SINT Committee Meeting

37th PARLIAMENT, 1st SESSION

Sub-Committee on International Trade, Trade Disputes and Investment of the Standing Committee on Foreign Affairs and International Trade

EVIDENCE

CONTENTS

Wednesday, April 10, 2002

¹

1530

The Chair (Mr. Mac Harb (Ottawa Centre, Lib.))

Mr. Simon V. Potter (First Vice-President, Canadian Bar Association)

¹

1535

The Chair

Mr. David T. Barlow (Chief Operating Officer, Harvey's, Cara Operations Ltd.; and Chairman, Government Affairs, Supply and Environment Committee, Canadian Restaurant and Foodservices Association)

¹

1540

Ms. Stephanie Jones (Vice-President, Food Supply, Canadian Restaurant and Foodservices Association)

¹

1545

¹

1550

The Chair

Mr. Gilles Valiquette (President, Society of Composers, Authors and Music Publishers of Canada)

¹

1555

The Chair

Mr. Paul Spurgeon (Vice-President, Legal Services, and General Counsel, Society of Composers, Authors and Music Publishers of Canada)

º

1600

The Chair

Mr. Mike Dungate (General Manager, Chicken Farmers of Canada)

º

1605

º

1610

º

1615

The Chair

Mr. David Robinson (Associate Executive Director, Canadian Association of University Teachers)

º

1620

º

1625

The Chair

Mr. Pierre Laliberté (Senior Economist, Social and Economic Policy, Canadian Labour Congress)

º

1630

º

1635

The Chair

Mr. Rick Casson (Lethbridge, Canadian Alliance)

º

1640

Mr. Mike Dungate

Mr. Rick Casson

Mr. Mike Dungate

Mr. Rick Casson

Mr. Gilles Valiquette

º

1645

Mr. Paul Spurgeon

Mr. Rick Casson

Mr. Paul Spurgeon

Mr. Rick Casson

The Chair

Mr. Pierre Paquette (Joliette, BQ)

º

1650

Mr. Gilles Valiquette

Mr. Pierre Paquette

Mr. Paul Spurgeon

º

1655

Mr. Pierre Paquette

Mr. Pierre Laliberté

»

1700

Mr. Pierre Paquette

Mr. Pierre Laliberté

Mr. Pierre Paquette

Mr. Pierre Laliberté

Mr. Pierre Paquette

Mr. Pierre Laliberté

Mr. Paquette

Mr. Pierre Laliberté

The Chair

Mr. Pat O'Brien (London--Fanshawe, Lib.)

Mr. Pierre Laliberté

Mr. Pat O'Brien

»

1705

Mr. Pierre Laliberté

Mr. Pat O'Brien

Mr. Pierre Laliberté

Mr. Pat O'Brien

The Chair

Mr. Mark Eyking (Sydney--Victoria, Lib.)

»

1710

Ms. Stephanie Jones

Mr. Mark Eyking

Ms. Stephanie Jones

»

1715

Mr. Mark Eyking

Ms. Stephanie Jones

Mr. Mark Eyking

Mr. David Barlow

Mr. Mark Eyking

Ms. Stephanie Jones

Mr. Mark Eyking

Ms. Stephanie Jones

The Chair

»

1720

Mr. Pierre Paquette

Mr. David Robinson

Mr. Pierre Paquette

The Chair

Mr. Simon Potter

The Chair

Mr. Simon Potter

The Chair

---

CANADA

Sub-Committee on International Trade, Trade Disputes and Investment of the Standing Committee on Foreign Affairs and International Trade

---

NUMBER 028

l

1st SESSION

l

37th PARLIAMENT

---

EVIDENCE

Wednesday, April 10, 2002

[Recorded by Electronic Apparatus]

¹  (1530)  

[English]

    The Chair (Mr. Mac Harb (Ottawa Centre, Lib.)): Good afternoon, everyone. This is the Subcommittee on International Trade, Trade Disputes and Investment of the Standing Committee on Foreign Affairs and International Trade. We are holding hearings on the WTO and trying to develop a report to the House of Commons and, hopefully, ultimately to the Government of Canada. As part of the hearings we have invited distinguished Canadians like you to come and meet with us and give us your words of wisdom. I want to welcome you on behalf of the committee members.

    What I thought we should do this afternoon is this. First you'll have your opening remarks individually, and then we will open the floor for questions as well as comments. I understand some of you have already given written submissions to the clerk of the committee. Those will be part of the proceedings, so you don't have to repeat them again. If you do not have the information with you and you want to send us some more information, we have a very limited timeframe for that, so you'd really have to do it pronto.

    We will not ask you any questions until everybody has had a chance to make his or her comments, and then we will do that. The report of the committee will be made to the House sometime over the next four weeks, and the government has a few weeks to respond to the recommendations.

    So without any further delay, we will start with the Canadian Bar Association. Simon, you're representing the Canadian Bar Association. I presume most of you have received the set of questions that we are interested in, the set of answers we are looking for. So with that, we welcome you.

    Mr. Potter, you have the floor.

    Mr. Simon V. Potter (First Vice-President, Canadian Bar Association): Thank you very much. Merci beaucoup, monsieur le président.

    The Canadian Bar Association represents 37,000 lawyers, notaries, students, and law professors. It's an honour to be able to appear before your committee to give you the point of view of the Canadian Bar Association in the discussions on trade in services.

    The document I have delivered to your committee, Mr. Chair, is the same document we submitted to Industry Canada nearly a year and a half ago, and our position has not changed since then. I don't propose to read that document to you, but I will give you the major outlines and comments, which shouldn't last more than five minutes.

    Our position is that trade has been very good for Canada in goods, and will certainly be very good for Canada in services as well. We believe that for services generally, and certainly for legal services, Canadians have much talent to export, as well as goods.

    Canadian lawyers are particularly well-suited to taking advantage of a liberalization of trade and services. Canadian lawyers practise in the two major languages of the world, and they practise in common law and civil law. So we believe, all in all, that Canadian lawyers are very well-suited to serve clients abroad in problems that are not necessarily Canadian ones.

    That said, we do not think disciplines being imposed from outside on the way Canada regulates its legal profession should be allowed to get to the point of interfering with something we have built up over decades and decades, if not centuries, in Canada.

    The legal profession sits apart from the generalized grouping of services, and is a very special kind of service. The lawyer is the buffer between the citizen and the law, the buffer between the citizen and the state. The independence of not only the lawyer but the profession of lawyers, the self-regulated aspect of that profession, and the need to make sure that self-regulation preserves the integrity of the profession and its role in a free and democratic society set the legal profession somewhat apart.

    That leads to answers to your questions, which have a particular slant. There are many things happening in the negotiation of trade in services that can apply across the board. In our paper we have used the model of the accountancy disciplines and looked at how they might apply to the legal profession. Many of the rules there can apply without any problem; however, some cannot.

    Our position is that Canada must be vigilant to ensure two things. First of all, in any liberalization or discipline on the rules domestic countries can have in the regulation of their legal services, enough flexibility must be left to allow for fully independent self-regulation of lawyers by law societies. We must never find ourselves in a situation in which a law society's rule is somehow overturned by a panel of experts in Geneva. We believe the law societies' rules, which are passed to maintain the integrity of the legal profession, must be preserved. That generally is the outline of our presentation, although of course we go into more detail in it.

¹  (1535)  

    We're very anxious to make sure Canadian lawyers can export their services abroad, that the obstacles to their doing that in other jurisdictions--and there are obstacles to that--are not unreasonable, and we agree that Canada should sign on to treaties that will prevent Canada from imposing its own unreasonable obstacles. But there must be preserved a flexibility for the law societies to maintain and preserve meaningful self-regulation to preserve the integrity of the profession, which has served the democratic and free nature of our society very well.

    Those are our submissions.

    The Chair: Thank you very much.

    From the Canadian Restaurant and Foodservices Association, we have Mr. Barlow.

    Mr. David T. Barlow (Chief Operating Officer, Harvey's, Cara Operations Ltd.; and Chairman, Government Affairs, Supply and Environment Committee, Canadian Restaurant and Foodservices Association): Thank you, Mr. Chairman.

    On behalf of the Canadian Restaurant and Foodservices Association, the CRFA, thank you for the opportunity to discuss the World Trade Organization's agriculture negotiations.

    My name is David Barlow. I'm chief operating officer of Harvey's Restaurants, a division of Cara Operations. Cara is a Canadian restaurant and food service company and the largest diversified food service company in Canada.

    Today I'm joined by Stephanie Jones, who is CRFA's vice-president of food supply.

    In the next few minutes I'd like to provide some background information on our industry and discuss some of the main points contained in the 12-page written submission we have filed with you. Ms. Jones will then conclude our remarks by responding to two of the key questions the Library of Parliament has identified.

    The CRFA is Canada's largest hospitality association, with 16,000 members representing over 48,000 food service outlets. The industry generates $42 billion in annual sales and directly employs 980,000 Canadians.

    Canada's restaurant and food service industry spends over $14.4 billion annually on food and beverage inputs and depends on a strong Canadian agricultural industry for its success. The food service industry is a major purchaser and plays a particularly important role in growing the market and developing new products in the dairy and poultry industries, which are subject to supply management. As in any buyer-seller relationship, the price, quality, and availability of these products are important to our members.

    Since the purpose of your hearings is to discuss the upcoming WTO negotiations, we will not discuss domestic issues with you today. Instead, we want to talk about what is on your agenda, the WTO agriculture negotiations.

    We believe these negotiations are very important to our industry. For several years we have been very active in international trade. For example, I was in Geneva during the Uruguay Round. I attended the Seattle WTO ministerial meeting. Ms. Jones was also in Doha at last November's ministerial meeting. Three years ago, the CRFA appeared before the Standing Committee on Foreign Affairs and International Trade.

    Mr. Chairman, now that you have a better understanding of why we are here, I'd like to deal with a couple of key questions before the subcommittee.

    The Library of Parliament research branch has prepared a document entitled “Key Information Requirements for the sub-committee's WTO and FTAA studies”, which identified several important questions regarding agriculture, including the following: Does the current Canadian negotiating position continue to be valid? How does one reconcile the Canadian position on agriculture trade liberalization expressed at the WTO with a seemingly more aggressive stance taken within the Cairns Group?

    CRFA's answer to the first question is clear. We do not believe the current Canadian negotiating position continues to be valid, for four reasons that Ms. Jones will discuss shortly.

    Before we discuss why changes are required, I would like to conclude by saying a few words about the WTO agriculture negotiations and Canada's initial negotiating position.

    From the outset it is important to remember that the WTO agriculture negotiations are not an isolated event. They are merely the next step in the ongoing agriculture reform process we started in the Uruguay Round of negotiations. In other words, the purpose of these negotiations is to reduce agricultural market access barriers, not maintain them.

    The WTO agriculture negotiations have been going on for over two years. Last month the WTO committee on agriculture agreed on its 2002-03 work program regarding the three pillars. The three pillars are market access, domestic support, and export subsidies. Although Canada has stated that all three pillars of the agreement on agriculture are important, Canada's initial negotiating position only seeks to eliminate export subsidies and perhaps trade- and production-distorting domestic subsidies. Canada's objectives are less ambitious for the third pillar because the initial negotiating position seeks substantial improvements in market access, but attempts to maintain significant access barriers in several supply management agricultural sectors, including the dairy and poultry sectors.

¹  (1540)  

    Over two years ago, in August 1999, the Government of Canada announced its initial position for the WTO agriculture negotiations. When they announced this position, Ministers Pettigrew and Vanclief stressed it was a starting point for entry into the negotiations and would be developed further as the negotiations proceed. Over the past couple of years, it has become clear that Canada's initial negotiating position must be modified.

    Thank you, Mr. Chairman.

    Ms. Jones will now explain why Canada's current negotiating position must be changed.

    Ms. Stephanie Jones (Vice-President, Food Supply, Canadian Restaurant and Foodservices Association): As Mr. Barlow mentioned, my name is Stephanie Jones. I am the vice-president of food supply with the Canadian Restaurant and Foodservices Association.

    On pages five to nine of our written submission, we respond to the question of whether the current Canadian position continues to be valid by stating that we believe changes are required for the following four reasons. First, we submit that Canada's initial negotiating position is inconsistent. Second, Canada's initial negotiating position does not promote the Doha developmental agenda. Third, Canada's initial position must be modified in light of the lessons of history. Fourth, we believe Canada's initial negotiating position must be modified in light of current realities.

    Mr. Chairman, I will briefly deal with each of the four reasons.

    First, with respect to the consistency of Canada's current position, pages five to six of our submission show both the WTO and the Organisation for Economic Co-operation and Development, OECD, have pointed out a simple fact. It would be naive to believe Canada can expect our trading partners to open their markets to our grain and oilseed products while Canada maintains triple-digit tariffs on poultry and dairy products.

    The second reason we believe changes are required appears on pages six to seven of our submission. There we see that the International Monetary Fund, IMF, recently discussed how Canada's high rates of protection for certain agricultural products do not promote development in the least-developed countries. In addition, last month the Government of Canada announced it is considering possible steps to improve market access to the world's poorest countries.

    Our Prime Minister has also been travelling in Africa to promote his G-8 development initiative. However, in its March 27 press release, the Government of Canada stipulated that supply-managed dairy and poultry products would be excluded from this tariff and quota trade liberalization initiative.

    Mr. Chairman, what kind of signal does this exclusion send to lesser-developed countries and the rest of the world regarding Canada's sincerity in promoting international trade and economic development in the neediest countries?

    The third reason we believe Canada's current agricultural negotiating position must be changed is that we do not think Canada can afford to repeat the mistakes of the past. Pages seven to nine of our submission contain statements from Canada's Uruguay Round negotiators that illustrate Canada's current position is untenable. The first lesson we learned in the Uruguay Round is that Canada does not have the leverage to maintain supply management market access barriers forever.

    During the first seven years of the Uruguay Round negotiations, Canada tried to maintain supply management access barriers that, at the time, consisted of fixed import quotas. However, during the last couple of weeks in the negotiations, Canada was forced to abandon the status quo. As one of more than 120 negotiating countries, Canada alone simply did not have the negotiating power to prevail in the Uruguay Round. In addition, Canada's major trading partners, the United States and the European Union, refused to support the supply management status quo.

    The fourth reason we believe Canada's current position must be changed is outlined on pages nine and ten of our submission, where we discuss the current realities of agricultural trade liberalization.

    As page nine of our submission shows, your colleagues in the Standing Committee on Agriculture and Agri-Food have noted that the issue is not whether supply management's current market access barriers will be reduced in the upcoming WTO negotiations; the issue is when and how the transition toward more open markets will occur.

    Before I conclude by discussing how this transition should be managed, I would like to respond to the Library of Parliament question regarding the more aggressive stance taken by the Cairns Group.

    After over two years of WTO agricultural negotiations, it is again clear that our major trading partners do not support Canada's position. For example, Canada has parted company with our Cairns Group allies on the critical issue of market access. Our Cairns Group allies and other trading partners do not support attempts to maintain triple-digit tariffs on dairy and poultry imports.

¹  (1545)  

    As we state on page 11 of our submission, we agree with Canada's Uruguay Round negotiator that Canada cannot afford once again to be isolated in Geneva and frozen out of key negotiations as we were during the Uruguay Round. Instead, we submit that Canada's negotiators should adopt the following two-pronged strategy.

    First, we must secure better access for Canadian dairy and poultry products in foreign markets. Second, we must negotiate a transition period that will enable the Canadian dairy and poultry industries to adjust to more open markets. Unlike in past negotiations, the Government of Canada must strive for better access to foreign markets for Canadian dairy and poultry producers just as it has successfully done in the past for other Canadian producers, including the cattle and pork producers.

    With respect to the key issue of transition, our position includes the following key points.

    First, the current tariff rate quota, TRQ, import access levels must be increased by 10 percentage points a year. For example, a 5% TRQ should be increased to 15% in the first year, to 25% in the second year, and so on.

    Second, in the Uruguay Round the 5% TRQ minimum access guideline enabled some countries to provide inadequate access in their WTO schedules. This time guidelines must be avoided and the access commitments must be clear and binding.

    Third, to make sure that TRQs provide clean market access, the current practice of TRQ country allocations and other restrictions should be eliminated.

    Fourth, customs tariffs on TRQ in-quota tariffs, TRQ over-quota tariffs, and non-TRQ tariffs should be eliminated over a ten-year transition period through equal annual reductions of 10% of the tariff. For example, a 200% tariff would fall to 180% in the first year, 160% in the second year, etc.

    As is the case with most of Canada's international trade agreements, our negotiators should strive to obtain a transition period of 10 years, which will allow Canadian dairy and poultry producers to adjust in an orderly manner from current import access levels in the 5% to 10% range, and tariffs in the 300% range, to open borders.

    Thank you, Mr. Chairman and members of the subcommittee. Mr. Barlow and I would be pleased to answer any of your questions.

¹  (1550)  

    The Chair: Thank you very much.

    From the Society of Composers, Authors and Music Publishers of Canada, Mr. Valiquette.

[Translation]

    Mr. Gilles Valiquette (President, Society of Composers, Authors and Music Publishers of Canada): Merci beaucoup, monsieur le président.Good morning everyone. My name is Gilles Valiquette and I'm an author and song writer as well as the President of the Society of Composers, Authors and Music Publishers of Canada, better known as SOCAN. With me today is Mr. Paul Spurgeon, SOCAN's Vice-President, Legal Services and General Counsel.

    Before I outline SOCAN's position on cultural diversity and international trade, I would just like to say a few words about our organization.

    SOCAN is a not-for-profit Canadian organization that represents composers, lyricists, songwriters and publishers of musical works from Canada and around the world. On behalf of our active Canadian members - of which there are over 20,000 - and of the members of our affiliated international organizations, we administer performing rights tied to music and lyrics. Performing rights, which come under the copyright umbrella, give copyright owners of musical works the sole right to perform their works in public or to communicate to the public by telecommunications, or to authorize others to do so, in return for royalty payments. My colleagues and I like to say that copyright is our bread and butter.

    Our members are creators of works of the spirit, works that reflect the image of our society and that generally fall into the category of “Canadian content”. We firmly believe that international trade treaties must not compromise Canada's sovereign right to consolidate its rules on Canadian content and to ensure that these are respected.

    You will find additional information about our organization and what we do in the first nine pages of our submission to the committee. However, we would like to use the time remaining to underscore some of the main points in our brief. We will then be happy to answer your questions.

    First of all, SOCAN is concerned that the Government of Canada's policies and programs have not effectively managed the relationship between cultural policies and trade policies. On pages 10 and 11 of our submission, we describe how Canadian culture has fared so far under the NAFTA, the North American Free Trade Agreement, and the WTO, the World Trade Organization. We also bring to light the dispute with the WTO over split-run periodicals as well as the dispute with Country Music Television under the NAFTA. These disputes are a clear indication that where international trade is concerned, Canadian culture is exposed to attack from outside sources.

    SOCAN is not alone in having concluded that the status quo isn't working. As you know, the Cultural Industries Sectoral Advisory Group on International Trade, the SAGIT, came to the same conclusion over three years ago. In February of 1999, after examining various options, SAGIT recommended that the Canadian government negotiate a new international instrument on cultural diversity. It also recommended that this new instrument set out the rules on the kind of domestic measures that countries can and cannot use to enhance cultural and linguistic diversity.

    SOCAN submits that Canadian content rules should be included in any list of legitimate cultural measures because they respect the international trade principles of transparency and national treatment. We strongly support the negotiation of an international instrument on cultural diversity and we are working with the Canadian government and with other organizations, including the Coalition for Cultural Diversity, to make cultural diversity a reality.

¹  (1555)  

    I understand that Coalition officials appeared before your sub-committee on March 21 last, so I won't reiterate the arguments they presented. In conclusion, however, I would like to say that SOCAN is very concerned about one thing. If the Government of Canada fails to negotiate in the very near future an international instrument on cultural diversity, any decisions taken in the interim at the WTO level will seriously limit our options.

    As we all know, WTO negotiations on services have been ongoing for the past two years. Moreover, on June 15, 1998, the WTO Secretariat drafted a briefing note on audiovisual services which singled out the CRTC's Canadian content policies. The United States have made it very clear that they intend to aggressively pursue their trade interests within the framework of the negotiations respecting audiovisual services.

    Mr. Chairman, the message we would like to convey is very clear: there isn't one single minute to waste. We urge the Government of Canada to make it a national priority to negotiate as soon as possible an international instrument on cultural diversity.

    I will now turn the floor over to my colleague Paul Spurgeon who will outline to you SOCAN's position on WTO negotiations in the area of services and investments.

    Thank you very much.

    The Chair: Mr. Spurgeon.

[English]

    Mr. Paul Spurgeon (Vice-President, Legal Services, and General Counsel, Society of Composers, Authors and Music Publishers of Canada): Good afternoon, Mr. Chairman and members of the subcommittee. As you mentioned, my name is Paul Spurgeon, and I am SOCAN's vice-president of legal services and general counsel. I am not a songwriter.

    I would like to finish SOCAN's presentation by dealing with pages 19 through 22 of our submission, in which we ask the simple question: does Canada's current WTO position fully protect Canadian culture?

    Canada's negotiating position in the WTO-GATS negotiations was announced by the Minister of International Trade, the Honourable Pierre Pettigrew, on March 14, 2001. At that time the minister stated, and I quote:

Sixth, Canada reiterates its position with respect to cultural diversity--that is, that Canada will make no new commitments that would restrict our ability to achieve our cultural policy objectives or to pursue the establishment of a new international instrument to protect the rights of all countries to take measures to preserve their cultural diversity.

Finally, with respect to the structure of the negotiations, Canada's position is that the “bottom-up” structure of the GATS should be maintained....

    To determine whether Canada's current WTO position fully protects Canadian culture, SOCAN submits that the subcommittee must consider the following issues: first, it is important to note that this statement is confined to new commitments and does not address the concerns we have discussed regarding existing commitments under the FTA, the NAFTA, and the GATT.

    Second, the minister's commitment is based on Canada's position that the bottom-up structure of the GATS should be maintained. Under a bottom-up structure, Canada can pick and choose the sectors in which it wishes to take on market access or national treatment obligations. Although this structure may be helpful in the GATS negotiations, we believe it does not eliminate our exposure.

    The reason we remain exposed as a country is that there is no guarantee that every international trade negotiation will adopt the so-called bottom-up structure. For example, on pages 15 and 16 of our submission we discuss the European Union's attack on Canada's film distribution policies. This WTO dispute arose under the GATS because the GATS adopted a top-down approach regarding the most favoured nation, or MFN, obligation. In other words, the GATS is not based solely on the so-called bottom-up structure.

    It should also be noted that the NAFTA services chapter adopted a top-down approach, where national treatment obligations apply to everything unless a party exempts a specific existing legislative measure by grandfathering it under annex I or exempts both present and future measures under annex II. There are no broad sectoral exemptions as there are with a bottom-up structure.

    In addition, it must be recognized that the GATS negotiations are not the only international trade negotiations that could impact on Canada's cultural sovereignty. For example, it has not been decided whether the Free Trade Area of the Americas, the FTAA, negotiations will be a bottom-up or a top-down structure. It is therefore important that the subcommittee recognize that there is no guarantee that the WTO and FTAA international trade negotiations will not adopt a top-down approach. SOCAN is concerned that a top-down approach could further limit Canada's ability to pursue its cultural policies.

    The third potential problem regarding Canada's current WTO position arises from the fact that the WTO negotiations are not confined to the GATS services negotiations. Other key sectors, including investment, may become the subject of negotiations following the fifth WTO ministerial conference scheduled to take place next year in Mexico.

    As the recent Multilateral Agreement on Investment, the MAI, negotiations clearly demonstrated, there is no guarantee that these WTO negotiations will be bottom-up. A top-down investment agreement could limit Canada's ability to apply performance requirements, including Canadian content rules.

º  (1600)  

    In addition, investor-state dispute provisions could expose our cultural measures to attack by foreign corporations. One of the reasons the NAFTA investment chapter is so controversial is that it creates absolute standards that Canada must apply to NAFTA and other foreign investors, even if Canada does not apply these standards to our own nationals.

    For example, as we discuss on page 21 of our submission, article 1106 creates obligations regarding performance requirements. Restrictions on performance requirements limit a state's ability to develop its domestic economy by requiring foreign investors to use local labour goods or services. But for the NAFTA cultural exemption, which in practice has not provided absolute protection, article 1106 would prohibit the application of Canadian content regulations to American investors. This would adversely affect SOCAN's members.

    So far article 1106 has not been an issue because foreign investment is currently restricted in the broadcasting sector. The subcommittee must therefore carefully consider the Canadian content consequences that would result if Canada opens the broadcasting sector up to foreign investors.

    As a result of the above concerns regarding the Government of Canada's current WTO position, we believe that the proposed international instrument on cultural diversity, mentioned by my colleague Mr. Valiquette, must be included as quickly as possible.

    Mr. Chairman, SOCAN would like to thank you again for this opportunity to appear before the subcommittee. We now would be pleased to respond to any questions.

    The Chair: Thank you very much.

    Now we have the Chicken Farmers of Canada, Mr. Dungate.

    Mr. Mike Dungate (General Manager, Chicken Farmers of Canada): Thank you very much, Mr. Chair. It's a pleasure to be before you today and share with you some of our views on the World Trade Organization and the Doha round of negotiations.

    I'm the general manager of Chicken Farmers of Canada. We represent 2,800 chicken farmers across the country, and over the next few minutes I'd like to outline what we'd like to see emerge out of the Doha declaration round and those negotiations.

    We are governed by a 14-member board of directors. We have farmer representatives from each of the 10 provinces across Canada as well as representatives from the Canadian Poultry and Egg Processors Council and the Further Poultry Processors Association of Canada. The Canadian Restaurant and Foodservices Association also sits on our board of directors.

    I think the strength of our industry is obvious. It's a Canadian success story. We've grown our industry by 60% over the last 10 years. Just to give you a few terms, we produce almost 1 billion kilograms of chicken on an annual basis in this country. We rank tenth in the world in production of chicken. We rank eighth in terms of exports of chicken from our market, and--this is probably surprising, considering some of the comments--we are the eighth largest importer of chicken in the world. We are also the seventh largest consumer of chicken on a per capita basis, and this year we reached 30 kilograms per person, which puts us within striking distance next year of beef as the number one consumed meat in this country.

    Just to put that in context, our per capita consumption over the last 10 years has grown by 31%, while that of all other meats is zero.

    So today I'd like to come back to the questions you've posed to us to give you some feedback on, and while you've asked questions on both the FTAA and the WTO, I will confine my comments to the WTO, because we think that is the appropriate place for us to be negotiating international trade rules, particularly in the key area we are interested in, which is tariff rate quotas.

    First and foremost, the Canadian government in our view needs to negotiate international trade policies that support the success of domestic industries. Our industry, governed under a supply-managed system, has built a strong, profitable, and sustainable industry that does not rely on government financial assistance. We are pleased that the government has declared its support for our evolving supply management system and that the Minister of Agriculture has stated clearly that it is a domestic issue and, as such, not on the WTO negotiating table.

    With those comments, I'd like to respond to some of the specific views. What are our views of the Doha declaration? First of all, we're pleased that a round has been launched. We see it as an opportunity to fix the inequities that came out of the Uruguay Round. We see it as a chance to aggressively pursue the initial Canadian negotiating position that we have, and we think the wording there does offer us the opportunity to fully pursue what we have put on the table. However, we think the timeframe is completely unrealistic. We set a deadline last time in 1986 of two years and we ended up in a seven-year negotiation. We have a much more complex negotiation this time, and I think we are--even with the best intentions--kidding ourselves that by January 1, 2005, we're going to have an agreement.

    What would we like to see coming out of this Doha declaration round? First and foremost--I think this is across all of agriculture in Canada, and we are a member of the Canadian Federation of Agriculture and are supportive of the trade statement they have--we need recognition that agriculture is different from industrial products. It is not our goal to put agriculture on the same basis as industrial products. Agriculture is tied to the land. You can't move agricultural production, as you might a television production facility, to where tax regimes or labour costs might be more profitable. We can't pick up Canada and move it someplace else, to a better climate.

    It also involves food, which is a necessity of life and brings in a lot more aspects such as food security, food safety, and the other factors that we bring. In Canada, with the size of the country we have, it is infinitely intertwined with rural communities and their continued existence.

º  (1605)  

    What we're looking for out of the Doha declaration round this time around is rules. Last time--and we applaud that initial step to bring agriculture within a rules-based system--we didn't make it. We got what were called modalities, and then each country went back and decided how they would implement them. We didn't get hard and fast rules. We need hard and fast rules.

    We need this so that everyone is treated equally. Right now, out of 142 WTO members, only 25 are allowed to use export subsidies. Only 30 are allowed to use trade-distorting domestic support. And not all WTO members provided what was called for, which was 5% minimum access. In fact, they interpreted it their own way and provided the access that they chose to provide.

    Where we're concerned is that our negotiators tend to get into the same mentality, which is that I'll take equal pain if you take equal pain. So we're going to perpetuate where we are. So if we're already offering more access, if we don't have export subsidies or domestic support, not only are we going to be disadvantaged, we're going to be further disadvantaged as that gap widens if we just start from where we are and everyone moves at the same pace.

    So we fully support eliminating export subsidies. They're the most trade-distorting measure out there and we should absolutely get rid of them. That being said, I think it is going to be extremely difficult to get rid of them in this round of negotiations. Should we allow those 25 countries to maintain their advantage for yet another round? I think that if we can't eliminate them, we need to set a limit. The negotiators can set the limit, whether it's 10% of the value of production and every WTO member has the right to use up to that limit. That's the only way we're going to bring the EU and the U.S., which account for 94% of export subsidies, to the table. As long as they have the distinct advantage, they will continue to negotiate to have it.

    We're in favour of reducing trade-distorting domestic support. It is probably the factor that is causing the greatest amount of grief and financial harm to our grains and oilseeds sector. What we propose is that we reduce this what they call the amber box--the trade-distorting support is what's called amber box--support down to a de minimis level of, say, 10%. So anyone can use up to 10%. It provides flexibility to respond to regional or climatic conditions or disaster programs.

    In that regard, we know that our prime disaster safety net program in Canada is an amber box program and we would not be able to use it if we just pursued the outright elimination. We don't receive any of these payments as the chicken industry, but we think it's something that's important all around and we have looked at not just what's good for chicken farmers but what's good for the industry across the country.

    I think one thing we have to bear in mind, and our negotiators should, is that just reducing trade-distorting support will not get the advantage that we think it will. Already the European Union, Japan, and the U.S. have retooled their domestic support programs to take them out of the amber box and put them into slightly less distorting blue and what is considered unlimited green boxes. So the fact is that a reduction on this is not going to have any impact on the dollars that are already being put on the table. I think you're probably well aware that the U.S. is going to put into place a new Farm Bill that will put $7.35 billion per year into U.S. agriculture over the next 10 years. That is already on top of their baseline support of $9.5 billion a year and it's all going to be within WTO commitments.

    So the fact is that just reducing the amber box support and saying this is the one thing.... We now have rules. We now have to work with the rules of the game. We can't just use nice statements that say get rid of this trade distorting support.

    I want to come to the key section for us, which is market access and tariff rate quotas. We adamantly want effective tariff rate quotas coming out of this next round. We already provide 7.5 %. The agreement called for 5% and we provide 7.5% access to our market, and as I said, we're the eighth largest importer in the world.

º  (1610)  

    Canada, in its initial negotiating position, has a great innovative approach on market access. Simply put, it is to reduce simple tariffs where you just have one tariff protecting a market as much as possible. If it doesn't get down to a point that provides access to that market, you have to convert it to a tariff rate quota with a zero in-quota tariff, the minimum access provided, and therefore we're going to provide access for our exporters now, not two or three rounds of negotiations later. If you look at industrial tariffs, we've been at it since 1947 and we haven't got rid of them yet. I don't expect we're going to get rid of tariffs in the next couple of rounds in agriculture. If you want access now for people, this is a way to provide it.

    What to us is an effective tariff rate quota? We have suggested in our industries to go to zero in-quota tariffs. It's not something that someone else suggested; we suggested it in Canada to come up with a CFA position that works for everyone. You maintain the over-quota tariff where it is, because all that does is regulate the amount of product on the market. You provide the 5% access that's there, but you make it of a more current period. Right now, we're talking 5% of the average consumption from 1986 to 1988. Well, we've increased our production by 60% in the last decade. That doesn't reflect 5% of what consumption is today. Let's move that base period up and make sure everyone is providing it.

    The key issue is to have clean administration so that people do not use other means, such as country-specific allocations. Certain countries, such as New Zealand, which is the biggest beneficiary of country-specific allocations in the world, get guaranteed access. No, it should be open and competitive. In that regard, we need to get fill rates up. That means that if you provide your access, you should provide 100% of that access. We do. The average in the WTO is 67%. There's a lot of room for improvement.

    The benefit of an effective tariff rate quota is that you provide real access immediately and you provide certainty of access for exporters. They know they have access to that market that is going to be there. It also provides certainty to a developing country, for example, so that they can establish their own domestic industry, while still permitting and promoting international trade and products. It's not going to take 100%. You're not going to have dumping of product into those markets, which is the key issue for them. It's not access to our market, but the ability to stand on their own agriculture systems in their own countries. It also provides food security for countries around the world. It will allow that.

    A key issue then is going to be sanitary and phytosanitary measures. Canada has taken a position that we don't want to reopen the SPS agreement at the WTO. I think we might have to reconsider that one. Australia and New Zealand are probably the most adept at using SPS measures. Ask Canadian pork exporters, Canadian salmon exporters, and Canadian poultry exporters if they can export to Australia or New Zealand. They can't. Australia and New Zealand will push for elimination of all market access barriers. Of course they will, because they have other protection.

    I just want to have a couple of words on what the Cairns Group view is, and then I will conclude. It really is a simplistic argument to get rid of everything. It really reflects New Zealand's and Australia's views of the world, but to understand those views of the world you have to understand where they live. They have small populations, they are at an extremely long distance from any of the agriculture exporters in the world, and they employ strict non-tariff barriers. In comparison, in Canada we live along a continent-wide thin line next to the largest agriculture exporter in the world. We deal with importing agriculture products each and every day in this country.

    We will collaborate with the Cairns Group. Our organization has participated in every Cairns farm leaders' meeting there has been in the last four years. We will participate there to collaborate where we can to the benefit of farmers around the world, and we will participate there, as Canada does in the Cairns Group, to influence the Cairns Group towards where Canada needs to be in international trade negotiations. We will also participate in other alliances to draw them closer to where Canada is, because the only people who will look out for Canada are Canadians. We're going to use alliances where we need to use them, and we'll use other alliances where we need to use those alliances.

    The one area where we clearly disagree with the Cairns Group is on market access. The Government of Canada recognizes that. That's why it put in its own paper. The other area we disagree with in their paper is that they demand a 50% down payment in the first year of implementation. We think it will cause a huge amount of uncertainty in agriculture industries around the world if you change the rules of the game dramatically in one year, and it's contrary to the WTO's own provisions that call for progressive implementation of provisions.

º  (1615)  

    Looking at our own initial negotiating position, we support the initial negotiating position Canada has put on the table. I think the one caveat there is that you might know that the Government of Canada, along with the provinces, is going through an agriculture policy framework discussion. I think we need to look at what comes out of that and then reassess our trade position based on the direction we may want to take in Canadian agriculture overall.

    We have to look at non-tariff barriers. They are going to be the key. The biggest protection to the EU is non-tariff barriers. That's the issue we have to focus on.

    Thank you very much for hearing our views. I'm prepared to respond to any questions you may have.

    The Chair: Thank you very much.

    From the Canadian Association of University Teachers, Mr. Robinson.

    Mr. David Robinson (Associate Executive Director, Canadian Association of University Teachers): Thank you for inviting us here today to present our views.

    Briefly, the Canadian Association of University Teachers represents approximately 30,000 professors, instructors, librarians and other academic staff working at universities and university colleges across Canada.

    What I'd like to address today is the Canadian negotiating position with regard to education under WTO's General Agreement on Trade in Services. I want to raise some concerns we have that stem from a legal opinion we commissioned and received last fall that was prepared by the law firm of Gottlieb Pearson. I want to highlight some of the findings from that opinion, and I have copies here for the committee, if you're interested.

    Briefly, the opinion found, first of all, that existing protections in the GATS for education and other public services appear to be inadequate. The government has said that public education is largely beyond the scope of GATS because services provided in the exercise of government authority are excluded under article 1.3.

    However, the legal opinion actually contradicts that position and interpretation of the exemption article 1.3, and notes that government services are defined very narrowly as any service that is supplied neither on a commercial basis nor in competition with one or more service suppliers.

    In Canada, since education services provided involve both public and private funding, are delivered by a mix of public non-profit and for-profit providers--and I think the same holds true for health care and other public services--the opinion concludes that they don't fully benefit from that general exclusion and,for that reason, recommends that Canada should consider seeking a permanent protection in the GATS for public services that better reflect the reality of our mixed systems.

    Secondly, the opinion raises concern that the inclusion of commercial education and training services in the GATS could indirectly pose a risk to public education in Canada. The Canadian government has indicated in a discussion paper that it may seek and may make commitments concerning commercial training in education services. Again, the legal opinion warns that the distinction between public and commercial education services is far from crystal clear.

    Many school boards offer adult learning and training services that compete with private institutions. Almost all Canadian universities these days have commercial appendages that promote marketable products or help secure private sector research funding. Several so-called public universities also house fully private programs, such as the executive MBA program offered by Queens University. In fact, several provinces are now conferring degree-granting status--essentially creating universities--for private and even for-profit institutions.

    In effect, then, commitments made covering commercial providers, if we were to do that, could further expose the public system to GATS rules. As well, I think on this point we need to keep in mind that GATS is an agreement that contains built-in commitments to progressively liberalize and expand the coverage of all service sectors, so if we make commitments covering commercial education services there certainly would be mounting pressure to expand the scope of what's covered under that commercial rubric, putting public education at risk, we feel.

    For that reason, CAUT believes, and in fact the Association of Universities and Colleges of Canada also agrees, that Canada should not make commitments in higher education services or in the related categories of adult education, commercial education, or other education services.

    The third point under GATS obligations is that opinion suggests that all education services supplied on a commercial basis or in competition with other suppliers, regardless of whether they're in public or private hands, are already subject to GATS unconditional obligations, like most favoured nation treatment rules on transparency and monopolies. The impact of these obligations right now are currently relatively modest, because we made no commitments covering education when the GATS was negotiated in 1994. This provides critical protection for the education system.

    However, if commitments are made, a number of policy risks would emerge, and in the opinion you see these outlined as rules and regulations we currently have around local hiring preferences right now, local content requirements, restriction of consumption subsidies like student loans and scholarships, and research subsidies to nationals, restriction of degree-granting authority to Canadian institutions, and the restriction of public subsidies currently to Canadian educational institutions and, in some cases, to public institutions only.

º  (1620)  

    The fourth concern that's raised in the opinion concerns the current and future GATS negotiations. The legal opinion raises some worries about the impact of these negotiations.

    First, this is the political-economic context of the negotiation. Even though Canada has not made any specific commitment in the area of education services and it has said it will not make commitments in public education, there is a concern that commitments made in other sectors could have an impact on education services.

    Commitments in telecommunications services, in libraries, in research and development, in professional services could all affect education services and their delivery. This points, I think, to the need for the government to carefully and systematically consider the impact of commitments made in other sectors on education before obviously making those commitments.

    Secondly, the opinion warns that the broad coverage of GATS and the future outcome of current negotiations will further affect education services. We know that the U.S. is seeking removal of so-called obstacles to trade in education services, and Canada will be under pressure to make market access and national treatment commitments in education.

    Finally, I want to conclude by raising three questions that we have.

    First, we need to ask ourselves whether we really need the GATS or other trade agreements to allow our institutions--and I hate to use the phrase--to sell their services abroad. Institutions in Canada will continue to develop exchange agreements, research collaborations, and offshore partnerships outside of any trade policy regime. There are existing mechanisms to deal with the issues raised by some countries that they characterize as impediments to trade. There are mechanisms such as the Lisbon Convention and the recognition of qualifications concerning higher education.

    The second question, then, stems from that. In my view, there is little need to include education services, commercial or otherwise, in trade agreements. Is it really worth the policy risk?

    Finally, I wonder whether an export promotion policy in education is consistent with our domestic policy commitments. If we accept the Minister of International Trade's assertion that public education is not up for negotiation, then why would we want to convince other governments to put it on the table? I think the values underlying Canada's education system should surely guide our conduct abroad.

    Thanks.

º  (1625)  

    The Chair: Thank you very much.

    Finally, from the Canadian Labour Congress, Monsieur Pierre Laliberté.

[Translation]

    Mr. Pierre Laliberté (Senior Economist, Social and Economic Policy, Canadian Labour Congress): Good day.

    I am a senior economist with the Canadian Labour Congress. As you no doubt already know, the CLC represents approximately 2.5 million workers from all sectors of activity across the country.

    I will be making my presentation in English, since my prepared text is also in English.

º  (1630)  

[English]

    Before addressing the topic of the WTO and the FTA more directly, I'd like to start by stating the basic message I would like to leave with you, which is that what the world needs today is not more economic agreements to further liberalize trade investment, but a credible and coherent sustainable development strategy that includes respect for human rights. This is not to say that the extension of foreign trade or the further extension of a market-based level playing field is not beneficial. Our point is that the further liberalization of trade and investment does not constitute the privileged road to economic growth and should take second seat to a different set of priorities for Canada and the international community.

    At the beginning of this new millennium, the issues that are crying for attention--and risk, in some cases, degenerating into unmanageable social and economic crisis--are the persistence of worldwide inequality, economic and social disparities, and the important environmental challenges that are facing us. Compounding the challenge, in our opinion, is the growing ability of large corporations, thanks to new communication and transportation technologies, to evade the regulatory supervision of national governments, whether one thinks of fiscal rules or social regulation.

    Faced with these global challenges, the world not only appears particularly ill-equipped with credible institutions of governance, but international institutions such as the WTO, the IMF, and the World Bank all seem to be geared towards the single-minded goal of promoting market liberalization, as if it were the key driver to solve all economic and social problems.

    Of course, it will be said, those institutions and the agreements they are enforcing represent only a subset of all international commitments. This is, however, to miss the obvious point that only those institutions appear to have effective power, as they control enormous resources and can inflict penalties on recalcitrant governments and communities.

    The asymmetry between the effective power of institutions geared towards the regulation of economic relations and those concerned with such soft issues as human rights and environmental, labour, and social development standards has not gone unnoticed. In fact, it lies at the heart of the collective unease with those institutions and with ongoing efforts to further liberalize trade and economic relations.

    The CLC takes the view that we need to develop institutions of global governance if we are to deal with the challenges that confront us. However, for this to happen there will need to be a serious rebalancing of priorities in current multilateral institutions and deliberations. Global economic institutions, including those overseeing trade, need to address the whole agenda of sustainable development and human rights, not just trade and investment. Further, they need to be more transparent and democratic than is the case at the moment.

    This is important for several reasons. The first has to do with the need for coherence between the various international priorities and commitments. One has to ensure that the liberalization of economic activity does not come at the expense of sustainable development or basic human rights.

    The second reason is that of the legitimacy of the governance process itself. As long as there is a de facto predominance of commercial interests, those who are concerned about rights and standards will resist rather than assist the establishment of global government institutions.

    We'd like to offer our brief list of a few guidelines we believe should guide Canada's thinking about international economic institutions, and trade agreements in particular.

    The first guideline would be the maintenance of flexibility in development strategies. Policies associated with market liberalization are but one strategy available to societies in their attempt to improve their economic and social conditions. Rules of international trade must accept the diversity of paths to economic development. Economic agreements should not lock countries into a certain path of development. States, especially those at lower levels of development, should be able to maintain the capacity to influence--even at times to discriminate--without penalty in order to influence their domestic economic development.

    The second principle is that key public services, natural resources such as water, and culture should be off limits to markets and to trade disciplines. I think this has been discussed, so I won't get into the rationale further here.

    As a third principle, countries should maintain the capacity to regulate in the public interest without having to compensate all stakeholders.

    In chapter 11 of NAFTA--and this is so well-known I don't need to delve into it very much--we see essentially a new legal doctrine emerging, where any government activity, regulation or law that impacts private sector players is liable to some form of compensation. This is an interpretation of what we have in front of us, but it's not entirely farfetched. I think that brings such dangerous implications that it really calls for our immediate attention.

    The fourth principle is that trade agreements should not seek to enforce a false symmetry on countries at widely different levels of development, and should make allowances for the specific needs of developing nations.

    Fifth, multilateral agreements on the environment and international agreements on fundamental labour and human rights should take precedence over WTO rules. Here we're dealing with one of the fault lines. The labour movement across the world has really tried hard to build core labour clauses or social clauses--whatever you want to call them--into these trade agreements. There's been a long debate within our own ranks as to whether this is an appropriate strategy, for a number of reasons. That tells us, because of the gap that exists right now internationally, this is our only viable strategy. I'd be happy to discuss the merits of doing this. Again, we think it's such a basic floor to address that it shouldn't call for....

    Sixth, non-democratic countries, or those where the fundamental rights of citizens are not respected, should not be able to count on the same trade and economic privileges as those who respect those principles. So again, we establish a club here where we extend privileges to each other. China, for instance, is one of the world's greatest human rights violators and probably the country whose level of imports to Canada has grown the fastest, but it basically gets extended privileges even though, in our opinion, they shouldn't be part of the club.

    Finally, proper mitigation measures have to be put into place to compensate workers on the losing end of the restructuring that follows the relaxation of trade barriers. In the context of multilateral agreements, where the winners and losers belong to different countries or regions, this should be addressed explicitly in the form of targeted adjustment funds.

    Where does that leave us in terms of the WTO and the FTAA? If you follow our line of reasoning, there's not a great deal we think should be added to the agenda at the WTO. We certainly think the WTO could regain some legitimacy by addressing the so-called implementation issues and improving both its external and internal processes. We think this is a prerequisite for credibility, to move ahead, and also for those institutions to actually be functional.

    While we believe in a rules-based multilateral system, we feel that the FTAA is an unneeded exercise. The FTAA can only come into being if it goes beyond the WTO in terms of liberalizing. This is a problem to the extent that we don't fill the governance gap appropriately. In Europe they have created a parliament to take care of that. They have created institutions to take care of that. But in the Americas, because of the wide disparity of development levels, I think that process is a bit premature--not to mention that the United States would oppose it, because clearly they can get, via trade agreements, what they otherwise get anyway.

º  (1635)  

    To us this appears to be a process where we're seeking to use leverage to increase the pressure at the WTO level. We don't think it's appropriate; however, we do think there's a role for Canada to play. In fact, we're quite heartened by what the Prime Minister has been doing touring Africa on this idea of market access. We think a right combination of market access, ODA, debt forgiveness so these countries have the margin to manoeuvre and to develop the capacity to take advantage of market access, is the right sort of package that we need to advocate, without further imposing conditionality with respect to trade liberalization.

    Thank you.

    The Chair: Thank you very much.

    We'll start with questions. Mr. Casson.

    Mr. Rick Casson (Lethbridge, Canadian Alliance): Thank you all very much. That's a wide-ranging number of issues to deal with trade, that's for sure.

    I'd like to ask you, Mr. Dungate, a couple of questions for clarification. You've talked about, and in your brief also mentioned, reducing the amount of support for the amber box definition. Some countries have done that, but they've shifted that support elsewhere. If that's allowable and going on, how are we going to solve it? You've mentioned we need clear rules, and I think CRFA mentioned as well that we need clear rules on how to go about putting a lot of this into practice. If countries are allowed to do that, then the support is still there, but is it then acceptable if it gets down into the greening...? Can any country just increase their green box support by whatever they choose?

    Help me with that; explain that a bit.

º  (1640)  

    Mr. Mike Dungate: Yes, the green box is unlimited. There's no restriction on how much spending you can put into your industry within the green box.

    I'll give you an example of what the U.S. has done. It had direct payments to its producers. It had it linked to production, so if you produced x amount of bushels or harvested this many acres of wheat, you got paid a price per the amount of production. That is considered trade distorting because it's directly linked to production.

    Now what they've done is decouple it. They give the same dollar cheque to the farmer, but they don't require him to produce anything; he can produce whatever commodity he wants. They say that's not trade distorting because it's not per se encouraging production.

    I think you can understand, coming from the farming community as you do, that whether a farmer gets the cheque for this reason or that reason, he's getting the cheque. That means he's going to stay on the farm and produce that, because he's going to factor it into his cost of production. So that's the one issue.

    What we tried to do, both ourselves and by promoting it at a Canadian Federation of Agriculture level, was provide an overall cap on all support, whether it be amber, blue, or green, and do it as a cap on your value of production.

    For Canada, our negotiators tested this at the negotiating table. As you can imagine, the EU, the U.S., and many other countries balked at this completely. I think it's a no go at the negotiating table. It's pretty clear this idea we came up with to try to address this issue wasn't going to work. What the answer is I don't know. The one thing I know is, don't think you're gaining any leverage by getting them down on this amber box support and giving them something else for it in return, because you're not going to get anything. That's the point at this point.

    Mr. Rick Casson: You also mentioned--and I guess this is what you're alluding to there--that because there's an imbalance already, if countries bring down their support evenly it's still not enough. Is that because there are more imports in your product than there are exports?

    Mr. Mike Dungate: It works inversely on market access to export subsidies. On export subsidies, we're already at zero on just about anything we have. We have some residual export subsidies in Canada, but we're going to be at zero, if you just do a straight reduction, long before the EU and the U.S. ever have to get down to a reasonable level on their export subsidies.

    On market access, for example, we know that on our poultry into the EU, they effectively provide about one-half of 1% of their consumption. We provide 7.5%. If we do this equal pain, where you increase access by 10%, it's not 10%--Stephanie was talking about this--but 10% on top of that. And 10% of 7.5% is three-quarters; 10% of one-half is five-tenths of 1%. They're going to move up incrementally while those who are providing more access are going to keep on widening that gap.

    We would rather say, what's the access level? Is it 5%? We would argue for 5%. If you say it's 7.5%, then everyone is at 7.5%. Why should we provide more than anyone else? Make it equal for everyone; that's the rule across the board. Make it equal on export subsidies. Everyone can use 10%. But whatever it is, make it available to everyone.

    Mr. Rick Casson: Mr. Spurgeon and Mr. Valiquette, I didn't know much about your organization and I was interested to see that your mandate is to collect and distribute royalties for your members. I don't understand how that works.

    When I was in my other life I was in municipal politics, and we had a skating rink that played music and we were supposed to zap it. I say “supposed to” because I don't know if we ever did. I think we must have, but hopefully we did, now that I've said that.

    So people sign up or become members. And then do you give them back...? If one of their songs is played, is that the person you get to, or is it a broad-based...? How is that money collected and distributed?

    Mr. Gilles Valiquette: I can start on that one. It could be a long song.

    The first thing to understand is that to write a song is a life in itself, compared to performing. We tend to put all the artists in the same bucket, you know. We have a lot of singer-songwriters in Canada, but our concern is with the writers.

    Bryan Adams wrote his songs, his early hits, with Jim Vallance, but who is Jim Vallance, you know? We have 20,000 members who write music like this.

    This is the deal we have had with Canadians since the 1920s. When we work at composing our song--let's say it's three days, three weeks, or whatever--we are not paid at that moment, but we have the right to be paid if our song is used. So the question is, when is it used? Well, it's when you hear it or when you copy it. So, of course, we hear it on radio, we hear it on TV, and we hear it on stage. We also hear it in arenas, in restaurants, and that's why we have the right to be paid there.

    SOCAN is an organization that is owned by the songwriters and the publishers, their agents. Because it would be impractical for each one of us to go to all the users and ask for our money, we have a collective that actually does that. It makes my life easier because I can still concentrate on writing songs, but for the users we give access to Canadian repertoire and to the world repertoire.

    Basically, we have quite a number of rates. They are regulated by the Canadian government at the Copyright Board level because we cannot decide by ourselves how much we can charge. So there's a quasi-judicial thing happening there, and after this, we have the right to collect the money. It's redistributed to all our members, and at the end of the year we're left with zero. It's basically a service we have for our members.

    I don't know if you want to add anything to this, Paul.

º  (1645)  

    Mr. Paul Spurgeon: You're absolutely right, and the skating rink you referred to would have to pay a licence fee. It would be less than $100 a year. That skating rink could play any piece of music, any CD it wanted to for the skaters for that licence fee.

    As Gilles said, the licence covers all that access to the world's repertoire of musical works, whether it's a Canadian song, a song from England, Elton John, a song from the United States, Spain, or Greece. It doesn't matter.

    Mr. Rick Casson: So who gets the hundred bucks?

    Mr. Paul Spurgeon: SOCAN does, and then SOCAN distributes it. It pools the money. I think your question is--everybody asks this question--how do you know what's being played so that everybody gets their money. Well, we have different pools of money; we have different distribution formulae.

    What we do with the money we collect from, say, skating rinks or from other general licensees, is pool it with money we collect from radio stations. Then we do what we call a representative sample of air play from radio stations that is accurate to plus or minus 5%--whatever is statistically valid and representative--looking at different formats of music use throughout the country, French-English language throughout the country, station format. We look at country music; we look at pop. We sample every radio station in the country, then figure out what songs they play and who is entitled to the money, and then cut cheques. And of course, the more your song gets played, the more money you'll get. That's how it works.

    On TV it's another thing. We also pool the money we collect from television; we pool the money we get from concerts. So it's done depending on the source of the revenue. It's a complicated business, but that's what we do.

    Mr. Rick Casson: Thank you.

    The Chair: Mr. Paquette.

[Translation]

    Mr. Pierre Paquette (Joliette, BQ): I'll start with you, Mr. Valiquette. First of all, I want you to know that you have some admirers in the House of Commons. That may not be saying much. Mr. Pilon from the Coalition has been here to explain to us the proposed international instrument and why it was important that the WTO not be in charge of this initiative. I totally agree with that, and I believe most parties in the House of Commons agree on the idea of an international instrument. However, we would have to see how in concrete terms, such an instrument could be implemented and what kind of organization would oversee it.

    One of the problems we face is that few countries, aside from Canada, Quebec and France, seem to appreciate the fact that the liberalization of the cultural products market constitutes a threat. Have efforts been made within your industry to heighten awareness among people, particularly among US songwriters? Have any international alliances been struck to promote this international instrument?

º  (1650)  

    Mr. Gilles Valiquette: Among other things, SOCAN is part of a worldwide association by the name of the International Confederation of Societies of Authors and Composers. Membership in the confederation is not restricted to people in the music industry. It extends to those in the graphic arts field, among others. Obviously, cultural diversity has always been a key concern of artists, particularly when it comes to their works. An artist's work mirrors the society in which he lives.

    However, an artist must also have access to the public to give others an opportunity to see themselves reflected in the artist's work. This synergy is known as culture. In my opinion, most countries are, more often than not, mindful of this synergism. A conference is slated to be held in London next September. In fact, one is held every two years. Cultural diversity will be one of the key subjects on the conference agenda.

    As you can see, cultural diversity is a major concern of ours. However, in light of the number of worldwide agreements, someone needs to take the initiative and that's what we're asking the Canadian government to do. Because Canada is a smaller country, it can respond more quickly. Because we've had to wage a constant battle in Quebec, we're somewhat more mindful of this reality.

    There have been some positive developments. I'm thinking here about the efforts of Heritage Canada to support Canadian content. For example, the sound recording program has secured a place for us, even if it's not always apparent that this is so. We mustn't forget that fifty years ago, our very own Félix Leclerc had to sign a lifetime contract with the French recording industry because there was no place for an artist of his ilk in Canada. Today, all of that has changed, thanks to the concept of Canadian content, which must be appreciated and valued. Often, other countries look to us as leaders in this field.

    I say we should move quickly on this initiative. The idea of an international instrument is a sound one. SAGIT has done an excellent job. The coalition has expressed a direct interest in the proposed initiative and SOCAN is collaborating with it. All that's needed, in my opinion, is a final push. We have all of the positive elements on our side and the whole thing is set to snowball because people are receptive to the idea. We'll certainly be sharing with the coalition the success of countries like Chile at last September's meeting. It's time for someone to step up to the plate on this matter.

    Mr. Pierre Paquette: Moreover, Ms. Beaudoin also attended the World Social Forum in Pôrto Alegre. We worked closely with the French to increase awareness among Brazilians. This is a very important culture in the Americas, after all.

    In the conclusion to your submission, you make the following observation: “With respect to services, SOCAN submits that the GATTS' “bottom-up” structure...”. Further on, you state that a “bottom-up” structure must also be adopted for Canadian investment. I'm not clear on what you mean exactly by a “bottom-up” structure.

[English]

    Mr. Paul Spurgeon: When you're negotiating an agreement, you can do it in different ways.

    A good analogy would be this: if you're building a house and you decide not to build an extra rec room or bedroom, you can do that and you exclude it from the building. You're building it and you say you don't want to put in a kitchen or to do this. It gets built without a kitchen or an extra bedroom.

    With top-down you don't have a choice. Everything is in. The roof goes on the house and it covers everything. Unless there's some kind of provision you can agree to that says you'll use the backyard until it is no longer useable, or something like that, that's all you can hope for. Top-down covers everything and you're committed, whereas with bottom-up you can pick and choose what you want in and what you want out. I think that's the preferable approach to take, if you can, when you're negotiating a trade agreement.

º  (1655)  

[Translation]

    Mr. Pierre Paquette: In French, we tend to talk about either an “approche négative” or an “approche positive”. Now I understand what you mean.

    Getting back to the Canadian Labour Congress, you mention in your submission a dual structure of monitoring labour rights. I have pressed this point considerably in this committee. I hope a formal proposal can be made so that Canada moves beyond mere pious wishes, debates this issue seriously and takes concrete action. I'd like to hear more about this dual structure, as you're the first ones to raise the issue with us.

    I'd also like to hear more from you about Chapter 11 of the NAFTA. You indicated that the clarifications made in no way addressed the substance of the problem. Could you elaborate on that statement?

    Mr. Pierre Laliberté: First of all, with respect to Chapter 11, prior to the Quebec Summit last year, we were encouraged by Minister Pettigrew's announcement that Chapter 11 would not be part of the FTAA package and that, given all the challenges that had been launched, he would endeavour to work with the United States and Mexico to clarify Chapter 11.

    In light of these announcements, we were hopeful that fairly substantial amendments or clarifications would be forthcoming. In actual fact, very little happened. To our way of thinking, the clarification merely opened the door for an amicus curiae...

»  (1700)  

    Mr. Pierre Paquette: It means a friend of the court.

    Mr. Pierre Laliberté: That's right. Moreover, the clarification isn't all that clear. We have no way of knowing if it's restrictive or not.

    We consider this to be part of the process. The problem, as we see it, is that expropriation is defined too broadly, as is the concept of investment. We also have some concerned about the VIP process of which foreign investors can avail themselves, whereas someone with a business in Canada must proceed through the international courts. That's where the real problems lie. The fact that one can be a friend of the court is merely a side bar.

    With respect to the dual structure you spoke of, as I was saying, in some ways it fills the existing void. In an ideal world, we would already have in place a restrictive structure to ensure that standards, fundamental human rights and core labour rights were respected. By this, we mean the absence of slavery, forced labour and child labour, as well as the freedom of association. These are fundamental rights that in principle, should be recognized and accepted in China, just as they are in Canada, India and Brazil.

    As we see it, the issue is not to make subtle adjustments to labour laws in these countries, but to ensure that proper standards are in place. Clearly, the WTO is not an expert on such matters. Nor does it claim to be able to resolve these issues. From the outset, working with the International Confederation of Free Trade Unions, we have called for the ILO to attest to the situation as far as labour rights are concerned, to take on a monitoring role and to determine whether or not rights have been violated. Recommendations could then be forwarded to the WTO, which would decide on the appropriate penalties.

    We continue to defend this position. As I stated at the outset, to the extent that we have no choice but to abide by these free trade agreements, we look upon this as an essential component. Ideally, however, these considerations should be part of separate, binding treaties which take precedence over trade agreements.

    Mr. Pierre Paquette: I know the ILO has set up a working committee to examine the social effects of globalization. Perhaps you could talk to us briefly about that. First of all, however, how is it that no Canadian sits on this committee?

    Mr. Pierre Laliberté: Now there you...

    Mr. Pierre Paquette: As you know, we're waiting to be recognized as a country, and I'm in no particular hurry, but it seems to me that the CLC should have...

    Mr. Pierre Laliberté: Indeed, we should have...

    Mr. Pierre Paquette: Perhaps you could tell us then what the mandate of this committee is?

    Mr. Pierre Laliberté: Listen, I can't give you...

    Mr. Pierre Paquette: If you have any background material on the history of this dual structure, I think you should share it with the committee.

    Mr. Pierre Laliberté: I'll be happy to send it to you.

[English]

    The Chair: Mr. O'Brien.

    Mr. Pat O'Brien (London--Fanshawe, Lib.): Thank you, Mr. Chairman.

    I want to thank the witnesses for some wide-ranging, interesting ideas and opinions that have been expressed. I would like to zero in on a couple. I'm sorry I'll have to leave for another commitment.

    I would like to address the comments of Mr. Laliberté.

    We had Mr. Juan Somavia at this committee, the head of the ILO. I asked him this question: “I want to know if the ILO supports the inclusion of labour standards within trade agreements”. He said, and this is a quote now:

...Canada is being very creative in this through side agreements that are of a promotional nature. There are a number of ways in which the energy that has been behind this trade and labour standards debate can be channelled so we make things happen.

    He was complimentary to the use of side agreements. He did not support the inclusion of core labour standards in trade agreements. I wonder what your reaction is to his opinion.

    Mr. Pierre Laliberté: I am surprised by that, to tell you the truth. For one thing, as Mr. Paquette just said, he's probably a very diplomatic and polite man. The ILO is a tripartite organization and has large constituencies in some countries that don't look kindly on fundamental labour rights, so he has a constituency to look after.

    This being said, we think the ILO, for all its flaws, is the least bad organization to actually adjudicate these issues to a large extent, because it has built an expertise and a network throughout the world since the First World War.

    On the issue of side agreements, we actually take objection to his view. Our experience with the NAFTA side agreements is that, sure, if you want to hold conferences, bring in academics, and discuss labour law, it's wonderful. If you are a Mexican worker in a maquiladora in Monterey, this is not going to help you. The process is cumbersome. It doesn't do the job. And Canada, to its credit, has tried to adjust somewhat. The Canada-Costa Rica agreement has been an attempt to address the notion of a floor.

    Mr. Pat O'Brien: I appreciate that very much. I would like to move on, if I could, because I have a couple of other questions. I took Mr. Somavia to be quite candid with his response. That's how I saw his response.

    In your brief you cite the EU, and some of my colleagues across the table have often said that the EU is a paragon of how things should be done, in terms of an economic regional trade agreement being a political trade agreement. On behalf of Minister Pettigrew a year ago or so, I attended a meeting of the development ministers of the EU, chaired by Minister Clare Short of the U.K. They unanimously and categorically rejected the inclusion of core labour standards in trade agreements. They agree with Mr. Somavia.

    I wonder what your reaction is.

»  (1705)  

    Mr. Pierre Laliberté: Frankly, I'm sure there are plenty of other things they don't want. I think we have to make a determination as to what our priorities are. If we were to determine, say,that we would impose a minimum wage of two bucks an hour to all workers in third world countries, that wouldn't work. What we're saying, what we want, is enabling rights--rights that will give these people a chance to fight, to improve their living conditions.

    Mr. Pat O'Brien: I understand your view. I respect your right to have your view. I'm just indicating to you that I'm not hearing a lot of other support for that view from other people who are very knowledgeable and involved in the labour movement in one way or another. That's okay. The NDP does not agree with the people I cited either. I think they were rather surprised at Mr. Somavia's comments.

    My last point, Mr. Chairman, is about the FTAA.

    I found you a bit pessimistic about the FTAA in your brief. You say that a regional trade agreement to further liberalize economic activity can make sense only if it is like the European Union, a political as well as an economic process.

    I guess my question is, who says that's true? I would point out to you that the EU evolved over 50 years to be what it is now. I think there is a plethora of examples where that statement your brief makes is just absolutely false. Economic trade agreements can be beneficial, in my view, without having to evolve into what the EU has evolved into.

    Mr. Pierre Laliberté: When the EU started, with an agreement on steel and coal, it essentially was a very partial trade agreement. Then in subsequent rounds it evolved into a more and more comprehensive and ambitious one.

    We're at the time where, as I said, if you read carefully, the FTAA can only improve on what exists. We're not talking about coal and steel here, right? For us it raises the problem of governance in general. We really need to build good multilateral institutions. To us, it's better to invest our energies in the WTO than in the FTAA.

    Mr. Pat O'Brien: Okay, and that's fair enough. I can't really disagree with you. The government has a three-pronged approach on trade: it's bilateral, it's regional, and it's multilateral. The WTO is clearly the first priority. We just think you're being short-sighted in not seeing any value to regional trade agreements. I just don't think the evidence supports that view.

    Mr. Chairman, thank you very much. I appreciate my colleagues giving me the chance to go first. I'm sorry to excuse myself to discuss these matters somewhere else.

    The Chair: That's all right. Thank you very much, Mr. O'Brien.

    Mr. Eyking, you have the floor.

    Mr. Mark Eyking (Sydney--Victoria, Lib.): I guess my question would be to Mr. Barlow and Ms. Jones. I'm not only on the trade committee; I'm on the agriculture committee. I think you're getting the wrong message about our position on marketing boards and opening our borders to cheaper products. We're very much in favour of marketing boards. They seem to have proven themselves quite beneficial to our food industry and farmers. They give a constant supply, they give a safe and healthy product, and they price themselves very competitively with other western countries. The price is usually determined not by the tariffs but usually by a cost of production formula that gives a small margin for the farmers.

    You seem to mention underdeveloped countries quite a bit and how opening these borders is going to help these underdeveloped countries. My sense is that it's a bit of a red herring, because if we open our borders to these products, the only things that are going to come in are products that are heavily subsidized, or surpluses to other countries at a lower price. It could save a lot of your companies a few cents on a milkshake or an egg sandwich or a chicken sandwich, but it's going to give a lower price to farmers.

    I guess what I'm getting at is this. I know you don't represent just multinational companies, but isn't the track record not that good in Europe and Asia when these companies go into these countries with cheaper products? What is the big advantage for your companies having all this cheaper food, all of a sudden, coming into the country? Is it going to save that much for the consumer, and is it going to help our agriculture? I'd like to have some comments on that.

»  (1710)  

    Ms. Stephanie Jones: I guess I'll take the question, and if Mr. Barlow has anything to add, we can go from there, Mr. Chairman.

    The quick answer to your question is that considering we are one of 140 countries at the negotiating table, we have to be realistic about what we can accomplish in this round of negotiations. The Doha agenda clearly identifies three areas for greater trade liberalization, and we've identified them in our submission. They are on page four of our submission. We're looking for substantial improvements in market access, reductions of all forms of export subsidies, with a view to phasing them out, and substantial reductions in trade-distorting domestic support. What I'm hearing, both in the question and in some of the responses we've heard today from other witnesses, is that two of those things can be accomplished and the third perhaps should be left alone, which is the market access piece of this agenda.

    I would draw your attention to something that our former ambassador and the former deputy minister of international trade said at the conclusion of the Uruguay Round and in the evidence provided to the Standing Committee on Foreign Affairs and International Trade. It's on page 11 of our submission, and I'm just going to quote him here:

I personally wish we could have done more on European subsidies, but the fact of the matter is, we ourselves did have our hands tied behind our backs because of supply management.

There's no question that at one point we were frozen out of negotiations between the U.S.A., Europe, Japan, and, God bless them, Australia, because the Americans didn't want us at the table reinforcing the Japanese supply management processes on rice.

    We have to be at the table on all three of these agenda items in the Doha Round in order to ensure that transition periods that make sense are put in place for our producers.

    We have to remember that supply management controls and marketing boards do not control all product flowing into Canada. Further processed goods that come in and are traded freely in Canada are growing exponentially. These are items that our consumers want, and they are coming in without any tariffs being applied to them.

    So we have to be realistic. We have to take a look at what can really be accomplished here.

    As to your question on the least developed countries and their track record, the comments I made in my statement were directly to point on why we are willing to open our borders on every other agricultural product except for supply management industries. I think it's prudent for this committee and for Canadians to be asking what kinds of policies are in place in Canada that make the supply-managed sectors uncompetitive with African countries, as an example.

    On that piece of it, I might turn to Mr. Dungate to ask him why he thinks it's so important that the supply-managed sectors are protected from who we see as the least developed countries in the world.

    Mr. Mark Eyking: I don't know why your organization is so down on supply management. Doesn't it give you a good product and a good price, and doesn't it give our farmers a good living? You're taking a roundabout way of trying to get rid of supply management. It's definitely not going to help underdeveloped countries. Is it going to help your businesses?

    Ms. Stephanie Jones: Again, we have to be realistic about what we can accomplish here. The overall goal of the WTO is to move the process of trade liberalization forward. If we take a look at the lessons history has provided us.... I will quote here from Michael Gifford in his evidence to the Standing Committee on Agriculture and Agri-Food. He is the former director general of the international policy directorate in Agriculture and Agri-Food Canada. As Canada's lead Uruguay Round negotiator, he was speaking to what happened last time:

...we wanted to maintain import quotas in support of supply management. We held that position until literally the last couple of weeks in the negotiation.

When the European Union agreed with the Americans that the name of the game was going to be tariffication and that all these import quotas, irrespective of whether they were legal or illegal, were going to be converted into tariffs, that position no longer became sustainable.

    I think the question is whether we want to be at the table when the U.S. and the EU come up with a solution this time around. I think we need to be at the table. We need to be there to ensure that the deal is a good deal for all Canadian farmers, both the supply-managed farmers and those who depend on free and open markets to maintain and grow their businesses in this country.

»  (1715)  

    Mr. Mark Eyking: Maybe I should ask my question differently. If we got rid of the marketing boards, what would you see taking place with our food industry?

    Ms. Stephanie Jones: Our proposal, which is clearly outlined on pages 11 and 12 of our submission, is not to eliminate marketing boards overnight. It is to address the realities of this round of trade negotiations and to recognize that three pillars are being negotiated, and market access is one of those.

    The reality is that Canada just doesn't have the negotiating clout to continue to ask for both open markets for many of its products and at the same time to protect supply management. As a result, we want strong domestic industries. We want strong domestic sources for our chicken and poultry and dairy products. We depend on those domestic sources. We need to ensure that realistic transition periods are negotiated so that we are not, for lack of a better phrase, stuck with what comes to us out of negotiations that Canada is excluded from, as happened last time around.

    On that I would again be quoting Gerald Shannon, who advised MPs after the Uruguay Round as follows:

We have to decide on whether we're going to fight the last war all over again with respect to protecting the dairy and poultry industries or whether there are better places to spend our negotiating chips. I think there are.

At a minimum, we can expect our negotiating partners to want to significantly reduce tariffication levels for our key agricultural import commodities. Some, such as our colleagues in the Cairns Group, will want tariffication removed entirely so that not only normal tariffs would apply.

Similarly, it would be a challenge to achieve even greater reductions in agricultural export subsidies than they managed last time around. Clearly, this prospect would be enhanced if Canadian negotiators did not have their hands tied behind their backs because of the supply management problem.

    I think that, clearly, the Doha agenda set out that every other country wants to discuss more open market access. That is the next step in any kind of global trade agreement. We need to decide as a country whether we want to be at the table talking about market access or whether we want to continue to tie the hands of our negotiators so that they can't discuss it and ensure that adequate transition periods are in place for supply-managed producers and so that, at the same time, open markets are created for the 90% of producers that operate in this country in a global trade environment.

    Mr. Mark Eyking: How many companies did you say you represent?

    Mr. David Barlow: We're talking about 16,000 restaurant outlets across the country.

    Mr. Mark Eyking: As you're representing them, I take it that their position is the same as yours, that they believe in dismantling the marketing boards and they figure they're going to have a better supply of food in the long run.

    Ms. Stephanie Jones: We represent 16,000 members across the country. We are an association that reflects the industry. We represent about two-thirds of the industry nationally. That includes both independent restaurants and large multinational chains.

    Mr. Mark Eyking: Your view is that they're not in favour of the present system for dairy, milk, eggs, and so forth.

    Ms. Stephanie Jones: We are here talking about our trade position, which is that supply management in terms of market access is not a sustainable position over the long term.

    But we'd be happy to speak to the agriculture committee or this committee at any time on our position on domestic supply management and the other issues that follow in the domestic work we do with organizations such as the Chicken Farmers of Canada.

    The Chair: Maybe Mr. Eyking and you could communicate further on this subject.

    Ms. Stephanie Jones: Yes.

    Mr. Mark Eyking: Thank you, Mr. Chairman.

    The Chair: Mr. Casson, are you okay?

    Mr. Rick Casson: Yes.

    The Chair: Mr. Paquette, a final question.

»  (1720)  

[Translation]

    Mr. Pierre Paquette: I have a short question for Mr. Robinson from the Canadian Association of University Teachers.

    With respect to services, both Canada and Mr. Pettigrew have adopted a position whereby services are excluded. Many of our universities are private institutions. Very few are public. Quebec has a network of publicly funded universities, but all of the rest are private institutions. As I see it, the defence of public education is a dangerous, ambiguous position. In essence, what we're striving to defend is the state's ability to protect our educational system, which includes both private and public education.

    Does your association share this vision or, in your opinion, should the Canadian government simply focus on protecting the integrity of the public education system?

[English]

    Mr. David Robinson: I think you're correct in that the position of the Government of Canada has been that public education is on the table. We've pressed in several meetings for a definition of what they mean by public education. With the K to 12 system there's a sort of general agreement that it's the public education system; when people talk about public education--in the English system, anyway--it generally means K to 12.

    In the post-secondary sector it's different. We have what's better described as a publicly regulated system, and that's the system we're interested in seeing protected. Whether we're talking about McGill or the Université du Québec à Montréal in Quebec, we want to see them both equally protected, because education is more than just trade in services; it's part of a public good, one we need to have proper oversight over.

[Translation]

    Mr. Pierre Paquette: Thank you. Like Mr. O'Brien, I didn't have a chance to mention how diverse the presentations were. Admittedly, we don't have enough time to thoroughly review this issue. Thank you.

[English]

    The Chair: Thank you very much.

    Mr. Potter, I have a small question for you. I greatly appreciated your representation.

    If there were one thing your organization would like to see reformed at the WTO in the area of proceeding, whether we're talking about dispute issues or any other legal matter, what would that be?

    Mr. Simon Potter: Well, I am a trade lawyer myself, so I'll make so bold as to speak with my own knowledge, not having asked all the trade experts in the CBA, because our position here has to do with services. If there is something to cure at the WTO, it is the process surrounding dispute settlement. That has to be opened up. Private access to that kind of dispute settlement has to come one day, and it has to be a proceeding in which everyone can have faith and credibility and be happy with the results that come out of it. If there's one thing to address, I would say it's that.

    The Chair: Would that be open hearings and open proceedings?

    Mr. Simon Potter: Open hearings and the kind of thing Mr. Laliberté was speaking about as well, to have a greater possibility of friends of the court, although that is happening in WTO dispute settlement panels now. NGOs are showing up and offering their briefs, but it is a somewhat pell-mell situation--or rather an ad hoc way of dealing with those things.

    I would say that if we're going to have a dispute settlement mechanism everyone can have faith in over the years, one in which these changes Stephanie Jones was talking about are going to be made...because those changes are coming, by the way , Mr. Eyking, they're on the way. If we're going to have faith in that dispute settlement mechanism, we're going to have to make sure it's more open, more transparent, and better understood by all of us.

    The Chair: On behalf of my colleagues from all the different political stripes, I want to say this has been one of the most dynamic presentations we have heard so far. I want to thank you greatly for what you have done today. You have advanced the agenda, and you have helped us to see things from a different perspective on a number of issues. Our report will be compiled over the next few weeks and will, hopefully, be made public sometime in the near future, and your comments will be reflected in one way or another in the report.

    We are going to recess for a minute and a half so our witnesses can move on to their other destinations, and then we will have to come back to talk briefly for a couple of minutes about future business and some other issues. We will adjourn for one and a half minutes.

    [Editor's Note: Proceedings continue in camera]