centre for the Settlement of Investment Disputes, an international ad hoc arbitration tribunal established under the United Nations Commission on International Trade Law.
Let me say that again. A foreign investment protection agreement with Croatia, which features investor state provisions virtually identical to NAFTA's chapter 11, went into effect on January 30 of this year and the far left has said nothing. It seems the radical left follows trade issues about as carefully as New Zealanders follow hockey.
I used to play hockey. If I am in a bar and people with a New Zealand accent tell me it is great that the Canadian team scored three touchdowns against Italy at the world hockey championships, I will thank them for their support but will likely not take their advice on next year's hockey pool. So it is with the fourth party in the House when it comes to trade policy. Its members seem to know as much about world trade as I do about yodelling.
The NDP's principal argument against chapter 11 is that it limits the government's ability to protect our environment and sovereignty in the same way that the charter of rights initially compelled Canadian police forces to adapt to the country's newly enshrined citizens rights.
Canada's international trade agreements will require governments to think smarter and more consistently in making public policy decisions. Chapter 11 of NAFTA is based on five basic principles. The first is transparency. Investors have a right to know what the law is and governments cannot capriciously change rules midstream.
The second is national treatment. We must treat investors from other countries the same way we treat Canadian investors, provided they do the same for us. In other words, we cannot stop Wal-Mart from building a big box store unless we are prepared to apply the same rules to Zellers, Canadian Tire or Rona.
The third is protection of investors. We cannot take property without offering compensation, and a property owner has the right to ask an independent body to determine if the compensation is fair.
The fourth is quick and fair settlement of disputes. Parties should get a quick and impartial decision.
The fifth is reciprocity. Canadian companies doing business abroad should be treated the same way we treat foreign companies here.
People may why ask they did not hear about investor state rights until recently. It is likely because the five principles I just listed are so basic to Canada and to our major trading partners that there was never any need to write them down.
It should come as no surprise that we are not negotiating foreign investment protection agreements with the United Kingdom, Switzerland, Taiwan or Australia. Those countries have long respected the five principles and thus there is no need for a formal agreement.
Every case in which we have included NAFTA chapter 11 type language has extended Canada's notion of an independent judiciary to less progressive states in regions like eastern Europe and Latin America.
Most lawyers will say that for foreign companies doing business in Canada NAFTA chapter 11 changes almost nothing. The left jumps up and down hysterically about the Ethyl Corporation case yet fails to point out that Canada's supreme court would probably have reached the same decision regardless of chapter 11.
Let us consider point 13 from the Ethyl Corporation's statement of claim. The MMT act does not prohibit the manufacture or use of MMT in Canada. It merely requires that all MMT sold in Canadian unleaded gasoline is 100% Canadian. A domestic manufacturer of MMT can manufacture and distribute MMT for use in unleaded gasoline entirely within a province and not violate the MMT act.
If the Ethyl Corporation wanted to maintain its presence in the Canadian octane enhancement market it would be required to build an MMT manufacturing, blending and storage facility in each province.
The left would have us believe that the Ethyl case proves that chapter 11 prevents us from protecting the environment. That is not so. If the federal government had banned outright the use of MMT in Canada, regardless of where it was made, the Ethyl Corporation would not have been able to use the discrimination clause which was so central to its case.
Let us think about this. Let us suppose the city of Ottawa decided that pizza contained a cancer causing ingredient and then used those health concerns to support a law prohibiting anyone from bringing pizza to Ottawa from Hull. If the city of Ottawa did not force its own pizza restaurants and vendors to close, the supreme court would probably find discrimination and force it to back down, repeal the law, award compensation and find another mechanism for banning the dangerous food. However it would not deny it the capacity to ban what is dangerous. It is the same with MMT.
NAFTA chapter 11 is nothing more or less than what has been the status quo in Canada since we adopted the British legal system before Confederation. By putting such language into NAFTA and into foreign investment protection agreements, we are simply asking other countries to give our companies and investors the same respect we have long given companies and investors, both Canadian and foreign, here in Canada.