December 15, 1987

NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

In other words, does a company in my constituency go to United States and face the same kind of neutral assessment, some sort of just view of what is fair? No, Mr. Speaker. It faces instead the rules which are established within U.S. legislation, and it has to deal with those rules. It can only appeal on the basis of those rules. There is no kind of neutral basis, no agreed basis, of what is a subsidy for both countries.

That matters tremendously because the basic problem with the United States system is that the U.S. in its countervail system establishes a very curious way of looking at issues. It says that if Canada, for instance-and there have been 13 cases against Canada in recent years-

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

How many have we had against the U.S.?

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

Five. Thirteen to five.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

How many?

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

Thirteen to five.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

How many anti-dumping?

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

I am talking about countervail. If the Member does not want to listen, he does not have to, but he could keep his ears open and he might learn something. There have been 13 countervail actions by the United States against Canada. In each of those cases it was examined quite clearly what Canada did with respect to subsidies, not whether the United States itself provided subsidies and, therefore, Canada had some sort of valid fair right to do the same thing.

There is absolutely nothing in U.S. law which requires the United States to look at the subsidies which its firms receive which complain about subsidies that Canadian firms receive. That is just not fair to our workers or to our business people. That is what should have been changed if the Government had got the objective it said it was seeking. Instead, the Government failed to get that objective. Now it is trying to tell

Canadians that somehow the Government has achieved those goals despite the fact that the record is very clear, but it has not in any sense achieved those goals whatever.

Moreover, we have to look at something that is even worse. The United States, so long as it names Canada, can change its countervail and anti-dumping laws at any point in the future if it wishes. That applies to Canada as well.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

No.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

So long as it is within the context of GATT, it applies to Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

No.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

I am sorry, it does. Perhaps the Parliamentary Secretary has not read the agreement. Unfortunately, he is not listening. Perhaps if he did listen, he would hear what I am saying.

If these laws are changed in the United States, and if Canada is named in the change, then it applies to Canada and we have to accept that change. It is true, we can take it to a panel, but that panel cannot make any sort of decision. The panel can only say to the United States: "Tut, tut, you have not done things the way you should have and Canada therefore has the right to retaliate". Is that not wonderful? We have the right in the future to do what we now have the right to do.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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PC

Steve Eugene Paproski (Deputy Chair of Committees of the Whole)

Progressive Conservative

The Acting Speaker (Mr. Paproski):

If the Hon. Member is having a question and answer session, I would appreciate if he directed it through the Chair.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

I thank you, Mr. Speaker. I suggest that the Parliamentary Secretary might follow that instruction as well.

This Government sought certain goals and, I must say, sought them with some energy. It sought those goals actively and it talked about those goals, but it did not succeed in any way in achieving those goals. Because of that, the deal that has been brought back is fatally flawed. It is simply not acceptable in the light of what business people across Canada told the committee as it travelled the country.

The people told us that they had sought secure and guaranteed access to the U.S. market. The Government failed to achieve that. The Government should recognize that and express its shame in that failure.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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?

An Hon. Member:

Sheer nonsense.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

It is absolutely true.

That is what the Government failed to achieve. What did it give away in the process of these negotiations? It gave away a tremendous amount.

The Government gave away a tremendous number of things that were of special concern to average people. First, it gave away jobs. It is quite clear that there will be thousands of jobs

December 15, 1987

lost. Why else would the Prime Minister (Mr. Mulroney) have talked, in the very period after the trade deal was originally announced, about massive adjustment help for workers who would be hurt by this deal? Of course, it is possible that the Prime Minister was just talking through his hat, but I prefer to think that he was expressing some concern about the thousands of people whose jobs would in fact be lost because of this deal.

Why has the Minister of Employment talked of up to 500,000 jobs being lost if that is not the case?

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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PC

John Horton McDermid (Parliamentary Secretary to the Minister for International Trade)

Progressive Conservative

Mr. McDermid:

Why don't you quote him accurately?

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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NDP

Steven W. Langdon

New Democratic Party

Mr. Langdon:

That is precisely what he said, and that is precisely what the people of Canada heard him say on television.

If these thousands of jobs are not to be lost, why is it that groups came before the committee talking about such job losses? B.C. fish processors reported to us that they expected to lose 6,000 to 8,000 jobs because of the way GATT was put into the free trade agreement. Prior to that, GATT was something with which one could negotiate and, in the end, if one actually felt that the position put forward was unreasonable, one could reject it. Under this deal, that is no longer possible.

B.C. fruit and vegetable growers told the committee that they would be wiped out. Grape growers from across the country told us that 20,000 jobs would be lost in that industry alone. The Council for Yukon Indians testified that they would lose out because they felt that the end of local hiring would follow upon the deal and they expected environmental damage. It is possible that the Minister may not be interested in what the Council for Yukon Indians said, but that is what the council said.

The Canadian Independent Computer Services Association, which is based in Winnipeg, Manitoba, testified that as a result of this deal, it is likely that 360,000 jobs would be shifted out of Canada in the next 10 years. The Government may not like these figures, but that is what the committee heard when it crossed the country.

The auto parts producers have now rejected this deal and expect that some 20,000 to 40,000 jobs will be lost. The printers' association testified before the committee in Fredericton, New Brunswick, that it expected to lose 6,000 jobs.

These are not, as the Government likes to pretend, trade unions coming to talk to the New Democratic Party. These are business and farm groups coming before a committee of the House of Commons giving very clear testimony with respect to the thousands and thousands of jobs which, from their expertise, they foresee as necessarily being lost because of this agreement.

It is not just job losses. As shifts from this country of enterprise to the anti-union southern states, the low-wage states of the South or the Maquiladora Corridor of Mexico

Free Trade

take place, we will see that wages and working conditions for workers in Canada will be affected. The competition will be used by business people here to try to force down wages and reduce working conditions.

Beyond jobs, we also saw investment being thrown out of the window. The controls which had existed to this point over takeovers of Canadians companies of over $5 million in assets were thrown out of the window. We saw controls over indirect takeovers thrown out of the window. Again, there will be tremendous consequences as a result of that.

Let me refer to a United States report which attempted to outline what was happening in this deal. They said quite clearly: "The real achievement of this agreement is that henceforth the vast majority of new U.S. investments will occur with no interference from the Canadian Government."

What does it mean in practice? For instance, as happened in my constituency recently, an American company will be able to take over a Canadian-owned company and simply shut it down for competitive reasons. There will be absolutely no recourse on the part of the Canadian Government, unless that firm has over $150 million in assets, which accounts for about 300 out of the thousands of companies in this country.

We can go on to deal with energy and resources. It seems that the Government does not want to hear what we say, so let me quote people who testified to us as we went across the country. Joseph Mercier, the owner of an oil exploration company in Alberta, said: "Instead of going into battle with Ontario for Alberta's rights, are we going to try to allocate the authority to some administrator in Washington?" He went on to say: "The National Energy Board will no longer be able to say anything about our natural gas, but there will be people in the Federal Energy Resources Commission in the United States, there will be people in Washington, who will tell us what we can do with our natural gas". That is what we heard from oil people in Alberta.

We heard the same thing from the small-scale explorers' association in Alberta, who would not endorse this deal because they also saw it as a completely unbalanced, one-way exercise which gave far more to the United States than to us.

We can discuss cultural control. We heard magnificent testimony from a person in Prince Edward Island who had taken the plunge and moved from central Canada to try to establish a small scale enterprise in Prince Edward Island. He found considerable difficulty in establishing that enterprise, but nevertheless has persisted and succeeded in making it economically viable. Let me quote Jack McAndrew, from our hearings in Charlottetown. He said: "I, like every other Canadian producer, have spent most of my adult life fighting for a stall in the market of my own country".

December 15, 1987

Free Trade

That is what cultural industries have had to face in this country in the past. Unfortunately, that is what they will have to face in the future.

This agreement still contains the incredibly ambiguous and detrimental clause which states that the United States, notwithstanding anything that is in the agreement otherwise, will have the right to take action against us as a result of any cultural action that we take under the terms of the agreement.

There were major surrenders in the context of economic development. The Atlantic Chamber of Commerce told us quite clearly that it was very concerned about what would happen to regional development programs in this country, and therefore could not endorse the deal. It states in its brief: "The Atlantic Chamber of Commerce is concerned, therefore, that the terms of a free trade deal could preclude the federal Government from implementing policies which address this serious problem of regional underdevelopment". It went on to state that the Atlantic Provinces Chamber of Commerce believes that the Canadian Government cannot negotiate away its right to provide assistance to business and industry in economically depressed parts of the country.

As well, there are serious losses to the Auto Pact and losses which have seriously hurt agriculture. For instance, the President of the British Columbia Fruit Growers said: "Is the family farm no longer significant?" The head of the National Farmers Union said: "The bottom line for producers will be lower prices for farm products. This will come at a time when economic ills in the farm community can be linked to the destructive and predatory practices of the U.S. and the economic community countries. These practices will not end with the signing of this agreement".

All in all, it is a bad deal for ordinary people. It is an inequitable deal between our two countries, and it is an unfair deal for average families across Canada. I believe it is an unacceptable deal for the people of Canada, as the next election will prove conclusively to everyone in this Chamber.

It is perhaps most sad that there was an alternative, just as the Prime Minister told the Leader of the Official Opposition (Mr. Turner) during that memorable debate. He was absolutely right at that time when he said: "Yes, you did have an option". In this case, the Government had and still has an option that it will not follow because of its own ideological blinders.

Let me outline what I believe are some of the key elements of such an alternative. First, it is possible and necessary to deal with the U.S. protectionist pressures directly, on a case by case basis. If we had taken that action with respect to softwood lumber and concentrated our resources on that issue, we would have been much more successful than we were with the terribly unfair deal we ultimately saw.

I believe it is possible to set up sectoral arrangements between ourselves and the United States. With respect to the chemical industry, for instance, we have heard from Canadian

chemical firms that they would be very interested in some kind of sectoral arrangement with the United States. That is the kind of thing we see as important to try to explore. The same is true with computer parts. There was a sectoral arrangement with respect to computer parts which the Government did away with because of its attempt to retaliate against the United States on shakes and shingles. That kind of sectoral arrangement also makes sense.

One can go through a whole host of different sectors of our economy within which it would be possible for us to work out arrangements like the Auto Pact, with safeguards, with protection for our people and communities, which would give us the possibility of benefiting from the U.S. market, but not at the expense of these tremendous giveaways which we have made part of this trade agreement.

I think that the GATT process, the General Agreement on Trade and Tariffs, is an important part of what this Party has always been committed to in terms of negotiation in order to reach freer trade arrangements throughout the world. It is a process which establishes equality among all the countries taking part. That equality is itself very, very important. It is also a process, I would point out, having been at the start of the last GATT round, within which we have considerable influence. It is a process within which Canada is listened to quite seriously. Within that process of negotiation it would be possible for us to work to reduce the subsidies the United States looks at through its trade legislation, to get an agreed set of rules among all countries, an agreed set of rules in which we would have partners on our side in attempting to achieve the kind of equal relationship in trade about which we are talking.

That kind of approach makes so much more sense than the direct one-on-one relationship we have tried to carry forward with a country so much bigger, so much more powerful economically than our own. That country has successfully won from us all sorts of concessions, and that I am certain would not have happened in the context of a GATT negotiation within which we had Japan, Germany, Britain and Italy on our side as part of an attempt to discipline protectionism within the United States.

Most important, however, is that we as a country develop through government leadership and technological expertise in some of our key industrial and service areas. We have to develop a set of effective and efficient sectors within our economy through training, through emphasis on science and technology, and through a great many other measures which a Government, which had not sold itself out through this trade deal, would be able to make use of. I am referring to mechanisms such as state purchasing policies, planning agreements with the various companies, which play such a key role in the trade both between ourselves and the United States and in trade internationally. We would be able to establish Canadian content rules. We would be able to set conditions on investors

December 15, 1987

that if they were going to take over Canadian plants, they would have to export certain amounts in the future. They would have to achieve certain levels of job increase in the future.

Those kinds of things could be done by a government seeking to establish technological expertise in key areas, if we had that kind of power still left to us.

We could also use tariffs. We could use tariffs selectively under GATT agreements, as we have in the past, to be able to assist certain parts of our economy to grow and to establish jobs for the people of this country. We could use other instruments such as public ownership. Public ownership is not something which, for ideological reasons, we would back away from as a Party. In addition to that thrust, we simply have to see to it that regulations are established for the multinational corporations which are so important in the international economy. That is what dominates trade, and the regulation of those multinationals is crucial in trying to shape that trade for the future.

When shut-downs take place, we must have full community review to see to it that communities and workers have a chance to see why it is that a company is being shut down and to challenge it, if it so wishes. We also have to see to it that there are no more export restrictions on the subsidiaries of multinational corporations in Canada when they are owned by other countries. That has to be part of our ruling as well.

We have to do a number of other things. I see you looking at the clock, Mr. Speaker. It is five o'clock and I would propose to continue tomorrow.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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PC

Steve Eugene Paproski (Deputy Chair of Committees of the Whole)

Progressive Conservative

The Acting Speaker (Mr. Paproski):

I assumed so.

Topic:   GOVERNMENT ORDERS
Subtopic:   CANADA-U.S. FREE TRADE AGREEMENT
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PROCEEDINGS ON ADJOURNMENT MOTION


[ Translation]


December 15, 1987