Ted Menzies

[May 28th, 2007]

Mr. Speaker, let me begin by thanking the hon. member for his interest in the government's efforts to expand export opportunities for Canadian businesses in South Korea through the negotiation of a free trade agreement. The government shares the hon. member's interests.

Indeed, some within the automotive industry are calling on the government to ensure that Canada's ongoing negotiations with Korea result in improved access to Korea's automotive market through the elimination of tariff and non-tariff barriers. This is why we have consulted with all interested stakeholders in Canada, including automotive manufacturers and workers, since the negotiations with Korea were first launched. This has included both one on one meetings with stakeholders, as well as regular meetings of a dedicated automotive consultative group that meets in advance of each round of negotiations. These consultations date back almost two years and will continue as long as the negotiations proceed.

I can therefore assure the hon. member that Canada's negotiators are doing their utmost to effectively address the concerns and interests of Canadian stakeholders.

The hon. member is surely well aware of the importance that trade plays in Canada's economy, contributing to over 40% of Canada's gross domestic product.

In “Advantage Canada”, the government's plan to strengthen Canada's economy and make it more competitive, we made clear our determination to pursue bilateral agreements with targeted countries. Canada is unfortunately lagging significantly behind its key competitors, not having concluded a single FTA since 2001. Since then, Canada's main competitors have been aggressively concluding agreements.

The early April conclusion by the United States of an FTA with Korea risks putting Canadian businesses at an unequal footing unless Canada can negotiate a comparable agreement to level the playing field.

Korea also has FTAs with trading partners such as Singapore, Chile and EFTA and ASEAN countries, and will soon begin negotiations with the EU. It is therefore important for Canada to ensure that Canadian exporters and investors have competitive terms of access to Korea's markets.

South Korea is a valued trading partner for Canada and represents a gateway to northeast Asia, a region of strategic importance to global value chains. In 2006 Korea was Canada's seventh largest trading partner, with Canadian exports totalling a record $3.3 billion.

A free trade agreement with Korea would offer the possibility of enhanced market access for a wide range of Canadian goods, services and investment opportunities, including due to Korea's relatively high average tariff.

For example, we expect gains in agriculture, particularly in beef, pork, canola and barley, fish, forestry, medical devices, pharmaceuticals and financial and professional services. In this regard, the government has received broad based support from stakeholders across Canada for FTA negotiations with Korea.

The government is aware of the concerns that have been expressed by the Canadian auto industry with respect to the closed nature of Korea's automotive market. FTA negotiations with Korea provide an excellent opportunity to address industry concerns regarding tariff and non-tariff barriers in Korea.

[May 15th, 2007]

Mr. Speaker, with all due respect to the hon. member, it is fine to stand in this House and suggest that if the Liberals had had one more month, they would have brought together an agreement that was, in the member's words, superior to the one we brought forward.

This may sound repetitive, and I am sure members have heard it in this House before, but they had 13 years to bring forward an agreement.

The softwood lumber dispute had gone on for 20 years. This new government brought it to an end. This new government recognized that we were not getting anywhere with litigation. The industries were suffering. The communities were suffering. Litigation was not of benefit to either the workers in the industry or Canadian industries themselves. We put that to bed. We brought together a softwood lumber agreement that is working.

[May 15th, 2007]

Mr. Speaker, I am pleased to have this opportunity to respond to the question asked by the hon. member for Algoma—Manitoulin—Kapuskasing concerning the softwood lumber agreement and the Canadian forest industry.

I think at the outset it is important to remind my colleague of the wide ranging benefits of the agreement. In 2006 Canada and the United States cleared one of the most significant hurdles this industry has ever seen, the softwood lumber dispute.

Key lumber producing provinces like British Columbia, Ontario and Quebec, as well as a clear majority of industry players signalled their strong support for the agreement.

Together with the provinces and industry, we worked hard to address a broad range of concerns. The final agreement bears that out. It revoked the U.S. duty orders and terminates all litigation.

It provides at least seven years of stability. It includes a number of initiatives to make North America's lumber industry more competitive over the long term. It returned over $5 billion in duty deposit refunds to Canadian softwood lumber exporters and it safeguards the abilities of the provinces to manage their forests.

As I have said before, the softwood lumber agreement was, and is, the single best way forward for this industry and the hundreds of thousands of Canadians who rely on it.

However, while the softwood lumber agreement is good for Canada, our work certainly did not end on October 12, the day that the agreement entered into force. The enabling legislation was passed on December 14, 2006, and we are now moving forward on the business of implementation.

In fact, the inaugural meeting of the softwood lumber committee took place in Washington, D.C. on February 22-23 of this year. The meeting was an opportunity for representatives from Canada and the United States to begin addressing longer term policy issues of importance to Canada such as establishing a process for determining regional exemptions from export measures and possible exclusions for softwood lumber products made from logs harvested from private lands.

The United States indicated prior to the meeting that it also intended to raise some questions about certain programs implemented by the Ontario and Quebec governments. As my colleague, the hon. Minister of International Trade stated, this was a very cordial first meeting with a very positive, constructive dialogue taking place.

As we all know, following the softwood lumber committee meeting, the United States requested consultations under the agreement on a number of provincial programs as well as federal programs and Canada's interpretation of a provision of the agreement. Consultations involve a more formal exchange of information and are designed to help resolve differences through a better understanding of the measures at issue.

The consultations occurred in Ottawa on April 19 of this year between Canadian and American federal officials. The consultations were constructive and positive providing a useful opportunity to clarify issues and concerns identified by the United States. American officials are now reviewing the information that Canada provided and will contact us if they have any further questions or concerns.

Both sides have an interest in ensuring that the agreement operates smoothly. Disagreements are inevitable in administering and implementing such a complex agreement. It was for this reason that we included in the agreement various institutional provisions that allow for a full exchange of views and to facilitate the resolution of differences in points of view.

We should never forget that we are one another's most important commercial partners.

[Settlement of International Investment Disputes Act, May 15th, 2007]

Mr. Speaker, I travelled with Mr. d'Aquino to India a few weeks ago and that comment was never made to me. Mr. d'Aquino and the other members of the Council of Chief Executives said what a wonderful idea it was for this new government to be actually looking at trade opportunities for Canadian businesses. He was very supportive of the fact that we introduced them to some companies in India that are looking for partners and investors. It was a great opportunity.

[Settlement of International Investment Disputes Act, May 15th, 2007]

Mr. Speaker, I guess there was a question in there. I do appreciate the fact that the member recognizes how important it is to our investor companies to have a piece of legislation like this in place.

This government has had to make some difficult decisions mainly because no difficult decisions were made in the previous 13 years, and I think we all recognize that. When a country has been left behind, it is always a challenge for it to catch up.

I might share with the hon. member some of the messages that we have been receiving at our trade committee from the business community in this country. It told us not to bring up the issue of income trusts, but the fact that it felt it had been abandoned.

Businesses are glad that they have a government now that recognizes the fact that they need an environment in which they are able to expand and in which they are able to compete on a level playing field with companies around the world. It is important that we provide a safe investment environment not only here in Canada for companies that want to invest here but for our companies that wish to grow and become investors in the world.

[Settlement of International Investment Disputes Act, May 15th, 2007]

Mr. Speaker, it is a pleasure to speak to Bill C-53, An Act to implement the Convention on the Settlement of Investment Disputes between States and Nationals of Other States.

The convention is also known as the ICSID Convention. We are renowned in the House for using acronyms but it is far simpler to use that when we are referring to the International Centre for the Settlement of Investment Disputes established by the convention.

I was first made aware of ICSID by a constituent of mine, a Mr. David Haigh, an internationally renowned dispute settlement arbitrator and a lawyer with Burnet, Duckworth and Palmer in Calgary, who has long advocated for Canada to bring ICSID into force. This gentlemen brought this to my attention back in my dark days when I was in opposition. We tried at that time to bring it forward at that time but were unsuccessful. However, now that we have a new government in this country we are actually able to get on with creating a business environment that is friendly to businesses.

I know that David, along with many Canadian investors, will be pleased that the government is moving forward with Bill C-53, and it is my pleasure to take part in the debate today.

Before a country can ratify the ICSID Convention, it needs to pass legislation providing for ICSID awards to be enforceable in its courts. For Canada, this means that it must pass and bring the act into force. In addition, any province or territory that is designated a constituent subdivision must bring similar legislation into force.

I would first like to discuss some of the pressing reasons for hastening Canada's ratification of the convention. I hesitate to use “hasten” because, as my hon. colleague just raised, we have been working on this since 1966.

There are three reasons why Canada should become a party to the ICSID Convention. It would provide additional protection to Canadian investors abroad by allowing them to have recourse to ICSID arbitration in their contracts with foreign states. It would also allow investors of Canada and foreign investors in Canada to bring investment claims under ICSID arbitral rules where such clauses are contained in our foreign investment protection agreements and free trade agreements. Also, it would contribute to reinforcing Canada's image as an investment friendly country.

I will tell the House more about the other advantages. When Canada ratifies the ICSID Convention, Canadian businesses investing abroad would finally be afforded the same level of protection as their competitors. There are numerous disadvantages associated with the absence of Canada from this convention. Canadian businesses are hurt. Even though Canadian investment abroad continues to rise, the ability of Canadian businesses to arbitrate investor state disputes is hurt by the fact that they must arbitrate without the infrastructure that ICSID would and could afford them.

Investors prefer ICSID to other arbitration mechanisms for many reasons, such as: the ICSID regime is an extremely efficient mechanism for the resolution of investment disputes; it provides better guarantees regarding enforcement of awards and more limited local court intervention; and ICSID's roster of arbitrators gives investors access to well-qualified arbitrators at ICSID at controlled rates and with extensive experience in international investment arbitration.

Since Canada has not ratified ICSID Convention, we are not granted a voice on ICSID's administrative council and cannot vote on changes to the ICSID arbitral rules.

I will turn now to the second advantage of ICSID: improving the dispute settlement process available under our treaties.

NAFTA and Canada's foreign investment protection agreements, or FIPAs, provide for ICSID dispute settlement as one of several options. However, up to now this option could not be used. Ratification of ICSID will provide investors with the option to use ICSID to resolve certain investor state disputes.

Chapter 11 of NAFTA provides that ICSID arbitrations may be used in cases where both the state of the complaining investor and the state complained against are party to ICSID. The U.S. is party to ICSID but not Mexico.

In the case of FIPA, most of our FIPA partners are already party to the ICSID convention. Consequently, when Canada ratifies the ICSID convention, arbitration using ICSID will become available under those agreements.

My final point is a simple one. Canada's absence from ICSID does little to augment our international image as a country which is open to free trade and foreign investment.

Already, as earlier mentioned, 143 countries are party to ICSID. It is time for Canada as well to become a party to ICSID. I will now explain why ratification is increasingly urgent.

First, we do not know when an investment dispute might arise in which Canadian membership in ICSID might be an important factor in preserving a Canadian investor's rights. Periodically, and again this year, we have been approached by investors who could have benefited significantly if Canada had already ratified the convention.

Second, some states that have ratified ICSID restrict enforcement of investor state arbitral awards unless such awards are made by an ICSID tribunal. It is difficult to persuade such a state to modify this practice when a solution is as simple as Canadian ratification of ICSID. Yet, until there is a solution, Canadian investors lack the protection provided by the availability of effective investor state dispute settlement mechanisms.

The Canadian business and legal communities support Canada's ratification of the ICSID convention.

The provinces and territories support ICSID. The convention allows Canada to designate provinces or territories as constituent subdivisions that will also be able to use the ICSID arbitration for disputes with international investors.

The Chamber of Commerce passed a policy resolution unanimously. Over 200 local chambers of commerce from coast to coast, at their AGM in September of 2006, passed a resolution which calls on the Government of Canada to ratify this convention.

I urge the House to listen to the call of Canada's investors, legal community and constituents like Mr. Haigh, and give expedient consideration to the bill in the interests of Canada's continuing international stature and healthy economy.

[International Trade, May 11th, 2007]

Mr. Speaker, last week the Minister of International Trade presented a clear vision of Canada's trade agenda for the Americas. His message was unambiguous. The Americas are a key priority. To that end, we have already started work with the U.S. and Mexico to further strengthen our NAFTA partnership.

Last year Canada signed a foreign investment protection and promotion agreement with Peru. This is the first such agreement that Canada has signed in eight long years. Negotiation of bilateral trade agreements with Caribbean and Latin American countries is another key part of our plan.

We aim to build--

[International Cooperation, May 11th, 2007]

Mr. Speaker, I would believe that everyone in this House would recognize that in budget 2007 we reaffirmed this government's commitment to double overseas official development assistance. We added $900 million in that budget for the next two years. I do not think that is diminishing. That is increasing.

[Softwood Lumber, May 11th, 2007]

Mr. Speaker, speaking of drivel, I think we have heard quite a bit of it. That is probably why the hon. Minister of International Trade left that party and came over here, because he knew that we would speak the truth and that we would stand up for the forestry workers, and that is what we did.

We put an agreement in place that actually provides security for this industry. We have some rough road ahead, but we are in the negotiation process. We think we are right, and we are going to stand up and defend the industry.

[Softwood Lumber, May 11th, 2007]

Mr. Speaker, the quick answer to that one would be no, absolutely not.

It was the current minister who established the softwood lumber agreement that the Liberals could not establish in all of their 13 years. We had 20 years of litigation and 20 years during which the Liberals could have gotten this done. It was the current minister who has put this in place and has provided an environment to discuss this.