CIIT Committee Report
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SUPPLEMENTARY OPINION NEW DEMOCRATIC PARTY OF CANADA INTRODUCTION The NDP thanks the Committee members, staff, analysts, and the witnesses who participated in this study of the “Priorities of Canadian Stakeholders Having an Interest in Bilateral and Trilateral Trade in North America, Between Canada, United States and Mexico” and the North American Free Trade Agreement (NAFTA). The NDP supports fair and progressive trade relations with key partners on the continent to create new opportunities for Canadian exporters, which would generate job creation and economic growth for Canadian workers and communities. When Canada signed NAFTA originally in 1994, the federal government promised people jobs, rising productivity and secure access to the largest market in the world. There is no way to determine the exact degree to which NAFTA has affected Canadian jobs or productivity growth. Twenty three years after NAFTA went into effect, there is strong support to modernize this agreement and ask whether it is the right model for today’s priorities of reducing inequality, eliminating poverty, and reversing and mitigating the destructive effects of climate change. The NDP heard from many witnesses during this study that NAFTA has created hardships for working people, and questions about factors that undermine our sovereignty, including our freedoms to pursue social, environmental and cultural policies. In addition, multiple stakeholders stated that withdrawal from NAFTA would not be catastrophic since World Trade Organization (WTO) bound tariff rates would still apply. The terms of this multilateral agreement are far broader than simply tariff reductions. As stated in the report from OpenMedia, “NAFTA reaches far beyond trade, and affect rights, interests, and fundamental values that are unique to Canada among the three members of NAFTA.” New Democrats understand the importance of our trading relationship with the US, our largest trading partner, and believe that a better NAFTA can improve the welfare of all North Americans. In order to achieve this it must be transparent, inclusive and forward-looking. It must address important issues like income inequality, sovereignty, climate change and human rights. We have the opportunity to change this key trade deal and make it about improving the lives of all Canadians. GOVERNMENT CONSULTATIONS AND TRANSPARENCY The NDP believes that the Government of Canada can make no meaningful claims to transparency without providing Canadians with information about the subjects of negotiation. The government must lift the veil of secrecy on trade negotiations. Despite the Liberal government’s efforts to consult, there remain no formal requirements set up for government to engage the public on trade agreements, and as with the previous government, the current government largely negotiates behind closed doors with very little public participation or transparency. As was noted in the main report, Global Affairs Canada (GAC) received over 22,500 submissions and over 43,000 online submissions as of December 2017. However, these GAC submissions have not been made public or provided to Members of Parliament. The level of government consultation was a frequently raised issue during the Committee’s study. While many industry groups reported feeling well consulted, many other groups felt the opposite to be true. The government’s continued failure to uphold its commitments to the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) when it comes to trade agreements is also of deep concern. Article 19 is very clear that Canada must obtain the free, prior and informed consent of Indigenous Peoples before adopting any measures that may affect them, and NAFTA certainly falls within this classification. The NDP also believes that in order for Canada to fulfill its obligations to Indigenous Peoples under the UN Declaration, they must have full representation at the negotiating table. In future negotiations, the government should consult Members of Parliament from all Parties who represent the Canadian public, in a meaningful and comprehensive way that includes Canadians from all sectors, regions and backgrounds, and the results of these consultations should be made public. The NDP will continue to push for better as the government embarks on all future negotiations. INEQUALITY Recent studies provided to the committee by the Canadian Centre for Policy Alternatives (CCPA), the Trade Justice Network of PEI, the Canadian Labour Congress (CLC), the Council of Canadians and UNIFOR argue that NAFTA’s overall benefits are contentious at best. In an article written by Pamela Palmater, she states that, “In fact, Canada’s welfare shows an actual decline of 0.06 per cent. Some experts have argued that NAFTA has created more economic instability than actual benefit as millions have lost their jobs, wages have stagnated generally and decreased in Mexico… Some have referred to NAFTA as the end result of negotiations between self-interested transnational corporate elite largely benefitting corporations — not people or the planet”. In an article written by Robert Scott, Jeff Faux and Carlos Salas named, the authors state, “Although, as the Canadian government is quick to note, trade volumes have increased dramatically in the post-NAFTA era, inequality has also increased and real wages have stagnated or, in the case of Mexico, fallen further behind.” In fact, in an interview with Bloomberg Businessweek, even Prime Minister Justin Trudeau admitted that, “Trade hasn’t been great for everyone…Sometimes it has benefitted only the top tier of any economy certain multinationals, not smaller businesses.” At its core, NAFTA is about shifting the power in the economy from governments and workers to corporations as it gives enforceable rights to investors and it limits the powers of current and future governments and the citizens who elect them. To truly improve this agreement, NAFTA must be renegotiated to protect the poorest and most marginalized people. As was noted in Oxfam Canada’s submission to Global Affairs Canada, equality in trade agreements cannot be attained if there is no emphasis on human rights, gender equality and inclusive economic growth, and it can have adverse effects like lowering labour standards and decreasing the provision of public services. LABOUR NAFTA’s current priorities and objectives must be redefined and must put the rights of working people first. When NAFTA was first signed, workers in all three countries were given false hope of more stringent labour standards and higher living standards. To this day, in Mexico, workers are still denied the right to engage in free collective bargaining with their employer, independent unions are often blocked from negotiating on behalf of workers, wages are stagnant, and labour laws and environmental laws are far below Canadian standards. In the United States, the rise of “Right to Work” laws across states are being used to deter unionization, diminish wages and labour rights. The North American Agreement on Labour Cooperation (NAALC) was a side agreement in NAFTA, and is therefore ineffectual. In fact, the NAALC was designed as a review mechanism that member states could voluntarily open themselves up to, but has limited capacity to sanction states for violation of the agreement, and thus is unable to harmonize labour rights among member states. And, as was noted in a report by the Council of Canadians, the NAALC does not provide an effective mechanism to challenge avoidance of domestic labour laws, which is encouraged as investors shift production to lower-wage countries in the ‘race to the bottom’. A modernized NAFTA must learn from and address the limitations of the NAALC by including a Labour Chapter into the main text of the agreement to ensure that labour regulations are binding and include penalties and standards for all three countries. The Canadian Labour Congress (CLC) also made it clear that in order to equally raise labour rights and standards in NAFTA, the Labour Chapter must include requirements from all three member states to sign and ratify the International Labour Organization’s (ILO) eight core conventions, adhere to its Decent Work Agenda, sign and ratify the ILO’s convention 81, which is the labour inspection convention and the chapter must include the creation of an independent labour secretariat to oversee a dispute-settlement process for violations of labour rights as there is no current or adequate mechanism to combat the widespread violation of labour rights. The NDP also agrees with the CLC that the Government of Canada must, “look at due diligence for Canadian companies and funding agencies… and create a framework for transnational bargaining to allow unions to represent workers in multiple countries.” The NDP believes that NAFTA negotiations should be guided by the principle that no one should be disadvantaged; working people cannot continue to be an afterthought in trade agreements. AUTO AND MANUFACTURING SECTOR While the highly-integrated North American auto and manufacturing industry has played with respect to increased production, innovation and sales, but the playing field is very uneven. Since 2001, 44,000 Canadian auto jobs and at least 400,000 manufacturing jobs were lost. In a report from UNIFOR, half of Canada’s current manufacturing trade balance with Mexico is made up of cars and parts. The overall automotive trade deficit between Mexico and Canada has gone from $1.6 to $8.7 billion dollars under NAFTA. It is important to note that rules of origin must be modernized to accommodate changes in technology and the rules dictating North American content (i.e. the tracing list) must by strengthened. This integration and trade liberalization has benefitted corporate stakeholders but has not been shared with workers or small and medium sized auto and manufacturing parts businesses. The Canadian government must defend auto jobs, address the unfair share of wealth and implement a National Auto Strategy to ensure the strength of the sector. INVESTOR STATE DISPUTE SETTLEMENT AND CHAPTER 11 The NDP believes investor-state provisions that privilege corporations in a way that conflicts with the public interest do not belong in trade agreements. These provisions allow foreign investors to bypass domestic court systems, thereby undermining our sovereignty. Arbitration tribunals, which lack accountability, can order governments to compensate investors who are allegedly harmed by public policies or regulations. The CCPA noted that, “Chapter 11 was originally characterized as an exceptional remedy to be used only under extreme circumstances… Instead, foreign investors have targeted a broad range of government measures in areas of environmental protection and natural resource management… Canada has lost or settled eight cases, paying out damages to foreign investors of over $215 million. In nine cases, arbitrators found that Canada did not breach the complainant investor’s rights in NAFTA. Canadian governments have incurred tens of millions of dollars in unrecoverable legal costs through this process.” While the Minister of Foreign Affairs said she would pursue changes to the ISDS provisions and work to bring them more in line with the Investor Court System (ICS) provisions that were negotiated as part of the Comprehensive Economic Trade Agreement (CETA), a professor from Osgoode Hall Law School, Dr. Gus Van Harten, revealed that there are gaps in the ICS. Members of the court decision making roster are remunerated based on the number of claims brought before the court, which is not healthy for perceptions of independence. In addition, the arbitration process is not public and therefore roster members are never held to account. In a report to the committee, UNIFOR raised the point that Canadian investors have access to a well-developed domestic court system, but Chapter 11 provides them with additional privileges which also threatens to “chill” domestic regulation. An ISDS challenge is not even necessary to influence and/or change a government’s position on regulations and legislation – rather the mere threat of a potential lawsuit under Chapter 11 is enough. It is important to note that Ecuador, Brazil, South Africa, Indonesia, India and Japan have all stated they would no longer or would never accept trade deals with these provisions in place. ENVIRONMENTAL PROTECTIONS, ENERGY AND WATER The NDP believes that the North American Agreement on Environmental Cooperation (NAAEC) must be brought into the main text of the agreement to ensure our protection from the disastrous impacts of climate change and the continuing degradation of our environment. The NAAEC has a limited budget, and its dispute settlement process is unable to compete with the strength and backing of the ISDS provisions within Chapter 11. NAFTA’s regressive energy proportionality provisions must be removed from NAFTA as they prohibit Canada from reducing oil and gas exports to the U.S., even if we experience shortages, reduce domestic output to meet greenhouse gas reduction obligations, or prioritize domestic value-added production. NAFTA treats water as a tradeable or marketable good instead of as a human right. Under Chapter 11, Canada has already been sued for laws protecting water and as corporations challenge our domestic laws further, our government’s ability to protect our water is at great risk. As was stated by Dr. David Suzuki from the Suzuki Foundation, “there should be no trade in water until and when we have come to care for and protect this sacred fluid in a way that is truly sustainable”. It is clear to the NDP that the ISDS provisions of Chapter 11 must be eliminated as they have had the greatest impact on domestic environmental, energy and water regulations and have created a regulatory chill as referenced in this report earlier. GENDER RIGHTS The NDP was disappointed that the committee chose to only reflect a vague statements of gender rights in their recommendations instead of truly reflecting the full and important testimony that witnesses brought forward on the Gender rights chapter. The NDP would like to emphasize again that Oxfam Canada called for a mainstreaming of gender rights throughout the entirety of the NAFTA text. It should not be solely limited to one chapter, and gender equality does not concern only issues that women entrepreneurs and business owners face. Labour rights must also address injustices to women like pay inequity, child labour and poor working conditions. The NDP believes that for an agreement to be truly progressive when it comes to gender rights, it must address the systemic inequalities for all women. The NDP believe that both a gender-analysis and a gender impact assessment must be applied to all trade agreements. INDIGENOUS RIGHTS As stated above the NDP believes the government must abide by Article 19 of the UN Declaration and obtain the free, prior and informed consent of Indigenous Peoples before adopting any measures that may affect them. Another key issue brought forward through witness testimony by the International Inter-Tribal Trade and Investment Organization, the National Aboriginal Economic Development Board and the Aboriginal Business Council was the protection of “traditional knowledge” and the rights on Indigenous communities’ rights over their cultural heritage as an intellectual property right. This is a concern that must be acknowledged and addressed by the Government of Canada. INTELLECTUAL PROPERTY, DIGITAL AND PRIVACY RIGHTS With respect to intellectual property and digital rights issues, which witnesses stated were difficult to negotiate within trade agreements, there are growing concerns over the level of preparedness of the Canadian government to defend and advance Canada’s. The Committee heard witnesses raise concerns over NAFTA’s potential and extensive changes to intellectual property (IP) rights related to copyright, patents and trademarks, which may unfairly benefit big U.S. corporations over Canadian consumers or innovators. Canadian copyright policy must not be sacrificed at the altar of free trade. Maintaining balanced and sensible copyright policy is particularly critical in light of the fundamental connection between copyright law and the ability to exercise free expression online—through sharing knowledge, research, and art; participating in public and political discourse; contributing to the cultural commons; and inspiring, and building upon creativity. The NDP emphasizes the fact that notice-and-notice is an effective system that achieves objectives with respect to copyright infringement, while mitigating (albeit not completely) the harms that arise from notice-and-takedown. The Canadian government, should reject any proposal to extend copyright terms beyond its current term of 50 years after the author’s death, knowing that current Canadian copyright terms are already largely in compliance with international copyright treaties. With drug prices in Canada already the second-highest in the world, the government must resist further patent extensions that will cause drug prices to rise even further, ensuring NAFTA will not impede the creation of a Pharmacare program in Canada. As stated by the CCPA, “Fully aligning our system of patent protection for medicines with the U.S. model would be extremely expensive for Canadian consumers and our health care system…[we cannot] impede access to affordable medicines in Mexico, a developing country with many citizens who are simply unable to bear these extra costs.” The USTR requested changes to NAFTA asking member countries to create criminal penalties for individuals who circumvent ‘digital locks’ and rights management information, such as people who use software to copy their DVDs onto their computers. Data storage changes must not prevent governments from requiring that data be stored on local Canadian servers. There are already laws in place in certain provinces (British Columbia and Nova Scotia) that protect Canadian privacy rights and require domestic data be stored locally, and as stated in a report by the BC Freedom of Information and Privacy Association (FIPA), it is vital that this current legislation and future Canadian legislative sovereignty not be undermined by NAFTA or other trade agreements. The NDP believes that Canada must preserve its longstanding approach to exempting culture from NAFTA and trade agreements. Cultural policy must be determined domestically by the Canadian government. Trade agreements must not be able to dictate our cultural policy. AGRICULTURE Agricultural organizations emphasized the deep integration of agricultural policies and trading practices for food producers and marketers, and the Canadian increase of exports. The NDP has concerns that NAFTA has put the provision of safe, domestic food or food sovereignty at risk and it is incumbent upon the Government of Canada to determine its own agricultural policy and ensure the public has the ability and right to know what is in their food and how and where it is produced. This point speaks to strengthening of Country of Origin labelling and raising the standards on pesticide and food safety harmonization. The NDP also believes that to further protect agricultural producers, bankruptcy protections, like those seen in the United States under the Perishable Agricultural Commodities Act, should be placed into NAFTA to better protect businesses dealing in fresh and frozen fruits and vegetables by establishing a code of fair business practices and by helping farmers and companies resolve business disputes. SUPPLY MANAGEMENT Supply management must be protected by the government against the recent US attempts to dismantle it. This will help ensure Canadians have access to high-quality, locally produced food, while supporting small family farms and rural communities. The supply managed sector is a major contributor to our economy contributing more than $26 billion to our economy and generating 310,000 jobs. Supply management must not continue to be eroded in trade agreements as was the case CETA and the TPP. No further market access should be granted to the US in NAFTA renegotiations. NDP RECOMMENDATIONS
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