Mr. Speaker, I thank my hon. colleague for raising this important matter at this time.
The position of the Government of Canada is that chapter 11 of NAFTA is working reasonably well, but as he correctly noted, there is room for improvement. Chapter 11 needs further clarity and transparency. Canada is committed to this important clarification process.
As an open and dynamic economy with significant international trade and investment flows, Canada has consistently supported a strong rules based system, multilaterally, regionally and bilaterally. We move on those three trade fronts simultaneously. We believe that investment rules can play an important part in providing a stable, transparent and predictable environment for international investment.
The importance of these rules to Canada's prosperity is clear. The value of Canadian direct investment abroad has increased by 400% between 1985 and 2000. This is an increase from $57 billion to $301 billion. In 2000 we benefited from over $291 billion in foreign direct investment in Canada. In turn, this investment generated Canadian jobs and fostered the growth of Canada's gross domestic product.
The growth in foreign investment by Canadian business has increased the demand for improved access and greater protection for Canadian investments abroad. Rules which facilitate a stable, transparent and open environment are an essential component of their success.
In light of such considerations Canada has long advocated a rules based international system and impartial dispute settlement in its trade and investment agreements such as NAFTA.
The NAFTA text was built on a longstanding experience and institutional knowledge of international trade and investment law. NAFTA parties want to ensure that it is understood and used in its proper context. My hon. colleague has cited some examples that could be stated as a misuse of chapter 11. To this end, the agreement provides for the issuance, by the NAFTA free trade commission, of notes of interpretation on provisions of chapter 11.
On July 31, 2001, the commission, which is comprised of NAFTA trade ministers, issued a binding interpretation on article 1105, the minimum standard of treatment provision. The notes of interpretation reaffirm that the standard of treatment set out in article 1105 reflects customary international law concerning the treatment of foreigners or aliens. It confirmed that a purported breach of another NAFTA article, or indeed a provision from another treaty, cannot constitute a breach of article 1105.
This binding interpretation also confirmed that fair and equitable treatment and full protection and security do not create additional obligations beyond those required by customary international law. The issuance of this binding interpretation has thus contributed to a proper understanding of article 1105.
I want to emphasize the importance the government places on the chapter 11 clarification process. The government understands that it is important to have such provisions, but it also understands, as my colleague mentioned, that there have been misinterpretations and that there needs to be greater clarification and transparency. The minister is highly committed to that. It is one of his top priorities.