Mr. Speaker, I will cover five points in my remarks. To help my colleagues follow, here is the plan. I will start with underdevelopment and the poverty gap. I will then set Bill C-5 in context. I will talk about Canadian official development assistance. I will reiterate the Bloc Quebecois position as stated by my colleague and, finally, I will describe a certain number of concerns.
Out of a world population of five billion, four billion people are living in developing countries, one billion of whom in total deprivation.
The United Nations has reported that the gap between have nations and have-not nations has doubled over the past 30 years. The economic growth rate of developing countries has been dropping steadily, particularly in Africa and Latin America. In the Bruntland report, the World Commission on Environment and Development stated, and I quote: "Deteriorating terms of trade, rising debt-service obligations, stagnating flows of aid, and growing protectionism in the developed market economies caused severe external payment problems. The increased cost of foreign borrowing, at a time when exports were depressed, also helped to plunge many developing countries into debt crises. Growth was cut back and many social objectives fell by the wayside, including those having to do with employment, health, education, environment, and human settlements".
The United Nations development program authorities estimate that protectionism in industrialized countries will deprive the South of $500 billion a year in export income, or ten times more than it receives annually in development assistance. At the same time, due to structural adjustment programs imposed on them, developing countries are forced to abandon any form of tariff protection and what not.
This means there can be no sustainable development without fair and equitable reform and restructuring of international financial, trading and policy systems. Less trade protectionism on the part of industrialized countries would be a first step in a true financial reform.
Just recently, we have heard the president of the GATT general assembly warn industrialized countries against reintroducing protectionism on the basis of preserving human rights and the environment.
In that context, industrialized countries have taken steps in the seventies, with the general preferential tariff, to promote a reduction of duties for developing countries. In 1974, Canada established the GPT under the Customs Tariff Act. Since then, the tariff has been extended every ten years.
The purpose of this bill is to support the economic growth of developing countries by promoting exports from these countries to Canada through tariff reduction.
The general preferential tariff is beneficial in many other ways as well. First of all, the GPT is a unilateral tariff reduction program, and Canada remains free to change tariff preferences without breaking any commitment under the GATT agreement.
The Canadian GPT would be one of the best in the world as it would not be used to put financial or political pressure on developing countries, as is the case in other countries.
Canada also made sure that imports under the GPT caused no injury to domestic producers. That is why the GPT does not apply to all products imported from developing countries, but only to those products which do not adversely affect the competitiveness of Canadian producers. Also, safeguard measures have been developed to protect Canadian businesses affected by the importation of goods under the GPT. Two such safeguards are presently applied to rubber soles and inner tubes.
It should be pointed out that, in 1992, gross imports under the GPT yielded approximately $90 million, or 5 per cent of Canada Customs' revenues.
Bill C-5 extends the general preferential tariff for another ten years. The Bloc Quebecois supports this government bill with reservations, but we will get into that later.
Canadian development assistance has been drying up for a few years. Difficult economic conditions in Canada have often been set forth to explain or justify this drying up. Budget cuts in official development assistance have reduced contributions to the assistance program to 0.4 per cent of the Canadian GDP.
To put things in perspective, Norway spends 1.16 per cent of its GDP on international assistance, Denmark and Sweden 1.03 per cent, the Netherlands 0.86 per cent, France 0.63 per cent, and Finland 0.62 per cent. In other words, although Canada is generous in absolute terms, it is not in the lead group and it is rather far from the internationally recognized standard of 0.7 per cent.
The reality is that, in the nineties, we almost gave up any measure which could have enabled us to reach that level. More recently, the April 1993 budget restricted to 1.5 per cent, as of 1994-95, the budget increase for Canadian international assistance.
A large part of Canadian development aid is provided through bilateral assistance and it covers more than 150 countries. Projects implemented are the subject of agreements between Canada and each beneficiary country. However, Canada also looks after its own interests, since 80 per cent of goods and services targeted for this bilateral aid come from our country. Tied aid, as it is called, has the effect of considerably reducing the value of the help provided to beneficiary countries.
For all intents and purposes, bilateral aid is a disguised form of subsidy to Canadian exporters. This creates a danger in that profiteering could play havoc with the priorities of assistance programs, by giving too much importance to commercial interests.
In 1993-94, bilateral aid is distributed in this fashion: Africa and the Middle East get 45 per cent, Asia 37 per cent, and Latin America 18 per cent. It must also be noted that this form of support represents 44 per cent of total Canadian aid to developing countries.
In spite of some flaws, preferential customs tariffs are an important tool of Canadian development aid. In an increasingly global economy, foreign trade, and this is particularly true for Canada, plays a vital role in the creation and retention of jobs.
It is precisely because Canada is free to classify developing countries, from the poorest to the most developed, that the GPT could be a flexible tool to direct aid to those who need it most.
The Bloc Quebecois agrees that promoting export growth of developing countries is a very commendable objective. However, we do have some reservations.
First, a large number of those countries which benefit the most from the GPT are newly industrialized countries, especially Brazil and the dragons and tigers of South-East Asia to which the hon. member referred. Those countries can no longer be considered as genuine third world nations. Yet, they are the main beneficiaries of that tariff.
Moreover, importing certain products from these countries, such as auto parts, could adversely affect the setting up of manufacturing plants for those parts close to auto builders in Canada, to use the same example.
Also, some countries like China and Indonesia, which largely benefit from preferential tariffs, are known for repeatedly violating human rights. If the Canadian government was consistent in the implementation of its foreign policy, it would have some reservations about favouring countries which do not respect human rights, as it does in the case of its development aid policy which, as you know, is conditional upon the respect of those basic rights.
Since the general preferential tariff is designed to help the growth of developing countries without causing a prejudice to the Canadian and Quebec economies, we would be justified to ask, at this time, for a more in-depth study on countries and products benefitting from the GPT.
This leads me to the classification of developing countries into newly industrialized countries. Does the government think that the general preferential tariff program still meets its objective, which is to promote the growth of developing countries, considering that some of the beneficiary countries have already reached high growth levels? And since newly industrialized countries are entitled to this tariff, does the hon. member think it is appropriate for the national treasury to forgo millions of dollars in annual revenues which is being not collected by customs services?
How to determine which countries no longer meet the criteria used to define developing countries is a complex issue. But we have to wonder if countries like South Korea, Taiwan, and others should still be entitled to a preferential treatment concerning customs duties.
Since my colleague already mentioned it, I just want to remind the hon. members that the United States have already withdrawn the benefit of a number of preferential tariffs.
It seems that the Canadian government wants to wait a little longer before taking a stand on this issue. However, it would be important for Canada to determine its position before the 1995 meetings of the United Nations conference.
In short, the Bloc Quebecois believes that we should reflect on the possibility of linking the general preferential tariff to some criterias, such as the industrialization level of the beneficiary, the human rights situation in that country, the alignment of its foreign policy with that of Canada, compliance with established rules of public international law, such as non-violence in its international relations and peaceful resolution of conflicts in which the beneficiary is involved.
As you see, before extending the benefit of the general preferential tariff, Canada should take into account these principles which should influence our foreign policy. But Canada should also consider the restrictions of its trade policy. For example, withdrawing the benefit of the general preferential tariff from any product originating in China could jeopardize trade relations with this country or other countries. However, since development assistance should be provided to the people who most need it, the list of beneficiaries of the general preferential tariff should be revised.
The Bloc Quebecois believes that such decisions should flow from consultations and discussions within the Canadian Parliamentary system, including the Standing Committee on External Affairs and International Trade.
Unfortunately, under the Customs Tariff Act, the government is under no obligation to undertake such consultations. On the contrary, the government may, on the recommendation of the Minister of Finance, by order in council, amend the list of beneficiaries to the general preferential tariff without any consultation. We, in the Bloc Quebecois, think it is unfortunate that the House of Commons does not have any say in the matter.
The Bloc Quebecois urges the government to undertake consultations with its Parliamentary partners, at least for the review of its position on the general preferential treatment before the 1995 meetings of the United Nations Commission on Trade and Development, as well as discussions on its general policy concerning the classification of countries.
