Mr. Speaker, I am pleased to speak today to this motion. We did have a debate at the trade committee on the issue of chapter 11. We heard from some witnesses on the issue of chapter 11 and some of the potential chapter 11 cases involving Newfoundland and Labrador and Quebec.
A provincial government has taken a position on a regulatory matter in terms of pesticides within its jurisdiction. We stand, and I believe and I certainly hope the government stands, in support of that provincial government on this issue.
We had a fairly short session at committee on chapter 11 but we need a longer study. I remember that day I spoke at committee urging it to at some point have a longer study of chapter 11.
The principle behind chapter 11 is that of national treatment, which is a reasonable principle. In fact, it is core to trade agreements. It is essential that we have some level of protection of national treatment to ensure that Canadian companies, which are investing abroad in other countries with which we have trade agreements, are not discriminated against by those governments. That could be in areas of procurement in some cases or it could be in areas of regulations in other cases.
We know now and we see what is going on in the U.S. around buy American and some of these other provisions what a pernicious impact protectionist measures can have on Canada and on Canadian companies. We clearly need provisions to protect Canadian companies, workers, investors and pensioners whose retirement savings and income depend on their investments being protected for Canadian companies doing business abroad.
I think most Canadians and most members of the House would agree that national treatment is a reasonable principle. We need to ensure that Canadian investors, companies and workers' interests are protected in the countries with which we enter trade agreements.
At the same time, for us to protect our workers, our companies and our investors in those countries, we need to ensure we provide equal levels of protection to their companies doing business in Canada. So there is a compromise there and a trade-off but it is a principle that we believe in.
The question about chapter 11 and the investor state provisions specifically within chapter 11 are important questions. Whether or not chapter 11 in its design is working in Canada's interests is also an important one. What are the other approaches to national treatment that other countries in their trade agreements are pursuing? Those are important questions that we need to study.
I have talked to some of the people involved in the negotiation of NAFTA, people who believe very strongly in NAFTA and strongly believe in the principles of free trade but who also believe that there are issues around chapter 11.
How do we deal with those in NAFTA? How do we reopen a discussion on chapter 11 and should we reopen NAFTA at a time of deepening and strengthening American protectionism? Those are important questions for us to ask in the House. Even with whatever flaws that may exist in chapter 11, I think most Canadians would agree that the NAFTA and the FTA have, by and large, benefited Canadians, have created jobs for Canadians and have increased competitiveness for Canadians.
The question is how we deal with investor state provisions, with the principle of national treatment and with chapter 11 of NAFTA.
It is an important study, not just in terms of our current agreements, our North American Free Trade Agreement, but in terms of future trade agreements and how we deal with the principle of national treatment. It is distinct from whether or not we open up chapter 11, potentially opening up NAFTA at a time when we see heightened American protectionism. It is quite possible that there are areas for future trade agreements where we may consider a different approach to national treatment and that there are ways to better protect Canadian interests and strengthen our capacity to defend the right of Canadian sub-national or national governments to put in place policies, environmental or otherwise, to protect our citizens and at the same time enter into and expand our trade relationships. I think those are important discussions.
We have not had, in my opinion, as much success as we should have had on some of these challenges. Is that because of flaws within chapter 11, or is that because the federal government has not provided enough resources or support to the challengers? Are we not providing enough support for chapter 11 challenges from within Canada? I have heard the case made by trade experts that the Department of Justice is not provided with enough resources, that it does not provide enough support to sub-national governments when they issue a challenge under chapter 11. That is important. It is one of the reasons we are seeing these disproportionate failures. We are not doing a good job at the federal level to help sub-national governments defend their interests and their capacity to protect their citizens.
In some cases legislation has been crafted that has not been chapter 11 compliant, that has been sloppy in its design. It was designed for a pre-NAFTA era, but then it failed when exposed to post-NAFTA rigour under chapter 11. We need to make sure that when we draft legislation, both at the federal and the sub-national government level, whether municipal or provincial, that the federal Department of Justice and the department of international trade work with other departments on the federal side that may be issuing a challenge, and/or they work with sub-national governments to ensure they are in fact compliant with NAFTA and chapter 11, and that it is tenable under NAFTA.
The whole approach of how we deal with this has to be looked at from the beginning. If a provincial or municipal level government intends to introduce a piece of legislation, say on the environment, we should make certain that those governments have access to federal expertise in the Department of Justice and the department of international trade to ensure they design the legislation in such a way that it can withstand NAFTA or chapter 11 challenges. The design of these initiatives is critically important.
Second, if the legislation has in fact been implemented in a way that ought to be chapter 11 resilient, then we should offer the provincial or municipal governments full support from the federal lawyers in the Department of Justice and the department of international trade.
Number one, are we doing our utmost at the federal level to support other levels of government in ensuring that they design legislation and regulations that are consistent with and tenable under chapter 11? Second, are we helping them enough, when there is a challenge, to succeed in fighting those challenges?
I would say that on both counts the federal government is not doing enough. We need to reach out. This is a federal government that has simply not engaged provincial governments effectively on some of these matters. For instance, with respect to the whole buy American issue, after seven months of buy American provisions, attacking Canadian jobs and exports at a time when we are seeing unprecedented job losses in Canada, the only leadership we have seen has come from provincial level governments in Canada.
I commend the provincial governments for filling the vacuum, rising to the occasion and taking leadership on that file. However, the fact is that it takes federal leadership and cooperation. I am certain that many of my colleagues opposite would agree that the Conservative Prime Minister has not built strong relations with provincial premiers and governments.
Frankly, at a time of global financial crisis and rising American and international protectionism, it has never been more important that we have a prime minister and a government that reaches out, strategizes, cooperates and collaborates with provincial and municipal governments. I think part of the issue is that the federal Conservative government does not understand the importance of close collaboration with provincial governments on these issues.
I alluded to the second issue earlier. We have to ask how we deal with the current chapter 11 provisions in NAFTA. I believe that the international trade committee should study chapter 11 thoroughly. I think we should put a significant amount of time into the study of chapter 11 so that we understand it.
The question that comes after is that when we have a more granular understanding of what we might do differently if we were negotiating a NAFTA again, would it then be in Canada's national interest to open up the NAFTA during protectionist times? I would assert that the bar had better be pretty high in terms of the gains to us if we were to propose to open up NAFTA during these times, because otherwise the risk would be very significant.
The third question is how we can better inform ourselves and our negotiators for future trade agreements. Clearly, national treatment is central to any trade agreement. We simply have to ensure that our companies are protected against discriminatory practices by foreign governments. That is important for Canadian workers, investors and union members whose retirements savings depend on Canadian equities that are invested in companies around the world.
We have to make sure that Canadian investments are protected. The only way to ensure that is to provide reciprocal protection to those investments. I do not think that anybody who understands the importance of trade would disagree with the principal of national treatment. The question is what the best vehicle and the best approaches are.
I would propose that when we have this study at committee that we bring in some of the people who were involved in the NAFTA discussions. We should bring in people like Gordon Ritchie, who was involved in the NAFTA discussions and who may have some views as to what could be done differently in terms of investor protection, investor state provisions and national treatment for other trade agreements going forward.
I think we should have a discussion at the trade committee about other issues as well, not just about investor state provisions. We should have a good discussion on the whole issue of chapter treatment versus side agreements on issues like the environment and labour.
It is not accurate to say that side agreements are meaningless, because they are not. In fact they can be very substantive and may have certain advantages over full chapter treatment, depending on what is written in the full chapter agreement and what is written in the labour and side agreements.
However, the point is whether we should be looking at what some other countries are doing. Some other countries are moving toward a full chapter treatment approach to some of those issues. Is that more substantive than side agreements with teeth and meaningful provisions to ensure enforcement?
Some trade experts I have talked with have argued that it depends on the specific agreement; it depends on the side agreements and the full chapter treatment. These are the kinds of issues we should have at committee. However, it is only possible if we are able to put our ideological weapons down.
When asked, there are people who simply say that they are pro free trade, because they are from the ideological right. And there are people who say that they are against free trade, because they are on the ideological left.
I think that the 20th century belonged to rigid ideologues and that in the 21st century the issues are far more complex, the challenges and opportunities facing Canada are greater, more frightening in some ways but more exciting in some ways, and it really takes an important debate that is less ideological than some of the ones we have had in this place in the past. That means we have to be prepared to look at these issues, not in terms of being a New Democrat and thus opposed to free trade agreements or being a Conservative and thus in favour of free trade agreements, but in a more mature sophisticated way, to actually study these issues and ensure we believe in trade.
But how can we strengthen our trade agreements to ensure we build a better global governance around issues of human rights? How can we strengthen our trade agreements so that we build stronger global and multilateral governance on issues of the environment? How can we ensure national treatment and protection of our Canadian companies as they invest and diversify their interests geographically outside the U.S.? How can we ensure they are protected and at the same time protect the rights of Canadian governments, national and sub-national, to implement legislation to protect its citizens?
Those are all important questions, and they are the types of questions that I hope the trade committee and this House could discuss and debate in a more open-minded, constructive way and less ideological and divisive way, because these are important issues for the future of the country.
Canada has the first trade deficit it has had in 30 years. As a small, open economy that depends on external trade for our standard of living and quality of life, we are now buying more than we are selling. That is ominous.
These trade agreements are important. There is a need to diversify our trade relationships outside of the U.S., outside of North America. There is a need to deepen our trade relationships with the EU, with India and China. China is growing by over 8% this year, and it is projected to grow by 8.5% next year, with massive investments in infrastructure, high-speed rail, clean technology, environmental sciences, clean energy and commodities, all of which are areas where Canada can lead and excel. We need to deepen our relationships with China.
The current Prime Minister has shown contempt for China and neglect for India.
We, the Liberal Party, believe in deepening our trade relationships with places like China and India, diversifying our trade relationships and building on multiculturalism, not just as a social policy, but as a successful economic strategy to build natural bridges in the fastest growing economies in the world.
These are important debates. We are committed, in the Liberal Party, to dealing with these constructively, to defend Canadian jobs and interests right here and to extend our influence on the world.
