Mr. Speaker, it is indeed a pleasure to rise in the House on behalf of my constituents in Nanaimo--Cowichan and to speak to Bill C-21, an act to amend the Customs Tariff.
On the face of it, the bill seems to be a fairly innocuous type of legislation. It is fairly mundane and routine, but it is interesting that this particular bill has provoked what I think is a fair amount of good discussion in the House today. There are times when I sit in this place on my House duty day and say to myself, “Is there really much point?” But we have had a good debate today and I think the bill, even though it seems to be fairly mundane, has been able to spark some interest in a number of ways as we have discussed it.
For the benefit of those who perhaps may be watching the debate on television, which might be an act of masochism, I am not sure, Bill C-21 amends two sections of the customs tariff. Specifically, the general preferential tariff and the least developed country tariff are extended for another 10 years until June 30, 2014. Of course one of the reasons the bill has to be put through the House in this manner as speedily as possible is that the current legislation expires on June 30 of this year, so there is some urgency to do this, particularly if there is an election coming.
The customs tariff is organized into several major components: the most favoured nations tariff, generally called the MFNT; the general preferential tariff, the GPT; and the least developed country tariff, the LDCT. These are nations that we have direct trade agreements with or nations that are subject to the general tariff rate.
The first three categories apply to our trading partners in the World Trade Organization with which we do not have separate trade agreements. Countries such as the United States, Mexico, Chile, Costa Rica, Israel and others belong to the fourth category, as tariff rates have been negotiated bilaterally, and trilaterally, of course, in the case of NAFTA, which encompasses the countries of Canada, the United States and Mexico. Four other nations, such as North Korea, do not belong to any category and are subject to the higher general tariff rate of 35%.
The vast majority of the countries in the world with which we have trading relations fall into the categories of the GPT or the LDCT. Examples of members in the GPT include China, Brazil, Kuwait and most other developed countries with which we trade. The LDCT list includes nations such as the Congo, Somalia, Haiti and other underdeveloped nations.
Both the GPT and the LDCT provide very low to non-existent tariff rates for nations in those categories. The reason behind putting these countries in these categories is that hopefully it will encourage the growth of those economies and trade relations with Canada. Most of these countries are developing nations that need to have some kind of free trade or rules based trading agreements with other countries to stimulate their economies. Of course, the problem exists that if these tariff rates were to expire these nations would be treated as MFN partners, most favoured nations partners, and then would be subject to that higher MFN tariff rate.
One of the interesting things that has happened in this debate today is that it has provoked an interesting debate on the whole question of globalization. Globalization is a huge topic in my riding. I hear about it very frequently from constituents, some of whom have very great concerns about globalization. I must say that there are times when I agree with their concerns.
However, the reality of globalization is that it is something that cannot be stopped. It is going to take place. In the kind of world in which we live today, where technology has created such a small world for us, where we can travel to other countries in such a timely and efficient manner, and where we can have interaction with developing nations at world forums and in other ways, this is something that just simply is not going to stop. What we need to see is that within the spread of globalization there is maintained for these less developed countries an opportunity to develop with justice and equality and fairness for all the people who exist in these nations.
Of course a lot of people are concerned about what could be classified as sweatshop operations in some of the developing nations, where charges have been levelled against large multinational companies that go in and seemingly take advantage of low wages and exploit the population. Sometimes it has been proven, of course, that they have done this with very small children. Those are concerns that we would have and I do not think anybody in the House, whether they favour open free trade or otherwise, would not be concerned about conditions like these.
However, I think we need to look at the positive aspects of globalization. Of course, this bill is really a housekeeping bill that puts some parameters around the effects of globalization. China is a very good example. I have had the opportunity to do a fair bit of travelling in southeast Asia in the last few years. I have visited Thailand, Taiwan, China and some other countries in that area such as Hong Kong. I think China is a good example of an emerging nation that has reaped the rewards of globalization in a very positive way.
What has happened in China, of course, is that it has opened its doors to increased foreign investment. That has been a particularly hard thing for it to do, coming out of its communist ideology, in being able to somehow conform to the rules and the practices of the World Trade Organization.
Those who go to Shanghai now will see simply acres and acres of brand new factories that have been developed over the last 10 years or so and are now providing jobs for hundreds of thousands of people who had no real jobs before. They are people who perhaps never in their lives made more than 10¢ a day in our money. Now they are making $1 a day. Maybe they are making $10 a day. In our terms as we look at that we say to ourselves that this is not much of a wage, but we have to remember that the buying power of $10 in China is a whole lot more than the buying power of $10 in this country.
Along with the increase in their wages, there is indeed an increase in the standard of living in that country. One cannot help but see this as one travels the country. They are certainly better off, or at least those folks now getting involved in the new industry are far better off than they were 20 years ago. Those people who walked to work or rode a bicycle before this can now afford a motorcycle. The people who could not afford to live in anything but a one room shack are now living in new four room houses. Again, that is not up to our standards. I am in the process of building a new house and in comparison to what I saw in China, it is a mansion. It is not a mansion for me, but it would be for them. However, they are certainly better off than they were and it is a result of globalization.
On the other side of globalization and free trade, and opening up economic borders, we have the problem of protectionism. We have seen protectionism rear its ugly head in the United States recently. The softwood lumber problem is a result of a protectionist policy. Even though we have had a rules-based agreement with the United States over softwood lumber, it has not worked because one of the trading partners has refused to open up its borders to free trade.
In my riding of Nanaimo--Cowichan that breakdown in free trade and that breakdown in the good effects of globalization has caused a huge problem. Hundreds of jobs have been lost because of the softwood lumber problem. If we did not have the arbitration policies that are in effect through NAFTA and the World Trade Organization, we would never see an end to this resolution.
Protectionism is not just an American problem. It is also a problem for our government. It knew for five years that the softwood lumber agreement would expire. It sat by on the sidelines and did nothing to allow us to move into another rules-based trade agreement with the United States on softwood lumber. When one expired, we simply moved into something else. That is one of the problems with globalization. That is one of the problems when governments do not take the opportunity to use the rules properly to create good economic conditions in this country.
We in the Conservative Party agree with Bill C-21. We see some of the problems it highlights in terms of the extension of tariffs. We will be supporting the bill when it comes to the House for a vote.