EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, October 30, 1996

.1533

[English]

The Co-Chairman (Mr. Duhamel): Ladies and gentlemen,

[Translation]

ladies and gentlemen

[English]

we expect my co-chair, Mr. Dupuy, to join us, but I think we should probably proceed. Time is going by quickly and we have just a certain amount of it.

Here's what we've done in the past. There's been no particular order. We've gone from left to right and right to left. We've asked you to keep your remarks as short as possible. Under no circumstances would we want you to go beyond ten minutes, because we simply won't have time for questions and answers subsequent to the presentation. So

[Translation]

please, try not to go beyond 10 minutes.

[English]

The second thing -

[Translation]

Hello, Mr. Dupuy. I apologize.

[English]

I thought perhaps you'd been -

The Co-Chairman (Mr. Dupuy): You carry on.

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

The second thing is that subsequent to the presentations we'll have opportunities to question you. Normally I go to my colleagues - my co-chair, Mr. Dupuy; my colleagues to the right, such as MPs Speller and Cullen; and Mr. Sauvageau to the left. They will raise questions with you, and then there may be an exchange of information,

[Translation]

a discussion among you all.

[English]

Having said that -

[Translation]

Mr. Sauvageau (Terrebonne): [Inaudible].

The Co-Chairman (Mr. Duhamel): Who knows? But they are not interested in foreign trade and such like. They have other priorities.

Oh, I should not have said that.

[English]

This is a non-partisan meeting.

Having begun, I was wondering whether Mr. Dupuy would want to say anything at this particular point.

The Co-Chairman (Mr. Dupuy): No, not at all.

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

Bienvenue. Welcome. I'm going to start from my right, so whoever is the chief spokesperson for the organization will lead on. Merci.

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[Translation]

Mr. John Le Boutillier (Chairman of the Board, Canadian Steel Producers Association): Thank you Mr. Chairman. My name is John Le Boutillier and I am the President and CEO of Sidbec-Dosco. I am also Chairman of the Board of the Canadian Steel Producers Association. I am accompanied by Mrs. Jean Van Loon, the President of our association, and by Mr. Don Belch, from Stelco, who chairs our trade committee.

The Canadian Steel Producers Association represents all Canadian producers of simple alloy steels. We manufacture simple alloy steels in six provinces. We have a total of 33,600 employees. We have operations both upstream and downstream from steel manufacturing in eight provinces.

Total sales are in the order of $11 billion. Exports total $3.8 billion. The steel industry in Canada is competitive. Our production costs are lower than those in the United States, Germany, Japan and South Korea.

There has been a 50 per cent increase in our productivity since 1990. We have an open industry. Between 30 and 40 per cent of steel deliveries are exported and 80 per cent of these exports are to the United States.

Imports represent one-third of the Canadian market, and 60 per cent of these imports come from the United States. We import raw materials and equipment. For seven years now, we have made enormous efforts to try to convince the Americans to eliminate the barriers relating to dumping under NAFTA.

We need legislation that imposes a certain degree of discipline on foreign exporters. Foreign companies try to get rid of their surpluses by selling them outside their own country. This enables them to keep the price structure intact at home. Import-export companies, the ones called traders, do the selling for them. When you consider the size of a number of foreign companies, surpluses can do a lot of damage in a small market like the Canadian market.

Therefore, we have to have the tools to protect ourselves against imports that could be called opportunistic or piratical. In short, we need to have the same protection as our closest partner has. It is an issue of equity - we have to be on the same footing.

In the short term, we do not want to become a market that is open to the dumping of foreign steel. Over the long term, we want to remain competitive with the United States as regards new investments. We firmly believe that this would improve our chances of negotiating new rules with the United States.

[English]

Overall, SIMA works well, but in some important ways it needs improvements.

One, we need to give Revenue Canada the legal authority to get more representative information on prices and costs in the foreign exporters' markets.

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Two, we also need to allow Revenue Canada discretion to put the onus for fair trading and the liability for penalties on the foreign exporter, not on the Canadian importer. This can only work in conjunction with the retrospective duty system.

Three, we need to streamline the procedures of the CITT and clarify in law certain critical definitions used in determining injury.

Four, we should give Revenue Canada clear authority to investigate and deal with the circumvention of anti-dumping orders.

Finally, we should provide Revenue Canada with the authority to react promptly when foreign exporters try to avoid the impact of a ruling by bringing in their product in advance.

In short, we need the tools to discipline foreign exporters of dumped products. Anti-dumping is an exceptional tool. It affects 1% of Canadian imports in the 1990s. It needs to be effective when used. It's a question of fairness. We need a level playing field.

We need tools comparable to those of the U.S. to protect ourselves from becoming the North American dumping ground of choice.

In the long term we want to compete with the U.S. for investment dollars, and we want to enhance our leverage with the U.S. in negotiating change.

I would like to mention that there has been some misunderstanding of the impact of recent changes by Revenue Canada. We have a handout that we hope will set the record straight, and if you wish to have copies we will pass them around.

[Translation]

The Co-Chairman (Mr. Duhamel): I like that very much. Thank you very much. I greatly appreciated your presentation, that you kept under the 10 minutes allotted. Thank you.

[English]

Mr. Jarvis.

Mr. Don Jarvis (Executive Director, Canadian Pasta Manufacturers Association): I'm representing the Canadian Pasta Manufacturers Association, and I am the sole representative of that industry here today.

The Canadian Pasta Manufacturers Association is composed of the companies that produce dry pasta and other pasta products for the Canadian market and for export.

There are four companies making up the association: Borden Foods Canada, with plants in Montreal and Lethbridge, Alberta; Primo, a division of Nabisco Limited, with a large plant in Toronto; Grisspasta, with a plant in Longueuil, on the south shore in Quebec; and Italpasta, with a pasta plant in Brampton, Ontario. We are the sole manufacturers of dry pasta in Canada.

The Canadian Pasta Manufacturers supports Finance Minister Paul Martin's stated goal in announcing this review of SIMA, that Canada needs to provide its industry with the same protection as that employed by our major trading partners.

Over the past two years our association and the Canadian industry has had first-hand experience with SIMA in a countervail and dumping action against, in this case, Italian imports.

To date the industry has been unsuccessful in gaining a level playing field to compete in the Canadian market against this subsidized and dumped product.

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The brief that was previously submitted explains, in some detail, the Canadian case. Also, our brief goes on to explain a U.S. situation that is very similar to the Canadian situation, and at the same time the U.S. pasta industry sought protection in that marketplace from the same subsidized and dumped product. Unfortunately, Canada's current system failed our industry this year, while at the same time the U.S. system acted promptly and efficiently to check the unfair trade of pasta into that market.

For example, with the injury in the Canadian market, in the early 1990s Canadian pasta manufacturers had about 90% of the Canadian market for dry pasta. It now has around 70% of the market. Over the past three years, up to the end of 1995, the Canadian industry - the four companies - lost in excess of $25 million in profit.

During the discussion period I'd like to take the opportunity to point out some of the detailed observations about the difference in processes between the U.S. and Canadian situation, but I'll leave that to the question period and the round table discussion.

One of the serious problems we are now facing, with two different results from two different but similar processes in the two countries, is that Canada is now the dumping place in North America for Italian and Turkish products. Mr. Chairman and committee members, I have some examples here of Turkish products that are now appearing in the Canadian marketplace. These were not appearing prior to the summer of this year. Significant duty is now being applied to it by the Americans, and it's now appearing in the Canadian market, which adds further competition for the domestic producers. I'll leave it with the clerk.

In introduction, I'd like to make several major observations.

1. Strong protection against unfair competition from foreign countries must be maintained by Canada, especially in food and agricultural products.

2. There needs to be a clear definition of injury and causation. In our experience, material injury was determined in an inconsistent manner by the CITT. In the U.S., the ITC considers causes of injury, but does not weigh the causes.

3. We recommend that the committee examine means to set up some formal mechanisms between the U.S. and Canada if similar complaints are being reviewed at the same time.

4. Governments needlessly subsidizing industry and agricultural crops will continue.

In our brief we've identified an example of current misguided investment policy in our industry by the governments of Canada and Quebec, specifically aimed at taking advantage of the new U.S. barrier to Italian pasta. We can discuss that during question period if you'd like. Therefore, our industry believes countervail protection must be maintained through SIMA.

5. Fifth, we accept the concerns that have to be taken into account regarding consumers and downstream industries. However, the committee and SIMA need to ensure that the interests of upstream industries are also accounted for. We have attached to our brief a letter from the Canadian Wheat Board expressing its support for the domestic pasta industry and their concerns about the erosion of sales of durum wheat caused by dumped and subsidized Italian pasta in this country.

Mr. Chairman and committee members, those are my introductory comments and I look forward to the round table discussion.

Thank you.

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

We'll now proceed to Mrs. Marsden, please.

Mrs. Sandra Marsden (President, Canadian Sugar Institute): Thank you, Mr. Chairman. I appreciate this opportunity to present our views to the subcommittees today and to answer any questions you may have.

I am Sandra Marsden, president of the Canadian Sugar Institute. Also with me is Mr. Greg Tereposky, who is sitting behind us and who may help with questions after the presentation if needed.

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The Canadian Sugar Institute was formed in 1966 as a trade association representing all Canadian manufacturers of refined sugar. Refined sugar in Canada is produced from both imported raw cane sugar and domestically grown sugar beets. We have six plants in six provinces across the country, from Saint John through to Vancouver.

In addition to the direct refinery and factory employment, and indirect support for Canada's sugar beet producers, refined sugar prices in Canada play an important input role to Canada's food processing industry, and that role is important, both domestically and internationally.

The Canadian Sugar Institute's interest in the SIMA review process reflects our recent experience with the legislation. What I would like to do is describe briefly that experience and our recommendations following from that.

First, let me explain a little bit about the sugar market. Compared to its major trading partners, the Canadian sugar market is unique in that we are unregulated and open. Most other industrialized countries - the United States and Europe would be prime examples - support their sugar industries with a support price that props up their price well above the world market price. To give you some perspective, the world raw sugar price is in the order of 10.5¢ U.S. per pound, while the U.S. domestic support price is 22.5¢ per pound.

These programs have resulted in substantial growth in domestic production, with concurrent import controls to protect domestic producers from foreign competition. At the same time, there are export subsidies or other programs that provide incentives to dump surplus into open markets like Canada. The fundamentals of these programs have been untouched by the NAFTA and the WTO.

Through the 1980s and early 1990s, the Canadian sugar industry was increasingly threatened by dumped and subsidized imports. The industry was able to offset some of the price erosions through dramatic cost cutting and rationalization. Four plants were closed in the 1980s through increased exports of refined sugar to a limited extent, and through increased sales to food processors for export. Unfortunately, by late 1994 there was little significant room for further cost containment or export growth.

Speaking from the U.S. exporters' perspective, competition persisted without fear of retaliation from the Canadian industry as border restrictions were increased under the WTO rather than reduced. Substantial price erosion from the EU continued, and that wouldn't be surprising given the substantial availability of surplus sugar for export. To put that in perspective, in 1995 European sugar exports were in the order of five million tonnes, while the Canadian refined sugar market is just over one million tonnes.

Given this scenario, the only option the Canadian sugar industry had was to invoke its rights under SIMA, and in March 1995 Revenue Canada initiated a combined anti-dumping and countervailing duty investigation. The industry received preliminary duty protection in July 1995, and the CITT reached its threat of injury finding in November 1995.

Let me quote one of the conclusions of the tribunal to illustrate their finding. The tribunal concluded that it was ``convinced that the domestic refiners could not remain viable if these depressed levels of net margins continued'' and that:

...the threat of injury from dumped and subsidized imports jeopardizes the existence of at least one Canadian sugar refinery, as well as the two sugar beet processing plants.

Recall that there are six plants in the country.

It is the Canadian Sugar Institute's position, therefore, that any attempt to reform SIMA must not remove the legitimate protection that this legislation provides industries such as the Canadian sugar industry.

I have just a couple of comments on the effectiveness of the existing law. Generally speaking, we found that the law is effective and well-administered. There is certainly room to streamline the process. We would have two comments with respect to the CITT process. One would be that we would recommend the CITT be instructed to require the filing of detailed briefs from all interested parties. Obviously, it's in the interests of the complainant to file detailed briefs, but it would certainly enhance the process or streamline the process and enhance the quality of information if detailed briefs were required of all parties.

We would also recommend the CITT be granted jurisdiction in advance of the Revenue Canada preliminary determination. This could help, for example, in ensuring that questionnaires were clearly developed and the information solicited was meaningful and accurate.

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In consideration as to whether SIMA addresses the interests of all parties, the CSI would say that SIMA is more than adequate in that regard and the process is transparent and fair. This is ensured through the extensive documentation required by the domestic industry, the detailed questionnaire responses, submissions from all interested parties, detailed reports and reasoning on the part of the tribunal and tribunal staff, and the very lengthy public and in camera hearings. We had experience not only with the injury process, but in the public interest proceedings that followed, as well as a request for a section 76 review.

In summary, I would say the Canadian sugar industry would support maintaining the SIMA, particularly for those sectors for which foreign governments distort domestic competitive market forces. If there is any initiative to replace or remove anti-dumping, countervailing duty protection, products such as refined sugar should be excluded from such an initiative. Thank you.

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

If your colleague wants to join us at the table, there is no problem. We just have to move over a little bit.

He's shy. We'll continue.

[Translation]

Ms Diane Brisebois (President, Retail Council of Canada): Hello.

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

Ms Brisebois: My name is Diane Brisebois and I am the President of the Retail Council of Canada. I would like to introduce my colleague, Mr. Darrell Pearson from Gottlieb & Pearson, who is our consultant on this issue.

[English]

Thank you for allowing us to appear before the committee today. While our submission has been distributed to the members, allow me to give you a brief overview of the Retail Council of Canada and the sectors it represents.

The Retail Council - I'll refer to it as the RCC - represents over 6,000 retailers from independent merchants to regional chains, department stores, mass merchants and discount stores. Our members represent all consumer product sectors, and our affiliate associations and sectoral associations now number over 100. The two most important sister associations within our organizations also include the Canadian Council of Grocery Distributors and the Canadian Association of Chain Drug Stores. All of these organizations obviously support our submission today.

The total sales generated by our member firms and affiliate associations exceed $165 billion. Our industry employs 1.4 million Canadians.

Retailing has changed substantially over the past ten years. Our market is increasingly competitive and global in nature. Not only are retailers importers of goods, but they also buy and sell their products in foreign markets today, creating new sources of revenue and Canadian tax dollars. Retailers have become more trade sensitive in the quest to offer consumers greater assortment and value.

There are three issues that we're raising in our submission today. First is the settlement process, second is the public interest, and third is determination of who in reality is the importer. Each of these issues is very germane to retailers, who are substantially impacted by anti-dumping and anti-subsidy proceedings in respect of consumer goods sold through retail distribution.

These proceedings may certainly add cost to retailers' purchases, either by way of application of special duty or by increased prices charged by domestic suppliers benefiting from SIMA protection, as well as legal and administration costs relating to involvement in the SIMA process.

As you can see, we're bringing a different perspective to the panel today.

Where retailers are harmed by application of these processes, this in turn may cause boomeranging harm to domestic suppliers seeking protection, as retailers are unable to pass along additional cost and/or provide consumers with value and assortments, and markets shrink.

The Retail Council of Canada recognizes that in some cases domestic industries are in need of protection. The recommendations set out in the submission are not intended to reduce the degree of necessary protection, but rather remove excess protection and create certainty as to liability.

At this point I'll ask my confrère, Mr. Pearson, to make his presentation. Thank you.

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Mr. Darrel Pearson (Senior Consultant, International Trade, Retail Council of Canada): I'm going to pick up on three issues, Mr. Chairman, very quickly.

First, the settlement process envisioned by the Special Import Measures Act is quite limited. The recommendations of the Retail Council of Canada include: early disclosure of the complaint to all parties adverse in interest; due process respecting the validity of the complaint; and a full opportunity to all parties adverse in interest to participate in order to reach a timely termination of the investigation, if appropriate, or a reduction of the scope of the complaint, or finally, its reasonable settlement.

The recommendations would allow retailers and other parties adverse in interest into the process at an early juncture in order to allow them to provide input as to the validity of the complaint. The result of such input may be that a complaint will proceed to an investigation but on a narrower basis. In other words, the intention would be that the scope of the investigation would be reduced to remove any products in respect of which the domestic industry is not truly suffering injury.

The Retail Council of Canada also recommends that customers and retailers participate in undertaking proceedings by which cases may be settled by way of increased prices or removal of dumping or subsidies. Retailers have a stake in this and are in a very good position to determine the degree to which prices can reasonably rise and be passed on to consumers.

Finally, the recommendations suggest a process whereby cases may not be initiated where they are simply not valid. The CITT does have a process reasonably early on that allows for a review of the complaint but does not allow for input or a hearing or submissions by parties who are adverse in interest. It is rare, therefore, that the CITT actually terminates on the basis of such a reference. This is largely attributable to the lack of information placed before the tribunal.

Retailers also have a great interest in the public interest inquiry that has been established to allow the CITT to determine if the full amount of anti-dumping or countervailing duties should be assessed. The test applied by the CITT is whether or not a reduction in the amount of anti-dumping or countervailing duties would be in the public interest. However, there is little by way of definition of the phrase ``public interest'' established by the CITT in its cases. Effectively, the CITT considers removal of injury or retardation to be paramount. This has resulted in a reduction of special duties on only one occasion, and that involving countervailing duties on U.S. corn since 1984.

The Retail Council of Canada recommends that the public interest proceeding be expanded to afford opportunities for the tribunal to reduce the amount of anti-dumping and countervailing duties on a more frequent basis. Regulations and an economic approach must be developed in order to provide a more sophisticated treatment of this issue.

In addition, circumstances change, and there is no concrete requirement that the tribunal is obliged to consider a public interest inquiry after it makes its injury or retardation finding. It can occur that within the five years' duration of the tribunal's finding there are changes in circumstance that would lead to a reduction in anti-dumping or countervailing duties. These could include: reduction in costs and other non-dumping related or non-subsidy related causes of injury; elimination of certain domestic producers; and the inability of consumers to absorb the full amount of anti-dumping or countervailing duties, with the result that markets shrink to the detriment not only of retailers but also of those very Canadian producers seeking protection. This should give cause to public interest inquiries at any time when the tribunal finding is in place.

It has also been problematic that parties adverse in interest have to declare their interest in a public interest inquiry prior to the hearing on the questions of injury and retardation. In fact, they must do so even before any evidence is filed and exchanged by counsel. This results more often than not in a declaration without meaning. There should be an opportunity to make such a declaration later on.

Finally, on the question of who is the importer, the importer, as you know, is responsible for payment of special duties. SIMA defines ``importer '' as the person who is in reality the importer. This is not necessarily the importer of record. In certain circumstances it is the importer's customers in Canada who are deemed to be the importers in reality and are made liable for payment of special duties. It is difficult enough for an importer to determine whether or not its goods are dumped and to measure the cost of some additional special duty. It is virtually impossible for that importer's customers to do so, and it is unfair to make them liable.

The Retail Council of Canada is concerned because many of its members may be considered importers even though the title has passed to them after importation and commercial arrangements have been engaged in a fashion to limit their liability to the price charged by the importers' suppliers.

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Constraints should be placed on the finding of who in reality is the importer, as recommended by the RCC - that is, providing title passes to customers of the importer after importation. The tribunal should be circumscribed from finding customers of the importer to be in reality the importers and should, in these circumstances, find the importer of record to be the importer.

Finally, as I noted earlier, and as Ms Brisebois has indicated, anti-dumping and countervailing proceedings have become more and more important to retailers. They have taken an increasing role before the tribunal, both as customers of product purchased from domestic industry and importers as CITT witnesses, where they are called upon in that capacity, and as direct importers themselves. Cases involving footwear, apparel, recreational goods, home office products, stationery, automobiles, industrial and commercial products and food products, including pasta, are cases where they have been involved.

Thus, they have become increasingly involved with the process in terms of determination of dumping and subsidy as well as the injury and retardation issues. They have found these proceedings to be very burdensome and submit that acceptance of the recommendations put forward in its submissions would be most beneficial.

Thank you, Mr. Chairman.

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

Now we're going to complete the circle. Our spokesperson is...?

Mr. Ken MacDonald (Director, Policy Development, Automotive Parts Manufacturers' Association of Canada): I am very pleased to be here on behalf of the Automotive Parts Manufacturers' Association. With me is Mr. Bob Taylor from Fabricated Steel. His company, a member company, does about $225 million in business per year, with about 1,100 employees. He'll give a very practical, hands-on experience explanation of the impact of certain proposed changes to SIMA.

Also accompanying me is Mr. Peter Clark of the trade consulting firm Grey, Clark, Shih & Associates of Ottawa.

The Automative Parts Manufacturers' Association is the national association representing OEM producers of parts for the worldwide automotive industry. Our petition today represents the majority of our members. Our steel mill members do dissent from our position.

First I will give some background on the industry. The automobile industry is a pivotal sector of the economy of Canada. There are, of course, about 500,000 jobs in the industry, writ large, including about 92,000 jobs in direct employment in parts manufacturing and another 52,000 in the assembly of vehicles in Canada.

It's already well known from recent media coverage that those jobs are among the best paid and most secure of industrial jobs. Of course, on top of that is spin-off to other sectors. About $1 spent in automotive turns into $3 outside the industry and the rest of the economy. To compare, the steel industry employs about 33,000 in direct employment.

The auto and auto parts manufacturers operate in a unique trade environment. The auto pact allows the import and export of parts and finished vehicles between the U.S. and Canada on a duty-free basis. According to Revenue Canada, in the history of the Special Import Measures Act there has never been a finding of injury made on anything imported under the auto pact and only a single product has been investigated. In other words, the history of trade under the pact has been pretty tranquil, free of investigations and free of proceedings in respect of dumping.

Note that the auto pact does not cover the materials used to make parts. Thus, we must be mindful, always, of the fact that if the importation of, say, American materials for auto parts became uncertain, costly or cumbersome, then parts makers and auto makers would probably shift production of that part to the U.S.

Thanks to the auto pact and NAFTA, it's important for you to know, the auto and auto parts industries of the U.S. and Canada are closely integrated. By this I mean that total production, for example, of certain cars, be it Crown Victoria, Chevrolet Lumina or Chrysler's LH line, are built in Canada for both American and Canadian buyers. Likewise, other models are built solely in the United States for both Canadian and American buyers. That translates to about 2.4 million vehicles in Canada in 1990, 90% of them exported.

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The same goes for parts. Parts are made in Canada, certain parts exclusively, for applications in cars north or south of the border. This translates to, therefore, a great deal of cross-border trade to make the industry, as presently structured, successful.

In terms of the importance of foreign sources of steel and raw materials, imported raw materials include steel, polymers and chemicals for making seat foam, for making coatings. About half of the auto parts made in Canada are steel parts, so steel is something I'll come back to again and again in this presentation.

Let me stress that the makers of those steel parts use mainly Canadian steel, but - and this is key - there are frequent instances in which they need access to steel and to other materials from the U.S. and other countries, for a number of reasons. Most important, as some of you may know, auto parts makers and auto makers operate on a just-in-time basis. Rather than keeping large stocks of inventory, the auto makers rely upon the parts makers to deliver parts as needed.

From time to time Canadian steel mills have been unable to deliver steel to the parts makers on the promised delivery date, thereby forcing the parts maker to find alternate sources - American and other country sources, particularly service centres. Service centres are fabricators and warehousers and distributors of steel, and they buy a significant portion of their raw material from the United States.

The second reason for dependence on foreign materials is that sometimes the auto makers' specifications - Chrysler, GM or Ford - to their customer is that a particular steel from a particular company will be the steel used in the making of that part.

Three, many large part makers subcontract the manufacture of a component of the larger part to smaller parts makers. Those smaller parts makers, because they buy steel in smaller quantities or in smaller pieces, may have to buy it from a service centre, which in turn means reliance on American steel and other foreign steel sources.

Finally, some types of steel and some of the chemicals are types simply not made in Canada.

Briefly, here's an overview on the impact. The steel industry has been calling on our government to adopt American-style dumping investigations, questionnaires, retrospective duty assessment and a few other things. They acknowledge that to do so is to make the investigation more costly and more time-consuming for respondents, but they indicate in their earlier position papers that this would, or could, pressure the United States to liberalize dumping rules and processes.

Others who have spoken to you in earlier days, such as the Importers Association and the firm of Gottlieb & Pearson, have already articulated very well the many reasons why that approach to influencing trade policy of the United States cannot succeed. We agree wholeheartedly with their submissions. On that we have little to add.

What's more important are the consequences for our industry. Access to foreign steel is lost or endangered when dumping duties in the range of 87% or 155% are imposed on a large and soaring number of American steel or foreign steel products, imposed because of the administrative burden and without a finding that those particular steel mills ever in fact dumped their steel, or caused injury.

I'm going to allow Mr. Taylor to take over from this point.

Mr. Bob Taylor (Coordinator, Customs and Traffic, Fabricated Steel Products (Fabco)): I'm here on behalf of Fabricated Steel Products. In our particular company in Windsor - and we have other Ontario plants, in Dresden and Ridgetown - we use some 66,000 tonnes of steel in a given year. Of that, some 5% this year came in from the United States.

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We are mostly on what we call a resale program. The resale program is something that has been coming in the auto industry for a long time. It is where General Motors, Ford, Chrysler, and we certainly know Nissan, purchase the steel. We buy it from them at a book price, incorporate that cost into our product, and ship it to them. We export some 85% of our product. We use cold-rolled from a company in the United States. Why? Because our customer says that's who we're going to buy it from. It's not a choice fabricated steel head, but if we want to supply this particular customer this is where we have to buy the material. It's very simple. If we don't want to import it then we won't be supplying them. That's a very simple one.

We're also telling you that we use corrosion resistance as well that we've had to bring in from the United States. The mills would like you to believe that everything is rosy, that they are supplying on time. They're not. They're four to six weeks behind in many cases. You can't shut down an auto company and expect to have business in Canada. It won't happen. We can give you information showing you their delivery promises, their redelivery promises, and their redelivery promises again. This is what's going on in the industry.

At the same time we have that, you have a notice put out by three of the big mills that we are now going to have price increases. When we discussed this last February, when they brought in this report on how to request information and on how Revenue wanted to police it, I said a number of people in the United States would back out of the market. We told them this would occur. They didn't believe us. But now you have 100 people who haven't responded to the questionnaire. Why? They don't need Canada. We may need them for competition prices, but they don't need us.

What does that do? Does that give a monopoly to the steel producers? Possibly. Does that give them the right to raise their prices? Maybe that was part of their program. It doesn't make a lot of sense to expect us...you've done so well in giving us the auto pact. Go out and increase your market; go out and do something.

The steel producers have been the beneficiaries as well. When you use 95% Canadian materials and you export 85% of it...it came from Canadians to begin with, but it was sold to the United States. Do they need this kind of protection just simply to scare the United States and see whether the U.S. will change its laws? They don't need that. They've chosen to participate in the U.S. markets because it's financially feasible to do so.

Their information systems can crank up the information that's necessary to get their product into the market. The United States is saying, except for the big mills, they don't want to do it; it's not a big enough marketplace. Where does that put us? We can't get emergency steel from these people without putting ourselves in danger of an 87% tariff that might be used in General Motors, Oshawa, or a 155% soon-to-be-announced one on corrosion resistance that might be used in GM Oshawa. We're the scapegoats, not them. Does our industry need this? I don't think so.

You've been very good at giving us things to work on. You gave us NAFTA. We learned how to do the paperwork for NAFTA. We have AALA; we learned how to do that.

It's a matter of getting your information to the marketplace so that you can market it, and we learned how to do it. So did Stelco, Dofasco, and the other mills. They can do that.

When you realize that some 50% to 60% of your costs for a particular product are in steel when you're in the stamping industry and you have an 87% or 155% punitive penalty on it, it isn't going to take long to realize that if you're supplying the Canadian market with this particular thing you can stamp these things by moving the dies out of Canada, putting them in the United States, and supplying Canada at a NAFTA duty rate of 1.8%, or if it qualifies under the auto pact, duty free. Common logic, economic logic, tells you you are not going to be in business for very long.

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We're not happy with the steel producers' format.

The Co-Chairman (Mr. Duhamel): I concluded that.

Mr. Taylor: We think some things should change.

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

Ladies and gentlemen, thank you for your contributions. I detected some differences of opinion, so I suspect there's going to be some exchange here. I'm going to do what all good politicians do when the going gets rough. I will turn it over to the pros. So my colleague, Mr. Dupuy, will now take over.

The Co-Chairman (Mr. Dupuy): I'm sure some of our MP colleagues have some questions on their minds, but before I turn to them, let me thank you all for this very fascinating presentation. The fact that all your views do not coincide justifies our own committee here. We'll try to shed some light through our exchanges.

So let's begin with questions. Mr. Sauvageau, are you interested in putting forth your questions?

[Translation]

Mr. Sauvageau: Yes, a few, please, Mr. Dupuy.

[English]

The Co-Chairman (Mr. Dupuy): Sorry, Mr. Sauvageau. I had your name, but Mr. Speller would like to open up.

[Translation]

Mr. Sauvageau: Do we not usually start this way? I did not have my hand up because usually...

The Co-Chairman (Mr. Duhamel): Because you usually speak first. Is that what you are saying?

Mr. Sauvageau: It has always worked that way.

The Co-Chairman (Mr. Duhamel): It is up to you to decide whether you want to go first. I have the impression there is no problem. I just want to say that Mr. Speller clearly indicated that he wanted to speak first.

Mr. Sauvageau: Mr. Speller probably wanted to say that wanted to speak immediately after me. So I am going to...

Some voices: Oh, Oh!

The Co-Chairman (Mr. Dupuy): You are lucky to have two co-chairs and the second co-chair is giving you the floor.

Mr. Sauvageau: Thank you, Mr. Speller, you are very kind.

I would like to congratulate those who gave a presentation and allowed us to gain some insight into the issue. We are all, I think, going to try to find out more about it.

I would like to take a brief look at the issue of the dispute we brought before the Tribunal. It is a very technical point. I would first like to address the first three speakers. If there are any errors in what I say, please do not hesitate to point them out.

First of all, the representative from the Canadian Sugar Institute suggested, if I understood correctly, streamlining the procedure followed by the Tribunal.

In addition, on page 6 of its brief, the Canadian Pasta Manufacturers Association says that the system is accessible but long, costly and complicated. That was the second presentation.

On page 6 again, this time in the brief from the Canadian Steel Producers Association, we read:

The procedures currently followed by the Canadian International Trade Tribunal are unnecessarily long and cumbersome. In addition, certain essential terms and criteria that the Tribunal must take into consideration are not defined in the legislation.

So, all this leads to a very simple question. I could perhaps address the steel people first and the rest of you could respond after.

Your paper makes very explicit recommendations on ways of improving the Special Import Measures Act. Could you explain - you first and then the others, as three out of the five who are here suggested it - how the procedures could be made less burdensome, less complicated and less costly? That is my first question.

[English]

Mrs. Jean Van Loon (President, Canadian Steel Producers Association): I guess I could start. In our view, one place to start is with the procedures of the CITT, where you have very long oral hearing processes with a lot of repetition of questions. We think you could shorten the oral part of those hearings down to three days by having a greater emphasis on written submissions, as some of the other people around the table have also suggested.

We would also agree with the suggestion that the CITT staff be able to get started on their investigation of injury earlier, so they can refine the questionnaires and make them more effective. We also think that, with a view to getting greater consistency, there's a requirement to have some of the key terms in the injury defined in legislation.

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We noted that our counterparts in the carpet industry had said that, in their experience, the system was working just fine and we needed to keep it and not change it. Looking back, I noted that when the carpet case was before the tribunal, the tribunal took a definition of material injury that we think is the right one. When the hot-rolled steel case went before the tribunal they didn't take that definition. We would like to have what we think is the right definition enshrined in law.

With respect to accumulation there have been inconsistencies as well, and again we think you should enshrine in law the requirement for accumulation within the constraints set by the World Trade Organization. Otherwise the CITT is in the position of trying to figure out which of ten drinks made a guy drunk. It's the cumulative effect that counts.

We have these and other suggestions spelled out in detail in our brief. Those are some of the ways we think you could streamline it. We also think you could avoid making it more complex by not following the recommendation to have open comments before an investigation is launched. That would simply introduce yet another stage of litigation into the process.

Right now, once there's a properly documented complaint, Revenue Canada looks very rigorously at whether it's worth launching an investigation. According to the government's report, over the 1990s, Revenue Canada has had 170 properly documented complaints and 31 investigations. That's 18%. That doesn't sound like a pushover to me.

Once you invite comments from other parties, you have to allow the complainants to respond again, and you enter a whole new round of litigation before you even have an investigation.

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

Mr. Jarvis: I think the feelings of the pasta manufacturers pretty well mirror those of the steel producers in terms of some of the observations they've made. We have three particular ones, and again these are from our own experience. The CITT public hearing process is very rigorous and very long. In our case, this year, it was an eight-day public hearing process versus a similar hearing process in the U.S., which was conducted in one day by the ITC. That's quite an interesting contrast.

I think there are opportunities for improving the linkage between the conclusion of the Revenue Canada investigation and findings and referral to the CITT. In our case, Revenue Canada began its investigation in May of 1995 and concluded in January of this year, and then we went into the CITT process. Revenue Canada's investigation was very rigorous, and we believe there could have been some formal referral to the CITT earlier so that CITT could have begun its investigation earlier.

On the third point, and again this mirrors the steel producers, I think it would be useful for SIMA to have a more precise definition of injury so that one could proceed through all these procedures in a much more expeditious manner.

Thank you.

The Co-Chairman (Mr. Dupuy): Other comments?

Mrs. Marsden: I think from our perspective our overall comment would be that the process generally works well. The only specific recommendation we had with respect to the CITT process - and those recommendations aren't perhaps as specific as those of the people who have spoken before me, and I think we would hesitate to comment on other industries because there are great differences. Certainly, to the extent the information available to the CITT is thorough and complete, that is going to help the process along, and the sooner the CITT gets that information the better.

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That's why we have recommended the filing of detailed briefs by all parties. We have also recommended that CITT be granted jurisdiction sooner so that they can become familiar with the industry and the case. That might, in the end, result in a shortened hearing time. At the same time, in our experience, if the case is complex, you need the time to air all concerns.

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

Mr. MacDonald.

Mr. MacDonald: A major concern for us would be the steps that start the process of an investigation. The comment was made a few moments ago about the usefulness of input from a potential respondent into whether or not Revenue Canada investigates a complaint. We endorse those who would suggest that there be a notice provision in the law - a requirement that Revenue Canada simply notify potential respondents when an investigation is being sought by some local producer.

I'm not suggesting a cumbersome process. I'm not suggesting litigation. I'm not suggesting anything more than a notice, because it has come to our attention that there have been, in the past, instances where Revenue Canada received a complaint and a lawyer or a consultant for a potential respondent has heard of it through the grapevine and was able to contact Revenue Canada and as a result stop in its tracks what would have been a groundless investigation - a pointless, unnecessary investigation.

But we want to stress that in terms of cumbersomeness, in terms of undue obstacles, it's particularly the early stages of investigation that concern us. The questionnaire is a document that's 80 pages in length and is sent to often a very wide array of potential so-called respondents. The point was made a few moments ago that if that respondent doesn't see a large market for the product in Canada, they'll ignore the questionnaire.

Of course, other processes down the road - verification meetings and what have you - add to the burden. If there is to be input from a complainant into the completeness of answers, for example, that's just going to aggravate the situation we speak of. The important point is, then, that all companies find duties being imposed by Revenue Canada through the simple fact of their not having sent in a questionnaire for business reasons, and not because they have something to hide, and the result is you lose sources.

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

Mr. Pearson.

Mr. Pearson: Thank you, Mr. Chairman.

The question as to how one might streamline things to reduce costs... I think the position taken by the Retail Council on the issue of settlement goes directly to the question. The earlier a settlement can be reached, by way of either termination or reduction of the scope of an investigation, the less costly it will be for all participants, including the government.

The point was made by the steel industry that of 170 cases in a recent period, only 31 had been proceeded with by Revenue Canada, but probably in the same period in the range of 20% to 25% of those eventually ended up with non-injury findings, which, had the issue been debated at an earlier stage, would have saved a lot of people a lot of money. Also, that doesn't even account for exclusions that have been granted by the tribunal of specific products within the scope of the finding.

It was also suggested that the tribunal start its investigation earlier, even before a dumping or countervail finding has been made by Revenue Canada. Well, that is only going to increase the cost, particularly in cases where there will be no dumping or no subsidy found that should be pursued. We say that if there's going to be any earlier discussions, it should be for purposes of settling the issue.

Finally, it was suggested that there should be a reduction in the length of hearings before the tribunal. I certainly understand the heavy cost borne by participants - my client one of those - in those proceedings. But what separates us, frankly, from our American counterparts, is that I believe the transparency and the process utilized by the tribunal gives every participant an opportunity to challenge the information. We have a system here that does involve extensive cross-examination, and that does give rise to transparency, and I believe, from the experience that we have had, results in better decision-making than when you simply file briefs and answer questions for 15 or 20 minutes, which is the process in the United States.

We had an eight-day case involving pasta; we had a four-and-a-half-week case,Mr. Chairman, involving cars from Korea, in particular Hyundai, but we got at the truth in that case because there was a no-injury finding made. I would not support a reduction, and our client would not support a reduction, in the length of hearings.

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Finally, on the specific issue of cumulation raised by the steel industry, I understand that they have a specific concern about that, but it's our view that the legislation is very clear. It is the practice of the tribunal to cumulate, except in very narrow circumstances already set out in SIMA. They do so by first looking at the entire case, and then afterwards they may make specific exclusions if you can make a very good case - 99% of the time they cumulate, so I don't think it's a major problem.

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

Mr. Speller.

Mr. Speller (Haldimand - Norfolk): Thank you, Mr. Chairman.

I want to thank the presenters today. My first question will go to the steel producers, but because of the range of differences of opinion I suspect the auto parts producers will also want to answer this, because it relates in some way to some of the things you said in your proposal.

Essentially, the importers association is arguing that the changes Revenue Canada made to the administrative review process have been detrimental. I think Mr. Taylor brought that up too. In your brief you say they've already caused the loss of some sources of steel, have made others very costly, and have made the import process very cumbersome. Further on you say you've had a loss of source of U.S. steel supply because of the longer questionnaire put out. I think you raised the questionnaire and said it was 83 pages. I take it the U.S. questionnaire is 10 times that size or close to it.

In any event, do the steel producers agree with what the auto parts manufacturers are saying here? Is that the case? Has that happened from the administrative review changes? Specifically, could you address Mr. Taylor's comments in terms of accessing sources of steel in the U.S.? He says his customer says he has to access it in the U.S. I'm not sure if they're related for any reason - I'm not sure what the reason is - but how do you answer his question there?

Mrs. Van Loon: Perhaps I could answer generally first, and then Don Belch, who's an actual supplier, could address the practical business case.

If you look at the overall picture, first of all, this administrative review has only been applied to provinces that are already covered by an anti-dumping order. So the questionnaire went out to companies already identified by Revenue Canada as having been involved in exports of dumped goods to Canada.

Second, the 87% figure being tossed around is not being paid by anybody. That is the figure that would be applied to people who refuse to cooperate with Revenue Canada's investigation. A number of people decided they'd rather back out of the market than cooperate with Revenue Canada's investigations, and the sum total of their exports to Canada of the subject goods amounted to 2.7% of Canadian consumption of those goods in 1995. So we're not talking about a huge impact.

Mr. Speller: Is that the 100 firms that Mr. Taylor was talking about that didn't...?

Mrs. Van Loon: Finally, the companies that did choose to cooperate with Revenue Canada are still under - the review is still going on and their normal values are being reviewed. This is the first time to review their normal values since they were set in 1993. So it's a reasonable thing to take another look at them, and it's also a reasonable thing to make sure the data you're basing the review on will be as comprehensive and detailed as possible.

I should mention that one of our member companies actually operates a plant in the United States and wound up filling out one of these questionnaires. They found they were able to fill it out quite easily without any outside help, so we shouldn't over-dramatize the difficulty of doing this.

Mr. Don Belch (Chairman, Trade Committee, Canadian Steel Producers Association): I think that really answers Mr. Speller's question.

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Mr. Speller: They're saying there's going to be a price increase or there have been price increases in products in Canada as a result of this and no price increases in the United States. Certainly, that would be seen as being uncompetitive to our people. Is that the case?

Mr. Belch: No, it's not the case. Coincidentally, there was a price increase announced in this product, cold-rolled steel, on October 4, 1996, I believe to take effect on November 18, 1996. I say ``coincidentally'' because U.S. producers had announced price increases back in August on the same group of products.

But, more importantly, when we look at the auto industry, the parts producers themselves are involved in annual contracts with their customers, and we, the steel companies, engage in annual contracts with the parts producers. So when it came to cold-rolled sheet, which is the subject ofMr. MacDonald's concern, we had already engaged in long-term 1997 pricing contracts with the major parts producers. So the cost of steel to those parts for 1997 was already decided before the price increases were announced to the general public, and those prices tend to be better than the prices that are offered to the smaller buyers.

Mr. Speller: Thank you. I'd like to hear from the auto parts people.

Mr. Peter Clark (President, Grey, Clark, Shih & Associates Limited): Mr. Dupuy, I would just make a couple of comments before Mr. Taylor gives you some of the experiences he's actually had.

I find it very interesting the way people use statistics around this room. When you have 10% of your market supplied by imports...2.7% of consumption is 27% of imports, which is a much more realistic number. It's the same as referring to 1% of total Canadian imports being covered by anti-dumping duties, yet if you zero that in on flat-rolled steel products you get a much higher number.

The fact of the matter is, sir, that those duties are exigible - 87.3% on cold-rolled on any company exporting to Canada other than five firms that have been named. There have been people who have shipped product and have paid the duty.

We'll file with you a number of letters from U.S. suppliers who have said they are not going to respond to Revenue Canada because the volume of their business with Canada does not justify the cost. I think Mr. Taylor can say something about price increases.

Mr. Taylor: As far as the price increases are concerned, I really don't know what went on in the United States, because we don't follow that in respect of flat-rolled. When we buy steel, we buy it out of the mills. We don't use any U.S. mills at all; they're all warehouses, so they're all spot buys. We have none.

As far as the contract reviews are concerned, I'm going to mention again that we do not... Ford Motor Company has recently gone on the out-source program. We used to buy materials directly from Dofasco and the mills, but now that Ford has gone on the out-source program they are buying that. We have 20% of theirs changed over. There is only a small balance left. We are at 100% on the General Motors out-source program and 100% on the Chrysler out-source program. We are also on the Nissan out-source program, which says we must buy from the United States because that's where they're supplying their steel from.

These are realities. These are not statistics of 1% and 0.5%. This goes on everyday in our business. When we get down to a shutdown situation we have to have access.

Mr. Speller: Thank you.

Mr. Chairman, I have a specific question for Mr. MacDonald. I was reading The Globe and Mail on the weekend and it said ``Auto parts firms plead for tariff''. I'm not sure if you saw that.

Mr. MacDonald: I haven't seen that.

Mr. Speller: It's in the Canadian business section of The Globe and Mail and it says ``Take up Big Three cause that Ottawa's levy on cars imported from offshore should stay''.

Essentially you're asking on the one hand for protection from the other auto makers, but on the other hand you're suggesting that the steel producers, your sources, shouldn't have that protection. Don't you see an inconsistency in that?

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Mr. MacDonald: Let me address that. I'm glad you asked the question. No auto parts maker is asking that there be less protection from injury-causing imports. Let me be clear that the emphasis here is on safety-valve need for foreign steel - safety-valve situations. We're not talking about large quantities of steel. We're not buying large quantities, as we mentioned, from the United States or other markets. We're buying the bulk, 90% approximately, mostly from Canadian sources. We're not buying American for the sake of cheaper steel.

We're talking about situations where delivery is not possible within the expected timeframes. We need that safety valve. That's key. There's that and a few other instances I mentioned where American steel processors are specified by the customer.

The bulk of the steel comes from Canada. We're talking about that alternate source in the specific situations we've mentioned. I don't see any inconsistency at all. We're not asking for a sheltered market at all. In fact, we're asking that the market not be sheltered. When companies supplying steel from outside of Canada are in effect barred from selling into Canada, we see it then, a protected market that may be contrary to everyone's interest. We see that in the price increase. That was referred to a few moments ago. We only need this option for emergency situations and a few other instances in order to buy a small quantity of steel from outside.

Mr. Speller: But at the same time you want a high tariff put on auto parts coming in from Korea and Toyota and -

Mr. MacDonald: Toyota has built factories and employed about 2,000 in Cambridge, Ontario. Honda has also built one, which it has recently expanded, in Alliston, Ontario. They invest money in Canada in order to access the market, and, frankly, their positions and that of GM and Ford, etc., ought to be reflected in finished vehicle tariff policy. But I don't see much of a relationship between the two issues. We're not asking to protect anyone unduly. We're talking about safety-valve situations.

Mr. Taylor: In our mind, when we read this in the paper, of course, we think there's a big difference between 6% on the vehicle and 155% on the materials as far as competitiveness is concerned.

Whereas Ken is talking about a safety value, Nissan is not a safety valve. Nissan is a matter of do you want the business in Canada or don't you? Do you want it in the auto parts manufacturing sector? There are basically three of us doing this work in southern Ontario. They will have no problem as far as resourcing the dies. We want the work. It's that simple.

Mr. Speller: Wouldn't it be the same for the steel industry that wants the work here in Canada rather than giving it to the U.S.?

Mr. Taylor: They could supply us in other product lines, but they can't keep up with the orders they have now, sir.

The Co-Chairman (Mr. Dupuy): Mr. Speller, I think we've been at it for 12 minutes. I think I will give the floor to Mr. Penson.

Mr. Penson (Peace River): Thank you, Mr. Chairman. There is an interesting mix of people around the table today. I appreciate that there are many different views here.

I would like to get back to the basic question in my mind, which is, do we really need dumping legislation in this country? I know there are lots of different views here, and I want to propose that in an integrated economy, as we have in Canada and the United States, where something like 87% of our exports go to the United States and they're also our biggest supplier... Aren't we talking about product that is in large part coming across the border every day in a normal business fashion by truck? We're not talking about products that are being dumped; for example, 50 million metric tonnes of steel coming in from some other country.

Isn't the reason we have dumping legislation in place simply because a country like the United States has it and it's a tit-for-tat process, that we feel we have to have it in order to protect our interests as a result of them having the dumping legislation? All things being equal, if that could be changed, they being our biggest trading partner, wouldn't it be in our interest to let the markets really decide these kinds of issues and do away with dumping altogether?

I'll just throw that out, and I'd like comments from the different panellists.

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Mr. Le Boutillier: The answer in an integrated market is yes, if we consider Canada, U.S. and Mexico as being an integrated market, and we do. We ship between 30% and 40% of our steel into the U.S. Steel consumption in Canada originates outside the country to the extent of 30%. We think that in an integrated market there should not be any anti-dumping laws.

For the past seven years we've been working as an industry with our government, with our counterparts in the U.S., and with the U.S. government, to define a better regime between the two countries, either in a very general way or on a sector-specific basis. We have gone nowhere and we need to compete.

We need to attract investment dollars and continue to invest in the steel industry in Canada. It's to our benefit. It's to the benefit of our employees. It's to the benefit of our customers. If you don't have a vibrant steel industry in Canada ten years down the road, our most important customers will suffer badly.

In the long run, yes, we should do away with anti-dumping suits on both sides of the border. We're not there yet. Our biggest trading partner has laws that he finds fair and continues to apply, and we need to defend ourselves and not be the dumping ground for steel looking for a market around the world.

Mr. Penson: Aren't you really trying to make a better deal for access into the United States for your product? Isn't that the reason for wanting mirror legislation, in order to bring them to the bargaining table, if you like?

Mr. Le Boutillier: ``Mirror'' is not the proper word. We're not trying to have legislation that is identical to the U.S. legislation, comma for comma. Down the road we would certainly like to have a more open regime with the Americans in the matter of steel trade.

Let's look at steel upstream and downstream. We use scrap, we use iron ore, we use coal, which crosses the border without any problems.

The customers we sell to, the auto parts industry, the automotive industry, have had the auto pact since 1963. We're stuck in the middle, and we're still facing those dumping suits year after year, which means the reviews, the cost in terms of money, in terms of manpower, in terms of lost opportunities, in terms of investment decisions being made. Until we have attained the same situation our suppliers and our customers have achieved, we need some sort of protection. That's all we're asking for.

Mr. Penson: I want to pursue this a little further before we pass it on. Correct me if I'm wrong, but you're not as much concerned with the amount of product that's coming into Canada competing with you as you are with limited access into the United States for your product. Is that right?

Mr. Le Boutillier: We're prepared to compete fairly. Our steel is competitive. We want access to the U.S. market and we are prepared to accept U.S.-produced steel that is competitively priced. We're open to that.

The Co-Chairman (Mr. Dupuy): Mr. Jarvis, do you wish to make a comment?

Mr. Jarvis: Yes, but we'll move from steel to pasta, if we can make that quantum leap.

My first observation in my introductory comments specifically was about food and agriculture products. I think even in the North American market - as I think we're all aware in this room - agricultural products are subsidized and will continue to be subsidized, and certainly that's the case with world trade as well in agricultural products.

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Take pasta, for example; 50% of the cost of pasta is really durum and water. So 50% of the cost of pasta is the wheat that's in the pasta.

Europeans subsidize the wheat. From my mail today I pulled out a report that the U.S. agricultural department is potentially resuming subsidies on wheat exports. So even the Americans are continuing subsidy programs. That's just in wheat. Of course, that exists in many other agricultural products.

I think food and agriculture is a unique and distinct product category. That's why I'd like to differentiate my response from certainly steel producers. It is not an integrated market. I'm sure there are no tariffs. There's free trade in pasta products themselves, but when it comes to the key, major raw materials we produce, there is ongoing, and will continue to be ongoing, subsidy in the domestic industry. Potentially, we'll need protection against that.

Mr. Penson: Mr. Jarvis, the last GATT round, the Uruguay round, brought agriculture under GATT for the first time. At least we are starting to see some progress being made in the phase-down of subsidies. It's at a scheduled rate, with all of the member countries phasing down at the same rate over a period of time.

Is that not going to be beneficial to you? Doesn't that level the playing field more in terms of the disputes you would anticipate? Because all countries that have signed on to that, including the United States, have to have a phase-down of those subsidies over a specified period of time.

Mr. Jarvis: I think the key word is ``phase-down''. It's not to an absolute zero, especially in many agricultural products - we could spend all afternoon going through each one - but certainly the Europeans are not committed to phasing out subsidies on their programs with respect to wheat or many other products, and neither are the Americans.

Mr. Penson: Would you support the next round at the World Trade Organization trying to advance that further, the elimination of subsidies?

Mr. Jarvis: Absolutely.

Mr. Penson: Okay.

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

[Translation]

Mr. Duhamel.

The Co-Chairman (Mr. Duhamel): Thank you, Mr. Chairman. Same degree of protection.

[English]

I get the impression that there are really two schools of thought. Intuitively, I want to stand up and say, why not? I mean, let's get tough. But then I keep hearing others say, be careful, this could have some very serious repercussions.

I'd like a few comments on that. Am I reading this correctly, that there are those two groupings, two ideologies, two thoughts out there?

Mrs. Van Loon: I think there is a legitimate concern that the Canadian economy uses imported inputs. Those are very important. The Canadian system already reflects a greater concern for that in a number of ways.

First of all, the scope of rulings in Canadian anti-dumping orders are normally much more tightly defined than in the United States. In the case, for example, of automotive products, anything that's brought in...and then for re-export, which as the APMA paper points out is 95% of the automotive production, then there's a drawback on whatever duty may have been paid. So the Canadian system has tried already to take account of that difference between Canada and the U.S.

That being said, the steel industry in particular is vulnerable to dumped goods from overseas, because in a number of areas of the world there's overcapacity in the steel industry and very large companies can get rid of just a small amount excess to their markets' needs. It can be very damaging to the Canadian or U.S. market. As long as those companies are out there, if they want to get rid of it and they have trouble getting into the U.S., they'll come to Canada.

The Co-Chairman (Mr. Duhamel): More precisely, then, do you want us to get tougher?

Mrs. Van Loon: Yes.

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

To those who want us not to be tougher, why?

Mr. MacDonald: I'm not sure I can add anything more in terms of broad themes. We've stressed the need for alternate sources, where necessary. I'll just address a couple of points that were made across the room in terms of drawback.

Drawback is a system where if you import a product, build it into a part and ship it back south of the border again, you're going to have whatever duty that was otherwise payable not remittable, not owing. That's assuming, of course, the part isn't going back south again, which is not a certainty in our business. If General Motors says to Fabco or to another parts maker, build this part that we intend to be used in the Cadillac we build down in Michigan, and they then decide to use that part also in the Chevy Lumina or another product line built in Canada, that of course would mean the end of a drawback in that case.

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Another instance would be where scrap is involved. You'd have a drawback in that respect. About 85% of the steel being brought in by parts makers is currently eligible for the drawback. The remaining 15% would not be.

The other point is that there are both drawbacks and inward processing. Inward processing means if you're doing enough business selling products back south of the line, then you don't have to pay even a refundable duty. It does require, however, that a bond be posted under inward processing. If your company isn't sufficiently creditworthy to post that bond, then you don't have access to inward processing, which means, then, you're facing a cashflow situation, paying a duty and having it remitted.

Mr. Taylor: If I can interject, Ken may have missed one thing. A number of rules have changed in the drawback that Ken may not be aware of. You don't have to post the bonds any more, etc.

But that's not the only problem here. You, or somebody, seems to think that every stamper exports his product.

We have a little company called Titan Tools in Windsor. These guys don't export all their products, and they don't have access to the mills. They don't have the tonnage. The institutes, the warehouses and so on, are saying they're coming up with a shortage because their orders are being cut back by the mills. So where does he go to get it? If he wants to stay in business, he has to go to the United States right at this point in time. He's not exporting this product. Would you rather have those little stamping companies close their doors? Because that's what you're going to do if you get tougher.

You're giving us all these wonderful things to work with. You've given us NAFTA. You've given us the auto pact. Don't take us backwards in time just to get tougher with the United States, because it isn't going to work for us. It's going to go in the other direction. They'll come and pull the dies.

Mr. MacDonald: Consider also the spillover of the small parts makers, or the small operations Mr. Taylor refers to. They might supply a subcomponent to a larger part, one made by Magna, say. If they can no longer supply, that has an impact on Magna. It has an impact on much larger employers, much larger operators.

Mr. Taylor: We have one more case we could tell you about. This happened in Windsor, where a gentleman happened to make swimming pools. He wanted galvanized steel. He went to the mills. He didn't have enough tonnage to get it from the mills, and rightfully so. He was told to go to the warehouses.

Next year, when he goes to the warehouses he finds out they don't have the materials because of what's happened. They can't get it from the mills because the supply has been cut off virtually from offshore. That means you, as a consumer, if you're going to put an above-ground swimming pool in your backyard, could be faced with a 155% duty on the raw materials, or you'll go without the swimming pool, or put in an in-ground, which makes some other swimming pool people happy.

This is what we're faced with. You're looking at a carrier in the transportation business who right now is hauling Dofasco, Stelco and various warehouse materials south of the border. Now he suddenly doesn't have cold-rolled and he doesn't have corrosion-resistant to bring back. There's no payload for him.

What happened? Did the prices in freight go up? He's not going to be able to bite it. So who's going to pay for it? This goes on and on. It's just keeps on going. Getting tougher is not the answer.

Thank you.

The Co-Chairman (Mr. Dupuy): Mr. Pearson.

Mr. Pearson: The Retail Council of Canada also takes the position that there is no need to get tougher. I haven't heard anything from the manufacturers' associations to indicate that, on the dumping side, if we can put it that way, in the questionnaire our friends have been talking about, Revenue Canada has not been able to be diligent in assessing large margins of dumping. Historically, they've proven themselves to be quite capable. This request to be tougher is not to seek, as far as I can tell, additional protection for the domestic market.

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I understand there's frustration on the part of the steel industry in Canada relative to what it undergoes when it exports to the U.S. and faces anti-dumping cases, but this protection, this getting tougher, should not be a tit-for-tat situation, because it could lead to retaliation. I think you heard from my partner, Richard Gottlieb, on that issue so I won't go into much detail there.

Just as an example of how the U.S. gets tough - and it's quite capable of doing so, if it cares, quite frankly - in the case of steel, the five major steel producers answer that question. They don't like it, but they do it. It hasn't stopped them from answering questionnaires and having access to our market.

As my friends over here suggested, through the NAFTA the U.S. brought in the elimination of duty drawback on anti-dumping duties and countervailing duties. If my friends produce a product that has dumping duty in its materials and ship it across the United States border or into Mexico, shortly they won't get anti-dumping duty or countervailing duties back. So they're under quite a constraint. As far as I understand it, that was a U.S. initiative.

From a Retail Council point of view, we should not focus - and this has been our experience in Canadian international trade - exclusively on the manufacturing sector, on manufacturers versus importers. There are other sectors, such as retail, a service-oriented sector, that are very significant suppliers to the Canadian economy and the GNP. You heard the numbers from Ms Brisebois.

To the extent that retailers suffer as a result of this get-tough attitude, it cannot be ignored. Consumers, as they showed you in the cross-border shopping days, are prepared to go across the border when costs get too high. We're not suggesting that with today's exchange rates it is going to happen, but when retailers can't get the assortment and can't provide value to consumers, they are not going to shop in Canada. When costs inhibit the ability to get assortment and value to consumers, that's exactly what happens. This hurts not only the retailers; it hurts the suppliers, including manufacturers.

The Co-Chairman (Mr. Dupuy): Thank you very much.

Mr. Cullen.

Mr. Cullen (Etobicoke North): Thank you, Mr. Co-Chair.

Ladies and gentlemen, thank you for your presentations. I'm relatively new to the SIMA world, but I have twenty years' experience in the forest sector, in the private and public sectors, so I've had some experience with countervail actions in the U.S. with respect to softwood lumber.

When people talk about the U.S. getting tougher, I'm not sure what they would do beyond what they're already doing. I have some sympathy... It's a tactical or a strategic question, I guess, and I think Mr. Duhamel, if I may be so bold, is touching on it in the sense of us taking tougher measures here and expecting a reaction in the United States.

I know that from the forest products industry's point of view, if there were some easing on the other side, like the arguments by the Retail Council, for example, with respect to public interest, let's say... The forest industry would have killed for some tougher public interest rules in the United States. We tried to lobby the home builders and the people who buy homes, but it wasn't part of the official process.

With respect to a retrospective or a prospective...and on the softwood lumber side we've seen the full effect of the retrospective approach to duty assessment. Some in the industry would argue...and I know the CPPA endorses the steel producers' position. However, they do say they champion free trade and they support your broad objectives.

There are a couple of different positions that one could take. One could say an eye for an eye and let's make it tough here and get them to move. Others may ask how we can argue for the U.S. to change. For example, let's look at prospective versus retrospective. If we've gone to a retrospective system... I don't want this to be redundant after Mr. Duhamel's question, but maybe it deserves some expansion. If we could design the perfect mousetrap...I know we can't, but there must be elements in both systems that probably would work better for everyone. Maybe you could comment on that. I know that would be an ideal world, and it's probably not achievable, but could you comment on what I've said, on some of the tactical and strategic questions involved?

Mr. Le Boutillier: Let me ask your question in this manner: wouldn't more stringent Canadian procedures risk retaliation by the U.S.? We have to be clear about this. We are not proposing that we go further than the Americans have. We are proposing that our system be made more comparable to the U.S. system, not comma for comma, just more comparable. They could hardly take exception to that.

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The U.S. Department of Commerce recently concluded that their system was more accurate, transparent and fair, and they're not complaining about the presence of Canadian steel in the U.S. market. They're not trying to hold us back at the border, no more than we are trying to hold American steel back at the border.

Until now, in government-to-government discussions, in discussions with our industry, or in discussions involving our counterparts in the U.S., they have not considered a better mousetrap. That's where we are.

You mentioned the softwood lumber situation. I can't see a reaction along those lines in steel.

Mr. Cullen: In terms of the U.S., let's say that SIMA was toughened up, if I can use that colloquial expression, what kind of worst-case reaction or retaliatory measures would you see the U.S. taking? Maybe the others can answer this as well.

Mr. Taylor: Would you like to see them attack the auto pact? We wouldn't.

Mr. Clark: Quite frankly, they might not do anything. We would end up harmonizing on the lowest common denominator.

I think Minister Martin indicated in his press release that Canada was trying to bring some order into the international trading world, and particularly into unfair trade laws. In my view, it's very hard to preach the high road from a perch in the sewer.

The Co-Chairman (Mr. Dupuy): Good point, particularly when your feathers are wet.

Some hon. members: Oh, oh!

Mr. Le Boutillier: A proposal we have made to our U.S. friends is that if we have an integrated market - and they tend to agree that the Canada-U.S. market is integrated - let's look at it on a common basis and deal with imported steel from offshore that is dumped or unduly subsidized. I think that would be something very constructive. We have promoted that over the years. We keep talking but nobody is listening so far.

Mr. Cullen: Mr. Chairman, could I ask one supplemental question?

The Co-Chairman (Mr. Dupuy): Yes, of course, Mr. Cullen.

Mr. Cullen: The U.S. steel industry has been much discussed. In the forestry sector, which is largely made up of commodity players as well, we looked at that model in the U.S. If you look at what happened in the U.S. steel industry - and you can correct me if I'm wrong because I haven't played in the steel industry - there were massive amounts of steel moving in from offshore into the United States. Look at Pittsburgh, for example. I've studied that a little bit. The steel industry there was basically decimated. They've gone to mini-mills or niche market mills, whatever one calls them. Was that steel coming into the U.S. being dumped or heavily subsidized, and did the U.S. not take any retaliatory action?

Mr. Belch: The U.S. had an experience of dealing with large volumes of unfairly imported steel over perhaps the 1970s and the 1980s. It was unfairly traded and was, at most times, being subsidized by foreign governments, but in many cases it was being dumped.

The U.S. steel industry did endeavour to deal with it using legislation such as we would use with SIMA, but every time they got close to the right resolution of those cases, which would have been the correct countervailing duty or the correct anti-dumping duty, U.S. State Department types of issues intervened, and they went to various grey measures limiting the volumes of imports. That doesn't send the right signal to the market. It doesn't send the signal that you have to fairly price your product, that you have to be properly competitive in the market place.

So the U.S. went that way for a long period of time. Only in 1992 did they change their approach. By then they had been decimated in the Pittsburgh area and had filed anti-dumping complaints. At that point in time, it was kind of unique because we were also into the Canada-U.S. Free Trade Agreement and we were looking at an integrated North American market.

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Just as the auto pact resulted in more of a two-way flow across the border, a rationalization of production in both countries, a more competitive auto industry, and a more competitive parts industry, we started to do the same thing in the steel business. You had a much larger flow going south and a much larger flow coming north.

When you get into this kind of situation and you look at dumping from offshore, it's very difficult for a U.S. industry to start to take a dumping case and then not listen to its lawyers, who say to involve Canada because Canada will provide a critical mass and make it possible to win the case.

So we've been drawn into cases where we should not rightfully have been drawn in. It's not a reflection of the growing integration of the market, but the lack of the ability of the negotiators to actually deal with trade within that integrated market when the Canada-U.S. Free Trade Agreement came along.

As you'll recall, we had five years of the two governments looking at how to deal with anti-dumping and countervail, but the U.S. would never approach those negotiations. It extended to two more years under the NAFTA, and again the U.S. never approached it.

The U.S. industry itself is, I think, going to change over the years. It's a much different industry than it used to be. It does have a lot of new producers, and those new producers are more market-based. At some point in time in the future you will perhaps get a recognition that this is an integrated market.

In the meantime, we're not suggesting modifying the rules dramatically. We're suggesting certain changes in the rules that are relatively minor when you look at the extent of the law, and they would make the application of law in both countries similar. If you don't do that, you're going to get more investment always flowing into the United States and not into Canada. We have two Canadian steel producers who have invested in the U.S. since the beginning of these trade disputes and, in large part, one of the reasons is that it puts them within the protected border and makes it much easier to do business. More of that will happen if we don't have a regime in Canada comparable to what the United States has.

The Co-Chairman (Mr. Dupuy): Mr. MacDonald, you wanted to make a comment.

Mr. MacDonald: Briefly, yes.

Auto parts makers would welcome the ideal world of either the elimination of dumping rules between Canada and the United States or a substantial and bilateral harmonization and liberalization of those rules, but we see that we would very much be taking the greatest exposure on proposals to toughen our rules in the hopes of persuading the United States to change some of theirs. I'm just stressing that our market is small. Their market is much larger. How would our changes persuade the United States to give better access to their market in exchange for access to our rather small market? That's an important key point.

If I understand things correctly, the other one key point is that the steel producers already enjoy a substantial market share in the United States, to the extent that they export a sizeable 30% of their product, plus that which goes into the U.S. through parts.

We've already described our situation. I think our remarks stand for themselves.

The Co-Chairman (Mr. Dupuy): Yes, Mr. Jarvis.

Mr. Jarvis: Perhaps I could also respond to Mr. Cullen's general observation and try to again make that leap from steel to pasta.

The pasta industry is quite integrated in North America. Companies manufacture it in both countries for both markets. If there is a common threat - for example, Italian and Turkish pasta in this case - and it's recognized as such, perhaps there's some way in which our two systems could recognize that and deal with the common threat together, perhaps under some safeguard measure under the free trade agreement.

The Co-Chairman (Mr. Dupuy): Thank you, Mr. Jarvis.

Mr. Graham, please.

Mr. Graham (Rosedale): Thank you, Mr. Chairman.

I'd like to thank all the presenters this afternoon, and I thank the organizers for a very stimulating panel. I think it has set out exactly the problem that we have to wrestle with, and that is getting the right balance in the substantive rules of law and the procedural rules of law to ensure that legitimate producers in Canada - in this case the steel, pasta and sugar producers - are protected against unfair competition coming in from the side.

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At the same time, we have to be careful about not allowing Canadian consumers of imported products to be disadvantaged by the fact that prices are higher than they need be because of the rules we've adopted - and of course we've heard from the auto exporters and retailers. What still puzzles me - and I don't suppose I'm alone on this - is that this is the classic model. It's the balance that the law tried to achieve in the last reform, when we went through all this eight to ten years ago.

I suppose because of where the world has moved, we now live in an integrated market at a very intense level with the U.S. and Canada, and now at the Mexican level, although that's less intense, but still it's a more intense level than it was ten years ago at the WTO level. We're still stuck in the paradigm of the old discussion and the old model, which is what concerns us. It seems to me that if we're going to try to invent a new system for the 21st century, because this isn't going to be done again for a little while...can you help us?

We listened to them. Look at the consequences of the integrated market. We've heard from the auto producers. If we make it more expensive here, the jobs will move to the States. It wasn't that way before. It was just that it made for a more expensive product. Now there are hundreds of industries like that and the guys will actually move there, and they can move to Mexico too. We know that. I know the automotive parts industry can move like that. Many of them do, and they have manufacturers all over.

Pasta was a perfect example. Your problem is the fact that you get the border to the U.S...and now it comes dumping in here. I've heard about the durum wheat going into the United States. They stop our durum wheat from going up. I talked to some U.S. pasta manufacturers who said this is crazy. Now they're getting Italian pasta and it's killing their pasta manufacturers to keep Canadian durum wheat out because it's cheaper than their durum wheat. We go around and around in that sort of circle. Sugar has the same problem.

For the steel producers, the question I always ask is the same question. How can we justify sideswiping everybody else to resolve a specific problem of one or two industries? The consumers in Canada... For everybody else, does your industry have some constructive, new ideas, some new thinking as to how the heck we can come to grips with this?

I know what the thinking really is - and I think Mr. Belch put it to us. We haven't been able to deal with it on the bilateral or multilateral level. That's the problem. We haven't put into place the new international regime that has to replace the national regimes to make it work.

I heard a suggestion from Mr. Jarvis - and it's the first thing I've heard in the committee - that if we're going to have a NAFTA regime for tariffs, we should have a NAFTA regime for dumping and countervail if it's from outside the region.

Let me ask that question, because I can tell the chairman wants me to ask one. He always wants a question, and I always fit it in at the end. Mr. Penson taught me how to do that.

My question is this. For the participants in this room - both producers and consumers - would that be a reasonable suggestion? We would have to go from a free trade agreement to a common tariff, which basically means moving to a common market. That's what you'd have to do, where you'd have to move. Are Canadian producers and the consumers of products in this country willing to do that? I put it to them that unless they are, we can't have a resolution so that we can protect ourselves against Brazilian steel or Italian pasta and still protect the North American market. But that means an immense shift.

The Co-Chairman (Mr. Dupuy): Who would like to rise to that challenge?

Mrs. Marsden: I'll say something. That's a very big question.

Mr. Graham: I'm sorry it was so long.

Mrs. Marsden: Truly, if there could be a true free market economy in North America, I think the question is the right one. We perhaps could consider whether or not we could move towards a common policy on anti-dumping, countervail or safeguards or whatever. But the reality of the marketplace is that it is integrated in many sectors and isn't in others. There are very different industries here today and there are some common threads, but there are differences.

As I've explained, the SIMA legislation in Canada worked well in our case. It was transparent and included the public interest process, which is addressing many of the issues around impact on the user, consumer and so on. So I'm skeptical that we can work, at least out of this process, towards a NAFTA regime that would be effective.

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We can certainly learn from the U.S. system to help streamline this process, but fundamentally I think the SIMA is serving its purpose well in ensuring that this is an interim measure. Let me stress that. Where there isn't free trade, and when there is a need to protect against unfair dumping and subsidization... Down the road it may not be needed, but it certainly is today.

Mr. Graham: Thank you, Mr. Chairman.

The Co-Chairman (Mr. Dupuy): Thank you, Mr. Graham.

Mr. Pearson.

Mr. Pearson: As for moving to a common external tariff, the Retail Council of Canada would generally support that, because at present retailers in the United States have a clear advantage over Canadians. I'm talking about a customs tariff, not about special duties. When the goods move across the border and they've already been imported to the United States, they frequently do obtain NAFTA status, legitimately or not. So they would support a common external tariff.

As to whether that could be applied to SIMA types of duties, we have a major question. I think it may be unrealistic to expect that the United States, for example, would move to a system that would eliminate anti-dumping protection. We have a lot of products in Canada that we export to the United States, which legitimately are not the United States...specific lobby interests are against their importation when they're unfairly traded, and I think we have to be realistic about our objectives.

I think you also have to bear in mind what the objective of SIMA is. If you read the preamble, you know that the objective of SIMA is to provide the domestic industries in Canada with protection against unfair trade, and that has nothing to do with nor does it even tangentially reflect the interests of Canadian producers in exporting to foreign markets. The legislation sits separately in those terms, and that is what we all agreed to in the GATT. Each country agreed to that form of mechanism to protect its own industry.

If we're now talking about the ability to make SIMA more stringent in order to, as the steel industry is suggesting, gain greater access through weakening our sisters across the border, I just don't believe it is realistic. There is no precedent to suggest that the Americans would buckle.

On the specific issue that was raised by my friends from the pasta industry, on Turkey and other diversions that you get when the United States enforces its laws favourably for its industries and we don't... On that particular point you will recall that the United States brought an action against both Turkey and Italy and was successful. Here in Canada the action was only against Italy. Turkish product was in the market - and I'm not saying there was a large amount - but as far as I know, the pasta producers did not bring any action against Turkey.

In this market in Canada there was no injury caused. I don't know what took place in the United States, but presumably they know how to handle the issues separately in the United States. If there has been a diversion as a result of Turkish product entering into Canada that was previously going to the United States, of course it's open to the Canadian producers under our legislation to file a new complaint. They do have a small problem now, though, Mr. Chairman, inasmuch as they weren't able to establish injury caused by the Italians. But if the Turkish problem is worse than the Italian problem and if it is in fact related to dumping or subsidization, they have that option.

The Co-Chairman (Mr. Dupuy): Before I give the floor to Mr. Belch and Mr. Le Boutillier, I should inform my colleagues that we shall very soon hear the bells at 5:30 p.m. for the 5:45 p.m. vote. We'll have to compress our questions and answers. I have to apologize to my colleagues who were counting on the second round, but we have our duties in the House.

Mr. Belch, and then Mr. Le Boutillier.

Mr. Belch: I want to respond to Mr. Graham's question. Yes, we do have an integrated market in North America in a lot of products. Mr. Jarvis has always been trying to jump from pasta to steel, but we also can jump from steel back to pasta. There is a very similar interest here. It is an integrated market and it does face unfair trade from outside the market. It's been very difficult to engage the U.S. parts of the industries in dealing with these issues collectively, whether it's the pasta industry or the steel industry.

I think we're probably approaching that sort of situation in steel right now. Steel from Russia has been coming into the United States in basically a veritable flood. It's also coming into Canada.

It gets fabricated in Canada into a product that will be shipped to the United States. It gets fabricated in the United States into a product that gets shipped to Canada. I think the industry on both sides of the border is finally starting to understand that you can undermine the whole industrial structure of an integrated market if you let that occur and let it continue to occur.

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Both industries, the United States industry and the Canadian industry, have raised it with our governments. It's being addressed today in Paris at the OECD steel committee.

I think the more you get the U.S. government and the Canadian government working together, the more you might have the chance ultimately of defining the regime for trade within North America and then for trade from without North America.

The Co-Chairman (Mr. Dupuy): Mr. Peter Clark has asked for the floor, and then it will be Mrs. Van Loon.

Mr. Clark: I'll be very brief because of the limited time.

I believe that having a common trade policy, common trade regime, common tariff, and common unfair trade policy would remove all American excuses for not having a common anti-dumping system. I believe it and I've said it.

The question then moves to the political, as to whether or not we want it. I don't know if you want to run the next election on that platform.

The Co-Chairman (Mr. Dupuy): Mrs. Van Loon.

Mrs. Van Loon: I'd like to ask a question. If the U.S. would not be impressed by our legislation being comparable to theirs, why on earth do we think they would be impressed by our setting a good example?

The Co-Chairman (Mr. Dupuy): It seems to be a rhetorical question, because no one seems to be prepared to answer it.

Thank you very much for this session, for coming here, and exchanging your views with us.

May I remind my colleagues that our next meeting will be on November 18 at 3:30 p.m., room 269, West Block. Thank you very much.

This meeting is adjourned.

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