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A substantial report
Let us say it right off: this report by the Standing Committee on Foreign Affairs and International Trade is a substantial one. It addresses the main aspects of North American integration, including economy, trade, co-operation on matters of security, social development and environmental protection. It identifies the state of affairs, principal issues, perceptions and challenges.
We in the Bloc Quebecois, are very proud to have been a part of this exercise, which took place over more than a year and which allowed us to hear thousands of quality presentations. We traveled to Washington and Mexico. We traveled all across Canada, including to two hearings, one in Montreal and one in Quebec City. These hearings, in addition to being invaluable, gave us a sense of the people, their concerns and their expectations.
We want to thank the witnesses. We gave their opinions, requests and suggestions serious consideration. Obviously, because certain positions are irreconcilable, we had to make choices. At times these choices differed from those of the Liberal majority on the Committee, hence this dissenting opinion.
Interesting ideas
Without Quebec, the government of Brian Mulroney could not have signed FTA. We Quebecers are open-minded. Recently, however, NAFTA-related problems have arisen, and the idea has caught on that free trade is inadequate in the face of problems of poverty and the growing discrepancies in income and, on the other hand, there is a need to protect Quebec’s powers to make policies within its areas of jurisdiction.
In this regard, a number of the positions the Bloc Quebecois has been defending for some time on North American integration, although largely accepted in Quebec, have, for a long time, had little support in Canada. By trying once again and putting them to the witnesses and experts over the course of consultations, we have championed some of them. The Committee has made progress in the past year.
Let us take, for example, the idea of creating a social and structural development fund to help those who have not fared well under North American free trade. This idea, launched by Mexican President Vicente Fox when he visited Ottawa in September 2000, was received so well in Quebec that the Government of Quebec officially supported it. And yet, it went largely unnoticed in English Canada, and, at the start of the hearings, the Bloc met with categoric rejection on a number of occasions when it proposed it. But the idea caught on.
There are enormous economic discrepancies among the three North American countries and even among regions within these countries. The gap between the rich and the poor is growing — in Canada as well. Free trade alone is not reducing it, far from it. In fact, the liberalization of markets is leaving a lot of flotsam in its wake. The integration of the continent must be accompanied by a series of measures supporting those whom economic progress neglects, and there are many. Enjoyment of the advantages of access to a bigger market requires the appropriate infrastructures, be it in the areas of transportation, education or health. So when the poor are left to carry the burden of their poverty by themselves, they are unlikely to ever escape it.
The European Union has understood that and established a significant structural and social fund to distribute wealth in the case of the countries destined to become members. Despite certain failings, this fund was remarkably successful in that countries such as Ireland and Spain moved from relative poverty to prosperity. From the financial weights they were, these countries became full-fledged partners in the European Union and significant markets. This is a bit like what we were proposing for the North American continent.
A year ago, the idea was considered marginal in Canada. It has caught on to such an extent that the Committee is calling for more research on its feasibility. We are delighted and pleased.
Let us have a look at chapter 11 of NAFTA on protection of investment, as well. This chapter, which permits a business to sue a foreign government directly when it considers that a law prevents it from taking full advantage of its investment, is causing a number of problems. The scope of the chapter is so broad that it permits the most frivolous of proceedings. The amount of the suit can be so high that it discourages a government wishing to pass social or environmental legislation. In addition, the entire process lack transparency and openness.
The Bloc Quebecois has decried these potential abuses for a number of years, and witnesses in large numbers supported our position, to the point that the Committee adopted it in part. While it did not go as far as we would like, as we point out later, we are still pleased with the progress made.
The position of Committee members moved forward on another aspect of North American integration as well. It involves relations with Mexico. Perhaps it is for cultural reasons, But English Canada feels very close to the United States and far removed from Mexico. In English Canada, the tendency is often to consider Mexico a competitor when it comes time to attract the attention of the United States.
Quebec, on the other hand, tends to consider it an ally with which to tighten links, as a counterweight to the dominant American influence. It is all the more important for the Bloc Quebecois members, who know full well that it will be to the advantage of the country of Quebec to cultivate such relations. Ottawa takes offence at this sometimes. There was, for example, the episode where the federal government worked actively to prevent a meeting between the Premier of Quebec and the Mexican president, before it facilitated a similar meeting with the Premier of Alberta.
In all of Canada, it is Quebec that trades with Mexico the most and it is Quebec that has the closest ties of co-operation with Mexico. The Committee’s stay in Mexico, the many Mexican interventions, non interventions, seem to have borne fruit, as the report contains a number of signs of openness toward Mexico, which we had not seen previously. Here too, we are pleased.
The need for a counterweight to the dominant influence of the United States, which can be put into effect only through a set of alliances within multilateral institutions, has been felt increasingly since the terrible attacks of September 11, 2001 in the United States. The ensuing tension, while understandable, puts us under considerable pressure. While we are aware of our neighbour’s need for security, we must not lose sight of our values and interests. This is why certain aspects of co-operation with the United States worry us.
For example, the Canada-U.S. agreement on safe third countries could threaten our policies on such fundamental issues as our immigration policy or our acceptance of the refugees crucial to our survival as a French-speaking people on this continent. In addition, the proposed American missile shield, largely supported by the right in Canada, brings into question the entire policy on nuclear non-proliferation. While it did not go as far as we would have liked, the Committee did take our concerns into account.
Another advance: the Committee finally recognized the growing role played by the provinces in North American relations. Although the majority did not support the creation of a formal mechanism for consultation, it did, however, take an initial step.
We have examples of co-operation, such as the Great Lakes Commission or the Conference of New England Governors and Eastern Canadian Premiers. This co-operation is all the more important with the United States, our neighbour and principal partner, with which Quebec will continue to have special ties, regardless of the fate Quebecers choose for themselves.
The Bloc Quebecois intends to take advantage of the Committee’s slim window to promote the role that Quebec, within its areas of jurisdiction, can now play in international relations. In this time of rapid change and increased international trade, it advocates the extension of the window linking the people of Quebec and the world. It is vital to free Quebecers from the diplomatic isolation the federal government tries to keep it in.
The Committee’s study also gave us an opportunity to initiate certain discussions that are still taboo in English Canada. There is, for example, the issue of money. It must be recognized that the weakness of the Canadian dollar is causing problems of productivity and thus of prosperity. Its constant fluctuation compounds the task of our exporters. These problems are felt to such a point that a number of businesses prefer to do their accounting in American dollars and some of the cash reserves of the banks is in greenbacks.
Should we contemplate adopting a common currency to deal with these problems? The Bloc Quebecois proposed the creation of a monetary institute of the Americas to look into the question. We had the courage to do what no other party in the House of Commons has done. No doubt less attached to the Canadian dollar, 54% of Quebecers considered the idea of a common currency interesting, in contrast with a meagre 35% of Canadians, in a poll taken by Léger-Léger in September 2001. Nevertheless, the Committee was obliged to consider this issue and it even agreed to move research forward.
A lack of desire
Recognizing a problem is one thing. Working to resolve it is another, requiring more will. In several instances, the Committee was not prepared to take the step. We find that most regrettable.
Environment: The example of environmental protection is blatant. The unbridled competition created by open markets is having a negative impact on environmental legislation. Indeed, some might be tempted to promote competition over environmental protection. This must not happen.
The North American Agreement on Environmental Co-operation is notoriously ineffective. Decisions by the Commission for Environmental Co-operation (CEC) may be enforced only with the consent of the parties, in other words, never. After all, who would agree to be fined? And, in any case, its only mandate is to ensure countries comply with their own legislation. If these laws are ineffectual, it can do nothing.
It has been proposed to include minimum standards in the agreement on environmental protection, which the countries would be obliged to meet. Alas, the proposal was rejected.
Labour laws: The race to compete puts even greater pressure on working conditions; something that in part explains the growing gap between rich and poor. The North American Agreement on Labour Co-operation is reputed to be even more ineffective than the agreement on the environment. Here again, there is no minimum standard continent-wide.
The three North American countries have, however, reached agreement within the International Labour Organization on the recognition of certain basic rights, such as banning work by children and the right of association and to bargain collectively, for example. However, nothing requires them to honour these conventions.
The Bloc proposed including these basic conventions in the North American Agreement on Labour Co-operation, which would have made them enforceable. Here again, we were rejected.
Social and structural development fund: With respect to the social and structural development fund, the Committee did call for further research, but did not formally agree to the principle. What would have been an important message to send to the government became a missed opportunity. The mandate given the government is far too narrow to enable it to exert real pressure.
Quebec, like Canada, has victims of free trade. During the hearings, Professor Mario Polèse of the INRS, with figures to back him up, showed that, in Quebec, the major centres were benefiting from free trade, whereas the outlying regions suffered. The gap between the rich and the poor expands relentlessly. As many witnesses said, Canada has never tried to adapt its social safety net to this state of affairs. Quite the contrary, government policy has simply accentuated the trend. Cuts to Employment Insurance, cuts to transfer payments to the provinces, which still have the task of maintaining the essence of the social programs.
Sectors affected: Free trade has given a major boost to certain sectors of our economy, especially those relating to new technologies. Other sectors, however, have suffered. The price of raw materials has dropped, to the detriment of mining regions. Low value-added industries, including clothing in Montreal, are having a hard time competing with poorer countries. Where are the help measures for those workers who suffered of that situation?
Softwood lumber: We are well aware that some effort has been made to decry the current state of affairs in the softwood lumber sector in Quebec and Canada. Nevertheless, considering the discussions that the Committee had in Washington, we deplore the lack of force of the report with that regards.
For over nine months now, the Bloc Quebecois has been calling on the federal government to put measures in place to help businesses survive the softwood lumber crisis, created by the Americans’ imposition of a 27.22% countervail and anti-dumping duty. With time, these sanctions could prove fatal to some businesses no longer able to absorb the losses. The objective of the Americans in this whole saga is obviously to play for time in order to wear down our forestry industry and eventually buy out our businesses at cut-rate cost. A victory before the WTO will be a hollow one if there are no more softwood lumber companies.
The Bloc Quebecois proposed a series of measures to help the workers and businesses affected by the crisis, including an increase of Employment Insurance premiums as long as their duration, the creation of a specific program for older workers and the instauration of a special status for seasonal workers to facilitate their access to Employment Insurance. For businesses, we demand a loan-guarantee program as well as incentives for second and third transformation industries and interior demand stimulation. In the absence of such measures — and the Government still delays action — many workers and businesses might not survive crisis.
NAFTA’s institutional framework: In another vein, it must be admitted that the entire institutional framework of NAFTA is inadequate. The dispute resolution process is neither transparent nor open. We have proposed solutions from the publication of documents on the causes before arbitration tribunals to granting the provinces or NGOs the right to make presentations there. This, too, the Committee rejected.
Retaining our independence from the United States: Finally, the Bloc expressed concerns over Canada’s desire to keep its policies distinct from those of the United States in a number of areas, including immigration policy, foreign policy and defence policy, among others. The Committee did include a paragraph to express these concerns, but never made the strong statement of principles we were expecting.
Defence: In terms of defence, the Committee proposes to substantially increase the defence budget. Defence policy is currently being re-evaluated. Foreign policy will be re-assessed next year. According to whether Canada decides to intensify its military cooperation with NATO allies or to concentrate on its role as a peacekeeper with the UN, the needs of the Canadian forces will be radically different. The Bloc Quebecois thinks that it would be preferable for the Government to wait for until the new foreign policy is adopted, allowing us to assess the needs of the military to enable it, before substantially increase the budgets.
It is true our military is exhausted. Some of the equipment may be outdated. It is possible that a budget increase is necessary. However, seeking a substantial budget increase before even deciding what it will be used for lacks caution. We cannot support this.
Conclusion
Eight years after NAFTA came into force, it was time for an assessment. Quebec as a whole has benefited from it. The differences between Quebec and Ontario, in terms of revenue or unemployment, for example, have never been so slim.
However, NAFTA has produced more than just benefits. The wealth it has generated is very unequally distributed. Certain regions are becoming poorer. The number of those left out is growing. Free trade alone cannot resolve all the problems. It must be accompanied by other measures so as to prevent the inequalities from ceaselessly expanding. What is more, concerns over the powers of government are beginning to appear, and they must be dealt with.
The Committee has noted these discrepancies in its report. It expressed its concern. We in the Bloc Quebecois, however feel that it failed to take the additional step that would have brought it to propose specific measures to resolve them. We find this regrettable.
As negotiations are underway in a new WTO round and the question of the expansion of free trade to the three Americas is being considered, the experience gained with NAFTA is invaluable. The Committee should have set out strong and clear principles to guide the actions of the government in these negotiations and thus prevent the repetition of NAFTA’s failings. We regret that it did not do so sufficiently clearly in its report.
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