EVIDENCE

[Recorded by Electronic Apparatus]

Monday, November 25, 1996

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[English]

The Co-Chairman (Mr. Duhamel): Good afternoon, bonjour.

I'm the co-chair of this particular committee with the Hon. Michel Dupuy, who happens to be away at this particular point in time. He asked me to convey his warmest and sincerest regards. I believe he knows a number of you.

The usual format is going to be just slightly different today. Usually we begin with the panellists, who are encouraged - all I can do is encourage - to keep the remarks within roughly seven minutes or less. They get marks for good behaviour. Then the members will raise questions. Of course, at any time other panellists may wish to build or to challenge, to add or subtract.

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The slightly different twist today is that Mr. Grubel, who is the colleague from the House of Commons, will be making a statement. I believe he has promised me that he will be quite brief. I did tell him we would let him know how wise his commentary happened to be within the first few minutes. He'll be watching my body language, I'm sure.

So with that said, Mr. Grubel, in a just a few seconds I will encourage you to proceed with a brief statement. Then I will go to the panellists, and we will hear their testimony, and then we will go on to questions, if that is satisfactory.

I believe I have a quorum. I have with me today my colleagues Mr. Cullen, Mr. Grubel, whom I've already mentioned, and Mr. Penson. The gentleman deep in thought and listening - and some people say members of Parliament don't listen - is Mr. Rocheleau.

[Translation]

See how attentive he is today.

[English]

We can now proceed.

Mr. Grubel (Capilano - Howe Sound): Thank you, Mr. Chairman. Thank you for letting me wear my hat today as a professional economist with 30 years' experience of teaching international economics.

SIMA has its roots in economic theory and assumptions that are no longer valid in this age of globalized markets and information. According to this old theory, importing countries suffer a reduction in welfare, because dumped and subsidized imports drive domestic producers out of business. Thereafter, the offending importers would increase prices above their previous levels, recoup their losses from the previous sales below cost and government subsidies, and earn an economic rent thereafter. Consumers in the importing country suffering from such foreign policies would end up paying higher prices permanently and lose their industries to boot.

In today's world, suppliers of any product seek monopolies in vain. All of them face very effective competition from many different sources and substitute products. The opportunity to raise prices and maintain them at exploitative levels does not exist any longer.

For this reason, dumping and subsidies by exporters always produce only costs. There is no chance to recoup them. Therefore, I conclude that dumping and subsidies are not rational.

In a rational world, therefore, no one benefits from these policies, and they would not exist. In such a world SIMA-type protection is unnecessary. Of course, the problem with this conclusion is that government and firms are not always rational.

Subsidies to agricultural production are used by many countries, including Canada. There are still subsidies to manufacturing and mining, but these are becoming increasingly rare.

The question is whether SIMA-type legislation is the best method for dealing with this problem. Economic theory says no. There's a distortion to efficient market operation. Eliminate the distortion. Do not introduce a new one.

International agreements aimed at the universal elimination of subsidies and dumping practices are in place and based on this argument. Progress has been made on their elimination, but some practices persist. The most notable of these involves agricultural support programs of the European Union. I will return on how to deal with their existence.

In the case of industrial subsidies one important problem involves making valid empirical judgments about economically justifiable subsidies to basic research and non-justifiable subsidies to applied research and development. On the one hand, when we widely give subsidies to pure knowledge, basic research, that is valid. But subsidies to research and development, stressing the development aspect, is really something that a company should absorb. It should not be given to companies. Fudging on these issues goes on in all industrial countries, including Canada.

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A second problem with industrial subsidies arises from the difference between marginal and average costs.

[Translation]

Mr. Rocheleau (Trois-Rivières): Point of order, Mr. Chairman. The interpretation of the document is not being done anymore, not only because Mr. Grubel did not table his text in both languages, but also because he is speaking too fast. This runs counter to the spirit of the Official Languages Act, which is the law of the land. I would ask Mr. Grubel to speak slowly.

Mr. Grubel: Once again, it is the same thing. I'm sorry.

[English]

I ask your pardon.

[Translation]

Mr. Rocheleau: To the interpreter as well.

[English]

Mr. Grubel: Okay.

The second problem with industrial subsidies arises from the difference between marginal and average costs. In the longer run, prices have to cover average costs, but during economic downturns, they often cover only marginal costs. During booms, prices often are higher than average costs and make up for the losses during the downturn.

The Canadian steel industry especially accuses the International Trade Commission of the United States of unfair actions for insisting that prices not covering average costs involve dumping and are actionable. Roger Phillips, the president of IPSCO, gave a paper on that subject at the Fraser Institute. I'm very familiar with the argument, and I agree with him, but we do the same in Canada. These practices are based on very bad economics. They must be stopped.

In light of these inadequately short remarks about economics, here are my policy recommendations.

First, let me discuss agricultural products. Until the European Union gets rid of its massive agricultural subsidies, SIMA should be retained for trade with Europe in agricultural and downstream products, such as wine. However, it should be abandoned for trade within NAFTA, not so much because there are no subsidies but because they are granted by all three countries.

I am convinced that the Canadian, American and Mexican public, as distinct from the producers of import-competing goods, would be made better off by this policy.

In the case of dumping of agricultural products, the problem is much like that in goods production. Under certain conditions, it is economically warranted to sell goods at marginal cost. This happens especially when bumper harvests depress prices at home and often in the world, but bumper harvests occur randomly in both the United States and Canada. Producers in both countries would, over the longer run, benefit from selling goods at marginal costs from time to time without the threat of countervailing duties.

Consider, for example, that you put in your wheat expecting a certain return to cover your costs not only of seeding and harvesting and fertilizers but also to pay the interest on your equipment and on your mortgage. But sometimes there are such good harvests all over the world that in the year you bring in your harvest, the only price at which you can sell is to cover the cost of moving the agricultural products to market. You at least then cover your marginal costs if you are able to export.

In return, when the Americans will accept our wheat and the Mexicans will accept our wheat, when this is the case, we promise to accept some of their products, at a price less than full recovery of cost, during times when economic conditions or climatic influences or whatever force them temporarily to sell at a cost that does not fully recover all costs. Here is what would be the result if we did that.

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Consider how great it would be if there were no more actions against Canadian softwood lumber, pork, potatoes and grains on the one side, and if there were no more Canadian actions against U.S. fruits, vegetables, potatoes and other seasonal products on the other. How great it would be if we could prevent the risk of Mexican producers organizing effectively against the dumping of Canadian grains during the bumper years, when often prices are below production costs, at the same time assuring Canadian consumers of a steady flow of low-priced goods from southern climates during our northern winters, unconstrained by the threat of SIMA actions.

Concerning manufacturing and mining, the irrationality of SIMA-type protection is known by most technical policy advisers in Canada, the U.S. and Mexico. The opposition for changing the state of affairs comes from U.S. politicians and the affected industries backing them. This is so because under the U.S. political system, based on free votes in Congress, individual politicians can be persuaded quite readily to vote in support of industries that deliver votes and money. Of course, these industries enjoy huge benefits from such action.

Gordon Ritchie once gave me a number, which I've forgotten, that showed softwood lumber import restrictions have increased the stock market value of U.S. forestry products companies by literally billions of dollars. That's why they can afford to pay the most high-priced lawyers to bring in this action.

I believe the Canadian government is quite ready to agree to a mutual and simultaneous elimination of anti-dumping and subsidies legislation in NAFTA for exactly the reasons noted above. In fact, Chrétien, according to this book I'm reading, Double vision, made this one of the demands of President Clinton in the aftermath of the election in October 1993, but because of the precarious nature of negotiations in Washington, and his attempts to get it through the House, he was not able to respond to this. We had tried but had not succeeded in getting this through.

If we did that, I believe the public in all countries would benefit. I support this Canadian position, and urge this committee to recommend that our government persist in its effort to reach agreements for the full elimination of the protective policies in NAFTA. Such efforts have been futile in the past. Let us not give us hope. If anyone 15 years ago would have predicted the creation of NAFTA, they would have been met with laughter. The same arguments that are made before this committee in support of SIMA were heard then in testimony before committees examining the need for tariffs and quotas.

We have with us today a gentleman who has gone through this in spades, Mr. Donald Macdonald. For many weeks and months he dedicated his life to hearing such testimony. Yet - and I hope he agrees - it was a combination of increasing public understanding of the cost of protection for consumers and the downstream users of protected goods. Resultant political pressures and the dedication of individual political leaders seeking to leave a mark in history defied the odds, took on the narrow self-interest groups and brought us NAFTA and the World Trade Organization reductions in tariff and quotas.

I think if we keep at it, history will repeat itself, simply because SIMA-type protection is as bad for overall welfare as were tariffs and quotas.

In closing, let me discuss briefly whether in the absence of a U.S. and Mexican agreement Canada should act unilaterally in either eliminating SIMA or getting tougher with U.S. importers in the interpretation of SIMA rules. My inclination as an economist is to suggest unilateral disarmament. Many of my professional colleagues support this view. Why should we shoot ourselves in the foot just because the Americans do?

Their lumber action has raised the price of the average house in the United States by $2,000 while increasing the stock value of some of these lumber producers in the United States by billions of dollars. The action took money from the average American wanting housing and put it right into the coffers of these big companies. Why should we do the same thing?

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I have a feeling this recommendation, however, will be rejected as being politically naive and unacceptable. So be it. I'm not running for re-election, and my party doesn't listen to me anyway when I'm wearing my academic hat.

On the issue of getting tough with the Americans, I speak again as a student of economics and history. I do not think it wise to annoy the elephant. She is more likely to step on the mouse than to start talking to it. We cannot afford to start a trade war over dumping and subsidy issues with the Americans. The kind of diplomacy, presentation of facts about self and national interest and patient negotiations that have brought us the miracle of free trade and open skies is much less risky and more likely to succeed. Let us stick with it, and strengthen it if we can.

Thank you for your indulgence. I apologize; I should have had a copy for the interpreter.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Grubel.

I'd like to begin receiving testimony from the various panellists. I shall start by inviting, from McCarthy Tétrault law firm in Toronto, the Hon. Donald Macdonald.

[Translation]

The hon. Donald Macdonald (Lawyer, partner, McCarthy Tétrault (Toronto)): Thank you Mr. Chairman. I must tell the representatives of the Bloc québécois that we have here a document in both French and English.

[English]

The committee's principal task, we know, is to focus on what effect the Special Import Measures Act has had on the Canadian economy, and in particular, how it fits in with Canada's trade agreements. But my purpose this afternoon is to move to a broader but related question that follows closely along what Mr. Grubel asked - namely, why in the context of the broader, North American market we should maintain the instruments of anti-dumping duties against imports.

The premise underlying anti-dumping duties is that it is unfair for merchants in country A to sell some of their production in country B at prices that are below the normal selling price in country A. That, however, is not a premise that we accept within domestic markets. Subject to an exception, which I'll discuss in a moment, if a merchant operating within his own country chooses to sell some of his products to some customers in that country at prices below that which he sells to others, there is no legal right for anyone to complain. His competition may not like the disadvantage his lower prices put them at, but if the merchant chooses to accept less of a return on his products, then that is a choice that, quite fairly, he can make.

The exception, of course, relates to competition law. Where the sales represent a pattern of discrimination as between customers, or where the sales are engaged in as part of a predatory strategy of driving competitors out of the market altogether, then competition laws are brought into play.

My argument this afternoon is that now that the American, Mexican and Canadian economies have substantially removed trade barriers against each other, the North American market should be treated as a single market for goods, and anti-dumping duties between the three trading partners are no longer justifiable any more than they would be in a domestic market. If there is concern about predatory pricing or other violations of the competitions laws, restriction of such conduct should be sought by international agreement.

[Translation]

My argument is that now that the American, Mexican and Canadian economies have substantially removed trade barriers against each other, the North American market should be treated as a single market for goods, and anti-dumping duties between the three trading partners are no longer justifiable - any more than they would be in a domestic market.

If there is concern about predatory pricing, or other violations of the competitions laws, restriction of such conduct should be sought by international agreement. I must admit that such an agreement would not necessarily be easily reached with the United States.

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[English]

My experience with trade matters has been on the policy-making side, as Mr. Grubel has mentioned, rather than in the day-to-day professional role of carrying out the trade laws once they are in place.

In the mid-1980s I was much involved as an advocate of a free trade agreement between Canada and the United States. One of my concerns at that time was that the American trade remedy actions were more than just correcting injustices to American business as permitted under GATT; they constituted a new set of trade barriers in themselves.

Many of Canada's aspirations were attained in the free agreement, but the hope that the trade barriers of anti-dumping duties and countervailing duties, as practised by the United States, might be ended was not attained. The custodians of American trade law have been summoned before international tribunals over the past number of years and have been pronounced guilty in a disproportionately large number of cases.

The best the Canadian negotiators could achieve in terms of reforming the remedies themselves was a commitment from the United States under article 1906 of the free trade agreement to enter into further negotiations to deal with anti-dumping and countervailing duties. The seven-year period envisaged by that article has come and gone, and we're in the same situation.

An indicator that the lack of progress in negotiations with the United States should be of concern to Canada and to Parliament is the fact that Canada's share of global foreign direct investment declined from 11% in 1980 to 5% in 1994. That has serious implications for job creation in Canada.

Research undertaken for Industry Canada and for the Department of Foreign Affairs and International Trade indicates that a gain of just one percentage point of that foreign direct investment could have created one million full-time jobs. Both of Canada's NAFTA partners, the U.S. and Mexico, either increased or held their own over the same period.

It's my belief that one possible reason for the loss of ground for Canada vis-à-vis our NAFTA partners in investment is the fact that trade remedy laws provide more protection to investment that locates in either the U.S. or Mexico than in Canada.

I think it's known that my colleagues and I at McCarthy Tétrault advise a number of Canadian steel companies, so I am somewhat familiar with that industry. I'm told that U.S. trade law was one of the reasons for the decisions of both Co-Steel/Dofasco and IPSCO to locate the new steelmaking operations in the United States.

Some of you may have seen the article, ``Big steel's small future'', in The Financial Post of November 23, referring to Dofasco's investment in the United States. The comment is made that it has in effect been the American trade barriers that have been the principal motivation to cause a Canadian steelmaker, and more than one Canadian steelmaker, to locate inside the U.S. market.

The time has come for a new endeavour to eliminate anti-dumping duty. How, you may ask, can the United States, and especially Congress, be persuaded to negotiate what so far they have avoided negotiating? The answer is, inflicting on their constituents - and here I depart from Mr. Grubel - some of the pain they've been inflicting on us. If the U.S. will not negotiate, then Canada should be taking all legitimate action to bring them to the negotiating table.

[Translation]

The time has come for a new endeavour to eliminate anti-dumping duties. How, you may ask, can the United States, and especially Congress, be persuaded to negotiate what so far they have avoided negotiating? By inflicting on their constituents some of the pain they've been inflicting on us? If the U.S. will not negotiate, then Canada should be taking all legitimate action to bring them to the negotiating table.

[English]

My proposal to you today is that Canada should now exercise its legitimate right to apply to United States exporters the same kind of strict rules applied by the United States to Canadian exporters under the U.S. anti-dumping laws to the point - and here we should respect our obligations - that such a more intensive regime does not violate our commitment under the World Trade Organization negotiations.

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There would be many businessmen in the United States who would be happy to have a regime in which they could sell at lower prices, free of penalty, into the Canadian market. They cannot sell as freely as they would like into that Canadian market because of our anti-dumping system, and they don't really expect us to drop our anti-dumping system when their own country maintains an anti-dumping system even more strenuous than our own.

This brings me to my next point, namely that the American anti-dumping procedures are substantially more rigorous for the exporter than our own - so rigorous, in fact, that what is supposed to be a trade remedy has become a major trade barrier to Canadians hoping to do business in the United States.

The products covered by the U.S. investigations are sometimes from large industrial concerns, as were the five 1992-93 steel anti-dumping cases that named Canada. But many small manufacturers also get entangled in the web of U.S. trade remedy laws, as in the 1989 Limousines case that ended with the bankruptcy of the Canadian respondent firm and the withdrawal of the petition. More recently, small Canadian firms have been involved in the laminated hardwood flooring countervail proceedings in the United States.

Mr. Chairman, in the binder I've delivered to the committee clerk I have attached as appendix A a comparison of the application of Canadian and American anti-dumping laws, which I think demonstrates the differential treatment between the two. Incidentally, we're also making available a number of documents that we hope will assist the committee in its deliberations and that are tabled with you today, including our responses to your questionnaire, ``The Review of the Special Import Measures Act Key Questions''. We hope it will be of assistance.

To conclude, from the foregoing it will be apparent that by the practice of administrative protectionism through anti-dumping laws, the American authorities have created a further set of barriers to Canadian exports. Allied with programs of incentives offered to Canadian industry, principally at the state level in the United States, to locate new investment within the United States, Canadian firms have been under pressure to locate in that country. Incentives used by the American authorities are exactly the kinds of incentives that American officials have accused Canada of, notably in the softwood lumber case.

We cannot achieve anything by getting angry at this American double standard, however satisfying that may be. The best thing to do is to turn their own trade weapons around on them, where doing so will not violate bilateral or multilateral trade laws. We have indeed taken such an approach recently with the Helms-Burton legislation, with a quick and forceful response to this U.S. legislation by enacting Canadian blocking legislation and initiating the dispute resolution mechanism under NAFTA.

I close, therefore, by saying that I invite the committees to fully examine the question of recommending amendments to Parliament and to the government that will provide the American administration and the Congress with a reason to change U.S. laws so that Canada and the U.S., and Mexico if it be so willing, may eliminate anti-dumping duties from North American trade. Indeed, we have had a precedent for this in the past week in our very recent bilateral trade deal with the Government of Chile, which has provided a phased-out elimination of this remedy.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Macdonald.

I'd like now to proceed to the Canadian Bar Association. Will Mr. Dattu or Mr. Cranker be the spokesperson?

Mr. Riyaz Dattu (Secretary-Treasurer, National Sales and Commodity Tax Section, Canadian Bar Association): We will both be presenting. I will be beginning.

With me is Mr. Glenn Cranker, the vice-chairman of the sales and commodity tax section.

Our section is made up of legal practitioners who practise in the area of sales tax, goods and services tax, customs and international trade. Many of our members appear regularly before the Canadian International Trade Tribunal and work with Revenue Canada, either representing domestic industry complainants or assisting exporters and importers who are targets of the complaints.

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As a section of the CBA, we're also active in our day-to-day consultations with Canadian government agencies that are in charge of administering Canada's customs and trade legislation. For example, we have a biannual meeting with the members and staff of the Canadian International Trade Tribunal through the formation of a committee known as the CBA-CITT bench and bar committee.

As our section is made up of trade law practitioners who represent both domestic interests and foreign interests, we always strive to present our public views in a balanced manner. This is what we are attempting to do today.

I might begin by asking the members of the committee to look at pages 9 and 10 of our submission. The submission is presented in both an English version and a French version. At the bottom of page 9 in response to the question ``What do you consider to be the most important issue to be addressed in the review of SIMA?'' our answer is not unlike the two presenters you've heard already.

The section believes that the most important issue in the context of review of SIMA is the determination of the means by which the NAFTA parties eliminate anti-dumping laws for trade conducted among the three countries. All decisions taken in respect of this review should be made with the single objective that Canada obtain an agreement from its other NAFTA partners, particularly the U.S., that anti-dumping and countervailing duty laws have no place within NAFTA. We suggest that as an interim measure we might consider implementing into our legislation a mirror provision providing for reciprocal exemption.

That's where we come from, and then the debate is on how we get there. You've heard two points of view, one from Mr. Grubel in terms of our unilateral disarmament, and another one from Mr. Macdonald, speaking of retaliatory laws. Our recommendations are along the lines of Mr. Macdonald's but are tempered with the position of the Canadian Bar being that of rising to the matter of public interest.

We would recommend to this committee that the Canadian industry should not be impeded in seeking protection from dumped and subsidized imports by way of any procedural or substantive hurdles if such hurdles are not part of the GATT codes that Canada is a signatory to. In other words, our government should do all it can to assist Canadian industry to obtain protection from dumped or subsidized imports, provided such measures are consistent with Canada's obligations.

This may, in certain instances, require that we mirror the legislation that exists in the trading countries we're most apt to deal with, including the United States.

The second aspect of our representation is that the balance ought to be drawn in regard to the unimpeded access at the back end of the process, and let me explain what we mean by the back end. The process begins with the filing of a complaint by an industry, and if it's successful results in a finding by the tribunal. That's what we refer to as the front end.

The back end is the enforcement of that finding by Revenue Canada and by the tribunal if it decides to make a report on public interest. We believe that in the front end of the process there should be unimpeded access to the remedies provided by the GATT codes. On the back end, we deal with the concerns that downstream industries might have by way of a public interest provision and enforcement provisions that tend to achieve the objective of SIMA, which is to provide protection to the domestic industry.

I will deal with the front end recommendations of the Canadian Bar Association and then Mr. Cranker will deal with what I've referred to as the back end process.

On the front end process, we would recommend to the committee that the Canadian government consider means by which Revenue Canada and the CITT could enhance access for small businesses to the remedies provided by SIMA. We note that this assistance is already provided informally by both the Canadian government agencies. However, we believe there should be a legislated requirement akin to what exists in the United States, and in our submission we've referred to the provisions in the U.S. that mandate assistance from the Department of Commerce and the U.S. ITC to small businesses.

Second, we would recommend that the judging of the adequacy of a complaint be undertaken jointly by Revenue Canada and the CITT, with Revenue Canada's role being that of ensuring that the complaint is properly documented and contains sufficient evidence of dumping or subsidies injury and the causal connection. The existence of these criteria ought to be judged by Revenue Canada entirely on the basis of the information in the complaint.

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Once the investigation is initiated, the CITT could conduct a hearing with access afforded to all to make representations on the adequacy of the complaint relating to the allegations of injury and causal connection. Independent counsel for all affected parties would then have access to the CITT's records in respect of the preliminary decision on injury.

Independent counsel for all affected parties should be given access to the confidential records of the investigation conducted by Revenue Canada. At present, full access by independent counsel to the confidential records exists only during the phase of the CITT inquiry and is limited to the injury phase of the CITT inquiry. We believe that counsel for domestic industry should be provided access to the full records of Revenue Canada, because procedural fairness requires this. Indeed, the margins of dumping or amount of subsidy calculated by Revenue Canada are significant factors in the CITT's decision in determining the causal connection between the dumping or subsidies and the finding of injury.

There are other recommendations, but for purposes of highlighting our recommendations the last one we would bring to your attention is that the CITT be encouraged to carry out its hearings in a more streamlined fashion. The current process allows hearings to last up to three weeks, with one week being quite routine for most cases. In the U.S., hearings last no longer than one day, with two-day hearings being almost unheard of. The existence of procedures permitting hearings for as long as three weeks is a significant deterrence for small businesses seeking to avail themselves of the protection afforded by SIMA.

Those are the recommendations at the front end. Mr. Cranker will deal with the issues of the back end process.

Mr. Glenn Cranker (Vice-Chair, Sales and Commodities Tax Section, Canadian Bar Association): I don't know whether Mr. Dattu referring to me as the back end is complimentary or not, but I'll try to deal with the back end.

Mr. Dattu has tried to deal with the situation of filing the complaint up to an injury determination by the Canadian International Trade Tribunal. Assuming that happens - and we're in a less than idealistic world and we have dumping measures that apply - there are certain things the Canadian Bar Association thinks can be incorporated into SIMA to make it a little less protectionist and perhaps not as burdensome on consumers and users of product.

I'd like to deal with three different subjects, including the lesser duty rule, which is followed in the European Union; whether some of the Canadian measures on assessing duties should be the same as the U.S.; and interim reviews due to changed circumstances.

We have dealt with the lesser duty rule to a certain extent on page 5 of our submission in English and in French. It is simply based on the 1994 GATT code. Ordinarily, dumping duties will apply when there is an injury finding to eradicate the full margin of dumping. For example, in the SIMA background paper that has been filed with this subcommittee, the average margin of dumping, I think, was 37% of the normal value during the period under review. That means, in terms of the export price to Canada, an average 59% duty would apply at the time of importation.

We at the Canadian Bar Association think there should be some discretion given, and if Canadian industry does not require that full measure of duties, the lesser duty rule should apply. That is incorporated into the 1994 GATT anti-dumping code at article 9.1, where it says:

It is desirable that...the duty be less than the margin if such lesser duty would be adequate to remove the injury to the domestic industry.

Many of Canada's trading partners have adopted the lesser duty rule. The European Community, for example, states:

The amount of the anti-dumping duty shall not exceed the margin of dumping established but it should be less than the margin if such lesser duty would be adequate to remove the injury to the Community industry.

So you'd look to see how much dumping duty should be assessed. Mexico, one of Canada's trading partners, follows a similar rule but the U.S. does not.

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Now, this committee is going to be confronted with a question: should you adopt the American more stringent position or follow the lesser duty rule of the Community? Our recommendation is that the Community and the anti-dumping code recommendation should be followed, particularly since dumping duty ultimately is going to be payable by the Canadian consumer, or in many cases Canadian industries that are going to be using these imported products as an input in their production.

Secondly, on public interest, I guess this is part of the same rule. There is a public interest provision in section 45 of SIMA that allows for a lesser duty rule. As of now, as recently as the refined sugar case, the Canadian International Trade Tribunal has not interpreted that public interest provision to be the same as the lesser duty rule.

About the assessment of anti-dumping duties, the Americans, as I understand it from the background paper, will apply dumping duties where there is an affirmative injury finding outstanding based on a historical amount of dumping duties, and there will have to be a cash deposit for that amount, whereas our Revenue Canada, I think, is much fairer - and I speak for the Bar Association at the same time as for our committee - in imposing dumping duties. If the normal value of a particular product is $100 per unit in Canada, as long as the export price is raised to that $100 per unit no dumping duties will be applied, whereas with the Americans, if historically there has been a margin of 10%, let's say on softwood lumber, the Americans will apply it to that full extent. We would advocate a continuation of the Canadian process of assessment rather than the American.

Third, on the interim reviews by the Canadian International Trade Tribunal, now we have a five-year sunset provision where anti-dumping duties will expire after five years, subject to review and continuation by the tribunal. There have been some problems where there has been a change of circumstances before that time. Take, for example, a case where there's an injury finding against a range of chemical products and a Canadian manufacturer ceases to manufacture one particular grade that's used by a Canadian manufacturer. At present it's extremely difficult to get the dumping duties lifted and the Canadian producer sometimes will have to pay the duty notwithstanding the fact that he is totally unable to obtain the product from Canadian sources. We would recommend that SIMA, and perhaps the CITT, rules incorporate a provision that would allow changes of circumstances, and particularly to alleviate the margin of dumping.

I would reiterate that in the best of all possible worlds, and particularly within a NAFTA environment, we would like to see the dumping duties removed, but this committee is going to be faced with some practical solutions before we reach that ideal.

Thank you for your time.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Cranker.

I would like to go now to the British Columbia Vegetable Marketing Commission, Mr. Roger Hughes.

Mr. Roger Hughes (General Manager, British Columbia Vegetable Marketing Commission): Thank you very much, Mr. Chair.

I would like first to introduce the parties that are here, because we actually have two groups being represented. The B.C. Vegetable Marketing Commission, which I represent, is representative of roughly 600 growers, with a farm gate value of sales of $125 million and representing approximately 7,000 jobs. Mr. Husch is president of the B.C. Fruit Growers Association. He represents approximately 1,100 tree fruit growers, mainly from the Okanagan Valley, with farm gate sales of about $70 million and roughly 5,000 jobs.

There are three things we really want to address today, and it's very clear from the discussions we've had so far that we are taking quite a different position. The first thing we want to bring out is the importance of SIMA anti-dumping provisions to the horticulture sector in British Columbia.

Four horticultural commodities are currently covered by anti-dumping duties, or are subject to anti-dumping duties, and three of those four commodities are specific to British Columbia. The fourth, Delicious apples, is B.C. plus the rest of Canada. There are some reasons, we think, why that is the case.

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Second, we want to bring some of our experiences with SIMA, some very positive things we think have happened, and then some further changes that would improve the program.

Finally, just as a general point, our view - and this is, as I say, somewhat contrary to the views that have been expressed - is that we do not see SIMA as a barrier to trade. We see it in the context of a trade remedy against unfair trade practices and are very much of the view that it should be retained.

Why is SIMA important to B.C. horticulture? The horticulture sector in British Columbia is small in a global context, but it's very important to the province. We have a very small land base in B.C., particularly in the areas of the Okanagan and the lower mainland. We're working in areas that are very urbanized and with increasing urbanization. The costs of urbanization are significant in our costs of production and also in our opportunities for expansion.

To make the best use of the land that is there, it's important that we have some opportunities for relatively high-value products, and horticulture is one of the few crops that provide us with that opportunity. In addition to being of economic importance in land use, it also happens to be a relatively environmentally friendly use of the land, which again is very important in the context of an area where you are working side by side with highly urbanized areas or regions.

Where it really starts to become important is that our industry is, as I say, small but important, but in the context of the horticultural sector in the Pacific northwest of the United States it's a dwarf relative to a giant. When the giant sneezes, we get pneumonia.

The Pacific northwest is probably the largest single horticulture producing area in the world. Just to put it in context, in the case of potatoes Washington state produces approximately 4.5 million tonnes of potatoes per year. In British Columbia we produce about 60,000 tonnes. In the case of Delicious apples Washington state produces approximately 98 million bushels of Delicious apples. In British Columbia we produce 5.3 million. That's the size of the market. We have growers in Washington state who are probably as large as our entire industry. It does not take much of an action on their part to cause total disruption of our sector.

The other aspect is that in horticulture we're dealing with perishable products, subject to oversupply on both a seasonal basis and a longer-term basis. It is not at all unusual to see a wholesaler or a packer, or even, in the instance of the United States, a large grower, who is in particular circumstances where he has a lot of product; he doesn't want to put it into storage, he doesn't want to sell it out at a low price in his own market because of what he does to his established customers and the established market that is there. So what does he do? He dumps it into the neighbouring market, where there are a different set of wholesalers, a different set of people in the trade, and he gets rid of his product without disrupting his own situation.

That can happen on a day-by-day basis. It's not something that is theoretical; it is real. It happens in the trade every day.

The combination of those two things, a large industry and a perishable product, leaves the B.C. industry in an extremely vulnerable situation. It's extremely vulnerable to dumping. It's not theoretical; it happens.

.1630

At the present time, we have four products covered under anti-dumping. Onions, potatoes and lettuce are unique to British Columbia. The provision for anti-dumping there is that British Columbia is seen as a regional market. What we produce is produced for marketing locally. In the three cases I've mentioned, the highest we would have as a percentage of the total market would be in the case of potatoes, where we're 45% to 50%. The other cases were less than 50% of the market, and as low as 25% in the case of onions. The provision is Canada-wide for Delicious apples, but B.C. represents about 35% of the total production.

In terms of our experience with SIMA, some of the issues that we think need to be addressed are the following. The first has already been mentioned - that is, the time it takes and the costliness of initiating a review. This is particularly important in the agricultural sector, where you have a large number of small producers. There should be a provision or a means to enable them to work together and be able to make their case and bear the cost.

Second is with respect to processed products. There are many instances where the product is being imported. Finished product - for example, frozen vegetables - where the product is being dumped into Canada does put great stress onto the processing industry and ultimately back onto the agricultural sector. Under SIMA, because of the like-products argument, there is no provision, no ability, for producers to be able to raise and initiate action against that. Because of trade relationships and so forth, processors there are oftentimes very reluctant to - in fact, most times would not - enter into initiating a proceeding.

In our view, once an action has been initiated and the anti-dumping provisions are in place, the actions that have been taken, particularly during the last four years, to reduce the administrative burden of having the duties paid have been very positive. I think even wholesalers, although there are very few wholesalers who would not argue against doing away with anti-dumping provisions, in terms of what they've seen happen in the way the program is now administered by Revenue Canada, would certainly say a major improvement has taken place over the last four years. This is the way the anti-dumping duty is calculated and the timeliness with which it is calculated and the information is portrayed to the industry.

The fourth point - again, this goes back to some of the questions Mr. Grubel raised about the cost of the program to consumers - is that it only applies during the season when production is available. Obviously, anti-dumping only takes place or kicks in when the market price in the exporting market exceeds normal value.

In conclusion, our position is that we want to see the provisions of SIMA with respect to anti-dumping retained. We don't see it as a trade barrier but as a trade remedy. We also feel that it shouldn't be used as a bargaining chip in trade negotiations. If there are issues that have to be addressed with respect to what is happening in the U.S. versus what is happening in Canada, then let those issues be addressed, and addressed across the board, and not say, well, we'll put anti-dumping on the table as a way of perhaps bringing somebody else in.

.1635

We have a particular concern with what happened last week in the announcement of the new agreement with Chile and the fact that the provision is there - we don't quite fully understand what the implications are - for the elimination of anti-dumping duties, as we understand it, over a six-year period.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Hughes.

Mr. Husch, please.

Mr. Russell Husch (President, British Columbia Fruit Growers' Association): Thank you.

I just want to emphasize a couple of points. We are a small business - Mr. Hughes has stated that - in the scheme of the Canadian business world. We all recognize that this isn't a perfect world, and the people I represent...and I am a fruit grower; we're working in the trenches out there to help build this country.

We surely are quite concerned about the direction and particularly about this Chilean agreement, but to put it in perspective - and maybe numbers really do show it - the Washington state industry has 170,000 acres of tree fruits. We have 20,000 acres and, as Mr. Hughes stated, we have no room for expansion. The Americans, particularly in Washington, have 600,000 acres into which they can expand, and they're using water from the Columbia River Treaty system, water that is stored in our province.

So you can see that they have an opportunity here to put us out of business quite quickly. That's the first thing I'd like people to take into consideration.

The other thing is the dumping action itself. In the past, we found that a dumping action doesn't last one or two months. The impact on the marketplace lasts not only for that particular growing season but for the next one. We've talked about this huge giant sitting across the street from us - and they virtually are. You can walk down the street and throw a rock and it's in their country. And you'll find that they have their own mandate when it comes to trade and how they're going to be successful.

I would encourage the panel here, Mr. Chairman, to take that into consideration, because as small businesses we recognize that's where the future is in this country. At this time arbitrarily - and I hope that's not what's going to happen - to put us out in front in regard to the overall picture of a trade arrangement would sure hurt our industry considerably.

I will leave you with those two points. Thank you.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Husch, from - I should have mentioned this - the British Columbia Fruit Growers' Association in Vancouver.

Finally, from the United Steelworkers of America, Mr. Hugh Mackenzie, the research director. Mr. Mackenzie.

Mr. Hugh Mackenzie (Director of Research, United Steelworkers of America): That's correct.

I want to start by thanking the committee for rearranging its schedule, given the scheduling difficulties they had with the earlier date, so that we have the opportunity to make a presentation.

And as the chair has pointed out, I'm not Lawrence McBrearty. Mr. McBrearty unfortunately had a commitment that he couldn't avoid, so I'm here in his stead.

I want to say at the outset that it's an interesting day when Mr. Grubel says very favourable things about a former Liberal cabinet minister and then proceeds to quote or at least paraphrase not one but two Liberal Prime Ministers.

Some hon. members: Oh, oh!

Mr. Mackenzie: It just shows, I guess, what complex interactions there are when you talk about trade policy.

I'm going to try to stick to less than my seven minutes so that we can get into a bit of a discussion here, but let me start by referring directly to the title of our presentation, because I think it accurately describes the perspective we bring to this discussion.

We've called it ``Trade Politics in the 1990s: Making our End of the Playing Field as Bumpy as Theirs.'' I think that's an apt title, because the other thing I found interesting about it is that the steelworkers find themselves appearing in front of this committee agreeing pretty substantially with what a senior partner at McCarthy Tétrault is advising the committee to do.

.1640

The perspective we bring to this is the role that the Special Import Measures Act plays in the trade politics between Canada and the United States. I'll use a term that's gone out of fashion but was an integral part of the discussions that took place in the Macdonald commission and in the early years of the debate about free trade in Canada, and that's ``market access''.

Those of us who remember the history remember that in the lead-up to the beginnings of the free trade negotiations with the United States market access was considered to be an extremely important part of the rationale for getting into free trade discussions with the United States. You'll recall that at the time the steel industry was reeling from their experience with blanket trade actions in the United States - ironically rescued from a large part of that impact by an exemption granted by Ronald Reagan - but there were threats posed to Canadian potash exports to the United States and there was one of a continuous string of actions related to softwood lumber. The list just went on and on.

Issues of market access became one of the primary rationales for getting into the free trade negotiations with the United States. With regard to market access, people were quite explicit by what they meant: they wanted to make Canadian export industries less vulnerable to terrorism at the trade administration level by the authorities in the United States.

This has a history that continues throughout the discussion. Those who remember history will remember that right towards the end of the negotiations with the United States, Canada's chief negotiator Simon Reisman at one point announced the negotiations had broken down. In fact, he hied himself back to Ottawa from Washington and declared that the negotiations had failed because the United States was completely obdurate on the question of dealing with the trade harassment opportunities that their anti-dumping and subsidy legislation provided.

The political response was to bring the politicians into the act. I recall both Pat Carney and Michael Wilson going down to Washington and getting into very high-level discussions with American members of the U.S. cabinet to try to put the negotiations back on the rails.

The solution to that crisis in the negotiations, which ultimately paved the way for the then government to be able to rationalize signing, was the creation of a special working group to work out a common trade regulatory system between Canada and the United States that would make traditional dumping and countervailing duty measures unnecessary.

That process continued for a while. It didn't get very far, and then NAFTA came onto the scene. The Canadian government had to make a choice at that point about whether to continue to pursue the joint FTA-mandated discussions with the United States on a single common regulatory system, modelled on competition legislation, as Mr. Grubel has pointed out, or to fold it into the NAFTA discussions.

They essentially decided to fold it into the NAFTA discussions and to leave the FTA working group to die on the vine. As Mr. Macdonald has pointed out, that created the working group, whose mandate expired. The Canadian government's objective throughout has been, in substantive terms, to get Canada out from under the threat of the use of U.S. trade legislation against Canadian exports and, in policy terms, to replace the trade remedy system with something modelled on competition legislation.

.1645

As has been pointed out, that was a wonderful idea, except that the Americans weren't really prepared to pay very much attention to it. I'll describe that as the Canadian government's ``plan A''.

I think it's fair to say that after how many years we've been pursuing this - more than ten - plan A didn't work. Ten years later and two working groups later and two rounds of trade negotiations later, we're still essentially in the same situation as we were. The only reason why it's not a bigger issue at the moment is that the United States economy is doing relatively well and those people who would be at the front lines complaining about this are doing too well economically to be able to back that up. But it's clear we face the same potential threat.

The question is how do we get the United States to pay attention to what this funny little country north of the border wants to have happen in our trading relationship with them? We've tried setting up a working group, we've tried building it into conventional trade negotiations, and that hasn't worked.

We wholly support the position that was put to this committee earlier by the Canadian Steel Producers Association. Our position is that we basically have to make our legislation as advantageous to Canadian producers seeking to deal with dumping or potential dumping threats from the United States as the United States system is able to afford their domestic producers in responding likewise to ``threats'' from here. We can't afford to be boy scouts in these kinds of discussions. We have to do something to get people's attention.

In anticipation of the argument that this approach is no more likely to work than negotiations, there is some precedent for the emergence of more diverse political interests in the United States making the political decisions more difficult for the United States in the dumping area. Given that we've tried the straight-ahead negotiation route without a great deal of success, I think it's time to move our legislative system towards that of the United States so, as I said, their exporters to Canada face the same kind of problem as our exporters to the United States face.

In winding this up so we can get into some discussion, let me say just a couple of things. One is that the position of the industry on what the realistic long-term objective ought to be between Canada and the United States in the steel trade in particular is now essentially the same as the position the union has taken for some time; namely, on the assumption or the acceptance of the reality that given the nature of steel as an industry you're never going to be able to escape the steel industry politics in the United States no matter what you do in a generalized agreement, long-term stability in the trading relationship between Canada and the United States in steel really requires a sectorally based agreement. It requires an agreement between Canada and the United States specifically dealing with the steel industry, an agreement that recognizes the integrated nature of the markets between Canada and the United States, and one that takes into account the difficulties of adjustment to shocks in the trade system that are not peculiar to the industry but certainly an important factor in the industry.

.1650

Let me conclude by throwing a couple of numbers at you. The Canadian economy has always been extremely open, and it has been extremely open for a very long time. It is significantly more open now in the sense of its exposure to international trade than it was before the free trade agreement was negotiated. If you take exports and imports and add them together - and I realize there's a bit of double counting here, because things get shifted back and forth in the process in various places - you end up with a number that's roughly 56% of our GDP, which is a very large number.

The interesting thing, though, is that this has increased fairly substantially since NAFTA came into place, and almost all of the increase in that percentage exposure has been involved with trade with the United States. So when we're talking about trade policy and actions in trade policy to protect Canada's interest, we really are principally talking about actions to deal with our trading relationship with the United States. I think in this instance, whether one likes it or not, one is left with the conclusion that at least as an interim step in moving the negotiations along, we do have to make our end of the playing field as bumpy as theirs.

The Co-Chairman (Mr. Duhamel): Thank you.

Normally the way in which it works is that we begin with the official opposition. I allow roughly 10 minutes for an exchange. The question is often directed to a person or persons, but there again, if you'd like to add, that's fine.

[Translation]

Mr. Rocheleau, do you want to begin, please?

Mr. Rocheleau: I have two questions, one for my colleague Mr. Grubel and the other for Mr. Macdonald.

Mr. Grubel, if one was to follow your line of reasoning, we could end up in a situation where there would be practically no protection for local industries and products.

At the macro-economic and somewhat philosophical level, if your vision was to prevail, would there not be the danger of some sort of leveling to the lowest common denominator internationally, by which countries where social progress is at a minimum, particularly in the field of labour, where there are no social programs, where salaries are low, would have an opportunity to compete on an equal footing and without any constraint with more developed economies such as ours? At the end of the day, it would be a loosing proposition for all parties involved, in my humble opinion. Instead, should we not demand that these countries raise their standards gradually up to the point where their economy would be similar to ours, of the kind that we call developed, as opposed to an under-developed one? Are you not advocating some form of international under-development?

[English]

Mr. Grubel: I don't think so. I think we have seen around the world that opening up borders to international trade is a stimulus to economic development. Only by the incentive structure brought about by foreign competition by the prices that are developed is there the kind of increase in productivity from which Canada has gained.

There have been dire predictions about the effects of the free trade agreement, saying we would be wiped out. In fact, we have had such an export success that all of our economic growth in the last four years has come from exporting more to the rest of the world than we have bought from them. Those exports have been in very powerful developing industries.

I was going to say to my friends from B.C. in the same connection that there is a view that trade is very homogeneous product. It's really only apples. It's only agricultural products. But it has been shown that when trade is opened up between countries, firms in Canada have succeeded greatly under the pressure of competition in finding niches for products of a different variety, of different quality, at different times and so on.

The Americans are on the other side, sitting over there, saying these Canadians are wiping out our lettuce business, because we are supplying all the way down to San Francisco products such as tomatoes and lettuce grown in hot houses in B.C., where the energy is cheap and underpriced.

.1655

One always hears these same kinds of arguments. It always sounds very much like, yes, I can understand that you want to protect the interests, but in the long run I'm sure many industries that have been subjected to the winds of competition later said it was a good thing for them.

[Translation]

Mr. Rocheleau: Let us take a specific example, that of shipyards. There was in the past quite large shipyards in Quebec. Perhaps Mr. Mackenzie could attest to it. They must have had union members in these shipyards, particularly in Montreal, at Davie Shipbuilding Ltd., at MIL Davie Inc. But there were huge changes and today, we must compete directly with shipyards from abroad, mostly in Asia, where salaries and working conditions are certainly not equivalent. How could anyone think that Canada and Quebec - perhaps the Americans have the same problem - can compete when we know that the costs of production, at least as far as manpower is concerned, are really so far apart?

[English]

Mr. Grubel: With all due respect, from the aerospace centre of Montreal they are also exporting huge amounts to those same countries that are supplying us with ships. So it is a mutually beneficial exchange of products.

This is deteriorating into a discussion over the merits of free trade, and I think that's probably not something I would like to pursue. Maybe we can talk about that privately. I think we should take advantage of all these experts we have here.

The Co-Chairman (Mr. Duhamel): You obviously have a difference of opinion on that major issue. Let's leave it there for the time being.

[Translation]

Mr. Rocheleau, do you wish to pursue with Mr. Macdonald?

Mr. Rocheleau: Mr. Macdonald, you said on page 3 of the English version of your brief that Canada's share of global foreign direct investment declined from 11% in 1980 to 5% in 1994.

Later on, you say, and that is good to know, that one percentage point represents about one million jobs, and then you add:

...trade remedy laws provide more protection to investment that locates in either the U.S. or Mexico than in Canada.

Could you elaborate on this?

Mr. Macdonald: As a matter of fact, I'm not sure about this, Mr. Rocheleau. This figure is not based on my personal research, but I believe that...

Mr. Rocheleau: It is not so much the million jobs as the remedies.

Mr. Macdonald: It comes from the great authority known as the Globe and Mail newspaper from Toronto, but I accept these figures as accurate.

Mr. Rocheleau: I am not talking so much about the million jobs for every percentage point as about the trade remedies. You are talking about the trade remedies that are available to the Americans. Could you tell us more about this? What are your suggestions to deal with the American attitude?

Mr. Macdonald: You are talking about the benefits for the Unites States?

Mr. Rocheleau: Yes.

Mr. Macdonald: We have discussed with the Americans of the possibility of giving advantages to Canadian industries in order for them to position themselves on the American market. At the same time, parallel products of the Canadian industry are subject to these anti-dumping remedies which constitute a barrier for Canadians who want to sell in the U.S.

As a matter of fact, the United States is our major market and it is very difficult for us to avoid the effect of subsidies on Canadian industries in the U.S.

I don't have any solution to this issue, but one of the reasons why Canadian investments in the U.S. are in difficulty is the anti-dumping barrier applied to Canadian products manufactured by American plants in Canada. It is a partial solution only, so to speak, to abolish anti-dumping actions if at all possible, but it is one step toward reducing inequality.

.1700

Mr. Mackenzie alluded to a specific policy for the steel industry, just as we have one in the automobile industry. I entirely agree with such negotiations. I am not quite optimistic, but I believe that it is possible to reach such an agreement with the Americans, which would eliminate simultaneously the anti-dumping duties and the subsidies on both side of the border. We would then have one single market for all steel produced in North America. It would not be easy to obtain, but it is worth trying.

Mr. Rocheleau: Perhaps other witnesses would like to comment on your remarks.

The Co-Chairman (Mr. Duhamel): Ok. If no one wants to intervene, we will come back to it later on.

[English]

Are there others who wanted to add briefly to the comments or respond to Mr. Rocheleau?

Mr. Mackenzie: Just to reinforce the point that Mr. Macdonald raised, I'm pleased to see confirmation of what I thought was my typical paranoia about the decisions of some major Canadian steel-makers to locate plants in the United States. One of the few vestiges of my training as an economist is a belief in revealed preference. I think the fact that major Canadian steel companies are investing in plants in the United States so that they can serve the United States market without having to leap over the barriers created by the American trade system is an illustration of what a serious problem we're dealing with here.

The Co-Chairman (Mr. Duhamel): Thank you. Mr. Grubel.

Mr. Grubel: I'm putting on my hat as a member of the committee again. Mr. Mackenzie, this assertion is very interesting, but it is an assertion. We don't really know whether a less unionized environment, a closer proximity to the Mississippi and a closer proximity to Detroit make any difference.

Mr. Mackenzie: It's not my assertion, by the way. It's Mr. Macdonald's assertion.

Mr. Grubel: Yes, and we know where it's coming from.

I would like to question one assertion that Mr. Macdonald made: that the Americans are tougher than we are on the administration of SIMA-type legislation. The evidence I have heard is that Canada brings more actions than the Americans and finds a higher proportion of the actions in favour of importers and the erection of duties.

I think the testimony we have heard here is coloured by the steel industry. The steel industry may very well be an important and separate category and should maybe treated as such. Therefore, I welcome it if we can get a sector agreement on that.

Mr. Macdonald, are you sure we wouldn't be trampled by the elephant if we started to nag him too badly? As is said so often, the American industry is so large that for them to lose a tiny amount of specialized export to Canada is nothing but a small irritant. They can carry on a trade war for a very long time without getting very serious damage, whereas if we are cut off, we will suffer greatly when they put on their barriers.

Before I let you answer this, let me get in my second question. The idea that was used in free trade negotiations, as you know better than almost anybody else around here, is that we went to the people who suffered from the protection, the consumers, the downstream users of the product. Have we genuinely followed up along these lines, helped point out to the American interests where they are losing because of those things, and urged them to go to Clinton and say this is not in their interests? Have we exploited that to the fullest extent possible?

.1705

Mr. Macdonald: I can't be sure of that. There is obviously merit in that, but one thing that certainly will have an impact on the American political system is if one or more American firms or industries say, the Canadians have been very tough on us. They have toughened up the details of administration of the anti-dumping duty system, and we've just now completed at some expense a difficult proceeding with the Canadians in which we lost. Go to the congressmen and say that they have to do something about this. We think on the whole that this statesmanlike presentation that has been made that we abolish it on both sides of the border is something that should be done.

You're quite right. They are very powerful. On the other hand, the other interesting element about them is the leverage created by their political system. A very small interest group operating in the United States Congress can produce results, very often negative but sometimes positive. This is a little bit to encourage the Americans who might have a loss in this particular regard to say, listen, before we get into this kind of trading back and forth across the border, we as a firm are going to be disadvantaged. Let's go to our congressmen and ask to change the situation so that this particular grievance between us - not just a particular one, but the whole anti-dumping system - be put to one side. That is the argument I would make.

There's a second thing I was going to say. I've now forgotten what it was.

Mr. Grubel: What is the optimistic scenario? The pessimistic scenario is that they all get together and gang up and say that if we can do this, let's have tit for tat. How can you assess the probability that the former rather than the latter outcome is likely?

Mr. Macdonald: There is no certainty in this life. On the whole, and it may be just an emotional reaction, I think you do better to stand up and fight for it, even if you're dealing with the bully in the school yard, than to put up with the aggravation.

The other point I was going to make, Mr. Grubel, was about whether or not their system is more rigorous than ours. One of the documents in the package here -

Mr. Grubel: I saw that, yes.

Mr. Macdonald: - has a comparison, and you may want to weigh those and form a judgment.

We think it is more difficult, from the standpoint of Canadian firms that have had to fight their way through the maze that is the American anti-dumping system.

Mr. Grubel: I remember reading that the Mexicans have begun to initiate SIMA-type legislation. They sent to their American counterparts forms to be filled out in ten copies, all in Spanish. The producers came and said, what is this nonsense? They said, well, that's what you are doing to us.

Has anybody followed up on how the Americans reacted to that? Did some of the companies simply say, well, if that's the case, we'll leave it, to the detriment of the Mexican consumers? What was the reaction? Does anybody know?

Mr. Macdonald: I don't know, but it's an idea.

[Translation]

After all, we are a bilingual country and we can use one or the other of our official languages in dealing with the Americans.

Mr. Grubel: Yes, certainly.

The Co-Chairman (Mr. Duhamel): What an excellent idea!

[English]

Mr. Grubel: But do the research and see what happens with Mexico on that.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Grubel.

Further to the question of severity or difficulty or the comparison between the Canadian and American systems in terms of how they handle these issues, I think there was a suggestion - and correct me if I'm wrong, Mr. Grubel - that because Canada has initiated more, and some of our penalties have been more severe, you can test whether or not ours is less severe than the American system. Is that correct?

Mr. Grubel: It is a matter that should go to some tribunal, and then some people will make a case one way or the other.

My information comes from Anne Brunsdale, who was the head of the American trade committee during the Reagan years. She gave a talk at the Fraser Institute in which she documented that by her judgment, we were tougher in the administration and judgments than the Americans.

The Co-Chairman (Mr. Duhamel): We were tougher, okay. But is there not another facet that has been forgotten? Is our process tougher as well?

.1710

Mr. Grubel: I am not an expert in that field. I'm taking somebody who has lived with it in a way very few other people have, listening to the policy people and to the lawyers on both sides, someone who came to Canada and said, it is such unbelievably bad legislation in both countries, why don't we get together and get rid of it?

The Co-Chairman (Mr. Duhamel): Mr. Dattu, did you want to add?

Mr. Dattu: I'm just addressing the comments made by Mr. Grubel.

My understanding is that the Canadian tribunal ends up making two-thirds of its findings in favour of Canadian domestic industry, and you'll find the same statistics in the United States: two-thirds of the cases at the ITC are also resolved in their favour. But what that type of analysis seems to miss out on is the qualitative difference that goes into the process in the first place. In other words, you can look at statistics and they'll look as if they are giving you parity of results. What you're missing out on is how easy is it for a Canadian producer to initiate a case? The analyses that have been done by many show that the Canadian process provides for much harder guidelines for initiating a case than those which occur in the United States.

I have one other point. There's also the comparison that ought to be made with the U.S. economy, which is a very large economy and which can, at a whim, cause floods of imports into Canada. So it's not surprising there are more Canadian cases against the U.S., if indeed those are the statistics. I'm not aware of that, but if in fact that is so, it's as a result of the larger economy in the U.S., with the border industries that are able to spill their product over into Canada. The Canadian access to the U.S. market is a minuscule proportion of the entire U.S. market. So again, in that sense it is not something you can compare just based on statistics.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Dattu. That's helpful.

Mr. Macdonald.

Mr. Macdonald: Mr. Chairman, if I could refer Mr. Grubel to the very final document in my package there, the graph on orders and threats affecting trade, he'll see the Canadian market shares in the U.S. market, as a result of these proceedings, continue to remain low, while notwithstanding the Canadian proceedings the American figures have moved up sharply. We're just not treating them with the same vigour as they are treating us.

Mr. Grubel: I will have to study this graph to understand what that all means. Thank you.

The Co-Chairman (Mr. Duhamel): Mr. Cullen.

Mr. Cullen (Etobicoke North): Thank you, Mr. Chairman, gentlemen.

I always feel somewhat intimidated in this area of trade law. It's fairly esoteric and an area experts spend their whole lives studying and working in.

Mr. Grubel, first of all, I know you don't necessarily want to get into debate on your comments, because we do have these witnesses here, but you did read your comments into the record. My view is that while we all would like to see a changed order - certainly I would - in the dumping and subsidy rules between Canada and the U.S., there is a certain practical reality to having the U.S. be part of that movement. But I think your point, with respect, to some extent ignores the whole concept of economies of scale in industries, mobility of industries, and transportation economics.

I think the B.C. fruit growers are a case in point. The last time I was in the Okanagan, many of the fruit growers were trying to convert their land from fruit growing to other uses, but they were in the agricultural land reserve and they were somewhat stymied. The reason they were trying to do that is that the economics of fruit growing were not exactly stellar. Can you imagine what it would do if we just suddenly opened the border, with the huge economies of scale and the inability of some of these industries to move?

I take your point on niche marketing. I'm not sure it applies as well to commodity-like products, and particularly where commodity-like products are positioned in the domestic market.

Notwithstanding all of that, I would like to pursue something with the Hon. Donald Macdonald and the steel union people in particular.

Mr. Macdonald, you were looking at Ontario Hydro and the electrical industry, perhaps not wearing the hat you're wearing today. But this idea of a seamless world with the United States....

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When we look at energy, for example - and I'm sure you've heard from the forest products industry, an industry I'm familiar with - and if we look at the way the U.S. utilities industry is organized, for example, for cogeneration, they can provide the resource industries in the United States with huge advantages. I'm sure you probably heard from the resource sector that they wanted the utilities industry in Ontario chunked up and privatized and more market driven. Part of the reason, I think, is the way things are organized in the States. So we have a different playing field here in Canada from the United States.

I had two questions, one in relation to steel. It's my understanding that offshore steel producers had a huge damaging impact on the U.S. steel producers and caused some major dislocation there. Why can't the Canadian and U.S. steel producers unite? This came up in a discussion we had previously with the other steel-producing representations. Why not get together and band against the common enemy, which in many cases is the offshore producers, and fight it that way instead of fighting across the border amongst ourselves?

Mr. Macdonald: I think that is very much a case to be made. My comment was premised on the fact that we now have a single market and that therefore this particular remedy is now irrelevant. I'm not suggesting that Canada and the United States should take off the statute book, for the time being, the anti-dumping duty rights against all of our other trading partners with whom we do not have this single-market arrangement. I analogize the North American market now to the domestic market here in Canada in the sense that we may have other grievances, but surely we should be prepared to take the possibility of somebody cutting the price as one of the facts of market life.

A positive comment made by Mr. Mackenzie was that we should be looking at a sectoral negotiation. I don't pretend that's easy, but you make the point, which I think would assist in that one, that when the Russians or the Koreans or the Japanese start dumping into either the American market or the Canadian market they're not just dumping into the United States and Canada, they're dumping into North America, and we have good reason to act in a concerted fashion when it comes from outside.

The Co-Chairman (Mr. Duhamel): Mr. Mackenzie.

Mr. Mackenzie: I have a very quick follow-up point. Something Mr. Macdonald said prompts me to make another comment about how you measure the impact on Canada of the imbalance between our trade legislation and the legislation in the United States.

Two points haven't come up. One, when we're dealing with third-party offshore producers looking at dumping, frankly, they're going to dump into the market it's easiest to dump into. I don't know that I've seen a study of this, but when you talk to people in the steel industry you get the impression that Canada gets a disproportionate share of material dumped from offshore because it's easier to get it in here than into the United States. That's one aspect of the cost of this imbalance that doesn't come out in the statistics.

Another piece of it that doesn't come out in the statistics is that, looking at steel in particular, when you look at steel trade statistics between Canada and the United States over the last 15 years one of the things that strikes you is that particularly when you take into account the American sales into Canada, there really hasn't been a dramatic change in the overall balance between Canada and the United States despite the introduction of the free trade agreement.

As even some of my colleagues in the union on the other side of the border will acknowledge, primary industries like steel were supposed to be one of the areas where Canada was going to win. We were going to lose as a result of free trade from the loss of branch plants in the secondary manufacturing sector but we were supposed to gain in the primary sector. We haven't. One of the reasons we haven't is that the Canadian industry, in order to avoid teasing the bears in the United States, has exercised what they would describe as ``voluntary restraint'' in the extent of their penetration of U.S. markets. So there's an unmeasured impact of our inability to come to grips with this problem.

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The Co-Chairman (Mr. Duhamel): Mr. Husch, would you like to answer?

Mr. Husch: Yes. Thank you, Mr. Chairman.

Just to clarify from the tree fruit industry what we have today, because that might be helpful, today with apples we have a fair trade agreement as opposed to a free trade agreement - and that's the way I look at things - under NAFTA. That is to say, there are no tariffs and we compete head to head with Washington state or any other state south of the border.

As part of that, though, we've been trying to resist enormous pressure from Washington state, which has a lot of tonnage, and the way we've been able to resist that is to be creative, to have new varieties, to fill those niche markets. That's one of the reasons we're still here today, because we've been able to do that. Also, it is because of the anti-dumping action that we have today supporting the apple industry right across Canada.

It is because of those practices that we've been able to withstand and are not just surviving; we're on the upswing here. If that is taken away, then you're going to see a dramatic change in the way the operation, in particular in our province, is going to happen, because we won't be there. We just won't be able to compete against that infrastructure and the support they get through labour legislation, pesticide legislation and all those factors.

We haven't been able, in this country, to level the playing field yet. Hopefully, some day that might happen.

The Co-Chairman (Mr. Duhamel): As I understand your comment, and it's supported by those made by Mr. Hughes as well, this is vitally important to you now and for your continued survival. While there may be some modifications possible for other sectors, it's not in the cards for you in terms of what you see to be your priorities and your challenges.

Mr. Husch: Thank you.

The Co-Chairman (Mr. Duhamel): Mr. Cullen, a brief follow-up question.

Mr. Cullen: I'd like to follow up a bit. What I'm hearing is that you've managed to survive and prosper, but that's because we have some anti-dumping rules that provide for some kind of fair trading practices for you.

I would like to come back to...presumably, Mr. Chairman, we're also talking about subsidies. Is that part of this mandate? Suppose we look at comparing, let's say, jurisdictions outside of Canada in different regimes.

A little pet project of mine is looking at net subsidies. That is to say, when you look at the various statistics, I think one of the things that don't measure...in occupation, health and safety we have something that measures frequency and severity. You can measure frequency but severity.... In the context of trade dispute resolution, it doesn't deal with, for example, three or four countervail efforts over the last number of years which would cost millions and millions of dollars.

The concept of net subsidies would be such that, for example, we could reach some agreement with the Americans that you could only launch a countervail if you could demonstrate that there were more subsidies, let's say, in Canada than there were in the United States. If there weren't, then you didn't have a cause. The way it operates now, we can't really attack their regimes. We know there are some, certainly at the local government level, but do you think the concept of net subsidies has any merit at all or is it something that won't see the light of day?

That is directed to Mr. Macdonald and anyone else, the trade lawyers if they'd like to respond.

Mr. Macdonald: I'm not talking as a trade lawyer, but certainly it would be a valuable first step to do that. They don't recognize that at the moment.

I disagree with Mr. Grubel, perhaps, in the sense that I think there is a difference between anti-dumping duty and countervailing duty. You can assist your domestic manufacturers either by imposing a tariff against outside competitors or by subsidizing the domestic production, so that in effect the state is getting into the transaction by way of subsidy, where in the anti-dumping case it's just a firm that is prepared to sell at a lower price. So there is that difference between them.

I think it's fair to say that several administrations - several ministries, to use the Canadian term - have worked hard on getting a subsidies and countervailing duty agreement that would, as you say, net out the treatment on either side of the border.

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We're always going to have a difficulty, as I said to Mr. Rocheleau. Basically, we're trying to get into their market more than they are trying to get into ours. It's very difficult to say to the state of Kentucky, you mustn't do that to get our business. But if we can negotiate an accord in the steel industry, it would be well worth doing.

An interesting comparison is that while of course there are no longer any anti-dumping duties in the European Union, the Treaty of Rome, the agreement that set it up, still does provide a very strict regime for regulating, or attempting to regulate, the aids governments bring to their industries, in effect regulating subsidies. So even in the most comprehensive of markets it remains a problem.

The Co-Chair (Mr. Duhamel): Are there additional comments to be made on that point? Yes, Mr. Cranker.

Mr. Cranker: On the subsidies question, whether you can have a net subsidy test, let's say, before you launch an action, as you are probably aware, our countervailing duty legislation is based on the international subsidies code. At the last round, at Uruguay, we made considerable progress in trying to find the subsidies that were legitimate or not and when a case could actually be started. For example, some subsidies for regional economic development or because of environmental considerations are no longer actionable.

So whether or not you had a net subsidies test.... You could do it, I suppose, in either of two ways. One is that it could be a bilateral negotiation between Canada and the United States, which if you could negotiate it would be a good idea and a worthwhile objective. Second, we've been more successful in the context of international agreements to put in place some limitations on actions.

The Co-Chair (Mr. Duhamel): Mr. Penson.

Mr. Penson (Peace River): Mr. Chairman, I would like to thank the panel here this afternoon.

Mr. Macdonald, I certainly sympathize with what you're suggesting for anti-dumping in the North American market to try to bring the Americans to the table. The American market, especially in things such as steel, tends to be more of an integrated market, where there are flows of product across the U.S.-Canada border on a daily basis as opposed to shiploads of product that are being dumped into here. I hope that kind of strategy would work. I worry, though, that it might influence some American companies looking at the Canadian market, which might be a small market for some of their products, to say it's not worth doing business here, and therefore consumers might be affected by that.

I'll make one more comment before I ask a question of you. I liked your analogy to the school yard bully. I wish Canada would use the same kind of process when it comes to the countervail on softwood lumber that is being applied to us...or it was threatened to be applied to us and therefore we accepted a negotiated settlement. In my view we should have gone to the World Trade Organization to resolve that issue.

We are moving to a round of talks at the World Trade Organization. The trade ministers are meeting next month in Singapore. Mr. Cranker also addressed this a bit in his remarks. I'm wondering if further progress can be made in the definition of subsidies and in trying to resolve that whole issue to make it easier to deal with that particular aspect of trade remedy. Do you see there are other countries that might be sympathetic to our point of view? As you know, Canada needs trade rules badly because we are a small population with big exports. I'm just wondering if there's anything that can be done there to advance the cause of subsidies at the next round of the GATT.

Mr. Macdonald: Mr. Penson, to be honest, I don't know the current state of play with that negotiation and I didn't follow closely the negotiations in the World Trade Organization agreement, so I'm not sure how far they got before they gave up and what might be done. I defer to the Canadian Bar practitioners, who are in this area all the time. Perhaps they can respond.

Mr. Penson: Yes, I would be happy to have that response. But the other question is about U.S. companies looking at the Canadian market as being too small or maybe not enough of a market in consideration of Canada putting stiff regulations on anti-dumping and that affecting our consumers. Do you see that as a problem for Canadian consumers?

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Mr. Macdonald: I suppose if it had that effect it could be a concern. I think they're trying to do business here because they find it attractive. When we experienced dumping, it's because we may not be as big a market as they are but it's still attractive enough for them to have a go at our markets. We could be too tough and drive them out. Somehow I don't think living with the Americans could ever be that easy.

The Co-Chairman (Mr. Duhamel): Did you want to add anything?

Mr. Cranker: When you talk about softwood lumber, I won't say it's one of my favourite subjects, but it's a fascinating area of international trade law. As I understand it, after the Uruguay Round was implemented the Canadian legislation and the American legislation had to be changed in order to incorporate things like the changes in the definition of subsidy. Not only did the Americans take the opportunity to incorporate that change, but they also took the opportunity to effectively reverse the findings of the binational panel on softwood lumber.

Some people said at that point Canada could have exercised a recourse to the WTO and challenged whether the American amendments to its law were appropriate. I personally - not speaking for the Bar Association - think it's important to have an international organization where we aren't necessarily just the mouse and have a number of people who may have more of a say united is an important thing. There's a lot to be gained by changing the subsidies definition, for example, in that international context. As for what's coming up, I'm afraid I'm not au courant so I can't be of any help there.

Mr. Dattu: My sense is that two years after having concluded the Uruguay Round, the countries around the world are in the process of digesting the changes that have come about. Certainly after listening to people at the EU and listening to all Canadian negotiators, the sense I have is that this is the time for taking stock of where we've been and then looking at further agendas.

I agree with Mr. Cranker that the one thing we achieved in the Uruguay Round that is going to make a substantial change in the dynamics of negotiations on trade irritants will be the WTO. We have a system now that is going to provide for automatic approval of the panel reports unless there's a unanimous decision in effect by the dispute settlement body not to adopt that report.

That change, in and of itself, will permit Canada and some of the smaller countries to get bigger trading partners to the table. Unlike the previous GATT dispute resolution system whereby countries could block the adoption of panels or reports, we will not have that type of foot-dragging.

Experience has shown that the first two WTO dispute resolution matters got resolved in a period of 15 to 18 months, and that's going all the way up to the appellate body. That's a significant change.

Mr. Penson: I find this very interesting, because I think you're right that this is going to be a period of consolidation. But what bothers me a little is that at some point we need to move further. I think most countries would agree with that, although it may take some time.

The difficulty I have is that we don't even use the processes that are in place right now, such as the dispute resolution mechanism at the WTO. It makes me wonder how it could be seen that Canada would want to have further trade liberalization and better definition down the road. The softwood lumber is a case in point. I understand that the United States has changed its domestic law and we probably wouldn't win this case at NAFTA any more. But to accept export caps to me is totally against the spirit of free trade, and it seems to me there's a process we could be using.

Mr. Dattu: I was at Georgetown University Law Center Thursday and Friday. The topic of discussion in the U.S. was the usage of the WTO. The USTR representatives as well as the U.S. Department of Commerce representatives who were there at the conference were speaking in terms of using the WTO to enforce negotiations or obligations that are in place. They are vigorously soliciting views from U.S. industry of instances where there have been breaches of WTO trade laws.

There's an abundance of information on what the U.S. is doing, but the U.S. is setting up separate bodies within the Department of Commerce to seek out views of U.S. industry to assist U.S. industry in gaining market access to foreign countries, with the usage of the WTO dispute resolution being the mechanism to enforce access into the market.

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There is a sense that the U.S. unilateralism that existed prior to the WTO may fade as we get into a system that allows for enforcement of obligations. To that extent, I suppose Canada could also start using the WTO more, and we are certainly doing that. I shouldn't suggest we aren't. When we look at the roster of cases, we see that Canada is an active participant in many of the WTO disputes.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Penson. I have just three brief questions that require very short answers for Mr. Hughes or Mr. Husch.

I take it you're in disagreement with Mr. Grubel's assertion - this is not a political debate, I just want to make sure I understand this clearly. The withdrawal of these mechanisms, protections or regulations, call them what you will, would not produce the kinds of results he has suggested, which is that other industries would come out from the mix and flourish...and therefore these are not really as necessary as some people suggest, notably you in this particular case. It's a philosophical, ideological kind of situation. I just want to make sure that has been clearly understood by myself and others.

Mr. Husch: That's true from our industry.

Mr. Hughes: I think that would also be the case with us. We're not arguing against the need to be competitive and the need to be able to survive. We are saying that because of the context we're working in and the kind of environment we're working in, from our perspective there's a need to retain those trade remedies that allow us to compete in situations where we don't have fair treatment.

The Co-Chairman (Mr. Duhamel): Mr. Mackenzie, what does this sectoral agreement of which we spoke briefly mean to you? So we know quite clearly what you had in mind, just sketch it out briefly for us.

Mr. Mackenzie: What we have in mind when we talk about a sectoral agreement is an agreement that deals with the current reality of the integration of the market in North America in steel, that recognizes issues of adjustment to change and deals directly with questions of subsidy. I couldn't predict the outcome. I guess the strategy, if you want to put it that way, is that if we can't achieve a trade regime for all products that deals with these problems, maybe we can deal with it in the steel industry, where the arguments around market integration are so tight.

In many respects, the arguments related to the integration in North America of the steel industry are even stronger now than they were, because the auto sector is so much more integrated now than it was 10 years ago.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Mackenzie.

Mr. Macdonald, I'd like to understand a bit better than I did this figure you've shared with us on the loss of foreign investments in relationship to total investments. In your opinion, why have we gone from 11% to 5%, recognizing that the U.S., Mexico and others have gone through similar permutations and commutations in terms of new agreements, trade agreements and what have you. Could you elaborate on that a bit, please?

Mr. Macdonald: The first thing I realize is that before I use the figure again, I had better go back and find out the total background to it. Certainly an element of it, as represented by the steel industry, is that the combination of two U.S. measures - the anti-dumping duties plus state-level assistance - has attracted investment down there. They say, you have a barrier to meet if you continue to operate in Canada; come and invest in our state and you won't have to meet the barrier. That certainly has to be a contributor. But I don't think it is the only reason that has not happened.

I promise to go back to look at the figure and see if I can get some further background to it.

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The Co-Chairman (Mr. Duhamel): Thank you, Mr. Macdonald.

What I'd like to do now, gentlemen, is ask if you have some final brief comments to make before we bring the meeting to a conclusion.

Mr. Hughes, did you want to make any final comments?

Mr. Hughes: No, thanks.

The Co-Chairman (Mr. Duhamel): Mr. Dattu?

Mr. Dattu: I would like to make a couple of points on the figures in Mr. Macdonald's presentation.

There's an article in The Globe and Mail that reported on that, and that information may indeed be from Industry Canada. There is a unit of Industry Canada called Partnerships Canada, which is working away at reversing the numbers we see in that presentation.

In terms of the Canadian Bar's position, we have stated that we believe Canada's anti-dumping laws should be drafted within the confines of the GATT codes, but that in the interim to the point in time we achieve the disarmament that Mr. Grubel spoke about, not a unilateral disarmament but a trilateral disarmament within NAFTA, our laws should reflect the laws of our trading partners, particularly the United States.

We then have dealt with the subsequent process, and I might rephrase my example. In terms of the front end, I should have spoken about the investigative process, the back end being the enforcement. At the enforcement stage, I think there is room for application of the public interest provisions.

But our concern primarily is that of access. One diagram that illustrates very well the difficulty the Canadian industry has relative to the U.S. industry in seeking access to trade remedy laws is in comparing the length of hearings in the steel cases. I know you've heard quite a bit about the steel cases, but it turns out that many of the people we represent here today have been on both sides of the steel cases. We are very much aware of the steel cases, and they provide a good comparison because they were going on at about the same time on both the Canadian side and the U.S. side.

I have a chart I can hand to the clerk of the committee. It will show you that in the four cases that were brought in the U.S. against Canadian and other foreign producers, all in all, all four cases were heard at one time within a matter of two days, one day subsequent to the other.

On the Canadian side, the Canadian steel industry had to bring four separate cases, each of them lasting from nine days to thirteen business days, for a cumulative 42 days relative to two days in the U.S. ITC. That shows a stark distinction between the Canadian system and the U.S. system. So at the access stage, we say that Canadian industry should be at no disadvantage relative to its trading partners, but at the enforcement stage I think we can look at the subsequent downstream industries affected by actions that are brought by Canadian industry.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Dattu. I believe Mr. Cranker prefers your terms, access and enforcement.

Mr. Cranker, did you want to add any more to this?

Mr. Cranker: I think we should go out of our way here to say that our section consists of trade lawyers who represent both the complaining side and the import side.

Some people could say that 42 days is bad in comparison to the two days in the U.S., but many of the people in our section would say that in fact that shows the process is fairer and we do get our day in court. I wanted to put that on the record.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Cranker.

Mr. Macdonald, sir.

Mr. Macdonald: Mr. Chairman, I have no more to add, but thank you and the members of the committee for the chance to appear.

The Co-Chairman (Mr. Duhamel): Thank you.

Mr. Mackenzie.

Mr. Mackenzie: I don't have anything to add. I think it has been a pretty complete discussion.

The Co-Chairman (Mr. Duhamel): Thank you.

Be very brief, because I've been more than generous to you today, Mr. Grubel.

Mr. Grubel: I know.

I want to say that I'm very pleased that with this side of the table we all want the same thing; it's just a matter of difference on how to get there. I find that very encouraging.

The Co-Chairman (Mr. Duhamel): I see. I must ponder that comment.

Gentlemen, I want to mention that we have one more meeting on Wednesday, November 27. The following organizations will be appearing: the Canadian International Trade Tribunal, Revenue Canada Anti-Dumping, the Competition Bureau, Industry Canada, the Department of Finance, and Foreign Affairs and International Trade.

[Translation]

I only wanted to indicate how much I appreciated both the presentations and the exchanges this afternoon. To all of you, thank you.

[English]

Thank you very much.

Mr. Grubel: Thank you for your generosity, Mr. Chairman.

The Co-Chairman (Mr. Duhamel): This meeting is adjourned.

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