[Recorded by Electronic Apparatus]
Wednesday, March 5, 1997
.1545 
[English]
The Chairman: Order, please. Colleagues, we have a quorum and the opposition is represented.
We are fortunate today to have two very learned professors here to talk about our favourite subject: Professor Donald McRae, of the University of Ottawa, and, from Osgoode Hall, Jean-Gabriel Castel.
Gentlemen, our usual way of doing business is to invite you to make a presentation, after which we'll move into question period. All this is very simple and not too formal.
Professor McRae, would you like to start?
Professor Donald McRae (Faculty of Law, University of Ottawa): Thank you very much. I thought I would try to provide some sort of general broad context in which international trade agreements, particularly NAFTA, have to be interpreted.
In this regard, the question of how multilateral and regional trade agreements are reviewed has to be considered in light of the particular nature of international trade agreements. That is, I think one has to start by trying to understand what trade agreements actually do in order to get a sense of how they should be interpreted and of the problems that arise in the interpretation of trade agreements.
The underlying rationale of international trade agreements is of course that economic welfare is enhanced if barriers to the movement of goods across borders and barriers within domestic markets are reduced or eliminated. Of course the economic rationale for that is the principle of comparative advantage: if each state produces what it's most efficient at producing and imports what it is less efficient at producing, production and overall economic welfare will be enhanced.
Of course that principle, originally applied in the context of trade and goods, is now being applied to services and investment - that is, to the movement of people and money across borders.
But of course for a comparative advantage to work, government actions that impose barriers to movement of goods or that distort the cost of production or the cost of delivery of a service have to be eliminated. And that's really what trade agreements are trying to do. They are the mechanisms for this. They are the means by which states agree to limitations on what they can do in the regulation of economic activity. Trade agreements limit the ways in which states can deal with economic activity, both at the border and within their borders.
The fundamental principle underlying trade agreements is non-discrimination. States may not discriminate at the border between goods coming from different states either in the application of tariffs or in respect of other measures that are applied to goods on entry. This is the most favoured nation principle.
In addition, once goods have entered a state's territory, it may not discriminate between those goods and its own goods. This is the national treatment principle.
Of course trade agreements go beyond these fundamental principles. They embody the results of agreed tariff reductions and provide commitments not to reintroduce or impose new tariffs. They provide legal regimes for dealing with subsidies and countervailing duties. They provide for safeguards allowing states to take trade-restrictive measures in emergencies and in other situations. And they establish mechanisms for resolving disputes.
That general description is a description to which both the WTO, the World Trade Organization, and NAFTA apply. I think it's important to view NAFTA as a regional or limited version of the international trading regime that was originally established under the GATT and is now embodied in a more comprehensive way in the World Trade Organization.
Of course there are important differences between NAFTA and the WTO. Tariff reductions in a number of areas go further under NAFTA than under the WTO and they apply to all NAFTA parties but not to all WTO members. NAFTA dealt with certain areas earlier than did the WTO - like services, for example - and NAFTA goes further in terms of the disciplines in certain areas such as investment and intellectual property.
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So NAFTA then is a regional version of the WTO, with more extensive and deeper disciplines in certain areas. But it's a regional agreement that is recognized by the World Trade Organization as a free trade area under article XXIV. But notwithstanding the legal basis for it, the relationship between WTO obligations and NAFTA obligations has been a source of difficulty in the application of NAFTA and may cause difficulties in the future.
One of the potential areas of difficulty is of course dispute settlement. NAFTA provides that states have the option of taking a dispute under the dispute settlement mechanisms of NAFTA or under the settlement mechanisms of the WTO. But having decided on one, they cannot change their mind and pursue the other. So in principle there's a clear distinction. On the other hand, it is possible for a state to try to use dispute settlement on a collateral matter in one institution in order to limit or even to nullify the effect of a trade-dispute settlement or the other consequences under the other institution. So I think there are potential problems of overlap between the two institutions.
Well, then, how are trade agreements, in particular NAFTA, to be interpreted? I think there are two aspects to this question of interpretation. First is the mechanism for interpretation. Second is the issue of what rules of interpretation should apply. Then I think certain implications can be drawn about the interpretation or application of international trade agreements.
Well, first the mechanism - and I'll deal with this very briefly. GATT of course developed its own dispute-settlement mechanism through a panel process, and that panel process was the basis of chapters 18 and 19 of the Canada-United States Free Trade Agreement and of chapters 19 and 20 of NAFTA. Professor Castel will be talking about chapter 19. I won't say any more about that.
The chapter 18 process under the Canada-United States Free Trade Agreement, which is of course the basis of chapter 20, involved referring disputes between the two governments over the interpretation and application of the agreement to a panel of five experts appointed ad hoc for the particular dispute from a roster of panellists. The panel was intended to - if not intended to, in fact it did - function like a court or an arbitration tribunal and provide decisions to the parties. The parties then of course, under chapter 18 and again under chapter 20, are required to resolve the dispute normally in accordance with the decision of the panel.
Of course under chapter 18 of the Canada-United States Free Trade Agreement five cases were resolved. Essentially chapter 18 was incorporated into chapter 20. So I think the experience of chapter 18 is very important in any consideration of how chapter 20 of NAFTA is going to function. I understand I'm going to come back next week to talk about chapter 20 in more detail in a session directed to chapter 20, so I won't go into depth on chapter 20 at present.
Let me turn to the question of the rules of interpretation, the second part of this question on interpretation. International trade agreements of course are simply treaties between states. They are agreements under international law. The World Trade Organization provides that it is to be interpreted according to the customary rules of interpretation of public international law. The appellate body of the World Trade Organization has made clear that this obligation to apply the customary principles of international law is an obligation to apply the provisions of the Vienna Convention on the Law of Treaties. In NAFTA it's provided that the agreement is to be interpreted in accordance with the applicable rules of international law. In cases under the free trade agreement chapter 18 and the only case so far under NAFTA chapter 20, panels have made clear that again, the governing principles of interpretation are those set out in the Vienna Convention on the Law of Treaties.
Well, what then are these principles of interpretation? Essentially they require that the treaty be interpreted by looking at the ordinary meaning of the terms in their context and in the light of the object and purpose of the agreement. I think this idea of object and purpose is quite important, because it has some implications for the way in which trade disputes are resolved, and I think it has important implications for the sovereignty of states.
The underlying objective of trade agreements, as I've said, is to promote trade liberalization. I think NAFTA makes this clear in one of the early articles setting out the objectives when it talks about the objective as being to ``eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services''.
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The preamble to the agreement establishing the World Trade Organization says something similar. It speaks of the substantial reduction of tariffs and of other barriers to trade and the elimination of discriminatory treatment in international trade relations.
The importance of trade liberalization to the interpretation of NAFTA was made clear by the first panel under NAFTA chapter 20. It attached importance to trade liberalization, against which the agreements under consideration must be interpreted. It said any interpretation adopted by the panel must promote rather than inhibit NAFTA's objectives, and it said exceptions to obligations of trade liberalization must perforce be viewed with caution.
Trade liberalization means taking away the barriers that might otherwise be imposed by governments on the movement across their borders of goods, services, or investment and barriers that result from setting conditions under which foreign goods are sold, foreign services are provided, or foreign investment is to be permitted. One might almost say the objective of trade liberalization is to get rid of the whole idea of ``foreign'' in goods, services, or investment. They're just simply goods, services, or investment, no matter where they come from.
This has important implications for ideas of sovereignty. If we mean by ``sovereignty'' the ability of states to make decisions about what comes into their territory or about what happens after goods, services, or investment cross their borders, we might like to think we can do within our borders what we wish in terms of measures that might enhance economic activity within the state, measures that promote employment, or measures that promote production. But I would suggest the effect of the major international trade agreements we have entered into is to limit our ability to make decisions on these matters.
Let me give a few simple examples.
In 1982 a GATT panel ruled that Canada could not impose on foreign investors requirements that they purchase domestic rather than imported goods. That violated the GATT obligation of non-discrimination, the obligation of national treatment.
In 1989 a free trade agreement panel ruled that for all salmon and herring caught in Canada's 200-mile fishing zone on Canada's west coast, Canada could not impose a requirement that they had to be landed in Canada before being exported. That was an export restriction contrary to both the free trade agreement and the GATT.
To bring the matter right up to date, a World Trade Organization panel has apparently ruled that some of the measures taken by Canada to support the Canadian magazine industry are restrictions on import contrary to the GATT, and other measures are discriminatory and in violation of the national treatment obligations of GATT article III.
I refer to these examples not to show that Canada has not benefited from trade liberalization. It clearly has. References can be made to where dispute settlement panels have reached decisions that have opened foreign markets to Canada or have preserved measures taken by Canada to protect its markets.
For example, the recent ruling by the panel under chapter 20 of NAFTA upheld the ability of Canada to maintain its dairy and poultry supply and management systems with tariff rate quotas implemented under the WTO agreement on agriculture, notwithstanding the prohibition in NAFTA against increasing tariffs or creating new tariffs.
My point rather is that the consequence of trade liberalization is that states are increasingly limited in the range of domestic policies they can adopt that give preference to domestic industries, domestic producers, or domestic distributors or protect other domestic interests from the effect of foreign competition. Equally, Canada is more and more limited in its ability to take measures that will give advantage to Canadian producers in foreign markets.
I'm not suggesting domestic interests can never be preserved under international trade agreements. It's rather that the effect of international trade agreements is to reduce the realm of domestic economic policy-making and to increase the realm where economic policy is to be determined by negotiation between states.
For a country such as Canada and for most other countries as well, the realm of the truly domestic is shrinking and the realm of the international is expanding. Policies that might in the past have been developed unilaterally increasingly can only be developed multilaterally through negotiation with other states.
.1600
In summary, I think there are some key considerations that have to be kept in mind when looking at international trade agreements, including NAFTA, and when considering how dispute settlement operates under these agreements.
First, one has to keep in mind that the subject matter of trade agreements is expanding. We see that in terms of movement from goods to services, investment, and intellectual property.
Second, it is clear that the disciplines of trade agreements are more and more coming into contact with what might have otherwise been regarded as other areas of national or international jurisdiction. We see this in the trade and environment, trade and labour standards, and now trade and culture debate.
Third, some of the most effective dispute settlement mechanisms that exist between states are being developed, and have been developed, under international trade agreements.
Fourth, as a result, areas of hitherto domestic policy-making are coming within the framework of international trade agreements, and hence are subject to this international dispute settlement, which is becoming a more and more binding international dispute settlement.
Fifth, as a consequence, the boundaries between what is domestic and what is subject to international disciplines are being decided through international dispute settlement and international negotiations, and are not being determined unilaterally by each state.
As a final point, I would suggest these developments have a degree of inevitability about them. It's simply not possible in a global economy to close borders and make decisions domestically on these matters alone.
Thank you.
The Chairman: Thank you, Professor McRae.
Professor Castel.
Professor Jean-Gabriel Castel (Osgoode Hall Law School): Thank you, Mr. Chairman.
I have distributed the essence of what I was going to say in greater detail, but I will try to summarize the main thrust of these remarks.
I have been concerned in recent years that Canada has opened up its markets in a way that countries like Japan have not. At the same time, we are extremely integrated as a result of the FTA and NAFTA within the American economy. The trade remedies the Americans use, particularly in the field of subsidies against Canada, are not really suited for this deep integration. They may be suited for other countries that are not part of NAFTA, but they certainly are not suited for Canada. The same can be said about anti-dumping.
Another concern I've had is the need to stimulate the growth of technology, and the emergence in the United States of consortia that are exempted from the application of the antitrust laws under certain conditions.
On the other hand, in Japan these types of consortia have been going on for years. They allow the Japanese to benefit from aid that is not state aid. Aid is given by the members of the consortia, and as a result it doesn't fall under the anti-dumping or subsidy provisions that are found in the GATT or other international agreements.
I've come to the conclusion that the dispute settlement mechanism in place under chapter 19 is antiquated and does not suit the beginning of the 21st century. We have 19th century or 20th century remedies for a situation that is evolving continuously and requires a completely different approach. These remedies have been applied in an unprincipled way and have been abused, particularly by the Americans. They have inhibited Canada's goal to secure access to the NAFTA market. They have also impaired the ability of Canada to develop high technology.
.1605
So I suggest - it's very iconoclastic - that we should scrap chapter 19 and also scrap the remedies with respect to subsidies and anti-dumping, replacing this with a new principle, which would be to subject these activities to the competition law.
In other words, the new principle would be that the remedy should be based on the competition law, on the antitrust laws - and I shall say a few words about this in a moment - whether they should be the domestic antitrust laws of the members of NAFTA or whether it should be a sort of an antitrust law common to these countries, because the GATT does not contain any provisions on competition law. In essence, this is my thesis.
With respect to anti-dumping, chapter 19, as some of you may know, deals with the types of remedies that are available in the case of final determinations by the administrative agencies in the United States, Canada and Mexico with respect to dumping and with respect to subsidization. With respect to anti-dumping, it is clear - and even the Americans acknowledged this at the time of the signing of the FTA - that it is ill-suited for the integration of the economies of the three states. But the Americans did not want to do away with the anti-dumping remedy until the question of subsidies was settled.
We have done this with Chile. With Chile, there is a provision that specifically states that the anit-dumping remedies will not be applied.
Anti-dumping normally is addressed to correct a situation where you have a difference between the price in the domestic market and the price at which the goods are sold in the foreign market. Within a free trade zone or a common market, there is only one market. There's really no room for anti-dumping to apply because there's only one market. We have done away with that with Chile. New Zealand and Australia have also done away with anti-dumping between their two countries.
My suggestion - and I think the committee deals with this - is that we should push the Americans that way to try to get rid of the anti-dumping remedies and replace them with competition laws. The problem that arose with respect to anti-dumping is that in the anti-dumping system you don't have to show a predatory intent. In the competition law, you have to show a predatory intent: you're trying to knock out the competitor and then raise prices. But there have been very few successful prosecutions or actions with respect to predatory pricing - in both the United States and Canada - under the Competition Act.
I think that's the first thing one should do. It's quite a step forward in the Chile agreement, and I think we should press for extending it more generally.
When it comes to reform of countervailing duty, it's more difficult. Countervailing duty practice, which knocks down subsidies, is maybe still relevant with respect to countries that are not within a trading block. I'm not suggesting doing away with subsidization with respect to countries that are not part of NAFTA, but within NAFTA, again, because of the integration, particularly between the United States and Canada - Mexico is a special case - I don't see any necessity for retaining that remedy.
I suggest that we take an approach similar to state aid in the European Union. Subsidies would be incompatible with NAFTA only where they distort or threaten trade between the states. In other words, we're concerned with protecting competition, not protecting competitors.
.1610
This is a very important point. In the Common Market this is what happens. You're concerned with competition. What is important is injury to competition, not injury to a domestic producer.
Secondly, I think we should have a regime of subsidies which would be under the supervision of the United States, Canada, and Mexico. This is done in Europe. The European Commission is doing that. Of course the Americans are not very hot for this, because there's an infringement of sovereignty there. They don't want to be told they have to be careful of other types of subsidies they are going to distribute to farmers or whatever. We in Canada may not want to be told either. But it's working quite well within the European Community.
Then the remedy, if we assume there is a subsidy that adversely affects competition within NAFTA, would be the removal of the subsidy by the granting states. This is not the case at present, because, as some of you know, under SIMA or the equivalent American legislation what you impose is countervailing duties. You're not removing the subsidy. But that's what should be done. Then if the state refuses to remove the subsidy, the subsidy would have to be repaid by the company that received it. That would be a breach of the treaty and a breach of NAFTA.
So I feel in an integrated free trade area such as NAFTA subsidies should play a limited role and they should be granted only if they are in the best interest of the free trade area, not just in the interest of the United States or the interest of Canada.
We have made a bit of progress with GATT, because certain subsidies are now exempted from the non-actionable subsidies. This is particularly important for Canada because we want to develop our technology.
This is what I develop in the paper I distributed to you. There is this alternative. The Americans have developed these consortia in the microelectronic field, and these consortia are exempted from the antitrust laws. The Americans are trying to structure them in such a way that they cover not only research but also production, while the GATT code exempts only the research, not the production. They are not going to impose any countervailing duties or attack anything, but we may be caught if we're doing our own research, we give our own subsidies, and then suddenly we're slapped by the Americans with countervailing duties, while in the reverse we can't do anything.
My suggestion there is that we should join these consortia. Again, this may not be easy, but in my opinion this is the only way we can promote the development of Canadian research and development in the field of technology.
To turn to types of remedies, the procedural reform, so to speak, there are several ways of approaching the procedural reform. The main criticism that has been addressed to the chapter 19 procedures is first that the binational panels are shackled to a standard of judicial review and that they cannot really review the merits of the case. I remember when I sat on some of these panels how frustrated we were that we had to pay deference. Well, we didn't always pay deference to the administrative agencies. Then we had Justice Wilkey, who just got mad - I wasn't sitting on that panel, the softwood lumber, so I can speak about it - and said we had to pay respect to the administrative agency. Well, what is the point of having chapter 19 if we're just going to...?
.1615
The political interference in the United States is at the level of the administrative agency, who are political appointees and who are going to follow what some of the lobbies are going to tell them to do. It's at that stage we should have input, not at the stage of the appellate level, because the Federal Court of Appeal in the United States, and in Canada the Federal Court, are very honourable bodies of permanent judges. We don't have to fear anything from them. What we have to fear is at the lower level. But because of this deference the higher courts cannot do much to overturn a decision of the administrative agency that would adversely affect the interests of Canada.
Secondly, at the beginning of my talk I spoke of the ``final determination''. NAFTA chapter 19 deals only with final determination. It doesn't deal with preliminary determination. Preliminary determinations are very important, because they really set the scene for the subsequent procedure. Once you have a preliminary determination it's very difficult to overturn it. There's nothing in chapter 19 that enables us to reach preliminary determination.
Thirdly, you have the amendments. This is what was going to happen in the softwood lumber case. They were going to start a fourth case, because in the meanwhile the Americans had amended their administrative regulations so we would lose the fourth case. So the government settled the softwood lumber agreement, but it's an unsatisfactory situation, because article 19.03 allows the parties, if they change the law, only to discuss it and to take a countermeasure; in other words, a tit-for-tat. So the Americans are amending that regulation, we're going to amend the same. But there is no way to stop it, because it's not binding. A decision of a panel under 19.03 is not binding on the parties. This is again a very bad situation.
I suggest binding arbitration may be a way out of such a situation. Also, with preliminary duties we could extend panel review to preliminary determination. As for 19.03, decisions by the panel on amendments that would violate the NAFTA, they could be made binding. Personally, I would prefer to see an international trade tribunal set up by Canada, the United States, and Mexico, with permanent staff, permanent judges, a little like what has just been created at the WTO.
The other situation - but I think it's less realistic - would be to scrap chapter 19 altogether and just use the WTO and make the decision of the WTO panels binding. But that would necessitate completely reopening the dispute settlement provision of the WTO, and I doubt after all the efforts of the Uruguay Round all 130 partners would be willing to do that just to do us a favour so we could accommodate this.
I'm going to stop here, because I know I have overstepped my time. Again, I feel the competition law is sufficient to address the issues of both subsidies and dumping. There is really no need for chapter 19. But if we can't change that, at least we should amend it along the lines I have just suggested.
Thank you very much.
The Chairman: Thank you, Professor Castel.
.1620
[Translation]
If I understand this correctly, Mr. Graham is to leave in a few minutes. I'd ask Mr. Sauvageau if he'd like to give him his turn. I'll come back to him immediately after.
Mr. Sauvageau (Terrebonne): Of course.
Mr. Graham (Rosedale): I have a question, if you don't mind.
The Chairman: We would especially like to know if professor Graham is going to be questioning all professor Castel's recommendations and thoughts. It would be very interesting.
Mr. Graham: Never would I dare dispute or discuss with professors McRae and Castel who are eminent experts in the area of international trade.
[English]
I do have to leave. I would like to thank both Professor Castel and Professor McRae for their very interesting presentations. I'll read their papers with great interest.
I want to ask Dr. McRae specifically about the WTO. He made the very interesting point that international tribunals will not only be called upon to deal with more and more issues that touch on domestic matters because they're covered now by international agreements, but they will be called upon to deal with the jurisdictional issue to determine whether it is international or domestic. Of course we're presently confronted with exactly that issue on the Helms-Burton law. My understanding is that the United States has said ``We're not even going to go to the WTO tribunal, to hell with it, we're not even going to appear''.
If that is the case, doesn't that end right there the effectiveness of the WTO dispute resolution mechanism? We might as well wind up the thing and say goodbye, because if every country can say that, we can say all our cultural matters are matters of national security and therefore we determine unilaterally - we don't concede that the tribunal itself may determine - the jurisdiction of the tribunal. In fact, the tribunal has almost no jurisdiction. We're back to where the United States turned its back on the World Court in the Nicaragua case. One wonders where one is. Am I over-dramatizing this particular situation?
Prof. McRae: I don't think you are. I don't think it is possible to have a binding system of rules with an individual state saying it makes its own self-determination as to whether or not the rules apply to it.
A very narrowly defined national security exception could be drafted that would allow a state to say something is a matter of national security and it's not prepared to deviate from it. But the question of whether or not the state's behaviour fits within that has to be a matter that's subject to determination by the rule-interpreting body.
If the United States refuses to participate in the panel, it is disastrous for the dispute settlement process under the World Trade Organization.
Mr. Graham: Is it your understanding that I'm correct in this matter that the United States has indicated an intention not to participate in that panel?
Prof. McRae: I don't know. I've seen various interpretations of what it has said. One is that it is thinking of not participating and one is it has the option of not participating. The question is whether the United States will show up on a particular date. That's the real issue.
Mr. Graham: Okay. We will have to wait for the day.
Prof. Castel: I have looked at article XXI and the interpretation I was given on the history in the section in the old GATT of 1947. I must confess, in the history and the discussion that took place, and the subsequent history - because there have been other instances where some states have raised the issue at the time of South Africa, Argentina and so on - there seemed to be a consistent approach that each state was free to determine whether its security interests were at stake.
I think the Americans would probably win the case if they went before a panel, so I'm surprised they have decided to abstain. A book has just been published by the WTO, which, article by article, gives all the jurisprudence and all the discussion and background. Have a look at it. You will see it's very strongly in favour of the U.S. position - not of not participating. I agree with Professor McRae that it could mean the end if each nation.... It's not in our interest or anyone's interest to say that's a security interest or foreign policy and that's the end of the matter.
But I think they should go before it, because I think they would win.
Mr. Graham: Thank you very much.
[Translation]
The Chairman: Mr. Sauvageau.
Mr. Sauvageau: First, I'd like to apologize for being late. I was delayed in the House.
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I apologize in advance if I'm putting a question that professor McRae has answered before I got here. Professor Castel, in your presentation you said that if it was up to you you'd do away with anti-dumping provisions in all trade treaties to implement the Competition Act. Did I understand you correctly?
Prof. Castel: Yes, within the integrated groups.
Mr. Sauvageau: Within groups integrated under trade treaties and free trade agreements.
Prof. Castel: Exactly.
Mr. Sauvageau: When Canada signed the agreement with Chili, the anti-dumping provisions were dropped but we're expecting to negotiate for Chili to come on board NAFTA. According to you, what should Canada's position be on anti-dumping provisions? If we want Chili to also be a signatory of NAFTA, we'd surely have to have discussions on that aspect.
Prof. Castel: There are two possibilities. Chili could adhere to NAFTA as it is worded at the present time and that includes anti-dumping provisions and subsidies, or, as I suggested in an article some time ago, we could try to persuade the Americans and Mexico to go for the solution we used in our dealings with Chile and that Australia and New Zealand use in their trade dealings. From what I've read, at the time of the Free Trade Agreement between Canada and the U.S., the Americans were not opposed to doing away with the anti-dumping mechanisms. They first wanted to try to settle the matter of subsidies. NAFTA provided for the creation of a committee to look at that matter. I don't know if they've come to any conclusion.
Mr. Sauvageau: I think that according to the Red Book, there was supposed to be a report tabled in December 1995. I think the report is ready and that we'll be seeing it during the next elections, if I'm not wrong. Is that right, Mr. Dupuis?
The Chairman: It has not been made public, but the vibrations we're getting are rather on the negative side. During our consideration of the Bill on special import measures, we've had the opportunity to hear a few witnesses here who were not encouraging us in our belief that the U.S. were ready to change their position. That is certainly a fact that must be taken into consideration. It goes against what you're recommending, which is actually a far more sophisticated system, a far more perfect one, I would think within the context of a free trade zone.
Prof. Castel: The problem is that I just can't manage to understand it because normally, anti-dumping provisions apply when you have two markets. A domestic market and a foreign market. In other words, you sell your products in Canada at a higher price then what you sell them for in the U.S. But what is going to happen when there's only one single market left, which is the goal of NAFTA? When a number of years has gone by and all goods are circulating freely, how could we even imagine two markets in the international context? Anti-dumping duty will automatically not apply any more. On the other hand, you could apply competition law, on condition that, at that point, it can be shown that the intent is to harm predators or competitors.
The Chairman: It was demonstrated to us that in the case of Australia and New Zealand, an evolving process had led to this formula because there had to be almost perfect symmetry in the legislation governing competition. It is true that we have legislation that resembles American law but there are still differences between our system and the American one.
Prof. Castel: From the standpoint of antitrust law, the American doctrine is somewhat different. As a matter of fact, I was recently reading a decision regarding a consortium on what is called the Per Se Doctrine. But still, our laws are quite similar. You're absolutely right.
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Our laws would have to be just about identical, unless we pass a uniform law. The United Nations organization for international trade had prepared a uniform competition law about 20 years ago, but it was never passed by the States.
The Chairman: Mr. Sauvageau, I'm sorry I took the floor.
Mr. Sauvageau: You were telling us a bit more about the abolition of anti-dumping mechanisms between New Zealand and Australia. Officials from the Department of International Trade mentioned it several times and although we tried to obtain information from them, we're still waiting. With regard to the similarities and differences that can be applied in this context...
Prof. Castel: I mostly examined the situation of Chile. I did not manage to obtain a copy of the treaty between Australia and New Zealand. Since I don't have it at hand, I couldn't really answer you. I could only respond with regard to Chile and Canada. I am sorry.
Mr. Sauvageau: No problem.
[English]
Prof. Castel: Perhaps my colleague knows the deal.
Prof. McRae: I don't know the deal, but I understand that rather than going to a complete uniformity of laws, what is happening in the New Zealand-Australia context is each is given the opportunity to exercise its jurisdiction in the other country. That would be equivalent to Canada applying its competition law and having the ability to go into the United States in order to obtain the evidence necessary to hold hearings, and the United States being able to apply its competition law and to come into Canada in order to obtain the proper jurisdiction.
[Translation]
Mr. Sauvageau: I know this is a hypothetical question if you don't have the document, but at first glance, given your knowledge of the situation, is it normal that the Canadian government's ideology in free trade agreements is focused on this aspect of the abolition of anti-dumping measures? We're always told about the example of New Zealand and Australia. I think that professor Castel discussed it to some extent but what do you think about it, professor McRae?
[English]
Prof. McRae: This is getting beyond the realm, I suppose, of my expertise as a lawyer, but it seems to me politically the idea of the United States courts exercising some sort of jurisdiction in Canada and Canadian courts exercising jurisdiction in the United States would take a lot of acceptance.
It seems to me there's a choice that has to be made at some stage with NAFTA. That is, are we interested in only a free trade area with the limitations of free trade areas, or are we interested in the long term in a customs union with full harmonization of laws?
If we're interested in the customs union with full harmonization of laws, then the opportunities for harmonizing issues of anti-dumping or eliminating them and moving to competition policy become possible.
As long as we are interested only in a free trade area, and given the favourable lobby in the United States for anti-dumping laws, I suspect it is a long way before there would be any real movement in that area.
The Chairman: Mr. Penson.
Mr. Penson (Peace River): Thank you, Mr. Chairman.
I'm interested as well in the issue that Mr. Castel raised about competition law. Having been over to the WTO talks in Singapore shortly before Christmas, I know there is interest there with a number of member countries to revive the competition policy. That never got passed and I understand it's going to be discussed.
Dealing with the United States seems to me a little bit like the Canadian amateur boxing champion who was fighting an American from Detroit up in Edmonton a few years back. The television commentator said to him, ``Aren't you concerned that there are just Canadian referees here?'' The American boxer held up his fist and said, ``Well, I brought my own referees.'' It seems to me dealing with the United States is a little like that.
I'm wondering what the best method is. If we think the competition law is probably the best vehicle to handle phasing out of dumping and countervail, what's the best method of trying to pursue that? Is it bilaterally, or is it to try to get other member countries at the WTO to put it on the agenda for next time and try to raise it at that level?
.1635
Prof. Castel: There are three approaches you can take. The first one is the one I mentioned: the UNCITRAL, which is a body of the United Nations, had drafted a uniform competition law that was intended to be adopted by a number of countries whose economies lend themselves to competition, although because not all the states in the world, the developing countries, have reached a stage where they can afford competition laws, that was a real long shot in the sense that.... I remember the text was quite a good one. It was a blend between the European Community competition articles in the Rome Treaty and the U.S. antitrust laws. It was really suited for western countries with quite advanced market economies.
At this stage it's probably unrealistic to think this could be revived and adopted on a wide basis. The WTO may adopt some provisions that would lay down some general policies in the field of competition law such as the ones we have in the NAFTA - which are a little bit more developed than they were in the FTA - but that wouldn't really help that much.
The second approach would be to use the domestic laws of each country, because if there were dumping in Canada, then you would use Canadian laws of competition to address the problem. If a Canadian company were to dump in the United States, then you would use the U.S. antitrust laws. They are pretty similar, but there would be differences.
The third approach is the one you suggested - to have a sort of an integrated bilateral, or trilateral, with Mexico. Mexico has had to adopt antitrust laws, but I don't think they are very expert in the field because it's a little bit foreign to their economic system.
Those would be the two more realistic approaches, either sort of a trilateral drafting of blending their antitrust laws, or.... This, from a conflict of laws point of view, is the one I would favour. If the activities that are anti-competitive.... That's the easiest approach. If the activitiy that is anti-competitive takes place in Canada, then Canadian law - the Competition Act - applies. If the anti-competitive activity takes place in the United States, perpetrated by a Canadian - just because it would have to have an international aspect - then the American law would be applicable. It would be the regular courts in the States and the regular courts in Canada that would apply that.
Mr. Penson: Can I just ask one question, while we're still on this? In your view, is the Canadian competition law strong enough to handle this?
Prof. Castel: As far as dumping, it is neither strong nor weak. You have to show the predatory intent, and from my knowledge of the antitrust laws, it's very difficult to prove. This is one aspect of the law that is not generally.... It's very rare, because it's very difficult to prove. At the domestic level - because the Competition Act is only concerned with the domestic situation - to prove that you acted, that you have been selling at below price.... Many cases have come before the courts where it was proven that it's perfectly legitimate for a person in business to sell below price. There may be a lot of legitimate reasons why, without having a predatory intent, you want to sell at below price for this or that economic reason, so it's very rare that you can use that.
.1640
Mr. Penson: Professor, you said to ``protect the competition and not the competitors'', which I agree with, but there have been cases in Canada.... Just recently there's been a big merger of a couple of fertilizer companies in western Canada. My understanding is that the effect of that was to have one company controlling something like 80% of the domestic sales in Canada. I guess my question is - -
Prof. Castel: That goes under the monopoly and merger provisions of the.... They're different from the anti -
Mr. Penson: But it is part of competition laws.
Prof. Castel: Yes.
Mr. Penson: Would we have to adopt legislation similar to that of the United States to make this work?
Prof. Castel: I don't think so.
Prof. McRae: To go back to your question about whether there is a place to discuss this issue and is it the WTO, the only other place, in addition to Professor Castel's approach, that provides a forum for the discussion of these issues is the launch - or the about to be launched or the discussions about to be launched - of the free trade area of the Americas initiative, where the idea of a free trade agreement for the whole of the Americas is discussed. Clearly, the Canada-Chile model will be the basis for some sort of discussion there, so that may be a forum in which that issue can be pursued.
The stumbling block always remains the United States. I think the effect of adopting Professor Castel's proposal is essentially that anti-dumping actions will not be disciplined by competition policy: essentially, there will be no remedies in what are current cases of anti-dumping restraints because, as Professor Castel points out, practically none of them have predatory intent. Therefore, they would not violate competition policy.
But it is certainly true that if the problem remains.... The more one has a common market - without being a customs union - the idea of anti-dumping laws is simply a protectionist device in one of the markets.
The Chairman: Mr. Cullen.
Mr. Cullen (Etobicoke North): Thank you, Mr. Chair, Professor Castel and Professor McRae.
Professor Castel, I'm intrigued with your concept of a regime based on competition law or on market access. Could you expand further on that, particularly in the following context? I'm more familiar with the softwood lumber dispute. And the discussion we've had so far - and in your paper you talk about it - if I understand correctly, in the context of let's say the high-technology sectors and in the context of dumping.... This concept of competition-law-based regimes or market-access-based regimes - could you describe how we could develop that and use that as something that would alleviate another countervail softwood lumber dispute? How would that actually work?
Prof. Castel: Let me put it this way. I was looking at it just in the context of technology, let's say, but applied to trading goods the question would be about the subsidy of the stumping fees, for instance, which was the basis of the finding by the American administrative international trade tribunal and department that this constituted an unlawful subsidy. To use the new GATT terminology, it was ``an action about subsidy''.
If you just went by the competition law you would have to determine whether these subsidies would cause competition in the lumber industry as a whole, not whether it caused injury or lumber company damage to the XW company in Seattle. You would have to determine whether the competition in the lumber industry in Canada and in the United States would be lessened. The injury you would be interested in is not the injury to the individual lumber company, but to competition in the lumber industry. This is the way in which I would envisage that.
.1645
In the case of subsidies and countervail, you're going to impose a countervailing duty, but upon proof that a particular segment of the industry.... It may not be 51%, because under the SIMA or the equivalent legislation in the United States it has to be a substantial part of the industry that is affected, but it's affected in a different way from a competition way. The competition is among themselves, and I don't see how the stumping fee really can affect competition among the producers of boards and two-by-fours, or whatever.
Mr. Cullen: One of the areas I've been pursuing is the concept of net subsidies. I know it has some practical limitations in terms of implementation, but if we look at the U.S. forest products industry we know there are some subsidies to the U.S. industry at the state and local level but under the current countervail rules we can't really attack their process or their system; we have to respond to the alleged subsidies in our system.
I've also bumped into the concept - and I'm trying to learn more about it and maybe you could elaborate on it - that I think is called ``serious prejudice.'' I don't know if you're aware of that.
Nonetheless, in terms of competition, whether the way, let's say, stumpage was applied in Canada would cause injury the way you've described it to the competition of the lumber industry as a whole in North America, would this approach address this sort of net subsidy issue? Does it touch on that?
Prof. Castel: No, it wouldn't touch on that. It would just be whether the subsidy in itself would constitute an infringement of competition. It's in that sense that I would look at it, and you would have to look at the whole industry.
Whether we could separate them, saying on the one hand the Canadian industry and on the other the U.S. industry, is an interesting issue. My whole thesis is based upon the fact that Canada and the U.S. are closely integrated as a result of NAFTA and the FTA, and therefore we form a single market and you can't really segregate along the Canadian border.
That is the whole paradox. On the one hand you have the Americans, who are interested in that integration, and so are we, but they're still imposing anti-dumping or countervailing duties while in fact that shouldn't happen because of the integration. On the other hand, in Japan, where there is no close integration of Japan with other countries but they have all these consortia and things like that, they can resort to all kinds of anti-competitive activities, even with MITI, the government, encouraging them, but they don't come under the anti-dumping or countervailing duties because it's all internal; there are other companies. It's not the state that helps the other companies, but they are the companies that are part of the consortium, the cartels, in fact, and the Keiretsu.
In the North American context, I see no room for subsidies and dumping, and countervail or anti-dumping duties, because this is contrary to the nature of the integration of the two economies.
Mr. Cullen: I can understand the integrated market concept. From the Canadian forest products industry I know there have been some considerations from time to time looking at trade consortia, but for different reasons, to try to reduce some of the cyclicality in the pricing. But there's always been a reluctance to pursue that or even to discuss it because of the antitrust laws in the States.
.1650
I think I'm understanding better what you're saying as it might relate to the forest products industry. If you look at it as a North American market and if U.S.-Canadian timber pricing policies aren't really germane to the argument you're talking about, could you help me out on how the debate might emerge, let's say in the context of softwood lumber? If the Americans, for example, allege that subsidies in Canada are injurious to the competition of the lumber industry in North America, what kind of argumentation would come forward? I'm having trouble understanding.
Prof. Castel: I'm looking at it this way. What difference does it make whether the competitors or those who are receiving subsidies...? Let's say the State of Oregon grants some subsidies to an Oregon company. What about the pine growers in Alabama? Couldn't they say this is a subsidy, so it should countervailable? It's not countervailable between the states.
Mr. Cullen: Then what you're saying is that under this, if we apply the anti-competition dimension, there would really be no actionable cause.
Prof. Castel: But there may be if, as a result of a subsidy in the form of lower stumpage fees or whatever the nature of the subsidy - it may be another type of subsidy given to lumber companies in British Columbia or in Alabama.... If that had the effect of lessening competition, then it would come under the general scope of the antitrust laws of the U.S. or Canada.
It would certainly diminish. It would be much more difficult, unless it were a per se situation such as price-fixing. That would be per se. Otherwise the burden of proof would be on the complainant to show there was a violation of the antitrust laws. Is the low stumping fee a reasonable practice? If it is, then it doesn't violate the U.S. antitrust laws or the Canadian competition laws.
Mr. Cullen: As a Canadian and someone who's worked in the forest products industry, I think the way you've described it, it would have some attraction. My concern is about whether or not the Americans would buy into that. I still don't have a clear picture of what the argumentation -
Prof. Castel: Well, obviously -
Mr. Cullen: Yes, but that's another issue. The U.S. producers would mount some technical arguments to support their market access rationale, but what would the argumentation focus on in terms of decreasing competition, let's say, if stumpage were low? I don't understand how the argumentation would flow.
Prof. Castel: You're putting me on the spot, because I haven't really addressed the problem, but I would say this.
In a purely domestic American situation, they would be subject, as between themselves, to the American antitrust laws. Here all I'm suggesting is to extend it to the whole North American environment. So how could they complain about laws they are subject to anyway? Those lumber companies are subject to the American antitrust laws. All we're doing is extending it and saying they may also be subject to Canadian competition laws. I see no big deal there, because it's just extending the scope.
Maybe there is some problem of sovereignty or extraterritoriality, because you're going to apply to these lumber companies in a reverse situation in Canadian antitrust laws. But at the end of the day, there is nothing to complain....
.1655
All we're saying is that if the practices of the government or the lumber companies are such that they constitute an infringement of competition, then there will be remedies. It could be the simple damage remedy or triple damages.
There is a problem here. It's a very technical one. If it's a state A, it may be exempted from the antitrust laws in the United States. Just like under these consortia, they are exempted. If the production or research is in the United States, they're still subject in a limited way to the antitrust laws, but they won't get the triple damages; they will only get simple damages in the event that there would be a violation of the antitrust laws.
That could be worked out. As I said, you're asking me these questions, but I was not addressing the lumber industry.
Basically, I firmly believe that one could work out a system because of the integration of our economies whereby we could replace both the anti-dumping, which is the smallest problem, and the subsidies between these two countries. I don't suggest that we just get rid of all the subsidies and countervailing duties of all the countries of the world just because of the integration of our economies.
All you have to do is to look at the way it's working in Europe. Professor McRae was quite right when he asked whether we wanted a free trade area or a custom union. So that may make a difference.
But without having to answer that question - I still think Americans wouldn't go for a custom union anyway - and within the concept of the free trade area, I still think that we could work out a system whereby we could replace those two types of remedies by the competition remedy.
Mr. Penson: My concern has to do with the precedent we're setting by accepting caps on exports in areas like the softwood lumber deal. We've seen it with wheat two years ago. My understanding is that the United States is starting to make noises again about putting more restrictions on imports of wheat from Canada.
We've got a free trade agreement with NAFTA. We've got the WTO now. Yet we're not using that process.
This is what I'm wondering. Just take softwood lumber. I know you said you weren't prepared, but here's what I'm getting at. As the United States has done an end run and changed its domestic regulations, we probably wouldn't win at NAFTA any longer. So isn't it incumbent upon Canada to take a dispute like that to the WTO to really find out whether we are subsidizing our forest industries through stumpage or not? After all, we did sign an international agreement. My own view is that we would probably win that. I feel that we would. Even if we didn't, aren't we bound to accept what we've negotiated there?
Say the United States hit us with a countervail on it. Say we take it to the WTO for a ruling and they say we are subsidizing our forest industry based on the criteria they set at the WTO at the last round of the GATT. Then, professor, you said that we should probably remove those subsidies rather than have countervailing.
I'm just wondering what your thoughts are, both gentlemen, as to whether this isn't a vehicle that we should be using to try to determine whether we're right on these issues or not. As you know, they've been ongoing for a long time.
Prof. Castel: Chapter 19 is an exclusive remedy as far as final determination goes, but we can still go before the GATT, the WTO, on the question of the subsidies.
Mr. Penson: But you can only choose one or the other, can't you?
.1700
Prof. Castel: No, that's only if you are questioning a decision by an administrative tribunal such that you have to go under chapter 19. But as for questioning the existence of a subsidy as a violation of the GATT accord, and whether it violates article VIII or whether it violates specificity in article II of the GATT, I don't see why we can't go before the WTO on that.
Prof. McRae: I think clearly we could go to the WTO to get an answer.
I suppose the reason is that sometimes the consequences of living with the dispute may be better than the consequences of finding out what the real answer is. It may be that although this softwood lumber is a continued irritant, living with the agreement, at least for the short term, may be better than the consequence of going to the WTO and finding that this is a subsidy. Then we would have to deal with the political consequence of getting the provinces to change their laws, if that is consequence.
Now if we win, that's fine, but I suppose there must be some assessment of whether, economically, the industries are worse off through an agreement that establishes quotas, at least in the short term, and then wait and see.
But I think there's no question that the mechanism for resolving this issue of whether this is a subsidy or not according to the WTO is there and can be used.
Most individuals and governments feel they don't have to go to court unless someone takes them to court. If you have the measure in place and you think it's justified, you don't go to ask a court whether you're right, you wait until someone takes you to court to have a challenge.
Mr. Penson: I certainly agree, but I don't think you can treat the industry as just one player. There are winners and losers in all of this, of course, and the winners may just happen to be the 40% of the Canadian forest industry that's owned by U.S. companies, because their stock has increased greatly as a result of this.
Just so I'm clear, Professor Castel, I must be wrong here, but I understood that you had a choice of either taking this dispute, if you're challenged and hit with a countervail, to the NAFTA panel or to the WTO, but you couldn't take it to one and -
Prof. Castel: Under chapter 20, you have a choice. Under chapter 19, you have to go to the panels, but it only deals with the final determination of dumping or subsidizations.
Mr. Penson: That's as it relates to this particular case. Let's say that -
Prof. Castel: It has been done before in the beef case and others. You separate the issues. Some issues, even though they deal with subsidies on dumping, can be brought before the WTO. Issues that have to do with the determination of the administrative agencies have to proceed under chapter 19.
Prof. McRae: I think if a dumping case is brought in the United States, the decision of the international trade administration in the Department of Commerce can be reviewed by a chapter 19 panel. It can only be reviewed by a chapter 19 panel. A decision of the ITC can be reviewed by a NAFTA panel. The only question this panel can decide is whether the agency correctly applied U.S. law.
If Canada took the view, having resolved this through chapter 19, that the United States, in applying its anti-dumping law, was violating the GATT, then it could take the matter to a WTO panel to say that the United States law, as a whole, is simply not complying with the GATT. Then that could go to a GATT panel.
Mr. Penson: I'd just like to explore this a little bit further. Take the case of softwood lumber. Let's just work this through. Say Canada wouldn't have accepted this deal and the United States hit our industry with a countervailing duty. My understanding is that because they changed their domestic regulations, the likelihood of us winning would not have been that good.
So rather than going that route and finding out that, yes, the United States is applying its law correctly and then taking it to the WTO that way, couldn't we just take this dispute to the WTO - we could choose the forum - and say that we would like it to resolve this issue? The United States is hitting us with a countervail and saying that we're subsidizing our forest industry - we want a ruling on it.
.1705
We could go to the WTO and say that the United States has incorrectly interpreted its obligations under the WTO, under GATT, in treating this as a subsidy. This is not a subsidy according to GATT law, and therefore it is not a countervailable matter. That could be taken to the WTO.
Prof. Castel: I see why you raise that. We have this article 19.03 I mentioned there, and that is what the Americans have done. They have amended their regulations and everything. Normally according to 19.03 we would have to go to a NAFTA panel, which is not binding. But it's a very narrow one. If you look at article 19.03, the scope is quite narrow. And I agree with Professor McRae. You could still attack these changes before, even though prima facie it would look as if the only recourse is 19.03. But if there is a violation, you would have to show those amendments and those regulations violate the subsidies code.
[Translation]
The Chairman: If memory serves me, during the negotiations for the free trade agreement with the United States, an attempt had been made to identify subsidy measures that were acceptable and those that were not, which in a way limited the possibility of applying countervailing measures in so far as certain subsidy measures have been considered legitimate.
Is this a valid approach? Is this a negotiation that should be undertaken. It was interrupted and was never resolved, largely because the available time expired, apparently. Negotiations could not be extended any further.
Prof. Castel: Chapters 18 and 19 of the first agreement between Canada and the United States were done in haste, at the last minute, and they were inserted because as you said, an attempt had been made to negotiate anti-dumping and countervailing duties, which never came to fruition because it was such a controversial subject. With regard to countervailing duties, we had waited because at that time the negotiations of the Uruguay Round had already started and it was decided to leave things alone until GATT had adopted new rules. It seems a bit bizarre and I always wondered about that. We can't have different rules for anti-dumping duties and countervailing duties, two different systems. How can we have both the GATT regime and the NAFTA regime? In my opinion, this doesn't make sense because the principles are the same.
In the document that I submitted to you, I suggest a solution regarding technology, which is dealt with in paragraph 8.2 of the Agreement of Subsidies, which is quite limited. Moreover, the Americans extended the notion of research, R & D, in their consortium. Perhaps we could amend the GATT agreement on countervailing duties in this area. We could attempt to restrict or extend those that are not actionable in order to exempt from the application of countervailing duties certain subsidy practices that we have in Canada as well as in the United States. In the U.S. they don't seem to have too many scruples about this because they're even exempted in antitrust law. When we do something else in another area, they impose countervailing duties. So it seems to me that there's something wrong; we should renegotiate this.
.1710
Moreover, there is a provision for the striking of a committee since we were to have a special chapter on countervailing duties, but GATT intervened.
We have a more or less parallel example here. Read the chapter in the GATT agreement that deals with what we call the TRIPs and the chapter that we have in NAFTA. You're very familiar with it since it was your area when you were a minister. They're practically identical, but there are differences nonetheless. We could do the same thing: we could have a code on countervailing duties on subsidies that would be slightly different from the one in GATT. It is possible.
The Chairman: So that would be one approach from the standpoint of negotiations, which, in your opinion, would be valid.
Prof. Castel: To be honest, I don't think this will produce any results. As we say in English, the Americans want,
[English]
have their cake and eat it too.
[Translation]
They want to have their system of countervailing duties and be exempted from it when it suits them. Given their economic power, I prefer the integration system. That way, we don't need to get into all the detail. We simply apply antitrust law, which they like and they are used to. In my opinion, that would go down better, but personally, I'm rather pessimistic about the adoption of a special agreement between the three partners. The committee is working on it, but I would be surprised if it was ever fruitful.
[English]
The Chairman: Mr. Cullen.
Mr. Cullen: Thank you, Mr. Chairman.
Mr. Castel, I find this concept of a competition-law-based or market-access-based regime a very attractive one as well. When I look at it in the context of, let's say, softwood lumber, I'm not a competition lawyer and maybe I haven't been exposed to these arguments, but if one had to prove that, let's say, a government stumpage or other support program to the forest industry, for example, would unduly lessen competition or restrict market access, looking at the North American market as a whole I must say I can't conjure up a lot of examples or argumentation around that which to me as a Canadian and a supporter of Canadian producers would be good. I'm sure somewhere down there in the U.S. someone would think up some reasons why the Canadian provincial stumpage policies, for example, would lessen competition or restrict market access. If you have any thoughts further on that of what kind of argumentation you could develop, that would be helpful.
The bigger question is whether the parties would agree to it. Then we would have to look, as a country, if we live with that regime, at what sectors, other than technology or forest products...how would we do as a whole under that sort of regime. My intuitive sense is we would do okay.
Prof. Castel: It could apply across the board.
First of all, I think we have to brainwash ourselves. We have to forget about thinking in terms of anti-dumping and subsidies, because there we think of stumpage: is it a subsidy because it's a low fee and so on? We have to forget about all of that. We have to think in a completely different way: do the practices of the British Columbia government or the practices of the lumber industry constitute a violation of competition law?
.1715
I have a good case here, an American case. It's Addamax Corporation against Open Software Foundation. For the record, it's 1995-888, federal supplement 274. It involves technology, but it deals with this whole question of subsidies that were given domestically, internally there. They formed a joint venture and they had some government support and so on. Then some competitors attacked them, saying this was a violation of the antitrust laws. It's a very good decision, which shows how it works in the American context. Given that Canadian law and American law are not that much different when it comes to what constitutes anti-competitive activities, it's a good illustration of how this would work in any context.
Mr. Cullen: Can I get a copy of this? What is the name of the case again?
Prof. Castel: I have the case here, so the assistant here can make you a photocopy. That's my only copy. Is there a system here to photocopy it quickly? Because I don't want to give it out.
[Translation]
The Chairman: It would seem that our printing and photocopying department is closed at this hour. Perhaps you could send us copies.
Prof. Castel: Yes.
The Chairman: You could send them to our clerk and we'll distribute them to the committee's members.
[English]
Prof Castel: I don't pretend to be an expert in this, because, as I said, I'm beginning to explore that as a very serious possibility. So I may be just a few steps ahead of you, but not that much. It's something that should be explored, because I think it's a promising idea.
I'm working with a colleague and we wrote together the piece on the software. We're working in the field of technology there, so we're exploring this possibility. I personally believe that it can be applied to any field. It's not the unifying theory of Einstein, but nevertheless it's much more promising because it does not require necessarily the amendment or the adoption of new laws or the modification of old laws. The Americans would balk at that type of thing. But if we're serving them the antitrust laws, then that's their baby.
Mr. Cullen: I think it has some interesting appeal. As you say, it's a totally different.... You have to make a paradigm shift. I'm trying to work my way through that as well.
Prof. Castel: I have to explore it further myself.
Mr. Cullen: Thank you.
The Chairman: Professor McRae,
[Translation]
professor Castel, I wish to thank you very much for you appearance and your comments. We will take them into account in our future deliberations.
[English]
Thank you very much.
The meeting is adjourned to the call of the chair.