Madam Speaker, I wish to acknowledge that today's debate is taking place on the traditional territory of the Algonquin people.
When our government was elected in the fall of 2015, the world was a very different place. There was a certain degree of stability. There was a consensus that the principle of multilateralism was the ideal recipe for keeping the peace between nations and supporting free international trade to ensure greater prosperity for as many countries and people as possible.
Needless to say, the world has changed a lot since then. It has moved in the opposite direction. In the new international political context, as a country, we have suddenly been forced to cope with the need to return to the negotiating table to overhaul one of our most important agreements with the two countries that share the North American continent with us. That agreement is NAFTA, the North American Free Trade Agreement. We succeeded. We successfully negotiated something that was far from a foregone conclusion. We negotiated as equals with the most powerful economy on the planet, our neighbour and friend, and a tough negotiator, the United States.
I want to congratulate the Deputy Prime Minister, the then minister of foreign affairs, for her perspicacity, her determination, her poise under pressure, her tactful words at critical moments, her dignity and her diplomatic skills throughout the process.
I also want to congratulate the Prime Minister, who stepped in at the right times with firm and focused remarks to make it known that Canada would not capitulate to the United States.
We negotiated hard and successfully in the Canadian way. We were confident and firm but always respectful. We were true to our nature and to our reputation around the world. We were friendly but determined to stand up for Canadians and Canada's economic interests.
Canadians have a right to feel proud of our success in the NAFTA 2.0 negotiations, which were crucial economically, intense and not always linear. I think that is obvious.
In the time I have left, I would like to touch on a few key aspects of the new trade deal that I believe are important to my constituents, because they have written to me on numerous occasions about these issues.
The first is on dispute resolution, which, to my mind, is why we negotiated the original free trade agreement with the United States in the first place. I do not think it was to reduce tariffs so much, as there was already a free flow of goods, but we wanted to make sure, as a middle power with huge trade with the world's largest economy, that we could have a mechanism to objectively and rationally resolve disputes when protectionist pressures might rise south of the border. It was important. The whole idea of the free trade agreement, as far as I am concerned, was to have a dispute resolution mechanism so that we could be trading on a level playing field with a country that is 10 times bigger than we are.
We know that the United States, at the moment, is not fond of dispute settlement. In fact, for two years, the Trump administration has blocked the appointment of new members to the WTO's seven-member dispute resolution panel, claiming that dispute resolution compromises and undermines American sovereignty and latitude in trade. Therefore, the WTO dispute settlement mechanism was effectively paralyzed at a time when Canada was looking forward to having it deal with the United States and resolve the softwood lumber dispute with the United States.
We have heard a lot about softwood lumber in this debate. We have a case in front of the WTO, but because the dispute settlement mechanism has been paralyzed, obviously the WTO is not able to make a decision in that case.
Under NAFTA, there was similarly the potential for what is called “panel blocking”, where a country can block the creation of a dispute resolution panel by refusing to appoint members. That power existed under NAFTA for the United States, for example. Today, we have succeeded against all odds, given the prevailing mindset in the U.S., in having dispute resolution maintained in the new trade deal. Worth noting is that the new agreement is asymmetrical. That means that there is the possibility of dispute resolution between Canada and the U.S., but not between the U.S. and Mexico. Therefore, we clearly have a privileged position in this regard. We have also achieved an end to panel blocking, which is so important in the case of dispute settlement panels. We stood up and we won on that point.
A second issue is investor-state dispute resolution. For many years, there was concern that investor-state dispute resolution compromised Canadian economic and environmental sovereignty by subjugating our domestic policies to the economic interests of multinational corporations. NAFTA's infamous chapter 11 has been removed from the USMCA, or CUSMA, as some people call it, and investor disputes between Canada and the U.S. will no longer be subject to the investor-state dispute resolution process that existed under chapter 11.
It is important to mention that there are still obligations under the new agreement, with respect to expropriation, whether direct or indirect, where charges of indirect expropriation often flow when domestic environmental laws and regulations are seen to negatively impact foreign private interests in Canada. However, the Library of Parliament has stated:
Annex 14-B [of the USMCA] indicates that such actions' adverse effects on the economic value of an investment would not be sufficient to establish that an indirect expropriation has occurred. As well, Annex 14-B notes that whether any such actions constitute indirect expropriation would depend on factors that include the actions' economic impact, object, context, intent, and interference with 'distinct, reasonable investment-backed expectations” that such actions would not occur.
In many environmental cases, we would be able to argue that any rational investor who is well informed would understand that we would want to have policies to protect our environment in a particular area. For example, there was often speculation that chapter 11 would make it easier, hypothetically, for foreign private interests to one day pressure Canada to export its fresh water in bulk to a thirsty southern neighbour, namely, that in the face of domestic policies intended to block such exports, massive financial compensation might need to be paid to foreign private interests seeking to access bulk water as a tradable good. The USMCA makes that an even more remote possibility.
Many constituents wrote to me about dairy. I would like to reiterate that the supply management system has been maintained. There will, indeed, be new higher quotas for dairy imports from the U.S. with Canadian tariffs still being applied on dairy products that exceed these new quotas, tariffs ranging from 200% to 300%. According to reports, the new quotas are expected to give American dairy farmers access to up to 3.5% of Canada's market, from 1%. Therefore, we can see that the defence of the system is still very much in place. Yes, there has been a slight increase, but supply management has been maintained.