SINT Committee Meeting

SUB-COMMITTEE ON INTERNATIONAL TRADE, TRADE DISPUTES AND INVESTMENT OF THE STANDING COMMITTEE ON FOREIGN AFFAIRS AND INTERNATIONAL TRADE

SOUS-COMITÉ DU COMMERCE, DES DIFFÉRENDS COMMERCIAUX ET DES INVESTISSEMENTS INTERNATIONAUX DU COMITÉ PERMANENT DES AFFAIRES ÉTRANGÈRES ET DU COMMERCE INTERNATIONAL

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 13, 1999

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[Translation]

The Acting Chairman (Ms. Raymonde Folco (Laval West, Lib.)): Good afternoon, ladies and gentlemen. I think that we're the only ladies here this afternoon. It is my pleasure to open this meeting of the Sub-Committee on International Trade, Trade disputes and Investment of the Standing Committee on Foreign Affairs and International Trade.

As is stated on our agenda, today, April 13 at 3:30 PM, we will hear from representatives of the Fraser Institute and the Canadian Labour Congress. Pursuant to Standing Order 108(2), we will examine Canada's priority interests in the FTAA process.

We are still waiting for one or two documents, but I have decided to start now since all the witnesses are already present. We will receive the documents in a little while.

I move,

[English]

Mr. Lippert, that you begin with a 10-minute presentation, after which the members of the committee will have some questions to address to you. Then we'll go on with the Canadian Labour Congress; Mr. Martin will present, and we'll follow through with the questions, if that's agreeable.

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Mr. Lippert, you can start.

Mr. Owen Lippert (Director, Law and Markets Project, Fraser Institute): Thank you for inviting me to appear before this committee.

To say a quick word about the Fraser Institute itself, we are a registered charity involved in educational work, and this year we celebrate our 25th anniversary of being in the business of what we call retailing ideas.

One of the areas the Fraser Institute has been very much involved with over the years has been the ideas of free trade. Indeed, if you ever come to Vancouver, we'll present you with a tie that has Adam Smith on it. Adam Smith of course, 200 years ago, was the one who put forward the ideas of free trade, which still to this day enjoy a remarkable currency, certainly in the economic profession.

That said, negotiating free trade agreements is the political equivalent of a trip to the dentist. It takes a great deal of persuasion to get any country to begin such a process. I think most of us here will remember the debates in 1988. Indeed, as a personal aside, I participated in those while running for office—unsuccessfully, I might add—against Dave Barrett, who you probably know, and who is truly a great Canadian and great fun to debate.

Mr. Dick Martin (Secretary Treasurer, Canadian Labour Congress; President, Inter-American Regional Organization of Workers): You weren't running for the NDP, obviously.

Voices: Oh, oh!

Mr. Owen Lippert: No.

In more recent years, I have been following the free trade area of the Americas process very closely and have actually come to the conclusion that a stronger case needs to be made for the free trade area of the Americas, lest we have a repeat of the recent debacle surrounding the multilateral agreement on investment.

The signs of misinformation and confusion are already present. I attended the Business Forum sessions in both Belo Horizonte, Brazil and San José. I specifically participated in the working group on intellectual property and noticed a great deal of resistance to free trade. And in conversations with others there who went to many of the other workshops on services, government procurement—there are nine of them all together—there was the same resistance.

The FTAA debate, at least in terms of the hemisphere, has mirrored the ongoing north-south discussion on trade liberalization. Indeed that same debate takes place here within Canada between those, such as the Fraser Institute, who try to understand the dynamic effects of free trade and the working of comparative advantages, and those who worry about the changes in both wages and industrial structure that are purported to accompany free trade.

The MAI debate shows how effective arguments against free trade can be in a political climate where free trade does not have many supporters. Indeed that's a real problem, because so often efforts to achieve free trade are against a background of a costly web of subsidies and protections for politically favoured industries, and free trade seeks to remove such privileges.

In order to advance the free trade area of the Americas, there needs to be, in Canada and throughout the hemisphere, a far more clear and coherent economic explanation as to why free trade and investment rules are good policies in the first place. I'll get back to investment rules, because that is one of the key features of the free trade area of the Americas and one where Canada has a particularly important role to play.

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Looking at the FTAA, many aspects of it are becoming non-controversial, such as tariff reductions, greater transparency, and less paperwork. But one of the areas for potential conflict, and the one I'd like to address, is that of the enforcement mechanisms.

The enforcement mechanisms are a bit of a conundrum, because there's a huge diversity of institutional capacity in the hemisphere as to the quality of their legal systems, the quality of their trade laws, and the training of personnel necessary to do that. This is one area where Canada is making some strides in trying to provide “capacity-building exercises”, particularly for the Caribbean countries, which, as smaller countries, don't have the same resources.

In the enforcement mechanisms, one can employ a variety of methods. Within MERCOSUR, which is the trade area within Latin America, they have a very political dispute resolution mechanism, where issues go up the ladder and eventually it's done basically president to president or something like that. There is also the WTO model, which is using panels, and indeed Canada is becoming more familiar with that as we continue to lose those panels. And there is also the NAFTA model, which I think is really where the FTAA will go.

With the NAFTA model, essentially you have three-person panels that decide an issue, and there's a binding nature to those panel decisions. The NAFTA model is somewhat legalistic, but I would argue that it would be better to start with that and then try to assist various countries to upgrade their capacities in order to deal with that.

There is of course a distinct advantage to Canada by using a NAFTA-style enforcement mechanism, in that we helped design it, certainly Canadian trade lawyers are becoming familiar with it, and our foreign affairs department knows it inside and out.

There are two complications with the NAFTA model in terms of using it in the FTAA, referring back to the investment protections. I'd like to read you a quote from Allen Hertz, who was the NAFTA negotiator in this area of investment protections. He writes:

As for NAFTA, none of its multiple personalities is more important than its character as a powerful investment protection instrument.

What the chapter on investment protection does, and how it's been interpreted, is that disputes in very many areas.... I cite that of intellectual property protection, but it could also be in services, government procurement, standards, and a number of topics that could fall under it. The chapter provides companies with the ability to pursue actions against governments when they fail to uphold their agreements, and in the case of a ruling against a government, that compensation be paid. This is the issue that came up in the Ethyl case and now in the S.D. Myers case.

While there's been a lot of sensationalism about that mechanism, it actually is a very strong means to make trade law less of a political issue, less of a government issue per se, and push it out to the various companies and individuals who are trading, in order that they bear the brunt of resolving their disputes through some other mechanism. It's in that way that the FTAA could provide a wonderful model for of course the WTO talks coming up, but also for the resolution of a whole number of issues.

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In that regard, just to deviate a little bit from my text here, Michael Hart of the Carleton Centre for Trade Policy and Law makes the point about the free trade area of the Americas that its value will probably not be in the completion of a treaty—though I would hope he'd be wrong in that; I hope there is a treaty—but in that it provides a tremendous opportuntiy for countries with emerging economies, primarily Argentina and Brazil, to upgrade their trade negotiation skills and move forward.

In this, Canada has an opportunity, if not an obligation, to assist those countries, not necessarily in holding seminars and sending out officials so that may be a possibility, but in taking a principled stand within the free trade area of the Americas and saying the reason we're engaged in this is not to get into all sorts of bureaucratic pettifogging, but to stand up for the principles of free trade and extending those through, for instance, investment protections and other workable means.

I have something on the non-violation complaint in here, but in hindsight, it's so boring that even I lose myself. You can refer to that.

Just to end, one of the interesting things about the FTAA is that what we are really negotiating here is our own domestic regulatory regime. There are all sorts of accusations that this is the end of our national sovereignty. Well, it's not. It's negotiating ourselves into restraining ourselves from doing the economically counterproductive things that have, frankly, pockmarked the Canadian industrial scene: subsidies, protections, and endless, to use the technical word, jiggery-pokery that provides little benefits to identified groups.

Canada has reached a maturity, certainly since the free trade agreement with the United States, to be the boy scout of trade—to set forward a clear understanding of trade and free trade and let that sit there as an example. Certainly we proved we could do that and could act in, for instance, Bill C-91, which in 1993 upgraded our intellectual property laws.

To end then, even though there are all these complexities in international trade and negotiation and in the FTAA, they really boil down to very simple propositions. As one of the founders of the Fraser Institute said, the hard part of simplicity is recognizing it when you see it.

At any rate, Canada should make the FTAA a priority. Even though that may involve some political difficulties, our leadership in the hemisphere and our leadership worldwide in this area will be acknowledged, and we will be even more respected for taking the tough decisions than for simply trying to fight at the margins on all sorts of little things that Canada has grown out of, and in that I would include magazines.

If we don't do it, who will? Canada has a great deal to gain. If I have any hope for this committee, it's that you would transmit to the officials that indeed there is a tremendous political and public support for free trade.

The Acting Chairman (Ms. Raymonde Folco): Thank you very much, Mr. Lippert.

Considering the small number of people present here, I would suggest we go around once so that everyone gets a question, and then we'll go on to Mr. Martin and go around once again. Then there will be a general questioning if you like.

Mr. Penson.

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Mr. Charlie Penson (Peace River, Ref.): Madam Chair, that's certainly one method of doing it. I usually find that at these functions, if both speakers have a chance to make their presentations, there's a little more interaction. Then when we have a chance to ask questions, we can ask them of both of them. So another option is to have Mr. Martin proceed.

The Acting Chairman (Ms. Raymonde Folco): Would everyone agree to that way of doing it?

Mr. Martin.

Mr. Pat Martin (Winnipeg Centre, NDP): Madam Chair, I disagree. For one thing, we have votes today; the bells will ring at 5.15. I'm concerned that we won't have an adequate amount of time.

Given the two very polarized positions we're about to hear, I believe it's necessary that we deal with one, finish with it, and move on to the next, even if that means running out of time. At least we'll have dealt with one in an adequate way.

The Acting Chairman (Ms. Raymonde Folco): Could I just remind you, before I give Monsieur Sauvageau the right to speak, that this meeting is over at 5 o'clock this afternoon in any case?

Mr. Pat Martin: Well, all the more reason, Madam Speaker.

[Translation]

The Acting Chairman (Ms. Raymonde Folco): Mr. Sauvageau.

Mr. Benoît Sauvageau (Repentigny, BQ): Since for once in my life, I shall have the right to veto something, Madam Chair, since there are three of us, I would like to support Mr. Penson's motion. If our other colleagues respect the 10-minute limit, we will have all the time we wish to ask questions.

[English]

The Acting Chairman (Ms. Raymonde Folco): Mr. Martin, I will rule in favour of doing it all together, on the understanding that at 5 o'clock, in any case, this meeting will be over, so we can get back to the vote in plenty of time.

So I'll ask Mr. Martin to make his presentation now.

Since Mr. Lippert had 20 minutes, you may have 20 minutes. That will take us to 4.10, and there will be plenty of time then for everyone to ask questions.

I'm sorry, Mr. Martin.

Go ahead, Mr. Dick Martin, please.

Mr. Dick Martin: Thank you, Madam Chairperson.

Before I proceed, I'd like to introduce my colleague, Sheila Katz, who has a senior position with the Canadian Labour Congress. She specializes in free trade, in particular in the Americas, and has done a considerable amount of research on the issue.

Also, as not only secretary treasurer of the Canadian Labour Congress but president of the Inter-American Regional Organization of Workers from Caracas, Venezuela, I am certainly very much involved in the FTAA discussions.

You have the speaking notes I am using. I'll diverge from them in some cases.

We have also completed a study on Mexico, Chile, and Brazil and the impacts of free trade labour standards and other social standards. It's probably the most concise and up-to-date material that has been researched on those particular issues, and it's available in Canada. Certainly a great deal of work has gone into it.

We in the Canadian Labour Congress not only work with other social groups in Canada—what we term civil society—but we are also working, as a labour movement, with many other groups in the hemisphere, in particular social groups concerned about women and indigenous people, environmental organizations, and of course trade union centrals throughout Latin America, the Caribbean, Central America, and the U.S.

First of all, the CLC's views on the FTAA are consistent with our critique of Canada's overall trade policy, namely WTO, NAFTA, MAI, and all the others. The question to us is not whether or not we should trade, but how to do it so that it leads to a prosperous and democratic region in which all citizens share in the benefits of economic growth and development. That's the key to the whole thing. It's not in order to maximize profits for multinational or national organizations, but how does it improve the lives of the citizens throughout the hemisphere?

Through our work with Common Frontiers and ORIT—that's the acronym for the Inter-American Regional Organization of Workers—we have monitored the corporate-driven free trade model in the Canada-U.S. Free Trade Agreement, NAFTA, and MAI, involving a restructuring of the state reflecting the strategic interests of transnational capital.

Some manifestations of the race to the bottom, or downward harmonization, that stand in stark contrast to the promises of prosperity, rising productivity, and job creation are as follows.

One, investment rules such as binding investor-to-state arbitration allow corporations to attack democratically enacted laws. We know firsthand the Ethyl Corporation case and other cases looming.

Two, there are poor jobs in all three NAFTA countries, downward pressure on wages, and reduced bargaining power of unions by threatening to move to Mexico, where the minimum wage is $3 per day, child labour and discrimination at work are widespread, and workers cannot form their own independent, non-governmental, free trade unions.

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Three, the Mexico-U.S. border is plagued by environmental degradation involving the dumping of hazardous waste. I might add that we have been involved in a number of cases, under the side agreements of NAFTA, concerning the rights of Mexican workers, and we are far from satisfied, I can tell you, with the results. Although they're incomplete, they're in the works, but from our viewpoint, they have not improved at all the condition of Mexican workers.

Four, Canadian values are changing, characterized by an increase in social and economic inequity, stubbornly high rates of unemployment, stagnant incomes and wages, the serious attack on our cherished social programs and education, and environmental degradation.

This has been a bitter lesson for workers in the Americas, who see this unbalanced process being repeated in FTAA. Contrary to the business and political elite view that everything is on track, our brief addresses the reality faced by hundreds of millions of people suffering the impacts of deregulation, privatization, and market-driven economics as the formula for economic growth. These policies have generally failed, leaving a legacy of growing social exclusion, marginalization, and economic crisis.

In the Americas, 210 million people live in poverty. Over half of the workers in Latin America are in the informal sector. That is, you are basically a non-person covered by none of the social security that may exist in the country, but in fact are out on the corner selling pencils or gum or something like that. That is a serious and growing problem.

The private sector has pushed for more flexibility in labour markets, in the name of competition, and governments attempt to reduce or eliminate worker protections and rights. For example, Chile's labour code is only slightly improved since the one put in by Augusto Pinochet.

The informal sector, precarious work, discrimination against women and minorities, and the destruction of family farms are all growing.

Although there have been some advances towards formal democracies since the military dictatorships of the 1960s and 1970s, there are still serious security concerns in a number of countries, in particular Colombia and Mexico, and I would add also Peru, amongst others.

To give you an idea, torture, extraditial executions, disappearances, and arbitrary detentions are widespread in Mexico, often perpetrated by the Mexican army, police forces, or paramilitary groups.

In March, Ecuador experienced a popular uprising, led by the trade union movement, which mobilized the masses against government-announced austerity measures and price rises in the wake of contagion from Brazil's economic meltdown.

Paraguay's Vice-President was recently assassinated. The President, who was implicated, fled the country, and the government has been restructured, but the 50-year-old inter-party rivalry still exists, and the political stability of the new government will be affected by economic instability.

Colombia is a country in civil war, where trade unionists are systematic targets of paramilitary forces. And I'm only talking about trade unionists; I'm not talking about human rights workers, teachers, and such in Colombia.

I know parliamentarians were up late last night debating Kosovo. Noam Chomsky says that according to U.S. State Department estimates, the annual level of political killing by the government and paramilitary associates in Colombia is at about the level of Kosovo. And refugee flight, primarily from their atrocities, is well over 1 million people within the country of Colombia alone. In 1998, 90 trade unionists were murdered; in 1997, 170 were murdered; and 13 have been murdered so far in the first three months of this year. And I'm only talking about trade unionists.

In Brazil, where 20% of the population owns 90% of the land, tens of thousands of marching landless peasants and protesters maintain an ongoing campaign to demand land reform. Slavery indeed still exists in some parts of Brazil.

The reason I'm giving this information to committee members is so they understand the context of the countries we are talking about trading with. There are great discrepancies, and you cannot just call them democracies, not by a long shot. They may have had elections, but sometimes that's about as far as they go, once every two, three, or four years.

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Since the Miami summit, workers and civil society have been shut out of the government-private sector marriage. The regional labour movement has attempted to participate in the FTAA process by holding labour forums at annual FTAA trade ministers' meetings, and has proposed that a working group on labour and social issues be incorporated, with equal status to other working groups, mainly the Business Forum.

The CLC has sponsored Canadian labour and civil society delegations to events, supports the building of a multi-sectoral hemispheric social alliance, and has participated in the People's Summit of the Americas in Santiago, Chile. In fact we were one of the main pushes. Close to 1,000 people from the Americas attended it, from all parts of civil society.

With our southern neighbours, we put together a document called Alternatives for the Americas: Building a People's Hemispheric Agreement. It's available in French, English, Spanish, and Portuguese.

The labour movement's major concern is that the trade agreement include an enforceable mechanism to prevent countries from depressing wages and working conditions as a means of improving their competitive trade advantage—social dumping. This involves suppressing independent trade unions and denying workers' rights, in violation of internationally recognized norms.

The trade agreement must specify that its member states adhere to core labour rights. It must include an enforcement mechanism that involves the International Labour Organization, which all countries belong to and which business and labour participate in. It makes sense to us that the ILO be involved in these negotiations.

The trade agreement must also contain remedies for states or corporations that do not comply. That's the biggest problem with the side agreement of NAFTA under NAALC. The remedies really are not having much effect. Even though they recognize that trade union rights and a trade union environment are part of any trade matters, it is not enforceable. Side deals such as those linked to NAFTA are simply not acceptable.

The current mechanism for civil society participation in the FTAA process maintains the aforementioned bias in favour of the private sector, which is only one component of civil society. Governments should provide equal levels of access to all members of civil society in order to ensure that the debate on civil society participation is not merely a public relations exercise.

The Canadian government's commitment to its exporters and investors is clear. Now we need to see concrete evidence that all segments of civil society matter.

Madam Chairperson, we have expressed these concerns to Minister Marchi. We have continued to meet with senior people in the trade department, and this is well known to them.

We really hope the committee will impress upon the government negotiators that we, as trade unionists, and other parts of civil society have as much right to be there and accessible to trade negotiations as business. That's why we're putting forward these requests that we be treated, not in a better fashion, but in an equal fashion, to how business is being treated in these processes.

By the way, we also believe these processes should be as transparent as possible so that, quite bluntly, there is not another debacle like the MAI. We're told by different people that the days of MAI's closed doors are behind us, but we're from Missouri and want to have it proven otherwise.

Thank you.

The Acting Chairman (Ms. Raymonde Folco): Thank you very much, Mr. Martin.

The time has come for our questions.

Mr. Penson.

Mr. Charlie Penson: Thank you, Madam Chair.

Thank you to the presenters for the interesting presentations today to help us along on this process of free trade for the Americas.

Mr. Lippert started the debate by suggesting that a lot of this is an educational process. There are some small economies, especially in the Caribbean, that probably need some help in the whole area of understanding what free trade is all about and what might be the upsides and downsides.

I was at a conference in Mexico last spring where representatives of Mexico, Canada, and the United States—senators and members of Parliament—were talking about the need to do an assessment of where we're at in terms of the benefits and any problems free trade has created, after 10 years of free trade with the United States, and subsequently Mexico coming on.

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The discussion essentially centred on the idea that in order to move this process along any further, we're probably going to have to do an evaluation, and if there are benefits—and I believe there are substantial benefits—that needs to be told to our public in order to advance us. We've seen a pretty good example of it in the MAI debate, where a lot of misinformation was out there, but in any case, it was out, and people misunderstood or didn't understand the process or had some bad vibes as a result of the information they got.

So in order to advance us any further, we are going to have to talk to the Canadian public and all other areas—talk to civil society—about the upsides and downsides of this free trade.

Mr. Martin talked about being from Missouri. Well, there was a senator there from Missouri, and he told a story about touring a plant in his home riding in Missouri. He said almost all of the product manufactured in that plant went to either Canada or Mexico, and yet when he asked the workers what they thought of free trade, they were very much against it. They didn't recognize that they owed their jobs to that very agreement and to the countries that were involved in that agreement with them. I just put that out there.

The other area I would like an assessment on is this. Mr. Martin has raised the issue of labour and environment and the need to have labour included. My understanding is that that can also be used as a non-tariff barrier, and I believe that's happening right now, with the Congress of the United States not allowing, especially the agreement with Chile, to go ahead into NAFTA. Now we're seeing it also in the World Trade Organization with China's accession.

It seems to me that maybe we're not always so pure as to think we are doing this just to help people in other countries, because this is a form of protectionism as well, or it can be used as a form of protectionism.

I'd like your comments on those two areas: whether we can advance any further before some evaluation is done as to the merits, and also the area of non-tariff barriers as they pertain to those two items I've addressed.

The Acting Chairman (Ms. Raymonde Folco): Who is your question addressed to?

Mr. Charlie Penson: I'd like them both to answer, if possible, Madam Chair.

Mr. Owen Lippert: In terms of an assessment of where we stand, negotiations are going on in Miami right now. There's no formal reporting from them, so it's hard to know what's going on, but the question raises the bigger question that is much on the mind of Minister Marchi. Indeed I reviewed his testimony, I believe to this committee, a while back, and he is very concerned about the civil society aspect of it. I'll make my own special pleading that the Fraser Institute is probably as much civil society as the union movement.

The nature of these trade negotiations, as with all trade negotiations, is that there are trade-offs. At some point, there are people in a room who have to make decisions, and they are not going to have immediate public support or the chance to get that. If you try to do trade negotiations, it's bad enough doing it by committee, but by trying to do it by some kind of self-appointed plebiscite, the thing is just going to collapse under its own weight.

Is there an argument for greater openness? Yes. But greater openness doesn't mean giving a veto to those groups and individuals who feel their privileges will be stripped under a free trade agreement, because what's going to happen? They're going to veto it, and the advantages to trade will be lost.

In terms of the labour part of the question, there are some tricky issues here. Labour laws—and for that matter, it could be environmental laws or whatever—are something that countries can legitimately, to a point, alter in order to compete with other countries. This is particularly true for developing countries. They are simply not in a position to adopt the whole edifice of state-protected union movements and remain competitive. Some sectors may be competitive, but on the whole, it will depress growth, because the whole point of it is not to allow free entry of workers in and out of professions, but to try to choke that off.

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That said, there are legitimate concerns as to the right to organize. I think Mr. Martin and I may be in far more agreement here than either of us expect. There is a right to organize. Clearly in some of these countries, that right has been violated. Well, I would argue that it's been violated by governments that have injected themselves into the economy to the point that they are running the economy, and it becomes a clash of interest groups—the bureaucrats versus the labour movement—as to who's going to run the economy.

That's a very unhealthy situation. It's led to the depression in Latin America. Why Latin America is finally looking to free trade and deregulation is they've tried every mode of statist economics possible, and they've each failed, one worse than the other. That may be what Mr. Martin is going to have to deal with. The people in the country know these prescriptions for state intervention have failed.

Mr. Charlie Penson: Mr. Lippert, I want to get you back onto the basis of my question. I suggest we've reached a plateau in trade liberalization until we explain the benefits to our public, because business is behind government in this area. They don't understand that a lot of the growth in their own lives in terms of income has come from this sector, free trade for Canada and the United States, FTA. I want a reaction from you.

Mr. Owen Lippert: I agree with you. I think free trade is misunderstood. Everyone thinks free trade is just about selling more goods abroad. It's not that much more complicated, but it's not just that.

The whole reason to sell anything abroad is to buy something abroad. Why do we grow wheat? We grow wheat to buy cars and medicines and movies—all the things that go into our lives. We wouldn't grow wheat unless we were getting something.

Mr. Charlie Penson: So you agree with Mr. Martin that there has to be a benefit to the public, not just to corporations?

Mr. Owen Lippert: Yes, I agree, and in this regard, civil society, however it's defined, has a role to debate those pros and cons and to make that information available.

Mr. Charlie Penson: Okay.

The Acting Chairman (Ms. Raymonde Folco): I'd certainly like to hear Mr. Martin answer this question.

Mr. Dick Martin: Oh, you can bet.

Let me first of all try to address the non-tariff issue. Our position has been questioned to me by some Latin American governments: Aren't you engaging in some protectionism here? Well, the answer is yes, we are to some degree. We're trying to protect our members. We're trying to protect our quality of life. We're trying to protect our jobs and standard of living.

But at the same time, we are not crazy. We do agree that we have to trade. A nation the size of Canada, which has such a large production, has to sell it abroad. Otherwise we can't consume it ourselves. So we clearly understand that we are a trading nation.

Our objective is not to impose Canada's minimum wage in Mexico, Brazil, or Colombia, but rather to have it open to have free, democratic, trade union rights that are protected. The people will find their own way to establish their own wage policies, benefits, and such. It would be ludicrous for us to tell San Salvadoreans they should impose a $6-an-hour wage level in El Salvador. That doesn't make sense. It doesn't have any relationship with the economy. But we do say that if you are worker, you should have the right to form a free trade union without losing your job, going to jail, or being murdered. And that happens, as I pointed out, all too much throughout Latin America.

I use the case of Mexico. We know the Mexicans very well in terms of the trade union movements there. The official trade union movement is supported by the state, and it's part of the grand group of business, labour, and the government, all together in PRI, the Institutional Revolutionary Party, governing the state. But it is not a free, democratic trade union.

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When they do try to form a union to represent the workers in a proper way, they are not given certification. They are repressed. We have all kinds of documents about the workers being fired, going to jail, and in some cases being killed. We have complained bitterly about this under the side agreements of NAFTA, and the Mexicans, quite frankly, shrug it off.

Mr. Charlie Penson: What about the ILO, which is the international organization to address these issues?

Mr. Dick Martin: They don't have an enforcement mechanism. They can criticize, and they have. In fact a very damning document was produced last year by the ILO about the freedom to associate in Mexico.

Mr. Charlie Penson: What group would have an enforcement mechanism that would work?

Mr. Dick Martin: That's the problem. Nobody has the enforcement mechanism. That's why we're advocating that within in any trade agreements in the future, the right of labour to have free, independent trade unions and to organize and bargain be respected as much as intellectual property rights. That's an enforcement mechanism there.

I wouldn't even disagree. We'll provide you with all the information. We've done a lot of studies about what's happened under NAFTA and what is happening under other trade agreements.

What we would say is that's why we'd like to have the ILO involved in the negotiations, in order to talk about respecting labour standards that have been agreed to, on an international basis, by an awful lot of the countries. I might say that Mexico has signed more international conventions of the ILO than the United States or Canada, but they don't respect them. That's the frustration.

Mr. Charlie Penson: My understanding is that a lot of countries we're talking about and dealing with in this hemisphere are not that excited about putting those labour standards into a trade agreement. If you're suggesting that has to happen in order to allow the FTAA to go forward, what is the possibility of going forward under the scenario you just introduced?

Mr. Dick Martin: Well, I would suggest to you that if two of the largest economies of the FTAA, Canada and the United States, were to push the issue very strongly, there would be a pretty good chance of winning.

Latin American countries want an FTAA with Canada and the United States for one thing: access, primarily to the U.S. market.

Mr. Charlie Penson: That's true.

Mr. Dick Martin: That's obvious, but second access is to the Canadian market.

I would suggest if you had those, plus Brazil.... From time to time the Brazilian government has also endorsed this concept, although I wouldn't swear to you today that they'd do it, because they seem to be off and on. But if you, for example, had three of the largest economies in the hemisphere saying that, it would go a long way ahead.

The other part of it that I want to talk about very quickly is this. We are not talking about a committee of 1,000 to negotiate trade agreements. We understand how difficult that is. What we are talking about, though, is openness with what's done. That can be facilitated. Business has been in there—we know it has been in there—talking to trade negotiators. We say what's good for business is good for the rest of us, and surely we have access to that too.

As far as I know, business is not given a veto, but they can make a strong representation. We don't expect to be given a veto either, but we can make strong representation. Ultimately a trade agreement has to be between governments, not between businesses or trade organizations or trade unions.

The Acting Chairman (Ms. Raymonde Folco): Thank you, Mr. Martin.

[Translation]

Mr. Sauvageau, do you have any questions to ask the panel members?

Mr. Benoît Sauvageau: Yes, thank you, Madam Chair.

I would like to ask our two witnesses three short questions. First, the representative of the Fraser Institute expressed his concern with workers' rights. I would like to hear your opinion on the implementation of a voluntary code of conduct to export Canadian values abroad, for example, in South America.

I would then like to know whether we should formally incorporate in the Free Trade Americas Agreement the respect for fundamental rights as defined by the International Labour Organization. Should we insist that all countries who signed the FTAA commit to respecting the principles in the ILO agreement?

To support my two questions, I will refer to the example of Columbia, which Mr. Martin briefly mentioned. Although he did not cite examples, he said that the president of the EDC, Mr. Gillespie, had stated that his organization might provide loan guarantees to a Columbian company, without a voluntary code or any rules at all. He said that this company could do just about anything, including incarcerating and even killing its employees who decided to form a union, or something similar. Even the EDC does not worry about those rules. Before we continue we the FTAA, I would like to hear your views on this subject.

• 1620

Mr. Martin, the Columbian situation or similar situations exist at the present time and existed before there was a complete FTAA. Are you proposing that we withdraw from the negotiations, that we do not proceed with the FTAA or that we maintain the status quo? And if stayed at the negotiation table, what recommendations would you make? I am asking you this question because your report does not present any specific recommendations in this regard. By the way, I would like to thank you for having your brief translated into French.

As a final question, what do you think of the task force on the participation of Civil Society, which we created?

[English]

Mr. Owen Lippert: Thank you. Once again, I apologize for my presentation not being in French.

On the voluntary code of behaviour, on the surface of it, it doesn't seem that will have much effect one way or the other. There is a deeper problem in South American society in terms of respect for human rights, whether those are labour rights, rights of the person, or rights to property. And that's not to single out Latin America. Those same problems exist in many countries, and indeed in Canada as well. We do not have constitutional entrenchment of property rights, and therefore we see property rights being violated on almost a daily basis by various levels of government.

In terms of the labour issues, where I think the FTAA process can do the most for the people in Latin America is to, sure, highlight those issues, but realize that those issues are not going to be solved through trade agreements. Trade agreements are not going to solve the chronic problems of crime, hooliganism, and caudillism in Latin American society. That is going to take a....

Well, the process has begun towards more democratic societies. I would disagree with Mr. Martin that democracy is not on the ascendancy in Latin America. It's by no means perfect, but for the first time, we're seeing real hope. And with that I think will come an expectation among the populace for protection of rights, including the right to organize.

I don't think the whole labour code can be negotiated in the FTAA in any meaningful way. There could be all sorts of voluntary codes or whatever, but ultimately the countries down there, and maybe Canada as well, are either going to sign them and not obey them or not sign them at all, in which case we're no farther ahead.

I'd say one thing on the EDC. The EDC ought to be privatized. Any number of banks in this country or in other countries would gladly take over that role. Why we've given some kind of subsidy for one group of public employees to provide export loans is.... I fail to see the logic in that.

Mr. Dick Martin: Let me address your second question first, on the committee on civil society.

• 1625

To give you a very quick background, I did say in my brief that we had 1,000 people together in Santiago last spring, demanding input into the FTAA negotiations. Canada's response—and to give them credit, I think it was led by Canada—was to set up a civil society committee. How forceful they are at doing it, I can't be sure.

We do know there was opposition, in particular from Mexico, Peru, and Costa Rica, to having such a committee. That demonstrates, in our opinion, how far we have to go in terms of having them as trade partners, when they won't even open up their own societies to give them input into something that's going to affect them.

Nevertheless, they put out a notice. We call it the mailbox. You could send in a brief, if you found out about it. Something in the order of 13 briefs, I think, came from Canada; 26 from the United States; and one from Mexico. I can really see it was well advertised in Mexico for having input. It was left up to respective governments to advertise within their country that this position was open. It is now closed, and the committee must read the briefs and come to a conclusion.

We are not happy, to be blunt. We wanted a much more open process. That's what we were talking about. We wanted committees such as this to be travelling through the respective countries of the hemisphere. That has not happened. Obviously not very many people knew about it.

On the other issue, you said, “Well, these conditions exist, so would you stop the FTAA process from going forward simply because they exist already?” The answer is no. Here's an opportunity, though, a really big opportunity, to start redressing the grievances and the imbalances within the hemisphere.

We insist we should not be in a race to the bottom: the country with the lowest wages gets to export the most products, or the country with the lowest environmental standards gets to export the most products.

I might say there's all kinds of evidence that the labour standards and labour rights have gone backwards in Mexico since NAFTA was negotiated. In fact, on the books, Mexico had very good labour rights—very good. They have signed the majority of the ILO conventions, and they are not enforcing them at all. There's no evidence that they're enforcing them at all in Mexico.

The maquilas in the free trade zones have grown. About 1 million Mexican workers, primarily young women, are working in the free trade zones and are not covered by any unions or collective agreements, because it isn't possible to organize, in most instances.

So we have gone backwards. That's why we're very concerned about a future FTAA.

The Acting Chairman (Ms. Raymonde Folco): Thank you.

[Translation]

Mr. Benoît Sauvageau: Do I still have a little time?

The Acting Chairman (Ms. Raymonde Folco): Mr. Sauvageau, with your permission, I would like to go around the table so that everyone can ask a question.

Mr. Benoît Sauvageau: Agreed.

[English]

The Acting Chairman (Ms. Raymonde Folco): Mr. Martin, do you have a question?

Mr. Pat Martin: Thank you, Madam Chair. I'm very glad to be able to have an opportunity to add something to this debate.

Thank you both for the presentations.

The first comment I'd like to make is on your introduction, Mr. Lippert. When you introduced the Fraser Institute, I think you commented that you have registered charity status.

Mr. Sarkis Assadourian (Brampton Centre, Lib.): I was going to ask the same question.

Mr. Pat Martin: I've actually heard the rumour that corporations can make contributions to the Fraser Institute and get a tax deduction, and I've always found that annoying, frankly, because they're clearly a lobby group for one side of the story. So it seems to me fundamentally wrong.

The Acting Chairman (Ms. Raymonde Folco): I was counting on you, Mr. Martin, to bring that point up.

Mr. Pat Martin: I will follow that up in some other committee, I guess, because I'll be actively working to have that charitable status stripped away, if in fact it exists. It makes me furious to even think about it, frankly.

The other thing, and more to the point, Madam Speaker, is that the BCNI had a closed-door meeting, which is really the same camp Mr. Lippert is representing here, shelling for the corporations. The BCNI had a private meeting with the minister and with the cabinet, and I understand that the Canadian Labour Congress—and maybe Mr. Martin will be able to comment on this—wasn't welcome at that meeting or any other private meeting on this matter of the FTAA, even though they represent 2.4 million Canadians. I find that galling, and I'd like the people to comment on that when the time comes.

The other thing is, speaking on behalf of working people, more and more working Canadians are sensitized to this issue of liberalized trade agreements because of the recent struggle with the MAI. We've just gone through this. If nothing else, one of the quotes that really galvanized Canadians against the MAI came when the WTO had it in their camp, when they first pitched it and when the Trilateral Commission on Trade was pitching it. The chief spokesperson at that time said the MAI was necessary because there's a surplus of democracy in the world that's interfering with the free movement of investment and capital.

• 1630

Canadians were horrified—any thinking Canadian was horrified—and all of a sudden started looking at any liberalized trade agreements that didn't have the necessary protections with a great deal of hesitancy and obviously fear for working people, especially because it looked like a charter of rights for corporations. They wanted to bypass freely elected people, like the MPs here, and do whatever they wanted to do, without the nuisance of having to get approval by freely elected nation states. That horrified people.

In the same vein, people are justifiably worried about the FTAA. I can tell you, we've been talking about it a great deal, and we're very suspect when groups such as the Fraser Institute are such unabashed cheerleaders and boosters of this thing.

The latest book I read by the Fraser Institute—and I do read the Fraser Institute's literature—is by a guy named Fazil, I believe, and it's called Unions and Right-to-Work Laws. It was pushing right-to-work legislation as the only route for Canada to go. The irony of this is, at the same time that you're pushing liberalized trade agreements, you're pushing right-to-work legislation.

“Right to work”, to everybody who knows it, is a misnomer for a legislative agenda that's designed to remove unions' ability to elevate the standards of wages and working conditions of the people they represent. So you have this double-whammy of being forced to harmonize working conditions with Third World developing nations and taking away the only tool working people would have to try to maintain that standard of living in this country.

This leads me to be even more suspect of your intentions, or the Fraser Institute's intentions. It's a set-up. It's an absolute set-up, with the corporate sector applying pressure at one end to ram through the FTAA and applying pressure at the other end to dismantle the only tools working people have to maintain the standard of living they enjoy in this country. It makes me furious to think about it.

I do have some questions, though.

The Acting Chairman (Ms. Raymonde Folco): I was about to ask.

Mr. Pat Martin: I sensed that.

My concern is that if the globalization of capital is a reality, as we're being told—and as other people have said, we aren't against trade, obviously—then if one of the secondary goals should be to try to harmonize other people to our quality of life and our standard of living, how do you rationalize the move, the very deliberate move, to dismantle the only tool working people have to redistribute the wealth in this culture, by tearing that down with the right-to-work legislation? I'll ask both of you to comment on that, please.

The Acting Chairman (Ms. Raymonde Folco): Perhaps we'll ask Mr. Martin to reply first and then Mr. Lippert.

Mr. Dick Martin: On the first part, we have not had a private meeting with the cabinet about FTAA or NAFTA, for that matter. However, there have been meetings between us and other groups in civil society with Minister Marchi, and we did have meetings in Santiago with Minister Axworthy and Minister Marchi.

However, we have not been invited to meetings of the nature you talked about, such as the one between the BCNI and a lot of members of cabinet. That's why we are frustrated and outraged that, not only the Canadian Labour Congress, but that group we're working with, are on the outside trying to throw pieces of paper in and say, “Here's our opinion.” We want equal treatment.

Second of all, on the whole issue of trade union rights, you're quite correct: it varies greatly from country to country. But generally speaking—and I'm most familiar with Latin America—the trend is to suppress and oppress the trade unions to what they call the neo-liberalist globalization.

In not one country that I know of in Latin America have the labour standards gone up and improved in the last considerable amount of years—not one. Argentina used to have pretty good laws. They've had big changes in their laws that are oppressive and repressive. And of course it goes without saying that Central America has a hell of a lot to be desired, to say the least. And I did talk about Colombia and the murderous authorities there.

• 1635

I'd put a caveat. Perhaps parts of the Caribbean have had some improvement. But they're not part of NAFTA.

I don't think it's too much to ask, once again, that basic, core labour standards be put into a free trade agreement of the future, and that they be enforceable, like intellectual property rights or anything else. Then that would not be an unfair trade advantage against Canada and Canadian workers or America and American workers, or for that matter, other countries that have managed to improve their standards beyond the basic minimum floors.

In the organization I am president of, we have 43 million members in the Americas. You would think 43 million members could be given a little representation on such trade negotiations. After all, I don't know of any other organization in the whole hemisphere that has 43 million members in it and can't have a say. It's outrageous—unbelievable, when you think about.

The Acting Chairman (Ms. Raymonde Folco): Thank you.

Mr. Lippert, please.

Mr. Owen Lippert: First of all, neither I nor anyone at the Fraser Institute has had private meetings with any minister.

Mr. Pat Martin: It was BCNI, I said.

Mr. Owen Lippert: Well, that's BCNI.

Mr. Pat Martin: Quite frankly, I lumped you into the same category, and maybe that's not fair.

Mr. Owen Lippert: Well, to be precise—

Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.): What meeting was there? Well, we'll talk afterwards.

The Acting Chairman (Ms. Raymonde Folco): To avoid confrontation, perhaps, Mr. Lippert, you could answer, and I'll give one minute to Mr. Martin if he wishes to reply again, but then I'll go on to the other questions.

Mr. Owen Lippert: Just to be clear, what we're representing here today, what I'm trying to get across today, are ideas, not interests. It's the idea of free trade. It's the idea of the working of comparative advantage.

Some of the problems have come about precisely because of government auctioning off favours, whether to big companies or to big unions. It's that government auctioning off of these little tidbits that has caused the problems.

Saying it was the union movement that did the most for working people, and therefore trade agreements should entrench the union movement, is somewhat of a stretch. Closed-shop rules, membership rules, and inflexibility have on the whole not proven to be economically efficient, and there's a great deal of literature on that point. What they've done is, for the most part, caused a redistribution of income from non-union workers and consumers to privileged union members.

Given the outmoded structure of most union rules and the way our economy is going, in which the emphasis is on reducing transaction costs rather than increasing transaction costs, I don't see a convincing economic argument for entrenching those union rules.

More to the point, do you want a situation where you're saying to all these countries, “Here's your chance to find your little group of workers to be rewarded”? Indeed that is what's happened. Look at the history of Argentina. The history of Argentina has been fraught with difficulties when governments decided to make unions privileged political bodies. I'm not suggesting that's what Mr. Martin or Mr. Martin is suggesting, but it is certainly a danger, and history is fraught with examples of it.

The Acting Chairman (Ms. Raymonde Folco): Thank you, Mr. Lippert.

Mr. Martin, if you don't mind, I know you want to reply to that, but I'm going to go by and ask Mr. Speller to ask his question, and perhaps in your answer, you might manage to respond. I know you'll want to say something.

Mr. Speller.

Mr. Bob Speller: Thank you, Madam Chair.

Thank you, Mr. Martin and Mr. Lippert. Once again I've seen you this afternoon. That's twice in one day.

Mr. Owen Lippert: You're seeing more of me than you're seeing of your wife.

Mr. Bob Speller: Today, that's for sure.

I do want to correct what I think was an error by Mr. Martin—not this Mr. Martin. You two aren't related, are you?

Mr. Pat Martin: We're union brothers.

A voice: It's a conspiracy.

Voices: Oh, oh!

Mr. Bob Speller: You're not related to Paul Martin?

A voice: He's our rich uncle.

Mr. Bob Speller: I just want to correct the record from what I think Mr. Pat Martin was saying about some sort of private meeting between the BCNI and cabinet ministers, excluding all others. I think what he may be referring to is a meeting of ministers of trade from the different provinces, including New Democratic ministers of trade and our minister.

• 1640

A group was at that meeting, which included BCNI, the Alliance of Manufacturers and Exporters Canada, and Team Canada Inc. There were no other cabinet ministers there. That was one such meeting.

I know the minister has also met with you, as you said, as well as with Bob White and as many people as he can, because he has the same intention that you say in your paper, and you put it well. You say at the end:

Now we need to see concrete evidence that all segments of civil society matter.

That is important. Certainly that's something we've been trying to champion, not only in FTAA at the WTO, but also through the MAI.

Part of that process of course is the work being done by this committee and the cross-country hearings we're undertaking right now to hear from Canadians. I'm not going to suggest to you that it's an easy thing to do, to get out and hear every single Canadian on this issue. And I'm not going to suggest to you that we've done it right so far. In fact we've found flaws in the system so far, which we want to try to correct going into the next round into western Canada.

Nor do I want to suggest to you at all that this is the final consultation on this issue either, because in fact the minister has plans to consult, not only with parliamentarians again in this committee, but with NGOs and as many Canadians as possible. He's sent out letters; he's sent out releases. I know nobody reads the Canada Gazette. We all realize that. It's really our job—

The Acting Chairman (Ms. Raymonde Folco): Mr. Speller, would you ask the question?

Mr. Bob Speller: If you would let me continue, Madam Chair, it's our job to let civil society know that.

Hopefully, through your good offices and the work of the labour unions and different committees, we can get a better understanding of what Canadians really do want.

I do have a question, because I didn't read this in your report, but I know the New Democratic Party has been promoting this. I'm not sure if it's just the critic's position or the party's position, because frankly they haven't been around that much to let us know. Is it your position that we should not be at the negotiating table on the FTAA and the WTO, or do you think we need to be there at least, but that we also need to promote more of these labour and environmental issues?

Mr. Pat Martin: I have a point of order. I understand the rules of most committees say we are not to comment on the attendance—

Mr. Bob Speller: —of an individual member. If you read the Standing Orders, it says you're not to comment on an individual's—

Mr. Pat Martin: I didn't intervene, Madam Chair, when the member across was given time to question the witnesses, even though he wasn't here for the witnesses' presentations, which I found a little rude, in fact.

Mr. Bob Speller: Well, frankly, I can read the report, Mr. Martin.

The Acting Chairman (Ms. Raymonde Folco): Let me interrupt, please.

Mr. Bob Speller: If the New Democratic Party would bother showing up—

The Acting Chairman (Ms. Raymonde Folco): Excuse me. Let me interrupt.

You're right, Mr. Martin.

I would suggest that you get straight to your question, Mr. Speller, without making that comment.

Mr. Bob Speller: Thank you, Madam Chair. I think the honourable member will—

Mr. Pat Martin: Thank you for the ruling.

Mr. Bob Speller: Pardon me?

Mr. Pat Martin: I'm thanking the chair for the favourable ruling.

Mr. Bob Speller: I think if the chair had looked, she would have seen you're not to report on the fact that any honourable member is or is not in the chamber or in a committee at some time. It's perfectly within the rules to say the New Democratic Party has not been showing up to these committee meetings. In fact that's well within the rules.

The Acting Chairman (Ms. Raymonde Folco): Mr. Speller, please—

Mr. Pat Martin: You don't have to say it over and over and over again.

The Acting Chairman (Ms. Raymonde Folco): Mr. Speller—

Mr. Bob Speller: I'm wondering if Mr. Martin would respond to my question.

Mr. Dick Martin: The answer is we do think Canada should be at the table. We have never proposed that you not be at the table. There may be some point in the negotiations when you shouldn't be, but it's too early for us to predict that at this point in time.

What we are saying is that the views of labour, environmental, and social action groups should be taken into as serious consideration as the views of any business group. Evidence of that is that the Business Forum receives financial aid to conduct their business in setting up meetings, to do studies, and to have their conferences. The rest of us don't have any of that assistance. If any group in the country has the finances to do it themselves, it has to be the Business Forum, and if any group doesn't have the finances, it's the rest of us.

• 1645

So we're saying, isn't it right that you do the financing? We've requested it and have received the answer: no. That would go a long way to showing there is a critical and clear view to having the rest of society have input into the process.

Mr. Bob Speller: That's a good point, and that's why we've invited and paid for people to come to this committee. We realize that particularly some of the smaller NGOs just wouldn't have the ability to get here or have their points brought forward.

Mr. Dick Martin: No, they wouldn't. And quite bluntly, this process is something we advocated. We said before the whole process started, a travelling committee should go across the country, open to those who could not make it here, just having it in Ottawa.

The Acting Chairman (Ms. Raymonde Folco): For your information, I would like to say this committee spent a week in Quebec two weeks ago and is going now to the west. It's been to the Maritimes also. So it is making a real effort. And by “committee”, I mean all parties present in the House.

Mr. Dick Martin: Yes. We're not being critical of the committee at all. This is what we advocated, and hopefully it will produce some concrete results.

The point is it's find and dandy for us to have occasional meetings with the minister or ministers or bureaucrats, but we have to try to get everybody together for our labour and social forums, and it's all self-financing. Business gets the financing. That would go a long way at least to addressing the start of inequities.

I don't want to get into a big debate about the right to work, but I can tell you the right to work in the United States was an absolute, unequivocal disaster from the time it started. All you have to do is examine what states have right-to-work laws and what the standard of living is in those particular states: Arkansas, Mississippi, Alabama, and it goes on.

I just want to make the point that obviously the Fraser Institute and we are at totally diametrically opposed positions on it. We are not privileged people, like those represented by the Fraser Institute. I'm privileged. I'm privileged to represent workers and privileged to try to get the best deal for them in society.

All modern states have generally rejected right-to-work laws—western Europe, progressive U.S. states. Even Latin American dictatorships never proposed them, for heaven's sake.

A voice: Except Pinochet.

Mr. Dick Martin: Augusto Pinochet, right.

The Acting Chairman (Ms. Raymonde Folco): Thank you, Mr. Martin.

I'll go on to Mr. Assadourian, and then we'll go on to a second round if we have time.

Mr. Sarkis Assadourian: Thank you very much.

This is a sort of odd couple, the Fraser Institute and the labour, the left and the right, which is really in many ways a good sign.

I want to go back to the statement you made this morning, Mr. Lippert, that you're a charitable organization. My colleague raised the subject again. If the Fraser Institute is a charitable organization, the Reform Party should follow you, because basically it's the same philosophy, the same approach. I don't see why you have to be a charitable organization and come here at the expense of the corporation and a union where workers cannot come in with similar status. That's my first question. If you could clarify that point for me, I would appreciate it.

My second point is for Ms. Katz.

There's a problem on page 109 of your presentation. You say the GNP in Canada is $583 billion, and in Brazil it's $7.734 trillion?

Ms. Sheila Katz (NAFTA Coordinator, Canadian Labour Congress): No.

Mr. Sarkis Assadourian: Something is wrong there?

Ms. Sheila Katz: Yes. It's $734.5 billion. There's an extra “7” in there.

Mr. Sarkis Assadourian: Oh, all right.

My next question is to Mr. Martin.

Would you agree that what's good for GM workers in Canada is good for GM workers in the States and Mexico, and what's good for the GM corporation in Canada is good for the GM corporation in the States and Mexico? Or do you see differences there?

The Acting Chairman (Ms. Raymonde Folco): Is your question addressed to Mr. Martin?

Mr. Sarkis Assadourian: Yes.

The Acting Chairman (Ms. Raymonde Folco): Could you give a very short answer to that, Mr. Martin? Because I would like to get around to a second question.

Mr. Dick Martin: Let me put it this way. I would be very happy if Mexican workers got the same wages and benefits—

Mr. Sarkis Assadourian: No, my question is if what's good for GM workers in Canada is good for Mexican and American GM workers, and the same for the GM corporation—Canada, the States, and Mexico. I want to come to another point after you answer my question.

Mr. Dick Martin: I'm having a hard time. What's good for GM workers in Canada should be good for GM workers in the United States and Mexico?

Mr. Sarkis Assadourian: Yes.

• 1650

Mr. Dick Martin: Well, in some cases, GM workers in Canada have a better contract, and sometimes, in parts of their contract, in the States it's better. I can only say this much: the Mexican workers don't have anything as good as the United States or Canada.

Mr. Sarkis Assadourian: How about the U.S.?

Mr. Dick Martin: American GM workers?

Mr. Sarkis Assadourian: Yes.

Mr. Dick Martin: In some cases they have as good, in some cases better contracts.

Mr. Sarkis Assadourian: The reason I asked that, Mr. Martin, is that when the union comes, they make presentations here. I want to know if your presentation reflects Canadian concerns or union concerns, which may be the same in the States, Canada, and Mexico. That's what I'm driving at.

Mr. Dick Martin: Union concerns?

Mr. Sarkis Assadourian: And the same with corporations. I'd like to ask the same question to Mr. Lippert.

Mr. Dick Martin: Well, I can assure you that our presentation represents the organized workers' concerns in Canada. I have no doubt about that.

Mr. Sarkis Assadourian: Is it the same as in the States?

Mr. Dick Martin: On the FTAA, yes, generally.

Mr. Sarkis Assadourian: So basically I don't need to talk to you. I could talk to the Americans to get your point of view. Is that what you're telling me?

Mr. Dick Martin: On some of it.

Mr. Sarkis Assadourian: What happened to...? If I go to international conferences, I want to present your point of view, not the unions' point of view, which is also the American point of view.

Mr. Dick Martin: No, it's not an American point of view.

Mr. Sarkis Assadourian: That's what you told me just now.

Mr. Dick Martin: Excuse me. We developed this in this presentation. I've talked to you about Santiago; I've talked to you about the Inter-American Regional Organization of Workers. We all belong to it. This also represents, I might tell you, the point of view of a lot of Mexican workers and Mexican unions—independent ones.

Mr. Sarkis Assadourian: I could say the same thing for corporations too. We have witnesses coming in from GM. They will present the point of view of their shareholders, and the American point of view would be the same. We want to have a Canadian point of view, not corporations' or unions' points of view, to go to international conferences.

Mr. Dick Martin: Well, I can't give you another point of view. I belong to a union organization and I represent unions.

The Acting Chairman (Ms. Raymonde Folco): Mr. Assadourian, do you have a question to ask Mr. Martin?

Mr. Sarkis Assadourian: Yes, I asked a question.

The Acting Chairman (Ms. Raymonde Folco): Are you asking that same question to Mr. Lippert?

Mr. Sarkis Assadourian: Yes.

The Acting Chairman (Ms. Raymonde Folco): Could we have a short answer, Mr. Lippert?

Mr. Owen Lippert: Yes.

The Fraser Institute, I in particular, and all the members of the institute do not represent corporations. We represent, if anything, a way of thinking and analysing issues and public policy, employing for the most part neo-classical economics. In fact if anything, that frees us from the thrall of special interest analysis.

The Acting Chairman (Ms. Raymonde Folco): Thank you.

Now we'll go to a second round, but it's going to be very short, because we're now seven minutes from the end of the meeting.

Please ask a very short question, Mr. Penson. I know Monsieur Sauvageau also has a question, so make it very short, please.

Mr. Charlie Penson: A question arises from Mr. Martin's comments about right-to-work legislation. Specifically he talked about the southeastern United States. I travelled in that area just recently and noticed how things have improved markedly in the last few years. My understanding is that right-to-work legislation has been very effective there in boosting the economy. Mr. Martin suggested that's not the case, and I was just wondering if he has any studies or backup information to present to the committee, to allow us to see the data on it.

Mr. Dick Martin: I'd be happy to. Make sure you give me your card.

Mr. Charlie Penson: Well, you can just send it to the clerk.

The Acting Chairman (Ms. Raymonde Folco): Why don't you send it to the committee, Mr. Martin?

Mr. Dick Martin: Sure.

The Acting Chairman (Ms. Raymonde Folco): We'd be very interested in that.

Mr. Dick Martin: No problem.

The Acting Chairman (Ms. Raymonde Folco): Thank you.

[Translation]

Mr. Sauvageau.

Mr. Benoît Sauvageau: Mr. Martin, the CLC has proposed two approaches for the FTAA. First, we should not withdraw from the process and, secondly, the environmental and labour standards in South America are at too low a common denominator. What should the lowest common denominator be? If we don't withdraw, we will have to negotiate.

Mr. Lippert, I do not want to seem unpleasant, but since you represent a charitable organization that is supposed to be Canadian, and since you are a lawyer and Canada has an Official Languages Act, would you ensure that the next time that the Fraser Institute appears, a document is tabled in both official languages? Yes? Thank you. I knew that you were very nice, and you have just confirmed it.

Mr. Martin.

• 1655

[English]

Mr. Dick Martin: The social clauses we talk about, whether they're....

I talked about the ILO. That would establish minimum labour clauses. There is now also agreement in many cases on international standards for the environment, negotiated in Paris. The ISO, the International Standards Organization, deals with not only internal occupational health and safety issues but also external environmental standards issues that can be related to.

What we are mainly concerned about on these is, once again, that environmental standards are not degraded and degraded to go to the bottom, but in fact are improved all the time in order to have a level playing field. We talk about harmonization; we talk about level playing fields. What's the matter with having a high level playing field? That's what we're saying. I don't think there's a problem in establishing minimum environmental standards.

Mr. Benoît Sauvageau: Thank you.

Mr. Owen Lippert: I will work on the translation. It's an effort we should make.

The Acting Chairman (Ms. Raymonde Folco): Thank you.

Mr. Martin, you have exactly four minutes.

Mr. Pat Martin: Thank you very much, Madam Chair. I won't take long.

I'm interested in hearing some points of view, given that one of the secondary reasons for getting into trade with the underdeveloped nations is to help harmonize their standards to a higher level, hopefully. At least that's what the minister here told us when we were calling for a cease of trade with brutal dictators like in Indonesia, for instance. We were asking, why is Canada so interested in trading? When asked, the minister said clearly that it's important we keep trading with these places so that we can help bring them up to our standard of living. Yet in November we saw the APEC crisis, where clearly Canada was acting like.... If anything, it seemed the standards were being dragged down to the lowest common denominator.

In the minute or two we have left, would either of you like to comment on the risk, without any standards being built into trade agreements, of going backwards rather than forwards?

Mr. Owen Lippert: Higher standards evolve because people, through trade, gather wealth, and their expectations go up.

Mr. Dick Martin: And the redistribution of that wealth.

Mr. Owen Lippert: In fact this race to the bottom is one of the great myths.

A voice: Oh!

Mr. Owen Lippert: It simply does not exist.

Mr. Pat Martin: You can trust the Fraser Institute on that.

Mr. Owen Lippert: As people gain income, they want a higher quality of life, and more pressure is placed upon governments to ensure that. So the race to the bottom, in all the literature you care to look at—and if you want, I can provide references—has never been proven to exist in fact.

The Acting Chairman (Ms. Raymonde Folco): Thank you, Mr. Lippert.

Mr. Martin, I imagine you have an answer.

Mr. Dick Martin: The poverty rate in Mexico is below what it was in 1984. The proponents of free trade say it's a wonderful boon to Mexicans. Excuse me; Mexicans are in pretty dire shape.

There has been open and more trade throughout Latin America, through MERCOSUR and other regional trade agreements. There's not one bit of evidence at this point that the people's standard of living has improved. But there is tremendous historical and statistical data that there are a heck of a lot of more rich people in Mexico today than there were, but also a heck of a lot more poor people in Mexico. So the issue is distribution of wealth.

Corporations never distribute wealth any more than they have to. Government is the only vehicle that will ensure there is a proper distribution of wealth. That's why we are saying you should include in the trade agreements the standards that are going to ensure people are treated fairly in the distribution of wealth.

Wealth will be created. There's more wealth in the world today than ever in the history of humankind, but look at the poverty. It's a question of distribution, not a question of creation. A lot of you have probably travelled through Latin America. There's huge wealth there, and there's huge poverty, because governments did not take it upon themselves to ensure the people were going to have that wealth shared in a more equitable way.

So government has a very big role to play to ensure that, and we hope the committee will take that kind of action to recommend to the government that these types of mechanisms are put in place to ensure this will take place in an FTAA. We hope the government will finally say, after all, some brutal regimes are not worth having any relationship with whatsoever, because they are so obnoxious and so deadly.

We're not saying we should pull out of some kind of FTAA. We're saying give it a shot, but see if you can get someplace in making sure human rights, labour standards, and environmental standards are going to be put in there to ensure the people of the whole hemisphere share in the prosperity that may very well come from it.

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The Acting Chairman (Ms. Raymonde Folco): Certainly your statement, Mr. Martin, goes beyond Latin America. This is the kind of question we can ask ourselves regarding some other countries with which we trade.

Thank you very much, Mr. Lippert.

Thank you very much, Mr. Martin and Madame Katz.

This meeting is now over.