Mr. Speaker, it is my pleasure today to rise to address the motion before us. I will be splitting my time with the loquacious member for Edmonton—St. Albert. The motion reads:
That the House acknowledge the inadequacy of the assistance plan for the clothing and textile industries which was announced by the federal government following the closure of six plants in Huntingdon, and that it ask the government to further elaborate with regard to the following elements: the use of safeguards provided for in trade agreements, the implementation of measures to encourage the use of Quebec--and Canadian--made textiles and the creation of a program to assist older workers.
The Conservative Party has long been a supporter of free and fair trade and long advocated that if we as a nation of a small population with a large land mass with unparalleled natural resources have fair trading rules and a level playing field, Canadians will do well, have done well in the past and will succeed into the future.
The problem is how governments in the past, particularly this government, have represented Canadian industries and citizens in international trade agreements, and it has not been up to par. In general, the Conservative Party will support the motion, although not perfect, for certain reasons.
The first reason is we believe that more care and diligence must be put into trade agreements and negotiations. In our view some of the biggest economic problems facing Canadians today are due to a lack of attention by the government to huge trade issues, like in textiles, the beef industry, softwood lumber and elsewhere.
The second reason we will support it is the Liberal government has implemented a program, which I think the motion is referring to as well, through the least developed country initiative which is unfair and has caused serious harm to the industry. Under former Prime Minister Jean Chrétien, the government made a decision to provide duty free and quota free entry for textiles and clothing from 48 least developed countries. That decision has had a profoundly negative impact on the textile industry, and I will explain why later in my speech.
The third specific reason to support the motion is we support any examination of programs delivered by the human resources department to assist workers, not only older workers but workers who have been displaced in areas such as textiles or any other affected trade areas. This was something that was part of the original free trade agreement which the government at that time recognized. The Conservative government recognized the impact of the trade agreement on certain industries and tried to address that.
I want to point out some of the facts of the textile industry for the information of people. It is a vibrant modern manufacturing industry. It has a long and proud history in Canada, particularly in the province of Quebec. It is easy to understand why the industry is very important, particularly to Quebec and the Bloc Québécois. Roughly 47,000 Canadians are employed in textiles across Canada and a further 97,000 Canadians are employed in the apparel industry.
Textile and apparel jobs are an important source of employment for new Canadians. Approximately 40% of apparel workers are first generation Canadians. The textile industry comprises two subsectors: textile mills which includes fibre, yarn and thread mills, fabric mills, textile and fabric finishing and the fabric coating; and textile product mills which produce textile home furnishings such as carpets and rugs, curtains and lining as well as other textile mill products, excluding clothing which include tire cord fabrics, rope, textile bags and canvas. In addition, a significant number of textile workers produce textiles for motor vehicle seating. Obviously, it is another important industry in Canada.
Despite the fact that the R and D expenditures seem quite moderate, the textiles industry is touted as one of the most innovative in Canada, based on an innovation index designed by Statistics Canada. Critical to the successful adoption of these advanced technologies is a continuous upgrading of the industry's workforce knowledge and skills.
On trade, global integration is constantly reshaping and transforming our own economy. One of the most important issues facing Canadian industries is a safe and free movement of goods across borders in a timely manner.
Trade remains key to the future prosperity of all industries in Canada. Trade barriers limit Canadian firms in their capacities to grow and participate in foreign markets. Trade barriers cause investors to bypass Canadian businesses and hinder the mobility of goods and services in Canada. The Liberal government has not worked as effectively as it could with international organizations and individual nations to reduce the protection of policies of other countries to secure free trade agreements and to reduce the level of subsidies that have happened in other industries in other countries. The goal of governments in negotiations should be to secure agreements that benefit Canadian manufacturers by allowing them to compete and succeed through competition.
I want to address the LDC initiative and explain my perspective on it. This initiative, in combination with the appreciating Canadian dollar, has caused many in the Canadian textile industry to start importing rather than producing domestically. As of January 1, all the quotas Canada had on imported clothes from foreign countries were removed with some minor exceptions that came at the last minute.
The government greatly underestimated the impact on textile products of its decision to produce duty free and quota free entry for imports of textiles and clothing from 48 least developed countries. The LDCs are the world's poorest countries as designated by the United Nations on the basis of specific economic and social criteria.
We support this initiative and the industry supports the concept of the initiative. The problem is the textile and apparel manufacturing powerhouses, like China, India and Pakistan, will also through this initiative be given greater access to the Canadian market. That goes against the goal of the program, in and of itself. It is supposed to help the LDCs. It is not supposed to help emerging and developing economic powerhouses like China and India, which will obviously be some of our main competitors in this century.
The impact of the federal government's decision to provide duty free and quota free entry for imports of textiles and clothing from these 48 least developed countries has been devastating to Canada's textile industry.
The program has recently been changed. The industry has brought this to our attention on this side and I know it has made it very well known as an issue to the other side of the House. It has been very frustrated by the fact that the issue simply has not been addressed to its satisfaction.
The government has focused at the very last minute on the duty remission orders, and on doing a package. As the Bloc has already pointed out, after the mills had closed down at Huntingdon, it did the package, I believe, a day after, which was obviously a late response. This initiative is doing much more harm, and it is something to which the government should respond.
The specific reason for this is that under the rules of origin of this program, up to 75% of the ex-factory price of garments made in an LDC country can be of non-LDC materials from general preferential tariff countries, such as China, Korea, India, et cetera, countries with huge and sophisticated textile and clothing industries that hardly need Canada's help to export textiles and clothing.
The result is that these rules of origin deprive the least developed nations of any incentive for foreign investors to establish textile manufacturing facilities in their countries, investment that would lead to long term employment and advancement opportunities for the people who need it most. The purpose of the program was to encourage investment in these least developed nations as a way of lifting them out of their current economic condition. It is not doing that. In fact, it is allowing nations, which are turning into economic powerhouses, to access this program for their benefit.
The rules under the LDC also relegate the LDCs to clothing assembly, and only as long as they remain the cheapest source of labour in the world by paying the lowest wages in the world. As a result of the program, textile manufacturers across this country are being forced to close their facilities on an almost daily basis.
In terms of solutions, it should be possible to amend the LDCs' rules of origins to require that products made in the LDC countries are eligible for benefits under the program only if they are made from these least developed countries or from Canadian inputs. In addition, it would be appropriate and effective if an LDC-specific safeguard mechanism were to be instituted to deal with import surges.
The long term solution in the industry rests with tariff reductions. Our challenge to the government is in line with the motion. Why does it take the government so long to act on issues such as textiles? Why does it take so long to negotiate a fair tariff reduction agreement?
The previous speaker, the Parliamentary Secretary to the Minister of Health, mentioned something about China's agreement with other WTO nations. It is our understanding that President Bush, when he was in China last, got an agreement from the Chinese to limit their manufacturing and exports into to the United States, particularly as it affected the textile and apparel industry. Our understanding is our Prime Minister did not even ask for this, to which the government should respond.
In conclusion, we in the Conservative Party will be supporting the motion by the Bloc Québécois. We feel the final solution to the industry's challenge obviously involves the Canadian government allowing our manufacturing sectors more access to foreign markets but also ensuring that there is as much a level playing field as possible. If that happens the fact is our industries and companies will succeed very well.