Proceedings of the Standing Senate Committee on
Foreign Affairs
Issue 17 - Evidence
OTTAWA, Thursday, December 5, 1996
The Standing Senate Committee on Foreign Affairs, to which was referred Bill C-61, to implement the Canada-Israel Free Trade Agreement, met this day at 3:39 p.m. to give consideration to the bill.
Senator John B. Stewart (Chairman) in the Chair.
[English]
The Chairman: Honourable senators, the committee resumes its work on the consideration of Bill C-61. You will recall that at the previous meeting, a request was made that we ask the Minister for Foreign Affairs and International Trade to appear before the committee. This afternoon, we have the honour of having with us the Honourable Lloyd Axworthy. I have had a word with Mr. Axworthy. I know that his time is short. What I have suggested is that he say some words simply to launch our discussion this afternoon, and after that, those senators who have particular concerns, either about non-technical aspects of the bill or about the whole question of whether or not the bill should pass, will have an opportunity to raise them so that he might deal with them.
Mr. Axworthy, I invite you to make your opening statement.
The Honourable Lloyd Axworthy, Minister of Foreign Affairs and International Trade: Mr. Chairman, I have with me Barbara Gibson, director of our Middle East Division, and Sandy Moroz, who works on trade and tariffs. You have probably seen them before, and I am pleased to have them with me today.
I will try to deal with some of the questions that, I gather, were raised by members of the committee yesterday. As you know, I am not directly responsible for the free trade agreement itself but I will try to put some commentary forward on the way this engages our larger policies in the Middle East.
Let me start out by underlining the series of basic principles or premises that we have followed, and continue to follow, in the Canadian approach to the situation in the Middle East. It has a very long history and bipartisan support over a series of a number of governments. Our approach has included: the security and legitimacy of Israel itself; the support for the negotiation of peace based on UN Resolutions 242 and 338; the strong persuasion for the implementation of the principles of the peace process which were arrived at in Oslo; the active undertaking of our role in the Madrid process; the chairing of the refugee group and other activities, particularly in the economic field, to bring about confidence-building, reconciliation, cooperation and integration in that area.
In particular, in recent months we have been putting much emphasis on trying to pull together a number of initiatives to improve the economic activities in the Middle East. Our view is that perhaps the best way of demonstrating that a peace process makes sense is to have people see some benefits deriving from it.
At the Cairo conference that was held just three weeks ago -- at which I was supposed to lead a delegation but had to stay in Canada because of the Zaire matters -- we had probably one of the largest delegations of business people that has ever attended in the Middle East. At the same time, we also signed with the Egyptians a double-taxation agreement, formally known as the Foreign Investment Protection Agreement or FIPA, to foster further investment. We are presently negotiating with several other Arab countries with regard to investment and double-taxation agreements with the objective of increasing and improving the flow of economic activity.
We have undertaken a number of initiatives in terms of rebuilding. I have established an advisory group on Lebanon that was chaired by Mac Harb, the MP for Ottawa Centre. We have come up with a number of proposals. I will be attending a meeting in Washington on December 16 which has been called to provide a coherent, coordinated approach by various countries to the reconstruction in Lebanon.
We are assisting both Saudi Arabia and Jordan in their efforts to accede to the World Trade Organization. We are working with CIDA and other partners to enhance economic activity, direct investments and economic flows in the occupied territories themselves.
Along with those activities, the signing of the free trade agreement is part of the package to improve economic activity, to increase growth, to improve Canadian access and engagement in the area. It also demonstrates that there is a very important and significant element of improvement that can be gained at this time. We believe that the efforts we make in our own small way to provide that encouragement help in creating a climate in which negotiations and issues can be resolved.
As you heard from Ron MacDonald last evening, I believe -- I was out of the country but I read the report of his meeting with you -- the free trade agreement carries with it a major proposal to extend the benefits to the West Bank and Gaza. Mr. MacDonald has just finished a very successful set of discussions with Palestinian authorities as to undertaking negotiations of conditions under which that extension can be offered.
I have just seen some correspondence that Mr. MacDonald has written to Palestinian ministers in the authority offering to proceed, on the basis of his discussions, to secure those extended benefits with the Palestinian Authority.
There is, as I think I have just related, in fact, no change or alteration of Canadian policy. It is very much within the stream of doing everything we can in that region to try to assist in the development of a level of confidence and promote opportunity to engage in direct benefits through trade and investment.
As a small digression, Mr. Chairman, we are discovering that that approach is often the most effective way to achieve two things: First, private sector trade and investment is often far more successful than direct government aid in promoting economic growth and assistance. Second, it has been my experience, in the time I have been in this office, that economic arrangements which promote trade also lead to improved venues and access in which you can discuss political issues, such as human rights and other matters of vital concern. It improves contact, relationships and communications. It allows us opportunities to pursue these kinds of activities because you are building relationships on the basis that you are also there to provide direct assistance in a realistic way.
I want to provide assurances to members of the Senate Committee that I think this is simply another element in a strategy, an approach, which is designed to promote and improve the possibility for both stability and peaceful negotiations in the Middle East.
Senator Lynch-Staunton: Thank you, minister, for being with us. It was at my suggestion that you be invited.
Mr. Axworthy: You are the one responsible.
Senator Lynch-Staunton: I am the one you can blame. It is important that you be here so we can get a broad appreciation of the free trade agreement which is under discussion, and an appreciation of our general policy in the Middle East.
If I sound a bit blunt it is not intentional, but I have a feeling, from listening to you and from following what has been going on in the last little while, that Canada wants to be everything to everyone. It wants to be on everyone's side. It belongs to every international organization. It is at every meeting. It is in every worthy organization. Do we ever come down on the other side? Do we ever condemn Israel, or do we ever condemn Palestine, or do we condemn anyone, or do we qualify everything we do? I may not be wording this properly but I hope I am getting my thought across. I have a feeling that we are stretching ourselves a bit to be liked, and we are not committing ourselves to certain principles as much as we should.
Mr. Axworthy: That is a generic question but let me answer it.
Senator Lynch-Staunton: I can be more specific by talking about China and Indonesia, but we are talking about this particular issue.
Mr. Axworthy: I would be happy to answer those questions as well, senator, but let me give you an example. In the last week, I took probably the toughest stand of all the countries in London yesterday on the war criminals in Bosnia, by insisting that those countries which are signatories to the Dayton Accord live up to their obligations under the contract, and that if they are not able to do that, then the international community should withdraw economic support. We took the lead on that issue. I am pleased to say that the declaration which was issued today in London supports that position.
Also, we have taken the leading role in the Commonwealth on Nigeria. We have made it clear that we will not accept the oppression of human rights in that country. There is certainly nothing wishy-washy or ambivalent about the positions we have taken in that area.
One has only to look in the last month at the voting record of the Human Rights Committee of the United Nations where we have clearly signified our disapproval. With regard to the Middle East, when I was in New York in the latter part of September when the issue concerning the conflict over the tunnel arose, I appeared before the Security Council of the United Nations where I said it was wrong. I said that Israel should change its position. I made no bones about it. I said so at the best forum one could possibly do that.
I do not accept your premise that we are middling in everything we do. We try to live up to the values that people in this country want us to express.
I agree in part with one of the premises, that is, in the past we have tried to belong to too many organizations and tried to be in too many places. The mandate the Prime Minister has asked me to obtain is to start prioritizing where we think we can make a difference and where we think we should put the most effort. We are in the process of doing that. I have to tell you that it is not always greeted with happiness. There are many organizations in this country, each of which has their own views about where we should be placing our priorities. If I say we will be closing certain offices or embassies or shutting down certain activities in their countries, I hear about it from people in Canada, most of whom say that it is the wrong place to do it. I am doing it any way because we have to focus our resources and attention.
The Middle East is one of those priorities. That is why we have devoted both substantial resources to trade development and time to the politics of the region, to make that happen.
Senator Lynch-Staunton: I do not want to stray away from the major topic, but since you brought up war criminals, why do we not instruct NATO to arrest the suspected war criminals?
The Chairman: I have certain responsibilities. We have a bill before us which has been referred to the committee by the Senate. While we are not confined only to the clauses of the bill, I do not think we should spend too much time on Nigeria or even Bosnia.
Senator Lynch-Staunton: Minister, again, I appreciate you being here. I will limit myself to the topic before us.
The Parliamentary Secretary to the Minister for International Trade gave us an answer which is very reassuring. However, I want you to confirm the facts that, despite the concerns of Canadian Arabs that the ratification of this agreement would blemish Canada's reputation in the Middle East in the Arab countries, the Palestinian Authority supports this agreement and no Arab country, as far as we have been told -- and you would know -- has opposed Canada entering into such a free trade agreement with Israel.
Mr. Axworthy: We have received no communication whatsoever from any Arab country objecting to this agreement. Also, in the last three months, I have had a number of direct bilateral discussions with a number of foreign ministers from Arab countries, and that subject has not been raised with me.
Senator Lynch-Staunton: I discussed this with your officials two days ago and they were very good in their answers, but I was very poor in my understanding of it. How will Canada define the CIFTA beneficiary? Or is this an unfair question to you?
Mr. Axworthy: I can ask Mr. Moroz to answer that.
Senator Lynch-Staunton: We have gone through this before. You will be responsible, sir, for determining whether a CIFTA beneficiary qualifies, whether Canada recognizes that territory as being a valid beneficiary in terms of trade; is that correct?
Mr. Axworthy: It is limited to the occupied territories.
Senator Lynch-Staunton: I know, that. But the territories ebb and flow, do they not?
Mr. Axworthy: Not really. Negotiations are going on as to their status. However, at this point, the territory has been there for several thousand years, as far as I know.
Senator Whelan: Mr. Minister, I do not pretend to be an expert on Israel. I remember when we signed an agreement with Israel, and I said this before the committee the other day, to exchange agricultural scientists. They had some of the best in the world and we had some of the best in the world. By working together, we could develop many things.
When I read this trade agreement I see there are some exemptions. When I visited Israel, I got the great idea to start a corporation in Canada called Canagrex, the Canadian Agricultural Export Corporation. I got the idea for that from Agrexco in Israel, which was a highly efficient organization. It was also a highly subsidized and socialized organization. It was supported by what I would call "nearly communists." However, it was also supported by the Arab people and everyone there used it.
Trade between the countries is non-existent in many parts of the area. They have no free trade agreement with their closest neighbour. Trade is mostly in perishable products. At the time of my visit, they were using big airplanes, 747s and freighters, to fly produce to Denmark, Amsterdam, New York, Montreal and all over the world. It was a very efficient system.
Do you have a way of compiling all the facts on how these products are produced and subsidized? There are many ways of subsidizing products, other than by just hard, cold cash. Research is one of the greatest ways. They have some of the greatest researchers in the world, as well as some of the greatest scientists.
I asked the other day whether a thorough study had been done on just what we are competing with and how we are competing with them.
Mr. Axworthy: The best protection one has against any sort of unfair subsidy practice is countervail and dispute settlement mechanisms. Senator Whelan, you are getting into this whole area of the invisible forms of subsidies. The purpose of world trade organizations, and others, is to provide basic standards and rules against that and to set mechanisms on which they can be challenged.
We have a number of ways to support our agricultural activities, including research. I am proud to say we have some of the best agricultural research stations in my province. They have substantially aided the way in which we have been able to export specialty crops and value-added agricultural products. I think that is all to the good. If other countries are doing the same, then that is what is called "competition." I am not sure whether this is entirely within the scope of the bill, although it is an interesting topic.
Senator Whelan: I acknowledged the fact that we have some of the best researchers, which is why we are involved in exchange programs with them. What I am trying to get at is the trade that does not exist in perishable products, et cetera.
The Economic Council of Canada said that the Wheat Board was one of the best things that Canada ever had. I know that we have developed our agricultural products, not just for Western Canada but for all over, through research. Because we have exchanged that research all over the world, we have been able to do even better. I have nothing against that.
However, when a country cannot even trade with its closest neighbour and we call it "free trade," I have strong reservations.
Mr. Axworthy: Mr. Chairman, if members of the committee are interested, it may be helpful to table some of the proceedings of the Cairo conference, which specifically focused on this whole question of how they can improve inter-regional trade by bringing down barriers and standardizing rules. I do not think you could ask me to comment on why in another region one country does not trade with another country. I am concerned primarily about Canadian relationships in this area.
A number of proposals were put forward at the Cairo conference in terms of water irrigation and the standardization of rules and trade practices. This bill is a way of supporting those initiatives, by demonstrating that there is value in developing that kind of approach to economic growth and development.
Senator Whelan: I want to be clear, Mr. Chairman, that I am speaking about a very difficult market of trading, yet it represents about 70 per cent of their economy. I am speaking of perishable products which they cannot sell or deliver. I think that is a terrible tragedy.
Senator Kinsella: Mr. Minister, I have two areas I wish to explore. The first relates to the question of the CIFTA beneficiaries and how that is to be defined. If I understood the officials correctly the other day -- they can correct me if I am wrong -- the CIFTA beneficiaries will be defined in terms of where Israeli custom laws apply. Am I right?
Mr. Andrew R. Moroz, Deputy Negotiator, Rules of Origin, Department of Foreign Affairs and International Trade: The purpose of the CIFTA beneficiary provision is to extend formally the benefits to goods produced in the West Bank and Gaza, independent of whether Israeli custom laws apply to those areas. That is why you find the phrase "CIFTA beneficiary" in the bill. Under the free trade agreement itself, that phrase applies to those areas to which Israeli customs laws now apply. That is in part determined by interim agreements with the PLO on behalf of the Palestinian Authority.
In order to extend the benefits formally to the West Bank and the Gaza independent of whether Israeli laws will continue to apply at some point in the future, we developed the phrase "CIFTA beneficiary."
Mr. Axworthy: Senator Kinsella, the parliamentary secretary, Mr. MacDonald, is negotiating both a broader form of economic cooperation agreement with the occupied territories as well as the terms of an understanding on the definition of "territory" in the bill. The bill gives enough flexibility to adapt to any changes as those negotiations are concluded. I think he made much progress in his visit there. As soon as we are able to meet some of the criteria for those negotiations, which we will pursue very actively, then the extension of benefits to the West Bank and the Gaza will be done independent of the so-called Israeli custom laws. They will stand by themselves.
Senator Kinsella: In light of that, and notwithstanding the definition in clause 41(1) of "country," meaning "external territory of a country or other territory prescribed by regulation," there ought not be any fear that the territory encompassing the security area of southern Lebanon would never be included.
Mr. Axworthy: It is not part of this bill. As I said, we are working with a group of Canadians at reconstruction efforts in Lebanon itself. This bill is limited and restricted to simply the territories within what is now the Israeli custom law situation. As our own negotiations proceed, they would be incorporated in the bill on a stand-alone basis, but it would not go into southern Lebanon at this stage.
Who knows. If we get some great results coming out of the meetings in Washington on December 16, we may have further news, but it would not be in this bill; it would be something else.
Senator Kinsella: Some have expressed the fear north of Metulla that de facto, Israeli custom law applies.
Let me turn to another question, Mr. Minister. As you said at the outset, human rights are a fundamental principle of Canadian foreign policy and continue to be so. How do you see this particular initiative being an instrument for the promotion of human rights or an instrument of improved collaboration? I personally see great potential in that direction.
Mr. Axworthy: I agree. It is important to develop contacts and fora for discussions and points of confidence between ourselves and other countries, especially those which have serious human rights issues, and to do it in a context where we are not hectoring, preaching or standing on a barricade. We are there as friends, as partners and as commercial signatories.
We must be able to work in a parallel process. We follow that policy consistently with a number of countries. We clearly indicate where we consider violations have been made. We vote on United Nations' resolutions. We use our standing in various fora, but I think it goes down much better if we are prepared to help make changes and promote well being in those countries in which we have agreements.
I think the signing of the free trade agreement not only improves the level of contact, but strengthens the case that we are not being self-righteous when we say these things. We are doing these things in the context of wanting to be close and to have the kind of influence that comes when you have a more deep-rooted relationship. Stronger economic ties gives us those roots.
Senator Lynch-Staunton: How is that principle executed in our relations with Cuba, which we have kept going despite American objections. Certainly human rights violations there are more the rule than the exception. That is a good example of where Canada maintains contact with a country with a political system with which we may disagree so we can assist or encourage more appreciation for human rights. For the last 30 years, since Fidel Castro has been in power, what has been our influence? What have we proven by this cooperation with a regime we support through trade? Has it brought its values more closely to ours?
Mr. Axworthy: Senator, I can tell you that, since last June, I, my officials and others have been actively engaged with our counterparts in Cuba in discussions on that exact issue. We are making substantial headway, and I hope that over the next several months we will be able to undertake specific concrete measures with the Cubans which will assist in the governance of that country in a more open and transparent way.
We could not have done it if we had not maintained our good relations. We have never hesitated to object publicly. At the same time, we have had quite interesting and productive discussions. I am hoping that they will result in some useful developments which will demonstrate that the American approach is wrong and our approach is much more effective.
However, I cannot tell you at this moment because these discussions are ongoing.
Senator De Bané: Mr. Minister, several witnesses suggested to us that we should focus only on the economic aspect of this bill and nothing else. I think that position is untenable. It is untenable because it would be contrary to Canadian tradition and policies concerning that issue over the past half a century. The foreign affairs building here in Ottawa is called the Lester B. Pearson Building precisely because, since day one, Canada has promoted peace and talked the language of peace. It never tilts for either camp, but for peace. That is why we were awarded the Nobel Peace Prize. That is why, for the last 50 years, Canada has been looked upon as a beacon in that area. We have been most generous to, among others, the Arabs.
I cannot buy the argument that we must look only at economics and forget about the background. I cannot accept that as a Canadian. It would fly in the face of everything we have done in the Middle East in the past 50 years, irrespective of the government in power.
We heard representation from the Mennonite Church of Canada which has been very active in helping the Palestinians in their ordeal since 1949. We heard from Professor Sigler, a renowned Canadian political scientist.
We have heard how this bill can in no way help the Palestinians. I was very happy to hear you say this afternoon that what you are negotiating with the Palestinian Authority will, to use your words, stand on its own and not be dependent on this bill.
The consistent policy of the Canadian government has been that the Jewish settlements in Arab territories are illegal, which policy is consistent with that of every country on earth save two. You said that you will be very consistent and coherent. How can you reconcile that statement, which we have made consistently since 1967, and the extension of the benefits of free trade to all territories which are, to be blunt, under Israeli control, in view of the fact that there is now a government in Israel which has taken a stand exactly opposite to that of the government of Shimon Peres?
Mr. Peres said that they finally came to the conclusion that in order to have peace they had to give land. His successor says that if they are given peace, they will give nothing in return.
How do we as Canadians reconcile our long standing policy on those settlements now that we are extending, objectively, the benefits of this bill to those settlements?
Mr. Axworthy: Senator De Bané, we have made and continue to make our strong objections known to the settlements. In my statement at the United Nations, I reiterated that position. However, the benefits which we believe would accrue to West Bank and Gaza by having a free trade relationship with Canada are significant, both for economic reasons and the political reasons which I outlined to the previous questioner about giving us an opportunity to enrich and strengthen our ties with Israel and with the Palestinian authorities.
As Mr. MacDonald made clear last night, those negotiations are going very well. I certainly share your respect for the witnesses whom you mentioned, but I can also report to you that the Palestinian authorities themselves are quite interested in being included in the deal. They see that it is to their benefit and that is why they are actively engaged with us now in concluding that arrangement.
As I said earlier, those discussions are leading to a broader base of negotiations with the Palestinian authorities on a broader economic cooperation package, of which trade access will be a component but it will also allow us to explore other areas for cooperation with them. In effect, it is a building block which will allow extension.
Within those territories are the settlements. We oppose the settlements, but the participation they would have in the actual exchange of goods or services would be negligible and almost impossible to separate at this point.
You know from your own experience that it is very difficult to determine origin of goods. Most of these settlements are bedroom communities in which there is not much economic activity and to draw further lines within each of these to exclude them would make it an unworkable package.
I assure you that we will continue to express our concern. I hope to have a meeting in the next couple of weeks with the new foreign minister, Mr. Levy. We will continue to make our strong opposition to the settlements known.
Senator De Bané: Mr. Minister, I should like to thank you for what you have told us about what you intend to do for the Palestinians. I cannot speak for them; I am a Canadian. However, I can tell you that if you can use all your good offices to help create effective free trade between the Arab territories and Israel, that would be most helpful for the economy in that area.
I hear what you have said, but I want to remind you of the political debate which took place in Israel. Mr. Peres said that the peace agreement with the Palestinians had resulted in many more countries giving diplomatic recognition to Israel. He said that foreign investment in Israel had increased and listed all the benefits achieved since the Oslo Accord. Yet, the present Prime Minister of Israel is saying that he will get as much as possible from the rest of the world, but will not give an inch. That is why I told the parliamentary secretary -- and I hope I am wrong -- that I am pessimistic about a real peace and a lasting peace.
What I see, Mr. Minister, is that the government of Israel is developing a situation where the Palestinian Arabs will be living like those mini states that we had in South Africa: totally dependent on another big brother. That is why I am pessimistic and why I hope that you will use your good offices to prove me wrong.
Senator Andreychuk: I wish to share some of Senator De Bané's concern about this agreement and how it applies in the occupied territories. However, I do not share the pessimism that my colleague voiced about the present government in Israel. I think we would be cutting short some of their initiatives. While I have heard about some negatives, I have also heard some positives in these negotiations. Would you contemplate cancelling this agreement, should Israel not live up to its obligations in the peace negotiations?
Mr. Axworthy: First, I wish to remind the committee that the negotiations and the initial agreement to pursue this agreement took place with the previous Israeli government. If one wants to look at this as a product of the peace process, that is the product. Many of you have great experience in these matters and know that to abruptly move away from that basic principle of agreement because there is a change in government would not be looked upon very favourably, not only by the country involved but by other countries. It would show that we are not reliable international partners. When the government changed here, it continued the discussions begun by the previous government on certain free trade agreements and improved upon them substantially.
Senator Andreychuk: I am more concerned about the future than the past.
Mr. Axworthy: In the agreement, we have included a dispute settlement mechanism and provision for a commission to work these problems out.
Any change in the free trade agreement which would be precipitated by a fundamental change in Israeli policy would be part of a much broader examination on what to do. I do not think you could single out the free trade agreement per se. I share your optimism as well. I am not wild about it, but there is a chance for some movement in these areas. As I have said a couple of times, completing this agreement will give us a chance to make our case even further. As we establish closer economic ties with both the West Bank and Gaza and with Israel, it gives us more influence to try to make our positive voice felt, which Senator De Bané mentioned.
Senator Andreychuk: I am not sure whether you are indicating that it is in the cards that, should the peace process fail and should there not be positive signs and, perhaps, negative signs, this trade agreement might be up for review.
I should like to address a trade issue. As I understand the government's policy, multilateral trade arrangements are the preferred route. That is why we support the WTO so strongly. We then look to regional groupings. If I recall the history, we said that we would look into bilateral negotiations as an option but that our preferred route is multilateral. Is that still the policy of the government?
If so, how did you come to the arrangement with Israel, in what Middle East context for trade? In other words, what is the overall strategy? You have given us something about Saudi Arabia, and so on, but what is the overall strategy? How did we determine the positives and the negatives?
For example, when we went into South America, we knew that Chile would be a preferred route to extend NAFTA. When that failed, we looked to a bilateral agreement. We knew that it would have some down sides. We measured them and went into a bilateral discussion noting them. What did you measure and what ground rules did you put in place for the Middle East trade process before you entered into the agreement in Israel?
Mr. Axworthy: One of the strong reasons was that a number of Canadian companies felt that they were facing tough competition selling into the Israeli market because of the free trade agreements that Israel has with the United States, the European Commission, and other eastern European countries, particularly in the areas of high-technology, information technology -- that is, telecommunications -- where Canadian companies have a high level of competence. They were receiving discriminatory treatment at the border because of other FTAs that Israel has with other countries. It was done to level the playing field for our own private sector so that they would be able to access the Israeli markets.
We also feel that, in the broader policy context, the reduction of trade barriers generally combined with a higher level of integration of Middle East markets with international markets would be beneficial to the peace process and overall stability.
If you or other senators were interested, we could share the documentation coming out of the Cairo conference, because that is what it was about. How can a variety of countries work within the Middle East not only to improve internal trade within the region but also regional trade with the rest of the world.
Senator Prud'homme: I wish to thank you for having done something that is quite unique in the annals of Canadian politics. You took the time to answer an article in The Globe and Mail by Norman Spector. As is the custom when we do not like what people are doing; if it is politicians, we accuse them of being, in this case, anti-Semite; if they are high level civil servants, we accuse them of being Arabbist. It is a policy of blackmail or total intimidation to stop people from doing their jobs.
For 35 years, I respected bureaucrats. They may not like the decisions of their political masters -- and, that is wherein the debate lies -- but one should not attack them or refuse them promotions in order to intimidate them. That is a sensitive area, because it could ruin careers.
I was impressed by your determination to stand by your department. Anyone who reads the open letter will see that effort. I do not know what it takes to be a civil servant. I could never be a civil servant. If I had talents to give to my country, I would be afraid to be intimidated and blackmailed.
You said, sir, that we continue to make strong representations on settlement, and that is true. However, we sign a free trade agreement, and not only are our strong representations on settlements listened to, but we are told by the new government that they intend to do something.
I find the definition of "country" in clause 41 of Bill C-61 very tortuous. It includes an external territory of another country or other territory prescribed by regulation.
I, too, have communicated with the Palestinian Authority. Mr. Minister, they will accept anything because they are so desperate. You will not hear the Palestinian authorities blaming Canada, because they love Canada, they trust Canada, and they want Canada's support. They will not blame us or say they disagree; they will say, "It is not our business. You signed with them, so can you also do something for us?"
I do not like some of the things I heard from Mr. MacDonald. He was very efficient, but I do not want to praise him too much because it may ruin his career. Mr. MacDonald was quite good last night. However, I spoke with the same people, and they will take anything.
As for other countries, you raise a good point, Senator Lynch-Staunton. Why would the Arab countries make representations? They would say, "This is Canada's business. We want to be friends with Canada." They have enough sensitivity not to hurt their relationship with Canada by talking about something which is none of their business. They will only wait for the reaction.
Lastly, Mr. Minister, the Palestinians do not like it. They will not tell you they do not like it. They are not an appendage. On November 29, 1947, Canada voted at the United Nations to make the land of Palestine two countries. Canada was part of that. I respect Canada's decision. We voted to create two states, so one is not an appendage to another.
Mr. Minister, I am very happy to hear that we will be in a position to monitor this agreement, because I doubt very much that we will stop it or postpone it, as is the wish of many. As Senator Whelan said, trucks full of goods produced from the farm cannot even cross from one village to another. They stop them, they rob them, and then they let them go. That is what is happening between villages. I look at the Leader of the Government in the Senate and all senators and say, "Why not go and see for yourself?" If you have a conscience, you will be horrified. You cannot accept that someone in Gaza can have a swimming pool and an abundance of water and be next to someone who has only a few trees and is not able to get his own water. The water of the West Bank, Mr. Minister, will be used for the vegetables, which demand much water.
Mr. Minister, I thank the Department of External Affairs for having done its duty. I know the other department, International Trade, is of the other opinion, but as far as the Middle East is concerned, it is Canada's reputation that is at stake. If I have defended anything, it is equilibrium and peace for all, so that we can speak for all. Maybe I will start working on the question of the Kurds.
Senator Lynch-Staunton: Mr. Minister, I have difficulty in understanding or appreciating how we can both condemn the regime or government of Israel regarding the settlements and, at the same time, contradict that strong stand by signing agreements. Surely there is a contradiction there. Surely our feelings would be better stated by refusing to sign the agreements, by telling Israel, "You have violated the Oslo Accord, you are encroaching on territories, you are condemned by the whole world, and before we do any more negotiating on trade or anything else with you, we expect you to respect the obligations which you undertook formally in front of the world."
It seems to me that through this agreement we are tacitly sanctioning actions which at the same time we are condemning. To me there is a flagrant contradiction here which I have difficulty reconciling in my mind.
Mr. Axworthy: Let me try to answer both those questions.
The signing of a trade agreement with Israel and ensuring that the benefits of that agreement are incorporated for West Bank and Gaza is not a panacea that will solve all of the difficulties in the Middle East, which have existed for a long time, but it will not greatly add to them. It is a factor amongst many. For us to put so much significance on it is misplaced. I think it is an important step, but it is one amongst many steps.
I think we want to pursue, as Senator Prud'homme said, a balanced approach which has many factors to it: political factors, security factors, regional integrations. We are working on a number of fronts to try to support as much as we can the Oslo process and the Madrid process.
Our view is that there are some quite unacceptable practices, and we have stated so. We have also strongly opposed the closure between the territories in Israel because it makes no sense, and we have said so publicly. Ultimately, the best way is to provide more openings.
As you probably know, Senator Prud'homme, Canada invests many resources in helping to build closer contacts between Palestinians and Israelis at the level of school children, teachers, doctors, lawyers, professionals, trade unions. We are bringing them together in a variety of ways so they can learn to trust one another to overcome the antipathies and antagonisms which have built up over the years.
We did not have much to say about the choice of government in Israel. The Israelis choose their own governments based upon democratic franchise. As with any other sovereign government, where we do not agree with their practices, we use whatever influence we can to get them to change.
I would direct this response as well to Senator Lynch-Staunton. I am more interested in getting results than in taking vainglorious stands. The result I would like to see is peace in the Middle East and respect for human rights and to get the governments of all the authorities there to do so in an open and transparent way. Then you decide on the best way to achieve that result.
You can rip up an agreement. I do not think that would change anyone's position. The fact that we have strengthened connections, communications and confidence so that we can maintain dialogue, maintain an engagement, is a more effective way than the one you are proposing.
That is why I think this trade agreement is an assist in this area. It is also clearly designed to support our own business community which wants to do business in the Middle East. It will reduce the discrimination they face in selling their goods compared to the agreements with the United States, the European Union and several other countries.
There is an economic factor, but from a political point of view, I am sure that opening up channels and strengthening those channels, by force of a deeper relationship, will lead to better influence, better dialogue and a better opportunity to help influence those changes.
As I said before, it is based more upon roots. Anyone can make a statement. Anyone can make grandiloquent gestures. I am more interested in getting real results which alter, as much as we can, any unacceptable behaviours, and build confidence and security. That is my intention, and I will continue to practice that as long as I have this post.
Senator Lynch-Staunton: I do not like the term "vainglorious stand" because I do not think that would describe the position taken by Canada on South Africa. The results turned out to be quite acceptable.
Mr. Axworthy: You are forgetting one important element. While we take a stand, as we have with countries in the Middle East, we also maintain a very active dialogue with them. Only when there is agreement by all countries in the world to an economic sanction does that approach seem to work. One country by itself makes no difference.
Senator Lynch-Staunton: That is right. We took the lead and it was an economic stand, not just a mouthy stand.
Mr. Axworthy: We had agreement. In the meantime, Israel has free trade agreements with the United States and the European Union. It does not seem to me that they are working towards a boycott.
Senator Lynch-Staunton: You are taking a stand against Nigeria, are you not?
Mr. Axworthy: We are trying to bring other countries along with us.
Senator Lynch-Staunton: Will you take an economic stand, too?
Mr. Axworthy: We have taken stands mainly on the diplomatic side.
Senator Lynch-Staunton: You are threatening an economic boycott, are you not?
Mr. Axworthy: No, I am not threatening economic boycott.
Senator Lynch-Staunton: You are insinuating that an economic boycott may take place.
Mr. Axworthy: You have a well-known record for interpreting insinuations.
Senator Lynch-Staunton: I just read what you say. You were quite strong on Nigeria. Why are you not so strong on other countries that violate human rights?
Mr. Axworthy: I have been as strong as I can be in those areas. I would be glad to send you any copies of statements I have made in that respect.
In case it did not register, I said that, at the United Nations in September, I spoke out very strongly against the actions of the Israeli government.
Senator Lynch-Staunton: You speak very eloquently and I share your view, but how far must human rights be violated before we take more than an eloquent stand against those violations and before we put our foot down and say we will not trade or that we will encourage an economic boycott or that we will refuse defence aid or whatever? At what point?
This country was once quite adamant in its stand regarding human rights violations. Now it seems that trade is a priority and human rights have become secondary.
Mr. Axworthy: I disagree with you, sir.
Senator Lynch-Staunton: I hope we do not see pom-poms held over a dictator's head again.
Senator De Bané: Mr. Minister, I have known you for many years. I know that for you principles and noble ideals are very important. I have also had the honour of serving with you in cabinet. I remember how, on a particular issue which was essentially a question of principle, values and peace, you agonized much. Your reputation is well known for being inspired by a very generous, humane perspective.
Supplementary to the comments of the Leader of the Opposition, there is, in my opinion also, a blatant incoherence between our stand, since 1967, on the occupied territories and the Jewish settlements there and this bill with the benefits it extends to them.
I see two problems, one of a moral nature and the other from a Canadian perspective. If free trade is to establish level playing fields, is it fair for Canadian companies to be subjected to competition by businesses which have been heavily subsidized? As you know, in order to establish them, the government of Israel heavily subsidizes those Jewish settlements with public assistance that is not available within Israel proper. This is unfair for Canadians. It is inconsistent with our policies.
You have brought me to a practical consideration. You have said it is difficult to distinguish between produce or goods coming from Israel proper and from the settlements. I see your point. Would you consider asking Israel to put a certificate on things shipped to Canada, asking them to certify them as having been produced within Israel proper? That would take care of both consistency and also Canadian interests.
Mr. Axworthy: Senator, I am not sure how workable that would be. We can ask the trade officials to look at that. In today's marketplace, as you know, components are pulled together from various sources and assembled in one place. It is one of the difficulties we have with the rules-of-origin issues. If components are gathered from Renfrew, Pembroke and Carleton Place, and assembled in Nepean, where does it come from?
Senator De Bané: I understand that. Can we have that certification from the government of Israel's exporting authority? In our free trade agreement with the U.S., a product from Canada benefits based on the percentage that is done in Canada.
The merit of that suggestion should be studied. It would be consistent with our policies on the Middle East and it would put Canadian companies on a level playing field. They would be competing with companies from Israel but not with those which are heavily subsidized.
Mr. Axworthy: Just to follow the point, there have been past efforts, for example, with the United States, and with the European Union for that matter, to find some consensus. Both of those have free trade agreements with Israel. No practical way of doing it was found. I can ask my colleague Mr. Eggleton to examine those experiences to see what they mean.
Senator De Bané: Thank you.
Mr. Axworthy: I would conclude by saying that, in this file, as in many others, we must make those choices which we think make the most sense and will have the most impact. We must be very careful about the judgments we make. There are many countries, including many in the Middle East, which have no democratic system, no human rights commissions, have no access for their populations, and I am not sure that members here would recommend that we stop all discussions with them either.
In recent years, we have made effective overtures to a number of Middle East countries about improving relationships. Even though we would not endorse their government systems, it helps us along the way to establish those kinds of contacts. Senator Prud'homme and I have had discussions in these areas.
I have heard some speeches by members of this committee indicating that, even though some regimes are far less open than the Israeli regime, we should try to establish working linkages and connections. That has been generally useful advice. Contrary to what I heard from a former senator, if we were to adopt that principle, we would not be doing business with about 200-odd countries, and we certainly would not be able to have any influence.
In making these kinds of judgments, we must ensure the judgments are also balanced among all the participants involved in our economic aid development and trade relationships.
The Chairman: Thank you, Mr. Minister.
Senator Kinsella: At page 23 of the bill, proposed section 58(4) will allow for the making of regulation to do what Senator De Bané was mentioning. They can make regulations to define what it means to be imported from Israel or from another CIFTA beneficiary. The authority exists to do that.
The committee adjourned.