Proceedings of the Standing Senate Committee on
Foreign Affairs and International Trade
Issue No. 4 - Evidence - Meeting of April 14, 2016
OTTAWA, Thursday, April 14, 2016
The Standing Senate Committee on Foreign Affairs and International Trade met this day at 10:33 a.m. to study recent political and economic developments in Argentina in the context of their potential impact on regional and global dynamics, including on Canadian policy and interests, and other related matters; and to study foreign relations and international trade generally (topic: bilateral, regional and multilateral trade agreements: prospects for Canada).
Senator A. Raynell Andreychuk (Chair) in the chair.
[English]
The Chair: Honourable senators, the Standing Senate Committee on Foreign Affairs and International Trade is meeting today on the topic of Argentina, political, economic and international prospects. This is under our general order of reference. We have heard from eight witnesses so far. Recently we received a specific order of reference to study this matter. The committee will continue to hold meetings on recent political and economic developments in Argentina, which are of great interest to us.
It is our pleasure to now hear the ambassador of Argentina to Canada. On behalf of the committee, I welcome to this meeting Her Excellency Norma Nascimbene de Dumont and the officials that are here with her. Thank you for being with us this morning. We have had a practice of inviting ambassadors, and we are very pleased that you took up our offer. It's helpful to get your perspective as a representative of your government at this very crucial time in Argentina. We look forward to your presentation. We like questions, so if we can leave some time, the senators will no doubt have some questions from their perspectives. Welcome to the committee.
[Translation]
Her Excellency Norma Nascimbene de Dumont, Ambassador, Embassy of the Argentine Republic: Thank you, Madam Chair. It is indeed a great honour for the Embassy of the Argentine Republic and me to appear before this honourable committee to talk about my country, Argentina.
We are very thankful that the Canadian Senate has decided to study the Argentine reality and the possibilities to strengthen the bilateral relationship provided by the election of new governments in Argentina and in Canada.
[English]
Since my arrival in Canada, I have paid official several visits to several Canadian provinces, which gave me the opportunity to recognize great similarities between our two countries. Like Canada, Argentina also has a vast territory, abundance of natural resources and highly qualified human resources. Argentina's population also shows a diversity of origins, indigenous peoples and migrants coming from every continent; different cultures and different religions which were successfully integrated and co-exist in tolerance and respect of each other.
We do have a different history. In the 20th century, particularly during the Cold War in Argentina as well as in almost every Latin American country, political instability became the rule, which translated in military coups d'état that toppled democratically elected governments. This process achieved its most tragic expression with the military coup of March 24, 1976, which committed the most hideous human rights violations, left a trail of thousands and thousands of dead and disappeared, and embarked the nation in an absurd and fateful war for a cause that was and is deeply felt by the Argentine people, which is the recovery of our sovereignty over the Malvinas Islands.
In 1983, Argentina regained its democracy. Since then, even in times of dire economic crisis as the one we had to experience in 2001-02 with the default of our foreign debt, democratic governments held firmly. The possibility of going back to the times of the coup has been completely eradicated.
With the return of democracy, my country also learned how to deal with its past human rights violations in an exemplary way, based on memory, truth and justice, making accountable before the criminal justice system the perpetrators of human rights violations, most of whom are in jail today.
On November 22, 2015, for the first time in Argentina history, a ballotage was held in the general elections that had taken place a month before, and Mauricio Macri, a businessman who had created a new political party in 2005 and was Mayor of the City of Buenos Aires from 2007 to 2015, received the majority of the votes cast in the second round and was elected President.
These elections marked a new era in Argentine politics because for the first time, a candidate from a new, non- traditional political party was elected, but also because the Province of Buenos Aires, the main electoral district in Argentina, was lost by its traditional rulers, the Peronist Party, to a young and energetic lady from the same political party as President Macri.
Since he took office, President Macri defined three objectives for his government: t the elimination of poverty, the fight against narcorafficking and the rebuilding of democratic institutions to bring together the Argentinians. These objectives are the three drivers not only of Argentina's domestic policy but also of Argentina's foreign policy.
At the same time, from the very first moment, President Macri has acted in line with what he had promised before during his campaign. In the first few days of the administration, he eliminated all of the hurdles and duties on imports and exports, benefitting, in particular, regional economies. He was able to put together a very complicated package to unify the currency and fix the many imbalances in relationships with neighbouring countries and members of the Mercosur, in particular Uruguay and Brazil.
A major challenge to the Argentine economy was to seek a solution with regard to the longstanding conflict with the holdouts over debt that was defaulted in 2001. After successfully negotiating an agreement in New York, the government tabled a bill before Congress that was necessary to bring an end to these disputes.
In spite of the fact that President Macri does not have the majority in either of the two chambers of Congress, in less than one month — first the lower house and then the Senate — gave the green light to President Macri to swiftly enact legislation that repeals articles of the Padlock Law and the Sovereign Payment Law and authorized the government to issue $12.5 billion U.S. in bonds in order to pay the holdouts. Just yesterday, the court of New York confirmed the understanding agreed upon with the mediator. Then Argentina will proceed with the payments in the coming days.
In these little over 120 days in power, President Macri's government has also taken important measures aimed at restructuring the price of energy, transport and other services to better reflect their costs, eliminating subsidies but ensuring at the same time "social prices'' for electricity and gas, and social transport tickets for the benefit of the most vulnerable part of the Argentine society.
In foreign policy as well, President Macri generated a revamping of Argentina's international relations, in particular with North America and Europe and in the multilateral fora.
Since his inauguration, Argentina has received the visits of President Obama of the United States, President Hollande of France, the Prime Minister of Italy, as well as ministers of foreign affairs of Brazil, Uruguay, Chile, Spain and the European Union, among others. President Macri visited Brazil, Uruguay, Chile, the Holy See and attended the economic forum in Davos and the nuclear summit in Washington, where he held a meeting with Prime Minister Justin Trudeau on March 31, as well as with other heads of government.
Regarding multilateral relations, the Argentine Minister of Foreign Affairs, Ms. Susana Malcorra, clearly stated at the American Council on Foreign Relations that the government is going to insert Argentina in every available multilateral platform. She said that Argentina is going to work in UNASUR, in CELAC, in OAS and the United Nations in order to maximize the influence that Argentina can have as a traditional bridge builder in the world.
As a member of the G20, Argentina has just presented its candidature to chair the group in 2018, when it will be the turn of Latin America. This proposal has already received the valuable support of Brazil.
To conclude my remarks, let me speak about Argentina-Canada relations and of the great prospects ahead.
Our two countries have enjoyed a strong relationship for a very long time. Actually, in 2016, we celebrate 75 years of the arrival of the first Argentine ambassador to Canada and of the first Canadian envoy to Argentina, who actually was a senator, Senator William Ferdinand Alphonse Turgeon. Both countries have many similarities and share common values in terms of democracy, human rights, peaceful use of nuclear energy and climate change, just to name a few.
For many years, important Canadian companies have been present in Argentina in the fields of mining, energy, agro-industry and communications. We welcome their involvement and we need much more. Argentina has natural and human resources in abundance. Investments are needed to put the economy in motion and to grow.
Many new opportunities will be open to Canadian companies in clean energy and infrastructure, which are at the top of the Argentine government priorities.
Bilateral visits of high-level officials from both countries are already taking place. I mentioned before the positive meeting between President Macri and Prime Minister Trudeau on March 31. On that occasion, the Argentine president invited Mr. Trudeau to visit our country.
The Secretary of Mining of the Argentine government, accompanied by the governors of the provinces of San Juan and Catamarca, and high officials of other important mining provinces, participated in the Prospectors and Developers Association of Canada, PDAC, in Toronto, attracting a lot of interest at their different presentations.
Last week, the Director General for Latin America and the Caribbean of Global Affairs Canada — I think he was before this committee not too many days ago — was in Buenos Aires holding very fruitful meetings with high-level officials, as well as with important representatives of the opposition, members of the civil society and businessmen.
Only yesterday the Secretary of Trade for Argentina was in Toronto, invited by the Canadian Council for the Americas, and then came to Ottawa for a dinner at the official residence of Argentina.
In the first semester, we hope that a high-level bilateral meeting will take place. Arrangements have been made to accomplish that goal.
All these positive developments — the measures that have been taken by the Argentine government, the similarities in the approaches of President Macri and Prime Minister Trudeau to multilateralism and to the main issues in today's global agenda, such as climate change, hemispheric security and migration — generate high expectations for the possibility of fostering stronger bilateral relations. I am confident that these expectations will become a tangible reality.
I thank you very much for this opportunity. Of course, I remain at your disposal for any questions that you would like to pose.
The Chair: Thank you, Your Excellency. You have covered a lot of ground and certainly brought us up to date on the very interesting changes in your country. Thank you for putting it into historic perspective. It's very helpful to remind us of where the country has been and your expectations of where you will go.
Senator Downe: You talked, ambassador, in your remarks about opportunities and prospects and how it looks very positive for relations between our two countries. From your position, what do you see as the best opportunity over the next two or three years for our two countries to work on together?
Ms. Nascimbene de Dumont: On the economic side, there is already a very important presence of Canadian companies in my country, over 100 Canadian companies in very different fields — very important prospects in mining, and there are many more. I'm confident that with all the new measures that have been taken by President Macri and that will be taken in the following months, these investments will come.
Of course, in clean energy there is a huge possibility, a huge perspective of cooperation and involvement with Canadian companies. We know that there are many Canadian companies at the top level for clean energy. This is a priority because our country has already passed a law that compels acquiring 8 per cent of its energy from clean energy resources. We do have all the natural resources — solar, wind energy. We know we can provide the natural resource. What we need is the involvement and investment. I am very confident that they will come.
Senator Downe: Thank you. You also talked about some of the difficult history in your country, the military dictatorship et cetera. Given the new government, is there any assistance Canada can provide — governance, reform of the justice system — or any opportunities there for us to assist your country as you advance forward?
Ms. Nascimbene de Dumont: Well, I do believe Canada has a lot to give, not only to Argentina but to the whole of Latin America. One of the main objectives defined by President Macri is the fight against drug trafficking. This drug trafficking is not only drug trafficking but also criminal organizations. Canada may provide a very important collaboration in that regard.
We already have very important collaboration between universities, for instance, in science and technology. This is another point where Canada will be very important for us. It has been already, but it will be much more in many other fields. The next high-level bilateral meetings will identify where Canada may provide the skills and the knowledge that you have in many different fields.
Senator Poirier: Welcome to the committee. That was a very interesting presentation.
Last week the Panama Papers made a splash on international news. It appeared that President Macri might be part of them. His majority win last December was slim and he was facing a challenge in domestic politics to make the changes. What has been the political reaction in Argentina, as well as the people's reaction, of his name being mentioned?
Ms. Nascimbene de Dumont: First, President Macri has stated very clearly that in Argentina there will be no impunity for anybody. That is the basis of his government.
Regarding the Panama Papers, the name of President Macri appears in a society that belongs to his father. His father is one of the important entrepreneurs in Argentina. President Macri, in order to clarify the position, has asked the civil court to request a statement of assurance, a voluntary action, in order to present the documents to clarify the situation. He has requested from the judiciary, from the civil court, a statement of assurance.
He is a very wealthy man. He was wealthy from the time he was born. He has put all his wealth and all his assets in a blind trust in order to give the assurances that none of the measures that are going to be taken during his government could go to increase his own assets.
So these are two important, powerful measures that have been taken — to go himself voluntarily to the civil court in order to ask for a statement of assurance and to put all his wealth in a blind trust. I think if former President Piñera from Chile, who is also a very wealthy man, had done the same when he got to power in Chile some years ago —
Senator Poirier: I assume the people's reaction to him going ahead and doing that would have been positive. Do you feel that it could considerably be harder for him, though, to make the sweeping reforms that he intended because of this?
Ms. Nascimbene de Dumont: No. It's a personal opinion, but from the experience we have, in less than one month, he got the approval to have a solution with the hold-outs that had been pending in Argentina since 2001-02. He doesn't have a majority in either of the two chambers of the Congress. In our system, we need the approval from the Chamber of Deputies and from the Senate. He got the majority in both in record time. He knows how to negotiate with the other political parties.
Sincerely, there is a new era in Argentine politics. There is a new wave of younger politicians. For instance, the two governors who came to Toronto with the secretary of mining are young people. They belong to a different political party. They were all of the same opinion regarding the government and the way ahead. That shows that you can get consensus on very important issues. Of course we have challenges to surmount in our country.
Senator Poirier: Excellent. In November 2015, Allan Culham, Canada's former ambassador to OAS, stated the relationship between Canada and Argentina had been frayed over the years. Would you agree with that observation? Could you also share with us some of the opportunities for maybe deepening some relationships between Canada and Argentina?
Ms. Nascimbene de Dumont: Yes, I would say with the previous Canadian administration, there were big difficulties with the Argentine government, iIn particular because the previous Canadian administration changed their position regarding Malvinas. That created a very difficult friction with the government. With President Macri, there is a new approach to the relationship with North America as a whole, and with Europe, rather than the historical links..
The visit of President Obama was very successful, and it brings a new, different feeling even from the population to North America. President Macri and our Minister of Foreign Affairs have repeatedly stated that we want good and mature relations with everybody, in particular with the western hemisphere, Europe and North America. We want mature relations, but very good relations. We are going to improve. I'm sure they have already being improved in this very short time.
Senator Johnson: Welcome. It's lovely to see you this morning. You gave a very comprehensive presentation.
I want to follow up with regard to the broad consensus. The president does not hold the majority. Is he going to be able to get this consensus across the major Argentinian parties to continue reforming and trading with the world? What could be the major roadblocks? Then I'm going to ask about President Obama's visit and the United States.
Ms. Nascimbene de Dumont: Of course we cannot predict the future, but what we can say is that he knows how to negotiate with other parties because he created a new political party in 2005. With that completely new political party, he won the elections in what is the city of Buenos Aires, which is at the same level in our constitution with the other 23 provinces of the country. It is a very important electoral district. From the beginning, he didn't have a majority in the chambers, but he managed to negotiate and to get consensus on the questions that were important to everybody.
I do believe that in Argentina there are many things that are needed not only by the federal government but also by the provincial governments. In this surge of consensus on the main things that are needed in Argentina, I'm sure that there will be negotiations, because political parties are for that. There will be trade-offs perhaps. It is a completely different situation from the one before, where the government had the majority in both chambers. Now we have to negotiate. The government has to negotiate — and I'm sure they are very capable of doing that — to get consensus on the main issues that affect all Argentinians.
Senator Johnson: That's very good to know. I think you must have been encouraged by President Obama's visit and his comment about Argentina's new direction with the tens of millions of dollars in new investment. Tell me, are there any historical tensions that you want to mention or talk about right now between Argentina and the United States? What are the prospects for improved relations now with Obama's visit and following that visit, which seemed to go over very well? That relationship also affects Canada, of course.
Ms. Nascimbene de Dumont: I must say that, historically, if we go back to the 19th century, there have always been some tensions between north and south, and in particular perhaps Argentina and the United States. In the last, I would say, six or ten years, relations were not particularly good. This is a new government and this is a new approach. President Macri and the Minister of Foreign Affairs have made it plainly clear that they want a good — not the carnal relations that we used to have in the 1990s, but a mature —
Senator Johnson: Well put.
Ms. Nascimbene de Dumont: It was an adjective that was very — how to say? — well, at those times, well known in my country. But this is a new approach. We want to have good relations.
I think the visit of President Obama was a success in many aspects. He was there for the fortieth anniversary of the military coup. Nevertheless, he has stated that he will open up the archives of not only the Department of State but also of the security regarding those times, in order to clarify what was really their role. Sometimes there are, of course, doubts about the role of the United States, not only in Argentina but in several military coups in Latin America.
Senator Ataullahjan: Thank you, Your Excellency, for your presentation this morning. We've been looking at this issue over the past few weeks. We've had some witnesses who suggested that Argentina should be a priority for Canada, while other witnesses have suggested that Canada should proceed with caution, considering that it's a minority government and given the history of social unrest. Could you expand a little bit on the government's reform priorities and the probability of their success?
Ms. Nascimbene de Dumont: Every reform of the government will have in mind the three objectives that the president has already defined. The elimination of poverty is the first one. To eliminate poverty, he and the government will fight to create jobs, because the economy must grow again. It has not been growing for the past years, and it has to again become a positive economy. That is the only way that you will create jobs. With jobs, you can have your society. Without jobs, you have to just provide subsidies, and that is not the way.
Every single measure that the government has taken in these 120 days goes directly to try to reactivate the economy — to reactivate, in particular, the regional economies, in order for them to be able to export and to create jobs. I think every measure that he's going to take — and he's going to send to Congress some pieces of legislation to be approved — will focus on these three main objectives that I have mentioned already: the elimination of poverty, the combat against drug trafficking, and also the consolidation of democratic institutions.
Senator Ataullahjan: In terms of foreign policy, what are the priorities for the new government, both regionally and globally?
Ms. Nascimbene de Dumont: As I said, the government is trying to have good and mature relations with every country. This is a very important matter, I must say. My experience is in the multilateral field in particular, so I know that Argentina, like Canada, is a very important member of different multilateral fora: human rights and questions of nuclear energy. We are going to be in every single multilateral platform where we can really take our experience and be these bridge builders that we are used to being. Like Canada, we have a very long tradition in multilateralism. We are members of Mercosur, UNASUR, CELAC, OAS and the United Nations. In the United Nations, we are members of every single fora in human rights and the nuclear energy and the nuclear field of every single control regime that there is of weapons of mass destruction, chemical weapons, et cetera.
The government will foster this presence and the participation of Argentina and what we can offer. It is very important in many fields, particularly in the nuclear field, for instance. Similar to Canada, we do have a very long development — since the 1950s — in the nuclear field, but it has always been for peaceful uses. That is a very important feature to share with others, in particular in this very difficult world we are in today.
The Chair: We're running into a time constraint. I started out with a shorter list, and now it has really grown. I'm going to take two questioners at the same time and appeal for shorter questions and perhaps curtailed answers that will give us some flavour of the issues.
Senator D. Smith: As you know, Brazil's economy has been down a bit lately, and hopefully the Olympics will be a great success. Maybe that will re-energize it. To the extent thatBrazil has had some economic problems, has that rubbed off on Argentina or had any negative impact for your country? Is it an opportunity? How would you characterize the impact of the biggest economy in South America and it hurting Argentina?
The Chair: Senator Rivard, could you place your question and then we'll get the answers on two.
[Translation]
Senator Rivard: Your Excellency, my question will be brief. The fact that the Macri government is a minority one, that it is governing with the support of other parties and that tens of thousands of public servants have been laid off has given rise to protests. In Canada, surveys are published almost monthly. Do you know whether the population still supports the Macri government as firmly?
Here is my second question. When it comes to Canadian aluminum plants, such as Barrick Gold, which is operating in Argentina, Canada has asked that more be done about workers' rights and that the environment be protected.
Has this situation improved?
[English]
Ms. Nascimbene de Dumont: Yes, all the economic upheaval in Brazil has very strongly impacted my country. Brazil is our first trade partner.
Senator D. Smith: You mean a negative impact?
Ms. Nascimbene de Dumont: Yes, of course, in our economy. Yes, absolutely. But we hope that things will be better soon and that this will provide the opportunity for both countries and the Mercosur to go ahead in order to have, for instance, a free trade agreement with the European Union and that we can provide a platform from there abroad.
[Translation]
There have been protests in Argentina, obviously. That has to do with socio-economic problems and the fact that people in my country tend to take to the streets at the drop of a hat.
The latest surveys indicate that 60 per cent of the population was in favour of the measures taken by the government. That percentage may have dropped off lately, but 10 days ago, more than 60 per cent of the population supported those measures.
Regarding the Barrick Gold aluminum plant, you know that there was a spill, which caused the government great concern, so it decided to impose an economic sanction on the company. Those are delicate issues, and I know that Canadian aluminum producers are very responsible.
When that kind of an accident occurs, we have to deal with the consequences. The population was not always supportive toward the aluminum plant. We know this, as that is how things are all over. Every effort should be made to protect the environment, and that was a fairly substantial spill.
Senator Ngo: Welcome, Your Excellency.
[English]
We have heard from previous witnesses that, since elected, President Macri has proactively promoted and defended democratic principles in the region. He raised the issue to Mercosur, asking them to write back the democracy and human rights principle in the region. How will this impact politically and on human rights in the region, and in particular in Argentina?
The Chair: Thank you. We'll turn to Senator Housakos.
Senator Housakos: Ambassador, thank you for being with us. Clearly the relationship has been long and strong between Argentina and Canada. I'm sure there was a strong relationship with the previous government. With the incoming new government, I'm sure that relationship will continue to grow and foster.
There are a multitude of levels of relationships between governments and people in Parliament. Maybe you can talk to us about what we can do as parliamentarians to strengthen our parliamentary diplomacy between our two countries. What can we do to enhance the connections people-to-people and a cultural relationship? Argentina and Canada are in the same hemisphere but in many respects far apart. We have a giant in between us that takes up a lot of space in Central America and South America. It is an ongoing challenge for us in strengthening those people-to-people ties and cultural ties. Maybe you can suggest to us how Parliament can help contribute in that regard.
The Chair: I'm going to exercise another liberty so we get everyone in and give the final say to our ambassador. Senator Omidvar wants to ask a question, so we'll place it now and give you the latitude to answer all three and sum up in whatever words you would wish.
Senator Omidvar: Thank you, ambassador, for your presentation. Over the years, many Argentinians have chosen to become Canadians as either immigrants or refugees. I think of these people as natural ambassadors of trade between our two countries. I wonder if you have any evidence that in fact these trade ties are vibrant. If they're not, what proposals would you give to our government and to yours to ensure that this latent strength generates prosperity?
Ms. Nascimbene de Dumont: First of all, regarding the stance that has been taken very clearly by President Macri regarding human rights and democracy in the region and beyond, Argentina is a country that, because of its past and because of the way we have learned to deal with our past, is very much entitled to speak about democracy and about human rights. Our voice is not any voice; it's an important voice.
Regarding the second question and what you can do to foster and to collaborate with good, stronger relations with my country, one of them is the friendship group. Several of you have already taken part in it in the past, and we are trying to promote the re-establishment of this friendship group with parliamentarians in Argentina. We are strong believers of the importance of parliamentarian relations.
We have ParlAmericas, a platform where all the different parliamentarians meet, and we have the Inter- Parliamentary Union. Every platform should provide an opportunity to meet, because these meetings are really of substance. These meetings are significant and they help. I'm a strong believer in the importance of parliamentarian relations.
Of course, many Argentines came here and found haven in Canada during the times of the dictatorship and, after that, in the times of our dire economic crisis. While I travelled through different provinces in Canada, I had the opportunity to meet many of my compatriots that are in important positions at several universities — the University of Alberta, the University of British Columbia, the University of Ottawa; Dalhousie. You name it. You have some of our brains that have helped Canada, like Dr. Montaner in British Columbia, who was decorated by the high award of the Canadian government; and Professor de Bold here in Ottawa, who has also been awarded one of the highest awards by the Government of Canada. So we are very proud.
I always say that, for the embassy, these people are like our entrance door in order to facilitate our relations with the different towns and provinces where they live.
Regarding trade, we already have several of our products that are well known in Canada, for example Malbec. I am very lucky to find our wines everywhere I travel in Canada — good restaurants, medium restaurants. I have a choice of our Malbecs everywhere. Of course, the main export to Canada from Argentina is gold and silver because the main companies, Goldcorp, Barrick, Silver Standard and Pan American Silver, are there. We also have other things, for instance, shrimps come here. I'm proud to say that they say "Argentinian shrimp'' in the Metro and so on.
We have much more to offer. I'm sure that, with the measures that have been taken by the president to eliminate all the export duties and the barriers that affected our trade before, we are going to be much more present.
We also had the opening of the Canadian market to Argentine beef in December last year. It had been shut down because of some sanitary questions. However, we proved that these sanitary questions are no longer valid and the Canadian market has been open to our meat. I hope that soon we will have the opportunity to have our good beef here in Canada.
The Chair: Thank you. We're just about out of time, but I thought I'd put one question to you myself. Should there be an opportunity to visit and hear from the Argentinian side of what we are hearing in Canada? When we did our study on Brazil, it was impressed upon us that if we really wanted to understand the country, we would have to deal with the federal government and begin to understand how the states worked and how they impact the efficiency or lack of it in the parliamentary system in the federal level. We have heard less about the provinces and their impact. What would you suggest is a good balance, and what should we learn about your type of governance? Should we be concentrating on the central government as key, or are there elements out in the field that we should be looking at?
Ms. Nascimbene de Dumont: Of course, it is important to have the vision from the governors. I mentioned before that in the last PDAC we had the representation of several governors and vice governors of different provinces in my country. We are 24 in total; 23 provinces plus the autonomous city of Buenos Aires.
In our country, we have two chambers. The Senate represents the provinces. In the Senate, there are two senators of the party that has the majority in the elections of the province, and a third senator by the first minority.
In my country, you have to deal with the provinces. You cannot leave them aside. You need their votes. The senators represent their provinces. If you want to pass a law, you need to have the majority in the Senate; and in the Senate you need to get the approval of the different provinces. It is perhaps a little different from your system. We do have to be attentive to the needs and the aspirations of the provinces. The federal government cannot do it alone.
This process of negotiating in Congress that has been taking place, for instance, to solve the question of the hold- outs, shows that when you argue and you give the reasons, the provinces go with the federal government.
The Chair: Thank you. You've covered so much, so quickly. You've given us the perspectives not only of government but also your personal perspectives on an interesting country where we are looking to see ways and means that we can strengthen our relationship for the benefit of the citizens of Argentina as well as the citizens of Canada. It's been a rich array, and your thoughtfulness in coming and presenting it so well today is very much appreciated.
On behalf of all of the committee members here, I thank you for your visit, Your Excellency. No doubt you will follow our work and hope that we quote you and give you due regard in our report. Thank you for coming here today.
Ms. Nascimbene de Dumont: Thank you very much for the opportunity.
The Chair: Honourable senators, the Standing Senate Committee on Foreign Affairs and International Trade is continuing this morning. We are authorized to examine such issues as may arise from time to time relating to foreign relations and international trade generally. Under this mandate, the committee continues to hear witnesses during this second part of the meeting on the topic of bilateral, regional and multilateral trade agreements: prospects for Canada.
The committee has heard on different provisions included in trade agreements such as those relating to investment protection and intellectual property. The committee today will now have an opportunity to learn about the trade agreement provisions in relation to labour rights.
I'm pleased to welcome representatives of the labour program at Employment and Social Development Canada: Mr. Anthony Giles, Assistant Deputy Minister of Policy in the Dispute Resolution and International Affairs section, and Mr. Rakesh Patry, Director General in the International and Intergovernmental Labour Affairs section. Welcome, gentlemen, to the committee today. We'll hear your presentation and then afford the senators some opportunity to question you.
[Translation]
Anthony Giles, Assistant Deputy Minister, Policy, Dispute Resolution and International Affairs, Labour Program, Employment and Social Development Canada: Thank you for inviting us to appear this morning. We will begin with a brief overview of the issue. Afterwards, we will obviously be available to answer any questions.
Page 2 of our presentation provides an overview. We will start with the purpose of labour provisions. We will then talk about the approach in general and the provisions in more detail. After the conclusion, I will yield the floor to my colleague who will discuss the most pressing agreements.
[English]
Let me start with the purpose of labour provisions. There are essentially three reasons why Canada negotiates either in free trade agreements themselves or in a side agreements provisions on labour. One of those reasons is the longstanding Canadian international policy of seeking to support and strengthen good governments and the rule of law across the world. In the field of labour, that's particularly important because one of the features of these agreements is the attempt to strength the transparency and honesty with which labour laws are administered in different countries. They also try to strengthen social dialogue in those countries.
Second, in the competitive world that we live in now, the Canadian government believes that it is not fair to have Canadian employers and workers competing internationally with countries that don't respect fundamental principles of child labour, abolishing forced labour and so on. So it's a question of fair competition.
Third, Canada is a member of the International Labour Organization, and all members of the International Labour Organization have committed themselves, particularly through the 1998 declaration on fundamental rights, to promote, in their own country and internationally, core recognized labour standards. I'll come back to those in a few moments.
If we turn to Page 4, at a high level, essentially what our agreements or provisions try to do are, first, seek to negotiate enforceable agreements — not just agreements that are at the level of principal, but agreements that can actually be put into effect should they not be respected. Second, we try to root those agreements in internationally recognized labour standards. It is not something that Canada invents, but something Canada subscribes to as a member of the international community.
Tthe key components of any of these agreements are these: First, a set of comprehensive, mutual obligations on the part of both parties to comply with those labour standards. Second, it's important to include a true binding dispute resolution mechanism so that if one country or members of the community in that country believe the other country isn't upholding its side of the agreement, that there is a way to resolve those disputes. Third, and to balance that, all of our agreements also include an important element of cooperation because we believe that fundamentally the approach in this field should start with cooperation rather than disputes.
Turning to page 5, the first generation of agreements, those negotiations with Mexico, United States, Costa Rica and a few others, were originally focused more on obligations to enforce existing labour laws. They weren't focused so much on what should be in those labour laws in the various countries. However, since 2009, the Canadian government shifted its approach and began to add to the labour provisions that mutual respect for internationally recognized standards. Agreements with Peru, Columbia, Jordan, Panama, Honduras, and Korea are all rooted in a mutual recognition of the importance of the ILO 1998 declaration.
I think it's important to underline the four components of that declaration. First is freedom of association and free collective bargaining; second is a commitment to abolish child labour; third, elimination of compulsory or forced labour; and fourth, eliminating discrimination in employment. Those are international, core standards. Those are the ones our agreements are built upon and meant to reinforce. We also include, beyond that, protection in the area of occupational health and safety, wages and migrant workers.
On page 6, there is a list of a couple of other elements that are common in our agreements. I'll go through them extremely quickly.
First is that all the agreements allow the public to raise concerns. It's not just government to government, but they are designed so that trade unions, employers and other groups can bring forward concerns.
Second is a dispute resolution mechanism that applies to all the obligations.
Third, our agreements typically include the ultimate sanction of a financial penalty against the country that is not complying with the agreement.
They also include non-derogation clauses, which are clauses that say you should not lower your labour standards to create an investment opportunity or an investment advantage.
Then last, commitment to cooperation.
I'm going to pass it on to my colleague, Rakesh Patry, who is going to talk to you a little bit about the most recent negotiated agreements.
Rakesh Patry, Director General, International and Intergovernmental Labour Affairs, Labour Program, Employment and Social Development Canada: Thank you, Tony.
Good morning, senators. Tony has provided you with the history and the background behind these labour provisions. I will take a few minutes to provide you with a quick summary of some of the more recent agreements we have concluded. The two most notable of these, of course, are the Comprehensive Economic Trade Agreement with the European Union, CETA, as well as the Trans-Pacific Partnership agreement, of course.
These agreements are, of course, negotiations, and they are influenced by the partner countries with which we are negotiating. One of the key features that was included within the CETA and the TPP agreements was, most notably, a high level of obligations. In the case of the EU, all of their trade agreements that have labour provisions in them tend to have a particular focus on adherence to ILO fundamental conventions, and that is the case in our agreement in the CETA as well.
Both agreements have binding and enforceable labour provisions. What is particularly notable about the TPP chapter is that the enforceable provisions include the possibility of trade sanctions, which is the first time Canada has had such a feature in any of our labour agreements. Generally speaking, they are monetary penalties that are assessed, but in the case of the TPP, there is an option of trade sanctions instead of monetary penalties.
Finally, in the case of the EU agreement, the CETA, Canadian provinces and territories, as you know, were included in those negotiations for the CETA and consequently are bound by the labour obligations of that agreement as well. In the case of TPP, the federal government assumes the obligations on behalf of the provinces and territories for the labour chapter.
Two other agreements we have recently concluded are with Ukraine and a modernization agreement with Israel as well. The labour chapters of those agreements feature the more traditional Canadian approach to these provisions. Specifically, they are comprehensive, as Tony described, binding and enforceable obligations, and they do have the possibility of monetary penalties.
On slide 8, we recognize that negotiation of these agreements is but one element of them. Of course, it's important for to us develop an effective system of implementing these agreements and monitoring compliance with them.
From our perspective, these agreements are called Labour Cooperation Agreements. We place the emphasis on the fact that they are cooperative agreements. We do seek to work with our partner countries, the governments, civil society and industry, in ensuring that there is a constructive dialogue and that we do build cooperative exchanges with our partners in these countries as well, and we use that as a forum and a tool for addressing labour issues within our partner countries.
We also have a fairly modest technical assistance program that we use to try to assist these countries in improving their labour standards and to build capacity within the labour sector as well. Since 2006, we have run or funded 80 technical assistance projects with our partner countries with whom we have these labour cooperation agreements. The focus on them has been to use the limited fiscal and human resources that we have to improve labour standards and to develop compliance within the labour sector in these countries as well. We work closely with like-minded countries and partner countries, such as the EU and the U.S., in implementing these projects as well.
Going forward, in terms of negotiations — our final slide to wrap it up — we continue to take the view that labour agreements are an important tool to develop and promote respect for fundamental labour principles and rights in partner countries. We also recognize that it's important to have proper mechanisms and tools in place to implement these agreements. We are going to continue to work, both domestically and with our partner countries, in building capacity and knowledge base, and to work with partner countries, as I said, such as the U.S. and the EU, in coordinating our efforts with other countries in developing capacity to respect and promote fundamental labour rights in these countries.
Thank you very much for that opportunity.
Mr. Giles: We are open to your questions.
The Chair: Thank you. The slides are helpful. We can use them during the course of our study and when we come to specifically deal with the trade agreements that we will no doubt be facing in the future.
Senator Downe: We heard tremendous criticism about the Jordan-Canada Free Trade Agreement, about foreign countries operating what would be called sweatshops, importing particularly women from the region, countries around, to produce items that would then be sent to Canada because of the trade agreements. What monitoring has been done on the Jordan deal since we signed it in 2012?
Mr. Patry: We have worked closely with the Jordanian government in trying to assess the challenges and problems they face. Since 2009, we have provided just under $2 million, about $1.9 million, in technical assistance, which has focused on key areas where we believe there is a significant need for improving capacity within Jordan. Those have been around areas such as freedom of association, labour law reform and labour inspections.
We have also worked closely with the ILO in trying to address some of these issues. The ILO has a major program in Jordan focused around decent work and improving labour standards broadly within Jordan.
I would note that, more recently, the Syrian refugee crisis has obviously had a significant impact on the Jordanian economy, and that has translated into issues around labour standards as well.
Just earlier this year, in fact, we had a small team of officials in Jordan studying some of the issues that have arisen, both more recently as well as historically since our agreement came into effect, and looking at things we can do to improve labour standards within the country.
With respect to the Syrian refugee crisis and the impact that it's had on the Jordanian economy broadly, as well as on labour standards in the country, we are currently working with the Jordanian government, as well as with the ILO, on developing an 18-month project that will focus specifically on child labour issues within the refugee community. We are hopeful and optimistic that this will have an impact on the broader Jordanian labour sector as well.
Senator Downe: Thank you for that. I don't hear any monitoring there. Do any of our officials go to the actual factories that have these imported workers in these apparently deplorable conditions, or are we just dealing with the Jordanian government and international organizations, who obviously would have, in the case of the Jordanian government, an interest in the status quo because it increases the productivity of their country? The officials from Canada who were there recently, did they go to any of these factories?
Mr. Patry: They did. They were involved in visiting factories as well.
Senator Downe: Do they advise ahead of time or do they just show up unannounced?
Mr. Patry: They do advise ahead of time, because we do work with both civil society in Jordan as well as the government and the ILO.
Senator Downe: Do we pick the factories or is a list given to us?
Mr. Patry: We do this in consultation with the ILO. Based on the ILO's offices in the country, their country office and their country director, we work with them in identifying which factories will be visited, and they do visit the actual locations.
Senator Ngo: Thank you for your presentation. In your presentation, you mentioned the provision of labour rights, including the TPP. You also mentioned that if one of the partners failed to comply with a given provision, sanctions will be applicable. What sanctions are applicable, according to you, and how are they going to enforce it? In the TPP, you have 12 countries, and the country that I'm particularly interested in is Vietnam.
Mr. Patry: It's a difficult question to answer because we are sort of going into unchartered territory, as you know, with the TPP. Should it be ratified by Canada, it will be the first time we have had an agreement that is as broad and as wide-ranging as this. Should it be ratified by Canada, from a labour perspective, it would be the first time that we have had a situation of trade sanctions being an option.
The way it would work is a complaint or an objection would have to be levied by an individual, an organization or a civil society against a labour violation in a particular partner country. There is a very detailed dispute resolution mechanism that is spelled out within the TPP. Generally speaking, labour chapters have their own and separate dispute resolution mechanism. In the case of the TPP, it's subject to the overall agreement's dispute resolution mechanism, so it's spelled out, and they are about the steps that would have to be taken leading to ministerial consultations and arbitration panel. There are a number of factors that have to be taken into account. That panel would then have to make a decision on whether they have been in violation or no, and whether trade sanctions can be applied as a result of that.
Senator Ngo: Are you aware that Vietnam is a communist regime? There are no labour unions whatsoever in Vietnam. How do you measure that? How do you call them violations of labour rights when there is no union?
Mr. Patry: On that point, as you know, the United States has negotiated what they call a consistency agreement with Vietnam, as well as the governments of Malaysia and Brunei. That is a side agreement to the TPP.
In addition to that, the Canadian government has also recently signed a memorandum of understanding with the Vietnamese government. That is a plan of action to spell out ways to improve labour standards within the country.
The U.S. consistency agreement spells out in great detail the number of steps that Vietnam has to take in order to achieve compliance before ratification of TPP or in conjunction with ratification of TPP.
One of the key elements of that consistency plan focuses on freedom of association and the fact that the Vietnamese government must work on the creation of labour unions within the country, so that, of course, is going to be one of the key factors to monitor and to watch. That is where we expect that civil society will play in the future a much stronger role within Vietnam on labour issues.
Senator Ngo: I know that no civil society exists in Vietnam either.
Mr. Patry: Under the consistency plan that the U.S. is currently working on implementing with the Vietnamese government, there will be changes in legislation that will allow for the creation of unions, and they will work with them on the design and development of allowing these unions to be created.
Senator Dawson: I can see by your face that you have doubts. I can probably join you on that, but we won't elaborate.
[Translation]
Let's take the example of the agreement concluded with Europe, with the participation of Quebec and the presence of Pierre-Marc Johnson. That increases awareness of provincial jurisdictions. When we look at the Trans-Pacific Partnership, we don't really see the same level of participation among the provinces. How does Canada ensure, when it comes to areas not under its jurisdiction, that the agreement it is putting on the table will be accepted by the provinces?
Mr. Giles: That's a very good question. You are correct. It has long been recognized that the federal government can negotiate internationally, but it cannot impose obligations on the provinces in the absence of consultation and consensus. In the Trans-Pacific Partnership in particular, a provision requires the federal government to accept the jurisdiction on behalf of the provinces should a complaint be filed against Canada or against one of its regions.
However, it should be pointed out that the obligations contained in the Trans-Pacific Partnership are practically identical to those found in the agreement concluded with Europe. Since we have applied those principles in the past, we do not foresee any technical issues on that front.
[English]
Senator Dawson: I have a question for you, Madam Chair. Are we expecting ratification bills for some of these agreements that have been signed and will necessarily need our committee's support?
The Chair: We have a letter from the Minister of International Trade that we and the House of Commons should conduct as wide as possible consultations on the Trans-Pacific Partnership.
Previous to this government, the previous government, of course, had signed CETA and were awaiting it working through the scrubbing and all of those issues, and it would be contemplated it would be coming here. Those are the signals we are getting on both of them.
We are anticipating that Parliament will be involved in some form of ratification or review of these agreements. As you know, we have done that in the past. We did Jordan, et cetera.
If the trade agreements should come to fruition, they will come through this committee. The House is studying TPP now in its own way. We decided that our first look would be at all trade agreements historically to see what the economic and other impacts are so that we're well versed in the whole body of trade agreements in Canada so that we could be in a position not only to advise the government on existing agreements but to look forward to the future agreements and hopefully be part of the policy dialogue in a positive way.
Senator Oh: Thank you, gentlemen. Do the labour provisions included in Canada's FTAs provide adequate and effective protection for workers' rights?
Mr. Giles: I guess I would answer in two parts. In terms of the scope of the agreements and the various areas of workers' rights, labour standards and so on, they are extensive and clear, so they protect at that level.
Second, do these agreements alone serve to fully protect workers' rights in the various countries with which we have agreements? No. They are one part of a wider international effort to achieve that. Many of the countries that we have agreements with have similar agreements with other countries, the European Union, the United States and so on. As we have mentioned in some of our answers, the International Labour Organization is involved on the ground in most of these countries.
What I would say is that our agreements contribute toward a wider effort to increase the respect for labour standards and workers' rights in those countries. They alone are not the single solution. They are part of a wider solution.
Senator Poirier: You spoke about this with one of my colleagues just a little while ago. When you receive a complaint that a free trade partner has failed to comply with an agreement regarding labour laws, there are, depending on the results of the investigation, the possibility of sanctions and enforcement. If that happens, depending on the severity of the actions and need for enforcement, do you follow up or monitor to make sure that there is not a repeat? Do you do follow up on it?
Mr. Giles: No case yet has ever resulted in that kind of sanction, but were it to happen, yes, of course. Most of the agreements provide for a financial sanction but also provide for that money to be targeted at solving the original problem. Part of that would be monitoring how it was resolved. I should underline that we have yet to see any case get to the point, in any of the agreements, where that ultimate sanction was required. Like all sanctions, it's there in case, but usually the first steps of the process work to resolve the problem.
Senator Poirier: Therefore, at this point, would you rate it as 100 per cent successful?
Mr. Giles: As 100 per cent successful in the sense that . . . ?
Senator Poirier: When you get a complaint and you make the trade partner aware of it and deal with it, is it a success that it clears the problem?
Mr. Giles: A success rate in the sense that an agreement on all of them — now I'm referring to the North American Agreement on Labour Cooperation with Mexico and the United States — ended up with a mutually-agreed solution.
I recall one example from a number of years ago. There was a complaint against Mexico for the way employers were allowed to discriminate against pregnant women, either by not hiring them because they were pregnant or firing them soon after being hired. That complaint involved Canada and the United States working with Mexico to change that, to clarify their laws and also to work particularly in that section of northern Mexico — the maquiladoras — where the practice was rampant. It even involved the Minister of Labour of Mexico visiting, along with Canadian and U.S. officials, a number of those employers. That was regarded as successful.
Was the practice entirely eradicated forever? Probably not, but we did see a shift in behaviour, and that's what we were hoping for.
Senator Poirier: As we go forward in the years to come, based on the last few years, do you see the number of complaints going higher or lower? Are we stabilizing it?
Mr. Giles: They've been very low in recent years. What we are wondering about is, if the TPP is ratified and goes ahead, whether we will see an increase based on a number of the countries where labour conditions really need improvement. That's pure speculation on our part.
The Chair: We're running out of time, so I'm going to ask Senator Johnson and Senator Omidvar to put in their questions and then you can answer them.
Senator Johnson: A couple of quick ones. How are international labour agreements enforced, how can you ensure compliance and what are the financial penalties like?
Mr. Giles: I'll answer the first part of the question and then hand it over to Rakesh for the second part.
Regarding how they're enforced, it's important to appreciate that there's an ongoing dialogue, in most cases, not about specific cases but about general occupational health and safety issues that we've identified with the country and so on. That dialogue and joint work is meant, actually, to ensure that changes are made so that complaints don't have to be raised.
When they are brought forward, the first step in virtually all of our agreements is an attempt to solve it on a cooperative basis. That doesn't always work, or it might not always work, so after that effort has been made, it moves into, depending on the agreement, an international arbitration panel. We've never had to go that far, but that's how the mechanism works.
With respect to how much the financial penalties are, I'll have to turn that over to Rakesh.
Mr. Patry: That would be assessed by the independent panel that's created to examine whether there have been violations, and they would then determine the value of that penalty.
Senator Omidvar: This is actually a question of clarification about the protections for migrant workers. You have a parenthesis in the deck on page 7. Does this apply to migrant workers, when and if TPP is ratified, when they are working in Canada as part of the arrangement?
Mr. Patry: The reason for the parentheses on that slide is because in the CETA agreement it was very clear that both parties — the EU and Canada — were very keen and interested in ensuring that a similar level of protection exists for migrant workers. The TPP is a little more complicated, primarily because the U.S. takes a different approach to the protection of migrant workers, and there have been a number of discussions between the U.S. and the Mexican governments on how migrant workers would be protected. As a result, there are no explicit protections in TPP for migrant workers, but Canada's approach certainly is that migrant workers should be always receiving a similar level of protection that others working in the country would receive.
Mr. Giles: If I may add just one small point: Over time, different issues have come in and gone out of these agreements, but we never feel limited by the list of particular rights in any one agreement. We don't feel limited to not raising other issues, so were there to be issues raised with any TPP partner country, even in the absence of an explicit obligation, we would still feel free to raise it with them.
The Chair: One mechanism we've used in the past is what we call side agreements — additional agreements — but also foreign policy, if I understand you. In other words, we have a whole range of bilateral things. We don't put everything in the agreement, right?
Mr. Giles: That's quite right. Of course, there are many countries with which we don't have labour agreements, but that doesn't prevent us, in the context of the ILO, for example, or bilaterally, from raising those issues.
The Chair: It may be something that we would suggest to the government to seriously look at and ensure that we have some consistency on the issue.
Mr. Giles: That would be your prerogative.
The Chair: Thank you. I just wanted to underscore our prerogative.
Thank you very much. We needed the information, both to bring us up to date on current agreements, but also in anticipation of future agreements. Your slides and your answers have been extremely helpful. Thank you for coming and dealing with this issue so efficiently.
(The committee adjourned.)