CIIT Committee Report
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Supplemental Report of the Official Opposition New Democratic Party of Canada The Official Opposition New Democratic Party of Canada is very supportive of deepening and broadening Canadian economic relations with Japan. We share the view that closer economic relations between Canada and Japan can lead to greater prosperity for the people of both nations. We believe that pursuing an effective economic partnership agreement between our two countries is an important means to this end. As such, we support in principle, and in many specifics, the findings and recommendations contained in the Report. However, we believe the findings and recommendations in the Report are incomplete. Evidence received by the Committee made it clear that economic progress for Canada is dependent on more than simply signing an economic partnership agreement. Economic benefits will accrue fully to Canada only if the necessary policy and structural supports are provided. Careful and skilful negotiations are essential to achieve an economic partnership agreement that preserves democratically-determined policy-making, recognizes the importance of both private and public interests and deals successfully with the real issues at hand. The following expresses those additional findings and recommendations that we believe are necessary to achieve stronger economic relations with Japan and help the Canadian economy, environment and society flourish. Agriculture - The Committee’s trip to Japan revealed how important and sensitive the agriculture industry is to that nation. As one official stated, Japan is likely the only country in the world where its citizens are “…acutely aware of its food security index”. Although Japan imports over half of its agri-food needs annually, it is very protective of the production that does occur on its soil. We believe that this is a critical issue for Canada to respect in its negotiations. Representatives of the Japanese national farmers’ association made it very clear that its members would support a trade agreement with Canada only if it was beneficial to their interests. Similarly, we believe that Canadian negotiators must ensure that Canadian food producers’ interests are similarly advanced, and that our supply-managed sector is completely defended. Airline Service - We heard reports from a variety of Canadians and Japanese that there is inadequate airline service between our two countries. Clearly, ensuring that business persons, academics, students and visitors can more easily access our two nations is of no small importance to increasing economic relations. Accordingly, we believe that the Canadian government ought to work with private sector airlines and airport authorities to encourage the expansion of direct flights, particularly between Canada and Osaka, and Nagoya. Automobile Manufacturing - Canadian automobile manufacturers and labour unions raised concerns that the Japanese market contains a variety of non-tariff barriers that work to prevent full access to Canadian products. They, and other witnesses, cited examples ranging from exhaust system regulations to vertical integration of Japanese supply chains. However, other witnesses maintained that the difficulty Canadian manufacturers have in selling products in Japan is due to factors unrelated to trade barriers. New Democrats believe in the vital importance of the automobile industry to Canada’s economy. Therefore, the Canadian automobile sector, both management and labour, must be actively consulted and engaged throughout negotiations to ensure that any significant non-tariff barriers that inhibit fair access to the Japanese market, if such exist, are satisfactorily resolved in any final agreement. New Democrats believe that trade agreements must benefit value-added industries and the stable, high-paying jobs they create. Consular and Trade Commission Services - Witnesses in Canada were unanimous that the recent decision of the Government of Canada to close the Canadian Consulate in Osaka was misguided and unhelpful. This view was reinforced by a variety of people in Japan. Both the process that was employed (abrupt, with no advance notice to the Japanese government or stakeholders) and the substance of the decision were roundly perceived to be in error. Osaka is a very important economic region of Japan, with a market of some 30 million people and a very strong commercial ethos. It was noted that the Consulate’s services included trade commissioners. In our view, reducing trade commission services at the same time as we are embarking upon negotiations geared toward increasing trade is counter-productive and sends the wrong message. Accordingly, the Osaka Consulate should be re-opened immediately, with trade commission services restored. It is our further view that Canada ought to open additional consulates in Japan in major commercial centres and increase its trade commission presence in order to help Canadian businesses to better access the Japanese market. In addition, we believe that Canada should bolster its trade commission services in Canada, both to assist Japanese businesses wishing to operate in Canada, and Canadian businesses who require information about Japan. Effective Canadian Regulatory Systems - Japan has a well-known reputation for demanding high-quality, safe products. In order to successfully access the Japanese market, Canada must ensure that our quality and safety standards are sufficient to ensure our products will be attractive to the Japanese consumer. Recent challenges in the beef sector point to the serious economic consequences for Canadian producers when lax Government oversight leads to lapses in Canada’s food safety system. Therefore, the Government must reverse its trend of decreasing staff and resources to our product safety regulatory system. Instead, Canada must increase investment in an effective domestic regulatory structure to ensure products meet high quality, safety, sanitary and phyto-sanitary standards. Energy and Natural Resources - Canada benefits from an abundance of natural resources, and Japan is a net importer of these products. Renewable energy and innovative technologies are also of critical importance to citizens of both countries. We recommend that any economic partnership agreement encourage the development of sustainable and value-added products in these areas. We also believe that Canadian negotiators ought to make increased Canadian production of value-added industrial and manufacturing goods a primary focus. Environment, Labour and Human Rights - As modern economies and mature democracies, Canada and Japan share a commitment to advancing standards in the environmental, labour and human rights areas. New Democrats believe that such issues are core components of economic pacts and that standards in each area ought to be raised as a result of trade agreements. We accordingly recommend that these be given first-order priority in negotiations. Investor-State Dispute Settlement (ISDS) - ISDS procedures are of increasing, serious concern to Canadians. Such provisions permit foreign corporations to sue governments for enacting measures that are perceived to interfere with their profit expectations. Many feel that ISDS processes place undue restrictions on democratically-elected bodies to legislate economic, environment or social policies to the benefit of their citizens. Others have expressed concerns that ISDS processes violate principles of the rule of law, including the lack of an effective appeal procedure, conflicts of interest and no security of tenure for adjudicators. As Canada and Japan both have well-established, independent judiciaries, and because private actors have other means with which to protect their interests, there appear to be insufficient reasons to justify the inclusion of an ISDS process in any economic partnership agreement between our two countries. Intellectual Property Rights (IPRs) - IPRs did not receive focused discussion in testimony before the Committee. New Democrats believe that such rights should always strike a balance between the interests of rights holders and the interests of consumers—for example, ensuring costs are not increased on prescription medication for Canadians. We believe this principle must be respected in any economic partnership agreement. Political, Social, Cultural Connections - Increasing economic relations to mutual advantage takes more than a formal agreement. A number of Canadians with expertise in Asian relations have noted that taking advantage of opportunities to participate in regional Asian political bodies helps build trust, and increasing social and cultural exchanges fosters relationships that are intertwined with economic opportunity. Accordingly, we believe that the Government of Canada ought to increase its participation in regional Asian political bodies, and support the expansion of social and cultural exchanges, like those conducted through “sister city” pairings between municipalities. In addition, the Government should provide resources to provinces to increase opportunities for Canadian students to learn the Japanese language. Sub-Federal Canadian Governments - Economic partnership agreements invariably, and increasingly, affect provincial, municipal and other sub-federal governmental bodies. This is especially the case if Investor-State Dispute Settlement, public procurement or investment chapters are included in such agreements. It is therefore essential that such bodies be afforded the broadest possible consultation and participation roles in the negotiation process. Trans-Pacific Partnership (TPP) - The Government of Japan has not made a formal request to enter into the TPP process. We heard clearly that there is strong public opposition to the TPP in Japan. It was pointed out that the TPP does not include any of the major Asian economies, such as China, Japan, South Korea, Indonesia, or India. According to Japanese sources, economic modelling indicates the presence of Japan is a significant factor in generating economic benefits for the current participants; a TPP without Japan, however, provides marginal benefits. Japanese sources also reported that they regarded the TPP process to be highly secretive, with unacceptable conditions to enter the talks, and concerns were expressed that the United States was crafting an imbalanced agreement in favour of its own interests. New Democrats believe these points should be noted in this Report. Transparency and Accountability - New Democrats believe that trade and investment agreements must be negotiated in as transparent and accountable a manner as possible. Such treaties are not pursued for the benefit of the Government, or political parties; they are negotiated for the benefit of the public. Therefore, Canadians have a right to be consulted both prior to and during negotiations. In addition, we believe that Parliament and the Standing Committee on International Trade ought to be consulted and receive regular briefings from the Government throughout negotiations. The government also has a constitutional duty to consult First Nations on measures that impact their rights. To date, the Conservatives have maintained an unacceptable pattern of secrecy and selective consultation in trade negotiations that is not in keeping with accountable government or broad access to policy making. New Democrats recommend that this trend be replaced by a more transparent process in the Canada-Japan negotiations. Transportation Infrastructure - The Committee heard strong evidence that increased trade requires modern and efficient Canadian infrastructure. We must ensure that we have sufficient rail, handling and port facilities in place to manage not only present volumes of exports and imports, but also anticipated increases in the future. These facilities are needed across Canada as the Japanese market is accessed from both coasts. Accordingly, the Canadian government must make necessary investments in vital transportation infrastructure. Visa Services in Japan - Witnesses unanimously testified that the decision of the Canadian government to close its visa processing centre in Tokyo for Japanese residents and relocate same to Manila, Philippines, was a significant error. Like the decision to close the Canadian Consulate in Osaka, this move was done with little advance warning to the Japanese government or stakeholders. We heard that Japanese citizens do not like having to deal with a foreign country to obtain Canadian visas or being compelled to obtain foreign currency in order to do so. We also heard that competition from other countries for Japanese students, workers and business is substantial, and any barriers that Canada erects in this regard risk us losing these highly desirable visitors to other countries. In our view, Canadian visa services for Japanese residents should be fully restored to Tokyo at once. Canada should further consider expanding visa services to other regions of Japan as well. Recommendations The NDP recommends that the Government of Canada:
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